[00:02:12] Patrick Donley: I am super happy to have you on today. I’ve been a big fan for several years now on Twitter and just happy to get a chance to talk to you.

[00:02:19] Patrick Donley: We’ve been talking here a little about 15 or 20 minutes beforehand, and I, this is just going to be a fun conversation. So I’m looking forward to it. 

[00:02:26] Real Estate God: Yeah, me too. Really looking forward to it. 

[00:02:28] Patrick Donley: Cool. So I wanted to start off by asking about heroes. There’s a Warren Buffett quote where he talks about, tell me who your heroes are and I’ll tell you who you’re going to turn out to be.

[00:02:37] Patrick Donley: So I wanted to just jump right into talking about some of the heroes that you’ve had just growing up, maybe in college, post college stuff, people that have influenced and inspired you along the way, whether real estate related or not. 

[00:02:49] Real Estate God: Yeah, I think that’s a good one. I definitely had a ton of different ones.

[00:02:53] Real Estate God: And I think your kind of conception of what you want to do in life changes a lot as you get older. So I’d say my first hero is definitely my dad, just because incredible guy, like an incredible work ethic, just so personable, and really just so good at getting what he wants, which I think at the end of the day is what you want to do in life.

[00:03:10] Real Estate God: And we would have, I remember just one example, right? We were really young, outside of a frozen four. I forgot where we were, where the frozen four is being held, but we’re just walking down the street. And we’re just like, Oh, is that the frozen four? Let’s see if we can get in.

[00:03:21] Real Estate God: So we’re trying to like to haggle for tickets. There’s like none anywhere. My dad just goes up to this random guy, who looks like he’s, he knows what he’s doing, whatever. He talks to him for 30 seconds, the guy just hands him four tickets for free. And we’re just like, look, what’s going on here?

[00:03:34] Real Estate God: And he just never told us what he said to the guy. But, we ended up getting all the tickets for free and went in for free. And that’s just an example, like he always was able to do stuff like that. Where it was very much just showed his background, because he came from a not great background, where he had to have those street smarts, and then ended up working on Wall Street, so ended up having kind of both those combinations.

[00:03:52] Real Estate God: Which, most people don’t have, obviously, especially now, I think it’s insane, how bad people’s social skills are now. But, stuff like that really, I think, shaped me, understanding what you want to do, how to act, and all that. And I think as I got older, I morphed, because, initially, I really just wanted to work on Wall Street, right?

[00:04:09] Real Estate God: Basically in a job. And during my first internship, I ended up meeting the guy who’s now my mentor who basically was really good friends with the CEO of my firm. And he worked in the same office. And we ended up talking a ton because we’d just be there late. He was working late. I was always working late.

[00:04:23] Real Estate God: And it’d just be us in the office. We’d be talking a ton. And the more I talked, the more I was like, why would I work a job when I could just do what he’s doing? He’s making 10, 20 times more than when I was working a job. He’s doing the same work. It’s not different. He’s doing the same work. Yeah.

[00:04:37] Real Estate God: He’s a little smarter, but he’s not that much smarter. He’s not 20 times smarter. So it really started evolving and I was just like, why would I do this? You can just, there’s an easier path. And I think just being able to see that other people have done that path really helps. And obviously a lot of that is putting yourself in position to see it and all that.

[00:04:53] Real Estate God: But once you’re able to see it, it just becomes so obvious. You’re like, why would I do this? When I could just be making so much more and owning my own time and having more fun, honestly. 

[00:05:03] Patrick Donley: You had an interview that I listened to, I forget who it was with, but you had a comment about 401ks, and you had some interesting thoughts on that, which I really enjoyed hearing.

[00:05:12] Patrick Donley: Can you talk a little bit about that? Some of your thoughts on 401ks and how it’s not a bet on yourself? 

[00:05:18] Real Estate God: I think it’s inherently a bet against yourself, but I think the biggest thing with 401ks. And you’ll hear this from so many people. Look, I want to be worth 100, 000, 000 or 20, 000, 000, right?

[00:05:28] Real Estate God: How can you possibly rationalize caring about a 401k? When is your 401k going to be worth a million dollars, 2 million? So basically you’re going to spend all your time worrying about 1 percent of your eventual net worth. It just makes zero sense. And I think a lot of people just. They don’t get that those are two diametrically opposed ideas and they just go on with life like, oh I just keep contributing the 401k.

[00:05:47] Real Estate God: You’re not going to get anywhere by doing that, right? And it’s fine. If you want to just save some money, have that money for 65, whatever, right? That’s fine. But just be honest with yourself. You’re not trying to be worth a hundred million dollars, because if you were, you’d be doing it very differently.

[00:05:59] Real Estate God: And I think that’s one of the biggest things is that I think it engineers this mindset where you’re dishonest with yourself. And I think a lot of people are like that. And I’ll tweet about this a lot of the time to say look, if you’re not willing to do X, Y, and Z, you don’t really want it.

[00:06:12] Real Estate God: And someone would be like, Oh no, but I still want it. They don’t because you’d be doing it otherwise. And it’s just, it’s pretty simple. And I think that’s one of my main issues with the 401k is that, look, if you want to be as rich as you say you want to be, which is great, cool. I want to be that rich too.

[00:06:24] Real Estate God: The 401k is not going to matter and you have to be honest about that. 

[00:06:28] Patrick Donley: Yeah. So in your own life, and you’re coming out of college and we, I do want to get into that a little bit. Some of your early moves, career moves coming out of college. Did you take your own advice? Did you not contribute to a 401k specifically so you could save up capital to start getting involved in real estate deals?

[00:06:44] Real Estate God: I’ve never put a dollar into this day. I don’t even have one, but I didn’t even realize what I was doing at the time. Cause I think there’s a different mindset. When you’re in the mindset of being an entrepreneur, almost everything is better off being reinvested. Either one in yourself or two in a business when you’re starting out.

[00:07:00] Real Estate God: And I think a lot of people don’t get that either. With their first dollars, they always invest in the market. There’s an opportunity cost there, right? Like the first 50k you ever save, you have to scratch and claw for that, right? That’s not easy. And if you’re just going to put that in the market where you can’t use it to grow yourself or a business.

[00:07:15] Real Estate God: There’s a huge cost associated with that. Most people think, oh, I’m getting 8 percent a year. It’s no, you just missed out on the opportunity to start a business that can make you 10 million a year. It’s insane. And especially if you think about in the beginning whatever, 8 percent off 50K, you make four grand that year.

[00:07:28] Real Estate God: And what are you even doing? And obviously people just start yapping about like compound interest, blah, blah, blah. Sure. But that year you made four grand, right? And your opportunity costs in that 50k, if you’re any bit competent in yourself or a business, will be so much higher than that. So I think I didn’t really have that articulated at that point, but I knew I never wanted to put it somewhere where I couldn’t control it because I knew I’d.

[00:07:51] Real Estate God: I’d make more money doing it myself. 

[00:07:53] Patrick Donley: Charlie Munger’s got that quote about the first hundred thousand is a bitch, and I told you I had Dickie Bush on the podcast last week, and he said the same thing. His first advice for anybody is to save a hundred grand. Don’t even screw around with trying to figure out how to invest in 401ks and this, that, and the other.

[00:08:09] Patrick Donley: Save up a nest egg and invest in yourself. 

[00:08:12] Real Estate God: And a crazy thing too is, so the first 30 grand I ever made, I put it into a real estate deal. It was a calculated bet. It was basically, it’s hard to explain, but basically there was a 10 percent chance of making a million dollars off it, and a 90 percent chance I’d lose all the money.

[00:08:30] Real Estate God: The total was 50, I was 30, 000 a bit, but overall the expected value was positive, right? So that’s why I went through it, and it was, the reason it was able to do it was just because It was all public information based on cannabis integration into a state. So you could actually do the math on it. And I don’t think many people did the math on it, but anyway, ended up losing all the money.

[00:08:46] Real Estate God: And that was honestly, probably the most painful thing that’s ever happened to me. Cause it, it took me like just a year straight of just scrabbling crawling, whatever you want to call it to save it that 30 grand. And then it just went straight out the door. And I was like, wow, this sucks.

[00:08:58] Real Estate God: This is horrible. And that’s, I think that really taught me a lot just about. What I wanted to do with my money, how I wanted to invest it, risk profiles, everything like that. And I’ve been pretty public about the fact that I think losing money early on is the best thing that can happen to you.

[00:09:13] Real Estate God: I think I can probably argue for myself that I’ve probably learned that lesson too many times, but it’s an important lesson to learn. And once you do, you understand how you should, like, how you should be allocating your money. And at the end of the day, once you get to a certain level of wealth, income, all that, it’s very hard for the next marginal dollar of income to matter that much just because of the way it’s taxed.

[00:09:33] Real Estate God: So it all becomes how you manage your wealth, how you push it forward, and if you don’t learn those lessons early on, you’re going to lose all your money on the back end. So you’d way rather lose 30 grand than when you have a 10 million portfolio and you learn that lesson for the first time. I think all those things are actually really important, and that’s one of the huge things about not putting your money in the S& P 500 early on or 401k early on, because you don’t learn anything by doing that.

[00:09:55] Real Estate God: And everyone’s always oh, like you see the market go up and down. No you don’t. You’re going to leave your money in there regardless. So you’ve learned nothing by doing that. Meanwhile, I’ve lost 30 grand. but now I know exactly what to do next time. So at the end of the day, that money is nothing, right?

[00:10:08] Real Estate God: 30 grand is nothing. And once again, you go back to that mindset, right? You want to be worth a hundred million dollars. Why do you care about 30 grand? And what’s that going to do for you? You need to learn the lesson to multiply that or to be able to create larger amounts.

[00:10:18] Patrick Donley: I love these points. It’s so good.

[00:10:20] Patrick Donley: So last week, two different people recommended Die With Zero. I don’t know if you’re familiar with that book, Bill Perkins, but the guy, he worked on Wall Street. He was a trader and early in his career, he was doing exactly what you were talking about, like saving in a 401k, scratching and clawing, just trying to, and he was making nothing.

[00:10:36] Patrick Donley: He was like working on the floor of an exchange as a runner or something like that. So he’s just scrounging and trying to cut costs. saving a couple thousand bucks here and there. And he had a mentor and he said exactly what you said: what are you doing? Stop doing this. Like you’re going to, you’re potentially likely going to make a lot more money.

[00:10:53] Patrick Donley: Like what you’re doing right now has no bearing on where you’re going to be 20, 30, 40 years down the road. Yeah. Those are some really good points. I love your take on that. It’s fun to hear. 

[00:11:05] Real Estate God: The thing about money early on, is it just a tool? It’s a tool to learn, right? And once you have that experience, if you’re any bit good, At investing in yourself or about learning, eventually you’re gonna have a skillset that can make you a million dollars a year.

[00:11:16] Real Estate God: You just will. Whether you want to act on that skillset and actually go forward with starting that business. Or spending whatever 68 hours a week to do it is a different story, but you can easily get there. Everyone can get there, but you have to be in the trenches learning those lessons.

[00:11:31] Real Estate God: And I think a lot of people never, they never end up exercising that muscle, right? They basically work a W2 job and they look, I’m nothing against that, but you don’t make any decisions of consequence when there’s people above you, right? There’s always someone telling you, Hey, do this. Hey, do that. You’re never actually exercising that muscle of, Oh, I made a mistake.

[00:11:47] Real Estate God: This cost me, let me recalibrate because that never happens because someone else is already correcting your mistakes beforehand. At the same time, they don’t learn anything from the investing side because they just put it into 401k or their retirement account, whatever all those things are. Like me, I consider them all the same thing.

[00:12:01] Real Estate God: And I think it’s all fine. If you’re honest with yourself and you say, look, I want to have a comfortable life. And I want to retire with a few million dollars at 65. Sure. But if you want to actually make a ton of money, the only way to do that is one, starting a business, or two, being a really good investor.

[00:12:16] Real Estate God: Just mathematically, that’s the only way to do it. You have to learn early on that your mind is the most important thing there. It’s not the capital that is in your mind, because if you’re smart, you can multiply money really quickly. And if you’re smart, you can start a business. So it’s really all about that.

[00:12:28] Real Estate God: And the 30 grand you lose initially, the hundred grand you lose initially, all that it’s a drop in the bucket at the end of the day, it’s education. It is. It’s just, it’s education, right? And honestly, I would way rather, I know we were talking about college before we started recording, but if you told me I could spend 250 K on my own education versus 250 K on college, I didn’t think it’s close.

[00:12:46] Real Estate God: I think the only thing you learn in college is, yeah. The only thing it’s helpful for is one, the network, which I think is actually worth it. And two just really making lifelong friends and memories. But the rest of it if you told me, what would I pay for the actual college education I received?

[00:12:59] Real Estate God: It’s zero dollars. And you could tell no one values it either because all these classes are free. Harvard has that school online for free. No one takes it because it’s worthless. 

[00:13:07] Patrick Donley: It’s funny. I started to keep mentioning Dickie Bush, but he said the same thing. He went to Princeton, right? And he was a professional gamer, like Call of Duty, and ran tournaments and made money as a kid.

[00:13:20] Patrick Donley: And he’s I learned more playing 18 hours of video games than I ever did. At my Ivy League education in terms of how to run a business, how to talk to people, how to build relationships, all these things. His video games taught me more, which kind of, I’ve got kids that play video games, 12 or 14, they could play that long.

[00:13:38] Patrick Donley: And it was actually a good reframing for me because I viewed it as a total waste of time. 

[00:13:42] Real Estate God: I would almost go as far as to say. I had to unlearn all the bad habits I learned in college. I think it was actually highly detrimental from a professional standpoint. Obviously, look, I had a great time.

[00:13:52] Real Estate God: I made lifelong friends, whatever, right? Let’s ignore that part. From a professional development perspective, it probably took me two or three years to unlearn all the bad habits I learned in college, just because you don’t have to do anything. There’s no consequences. Nothing’s real. Like you go in there, you get like a C minus, nothing matters, right?

[00:14:06] Real Estate God: You just talk to the teacher, you wind about it for a bit. It goes up to a B plus, who cares, right? You go on to the next thing and it’s just like stuff like that. It just, as long as you knew people, it just stuff came in the door and you just, you never really had to do that much and there’s really.

[00:14:19] Real Estate God: Almost depending on where you went to school, it’s a contained environment. You can’t really make any mistakes, or you make a mistake, it gets like, it’s like a pillow fight. It goes up the ladder and nothing happens and it comes back down. So I think that’s just highly detrimental. I would honestly rank it.

[00:14:31] Real Estate God: College, I think it was detrimental to professional experience. I think my job, I probably learned. 100x what I learned in college. Maybe the first month, just insane. And then starting your business, I would say your first month of starting a business is more valuable than the entire W2 experienCe. 

[00:14:47] Patrick Donley: There’s so much listening to this. That is in college. And maybe you’re just looking back on your own experience and giving your younger self advice. What would you do, would you have done it totally differently? Would you say, would you have dropped out of college and just started something on your own?

[00:15:01] Real Estate God: So it’s a good question. Personally, I wouldn’t have just because I loved college so much. Like I just enjoyed those four years so much. I wouldn’t have given up on anything. And at that point I didn’t really care about money or anything. It was just like, you’re there to have fun.

[00:15:11] Real Estate God: But I think I’d have a different answer if I wasn’t able to leave so quickly, but I was, I just was right. I basically left to join the real estate private equity firm. I was there for a few years and I’ve always said this. I think real estate’s an incredibly simple business. I don’t think it takes that long to learn at all.

[00:15:25] Real Estate God: I think when people say that, they’re just completely lying to your face. And I haven’t. The actual results to back that up on the deals I’ve done personally. Basically, I was able to leave really quickly, so it wasn’t like I had to spend a lot of time there. It wasn’t like it was like this 20 year slog that a lot of people talk about.

[00:15:38] Real Estate God: So I wouldn’t really change much. I think I played it pretty much perfectly. At the same time I had a ton of failures there, even in college. Like I tried to start an ecommerce business. Completely failed. Me, and me and one of my good friends started this. It was like women’s health.

[00:15:50] Real Estate God: I don’t even know what the store was. Just a total joke. So we were just like, all right, why don’t we start running Facebook ads? And we didn’t know what we were doing. So we’re like, all right, we have a thousand bucks. That’ll probably go pretty far. I think we tapped out the budget within two days and we’re just like, all right, we’re broke.

[00:16:02] Real Estate God: I guess it’s over. And we just had no money left. So we had a few of those types of experiences too, which I think really helped later on because now I look at a ton of different businesses and just understand. The private equity side of it, not just the real estate side really helps you understand the risk reward of the real estate deals you’re doing and whether it makes sense or not, which I think a lot of people don’t have that on the real estate side because they’ve only ever done real estate, but I’ve had that experience across a few different businesses now, especially on the online side.

[00:16:26] Patrick Donley: It seems like you’re a little bit of a contrarian too. Your dad was on wall street, you went to an Ivy league school, studied econ, whatever. It seems like you would have gone straight to wall street yourself. But you didn’t take that path, so I wanted to hear a little bit about that, like going a little against the grain, because you definitely come across in your writing that you’ve got this contrarian bent, which I really appreciate.

[00:16:48] Real Estate God: Yeah, I’ve always been like that, very opinionated, always the one asking questions even in a CCD class, I’d be the one like, Did this really happen? And everyone’s like, all right, just shut this kid up in the back, but no, I would say what really happened was when everyone started doing their official recruiting, which was, I forgot if it’s probably sophomore year, it was like during the summer, I was enjoying myself.

[00:17:08] Real Estate God: I was like, I’m not getting in a suit. And talking to these people and like pretending I love Goldman Sachs, I’m pretending this guy isn’t like a total weirdo, right? So I don’t want to do that for my entire summer. So I was just like, I’m just not going to do it. So I just spent the entire summer having fun.

[00:17:19] Real Estate God: Everyone else was like stressing out over case studies or whatever those things are. And I basically did nothing. Then when I got back to school, I just took this internship at a local startup. And the guy was really accomplished. Actually a good guy to this day. One of them still invests in my deals and had a real estate guy startup in real estate.

[00:17:37] Real Estate God: No, it was actually a startup. It was, what was it basically like, like an entry level job platform that connected students. And employers, but he had started some other businesses beforehand. He was very wealthy already. And this is his second or third business, but he knew a lot and he was really helpful and he’s still, like I said, he invested in my deals to this day.

[00:17:55] Real Estate God: So we still keep in touch, but basically I was there doing that part time and I became pretty good friends with them. We were just drinking on Friday nights and he was just like, what do you want to do? And I don’t know. I’m going to do private equity. He’s like, all right. One of my best friends from business school runs a real estate private equity firm.

[00:18:08] Real Estate God: Want to interview. Sure. So I got to the interview. Literally didn’t know anything. Then, I got asked one question about real estate. I think it was about like what a cap rate is, like completely bungled it. And then ended up just making friends with the interviewer. Cause I just pointed out like, he was, he had a picture of him fishing on his desk and we just talked about fishing for 45 minutes.

[00:18:26] Real Estate God: And he was just like, look you don’t really know much, but you seem cool. Like you want to. We’ll give you the job. And I ended up getting that internship. Then basically, I grinded at their internship. That was probably the hardest I’ve worked in my life. I would say, basically 16, 18 hour days.

[00:18:40] Real Estate God: I wouldn’t get up from my desk. I just, I obviously wanted a return offer. So I didn’t go out at all. Just grinded for three months straight and then got the return offer. So that’s how I got in. It was a very atypical path. I never did recruiting. I never had to deal with the whole, I don’t know what to call it, like interviewing slob.

[00:18:54] Patrick Donley: So at what stage did the lightbulb for real estate come on? It didn’t sound like you had any real estate background in college or took any real estate courses or anything like that. When did the lightbulb hit that it was like, this is what I want to do. 

[00:19:07] Real Estate God: It didn’t really like it wasn’t one of those.

[00:19:08] Real Estate God: And to this day, I’m not that passionate about real estate. Like you told me, I was actually asking this question. I was at dinner with a few other really accomplished real estate guys. And. Everyone asked look, if you, if someone gave you a billion dollars, would you keep doing real estate? I was like, I wouldn’t touch it ever again in my life.

[00:19:23] Real Estate God: And a few of them were diehard guys. Look, we would be there the next morning. I was like, you guys are out of your minds. So I’m not, I’ve never been huge on it. I just, it’s a vehicle for making money. And I think it’s. It’s a very efficient vehicle for making money. It’s probably one of the easiest, just because of the fragmented nature, the tax treatment, pretty much everything, the leverage you can get, the risk reward of the deals.

[00:19:43] Real Estate God: I think it’s probably, I would argue it’s probably the best way in the country to actually make money, just given the way the U. S. is set up. So I think that’s really the main reason I’m in it. But it wasn’t like a light bulb came off and I was like, I need to be in real estate. It was just, look, I want to be in private equity.

[00:19:55] Real Estate God: This is probably the easiest backdoor in without having to do what everyone else did. Because at that point, all my friends who had better grades than me were more accomplished than me. They had to do two years of banking to get in and I basically skipped that entire thing. So I never went through the banking gauntlet.

[00:20:06] Real Estate God: I just skipped straight through and ended up in a really good spot, which I think was part luck, part skill. But that was the main appeal for me is it was like, look, I can shorten my career right now. I’ll be done and be at the associate level when these people are pretty much coming back in to do their first stint in PE.

[00:20:22] Patrick Donley: So when you worked a couple years doing PE, at what stage did you, and you mentioned the 30, 000 that you lost, but when did you do your first real estate deal? That was while you were working, right? 

[00:20:34] Real Estate God: My first deal that I actually did was a, it was probably like the first year. I would have to see if it was the first year or just after the first year I started working there.

[00:20:42] Real Estate God: I would need to check the timeline, but basically it was a 200K triplex. I once again had no money at the time, right? I basically scraped together 2, 500 bucks. And you had lost the 30 grand already, right? I had lost that 30 grand already. Yes, I’d lost that already. Or did I need to double check, but regardless, I had no money, whether I’d lost it or just didn’t have it at the time, I had no money and basically a 2, 500, so I knew I had to raise it all.

[00:21:08] Real Estate God: And look, I think a lot of people think it’s easy to do in the beginning. If you, even if you come from, I would say my background is a little bit better than most, but it’s really not like at the beginning, you’re just begging people for money. That’s all it is. And you’re not going off the deal.

[00:21:21] Real Estate God: You’re going off your reputation as a person. And I think that’s one of the biggest things people don’t get is they’re always like, Oh, like, how can I pitch this person? I don’t know. It’s your friends. Like, why do you not know how to pitch? Like, why do they not want to give you money?

[00:21:34] Real Estate God: Anyway, they’ve known you your entire life? So I’ve always been. So I think that’s one of the biggest red flags when I get that question. Someone’s Oh, no one will give me money. That is a really bad sign. That means no one in your life trusts you. And it doesn’t need to be a lot of money, right?

[00:21:47] Real Estate God: Like you just need to piece it together, right? We ended up having, I don’t even know how many investors in that deal. I had to bring in my business partner because. I couldn’t raise the whole 200k by myself, so it took a while, like we were like, begging and pleading with people, but there’s also people who wanted to give us money because they trusted us, because they’d known us their entire lives, or I’d known them through college or whatever yeah, I think people make that part a lot harder than it needs to be, because all that groundwork should be done by virtue of who you are as a person if you’re a trustworthy person, you’ve been trustworthy your entire life I have friends who easily right now, they’ve never done an investing role ever.

[00:22:18] Real Estate God: And if they said, Hey, can you shoot me 50 grand for this deal I’m doing? Say yes immediately. So I’ve always found that a huge red flag when people are like, Oh, I can’t find anyone. So that’s actually on you. That’s not anyone else. Yeah, that ‘s an issue, right? It’s a huge issue. It really is.

[00:22:33] Real Estate God: No one trusts you.

[00:22:34] Patrick Donley: Yeah. You had some really, you had a good tweet on having a W 2 and going out on your own and just some strong beginner moves that I wanted to talk about. Can you share a little bit about your thoughts on that and just how you handled it? Like when you ultimately went out on your own, talk about that process.

[00:22:50] Real Estate God: I think it’s a funny process because I think actually if you had, if I had run the numbers on what would happen, I never would have left. And I think a lot of people think the same way. You almost need to have that sense of naivete where, oh look, I can do it. We’ll make it work, blah, blah, blah.

[00:23:03] Real Estate God: But if you actually go through it it’s hard to do early on. So I think you just, you learn so much across the board. I think one of the biggest things you learn is just. How much time you waste in a W2 job. Almost everything is wasted. If you actually wrote down, even as a salesperson at a W2, which is probably the highest level of generating revenue for the company, how much time they spend on actual sales versus BS, it’s insane.

[00:23:24] Real Estate God: Right when you switch from that to, I can spend 100 percent of my time everyday making money. You realize making money is not that difficult. It’s really not. It just depends. What does become an issue is your time is so directly correlated to making money in the beginning that you feel really guilty when you’re not working because you’re like, look, I just missed out on whatever it is, a hundred grand on this deal or five grand on that.

[00:23:45] Real Estate God: It’s just all these things add up and you feel those like. Those pangs of guilt by not working, but overall, that’s one of the biggest things you learn is it’s not that hard, right? The fundamentals are actually really simple. You’re basically, if you’re selling a service, right? It’s basically, look, you have an offer.

[00:23:59] Real Estate God: You just need leads, right? Then you just need fulfillment. That’s the business, right? And it’s the same thing. Even on the real estate side, like it’s not that hard. You’re piecing together a deal, right? You need a deal. You need equity. You need debt. There it is, right? Like it is, a lot of this stuff is not difficult.

[00:24:13] Real Estate God: And over complicates the process, but. That’s one of the biggest things I learned almost immediately. Because I would say I was able to replace my income. Even when I was at my job, I was making a ton of money just on the online side, on the deals I was selling out of. And I was just like, why am I staying at this job?

[00:24:29] Real Estate God: It’s a total waste of time. I probably can make it, if I left today and replaced all this time I spent at the morning brew meeting, whatever it was, making money. I’d be in a 10 times better spot in a year. And I was, 

[00:24:42] Patrick Donley: I have the same experience. My first job out of college, I literally could have done the work in two or three hours a day, right?

[00:24:47] Patrick Donley: Realistically, to your point, it just frees up. If you leave, it just frees up this huge amount of time to just focus on whatever entrepreneurship, real estate. A bunch of other things. You’ve got some ideas. We were talking about Wall Street Playboys earlier, and I was a big fan of those guys in the blog.

[00:25:04] Patrick Donley: Talk to me a little bit about them. What was it about them that some of their ideas and thoughts and their writing that you enjoyed? 

[00:25:10] Real Estate God: I think I enjoy everything. I think they really don’t get the credit they deserve. And speaking to a lot of. Younger ish entrepreneurs. I know a lot of them just when you actually start talking to them yeah, I actually followed them too.

[00:25:20] Real Estate God: There’s a lot of that going on. So I think they nailed everything on the head. The biggest thing I think is really just their emphasis on basically starting a side business, scaling it up, and leaving your job. And the way they structure that in a way that actually the risk reward is better than anything you could ever do, right?

[00:25:37] Real Estate God: Cause you, you basically built it up while you’re at your job, which is what I ended up doing kind of on both ends. I was, I had the online side with my Twitter account and I had the real estate side that I did at the same time. And that’s, by the way, that’s another thing that I just can’t take seriously when people are like, Oh, I can’t do anything.

[00:25:52] Real Estate God: I’m like, I’m working 50 hours a week at my job. It looks like you can, right? You just don’t want to and that’s fine. But don’t pretend that you want to do it because when I was doing it, I was probably working 60 hours a week in my private equity job. I was buying deals that were doing really well.

[00:26:06] Real Estate God: And then I was running the online site too. And look, I’m not going to say it was easy, but it was doable, right? And everyone always acts like it’s this impossible thing just because their priorities are out of whack. So if you want to go to every single social event, yeah, it’s impossible. You’re right. If you want to actually be done by 30 or early 30s, you’re going to have to give some stuff up, right?

[00:26:25] Real Estate God: It’s not going to be fun. And I think a lot of people have this idea that they can do both paths, and you can. 

[00:26:31] Patrick Donley: They’ve got a book, I think it was called Efficiency, which was a really good one. I forgot the other one, too, which was also very good, that I think anybody should order, get, read, and implement.

[00:26:41] Real Estate God: They had that one, I think they had Triangle Investing, too. That’s it. Yeah. Triangle investing. That’s it. I honestly thought their blog, which is now defunct. I know we were talking about that earlier. It was better than all that stuff. Just their, a lot of it, their framework, how they approach things on the business side, what businesses to focus on.

[00:26:56] Real Estate God: I think that helps a lot early on, because a lot of that does save them. I know I talk about the trial and error period, but you also want to be smart about trial and error, right? You don’t want to be doing it a billion times. And it’s easier to be focused when you have those suggestions off the bat.

[00:27:07] Real Estate God: So I think a lot of that helped too with what to get into. I think one of the underrated things that they are extremely good at actually, and probably the best I’ve seen at is spotting long term trends. And I think that’s actually how they’ve made the majority of their money, is just being at the right place at the right time, which is really just like a macro investing thesis, but they take it to a micro level on what they choose to spend their time on.

[00:27:27] Real Estate God: And I think that’s very impressive for what they’ve been able to accomplish there. 

[00:27:30] Patrick Donley: So let’s go into that a little further. What are some of the macro trends that you’re seeing that you are interested in, intrigued by, want to focus on? 

[00:27:38] Real Estate God: So I would say. In general, from a very wide angle, that would be the most helpful for most people is I think having a W 2 job is just going to get more and more squeezed as we go forward, not even like a sales pitchy, like you need to get into real estate scenario in that look the labor pool is getting more and more global every single day.

[00:27:55] Real Estate God: I personally, I have a virtual assistant. She’s like a law degree in Europe. I pay her like 2, 000 a month. She’s better than us employees because I have us employees too. It’s coming. And I think a lot of people don’t realize that. I think they’re. Very good at what they do. They’re not, almost every employee is replaceable, and I think people win for a really rude awakening with that.

[00:28:13] Real Estate God: So what I always try to push people into from just a very wide macro perspective is look, you need to be developing a skill you can either use to run your own business or to invest. That’s it, right? Anything that’s W2 is eventually gonna get squeezed. I think even the high end jobs in the tech sector, a lot of those are gonna get absolutely hammered as time goes on.

[00:28:29] Real Estate God: I think one of the only ones that’s safe is strong sales skills. And if you can make other people money, you always have a job, but everything else I think is in really tough shape. And I think that’s only going to exacerbate going forward unless the U. S. kind of enacts some legislation to stop it.

[00:28:42] Real Estate God: But I just, at this point, I don’t know why you would hire an American employee when you could find someone way more qualified across the country for literally one tenth the cost. So I think that is probably the biggest macro trend that I see. And the other thing that’s actually a really big positive of that is as the world gets more and more financialized, and as there’s a bigger buyer pool for assets, Like the entire move is not to be basically an employee or not to be mostly buying the assets unless you’re really good at flipping it, but just start the business and sell it to them.

[00:29:10] Real Estate God: Or you have all these businesses now that would be unsellable 15 years ago that are now really sellable. And if you can get a business to a decent multiple, decent EBITDA, you sell it for a decent multiple. And it’s not that, it’s not that hard, right? I think about getting a job, like a service business, for example.

[00:29:25] Real Estate God: 300k in EBITDA is doable for almost everyone in the country over a five year time span, right? And you could argue what that would be sold for and depends on the business, but you assume it’s sold for around a million dollars, right? And that’s a better outcome than almost anyone would get anywhere else.

[00:29:38] Real Estate God: Not to mention if you’re actually able to do it right. You’re selling, you’ve got the EBIT up to a few million, you’re probably selling for a way wider multiple. And I think a lot of those things wouldn’t have been possible a long time ago. And I think that’s always odd when people complain about the current business multiples Oh, I can’t buy anything.

[00:29:52] Real Estate God: It’s okay, then just, obviously everyone’s overpaying for stuff. Create some crap, sell it to them and call it a day. Or like, why are you complaining? It’s a perfect opportunity. There are people who are willing to overpay, create something that they’ll overpay for. 

[00:30:03] Patrick Donley: What about real estate specifically?

[00:30:05] Patrick Donley: I know you’re agnostic in what you invest in, but I wanted to hear about it. Are there any trends that you see unfolding that whether it’s office or distressed office that might pique your interest later down the road? 

[00:30:17] Real Estate God: I think in general, the way to make money, I think there’s going to be two ways to make money in real estate going forward.

[00:30:21] Real Estate God: Ignoring the asset class angle, which I think is a little bit more difficult to parse through. But I think you’re in smaller fragmented markets and seeing one off opportunities that you can find a few of those a year. And I think that’s always going to be the case. There’s always going to be inefficiencies.

[00:30:36] Real Estate God: People are always going to need to sell for one reason or another. And that’s always going to be there. So that’s basically what I do. I don’t want to have a ton of AUM. I don’t like scaling. I don’t like managing a ton of employees. I just want to do really good deals, put a lot of my own money in, and just be in and out pretty quickly.

[00:30:48] Real Estate God: Like I just, I have no wish to have this huge organization that I have to deal with every second. The other angle is you go the AUM route, which is actually probably the better risk reward in all fairness, but you just raise a ton of capital. You basically market by deals that are okay. You use moderate leverage and you just make money off asset management fees.

[00:31:06] Real Estate God: And look, that’s what every big private equity firm is doing now. They all make a ton of money. Personally, I think it’s really boring, but it’s probably the best risk reward you can get out of any business in the world, honestly. If you say you lever a multifamily building 50%, like Fixed rate debt, that thing’s not going under unless you’re a moron.

[00:31:20] Real Estate God: So basically all you need to do is just keep that thing kicking. You just say, Hey look, we’re doing, our fund’s gonna be an evergreen fund, right? And we’re just gonna keep them there forever. And you just have asset management fees for the rest of your life. And I think that is on the high end, that’s what institutions are all doing now, because it’s very hard to find an edge in the institutional space with all the sophisticated actors.

[00:31:38] Real Estate God: But on the other side, you also have those kinds of fragmented markets on the low end. So I’ll call it the sub 20 million space, which I think will always be there. And I think those are really the two ways I would say to make money. I think there’s this kind of purgatory space where you raise like under a hundred mil.

[00:31:52] Real Estate God: You can’t really pay your employees well. Your AM fees aren’t that good. The opportunities are difficult because you’re trying to buy deals in the 50 million plus range. I think that’s like a dead space. And if you’re in there, you really want to scale up into the Make money on asset management fee space before anything else.

[00:32:07] Real Estate God: So that’s how I look at it from a macro sense. And I do think there’s gonna be a ton of opportunities and I’m seeing them right now too. ’cause I deal with people all the time, whether clients, friends, who are seeing these opportunities. And I’ve seen a few in the past two months that were actually very good as well.

[00:32:21] Real Estate God: So I do think the opportunities will be there.

[00:32:23] Patrick Donley: So let’s go into your thesis a little more. You focus on tertiary markets. It sounds like you really learn the market that you really better than anyone in the area and wait for a deal to come up that’s mispriced. Is that somewhat accurate to say?

[00:32:39] Real Estate God: Essentially, yeah. It’s a very simple method. And really the reason why it works is because when you’re in these types of markets. It doesn’t make sense for institutions to be there because they can’t get scale, right? There’s AUM fees that they really like, those asset management fees, they don’t come in, right?

[00:32:52] Real Estate God: Because there’s only 200 million worth of assets to buy in total. And obviously they’re not going to buy all of them. So that’s basically the idea that you’re in these markets that are fragmented. You know it better than anyone else. You basically pick the markets. The way I pick markets, I think, is incredibly unique.

[00:33:06] Real Estate God: Because I think most people look at it from a statistics perspective, right? They basically say, what’s the population growth? What is the economy, what’s the economic engine in the area? What’s the unemployment rate? What’s the crime rate? And look, I’m not going to say those things aren’t important, but that’s not how you make money in real estate, right?

[00:33:21] Real Estate God: Mathematically, how you make money in real estate is getting your stabilized yield above the market cap rate. It doesn’t, the stabilized yield doesn’t care what the crime rate is. Neither does the market cap rate. So I always find it funny how people have this like a third derivative and they’re like, Oh, like the crime rates doing this.

[00:33:33] Real Estate God: It’s true. But if I stabilize that at 20, do I care what the crime rate is? The answer’s obviously not. And I think a lot of people just don’t realize that they’re, the metrics they’re using are one step removed from how you actually make money. So the way I look at it is I look at markets, I canvas them when I’m first qualifying the market, right?

[00:33:49] Real Estate God: And I’m canvassing the markets and I’m just looking to see markets where I can regularly stabilize above the market cabaret. There’s that. As a market you can make money just mathematically that’s how you make money. It’s not possible to make money if your market cap rate is above your stabilized yield, just not right.

[00:34:02] Real Estate God: So that’s how I look at it. And obviously I look at the statistics later and I’ll filter through that. But I think everyone else really misses out because they go into it from the statistics perspective first. When that’s not how you make money. It’s just not. It’s a, it’s, it certainly plays a role, but it doesn’t directly lead to you making money.

[00:34:17] Real Estate God: You can have the best market in the world with population growth, everything like that, and still lose money immediately. 

[00:34:22] Patrick Donley: When you’re making a purchase, are you looking for stuff that you can do a value add on? 

[00:34:28] Real Estate God: The funny thing is ideally not, right? Ideally, you’re just buying at so much price.

[00:34:31] Real Estate God: You don’t have to do anything. That’s not always possible. But what I will say is usually what I’m looking for is there’s a few different types of adding value, right? In one sense, it’s actually executing renovations. And bringing it up to the renovated market rent. To me, that’s actually the worst way of doing it.

[00:34:47] Real Estate God: What I like to see is, I think of market rents in two capacities, right? You have the unrenovated market rent and the renovated market rent. And the unrenovated market rent is still a thing. And I think a lot of people skip over that because all they do is look at the renovated numbers and see what you can get on the top end.

[00:35:02] Real Estate God: But if your property is currently renting for 800, the unrenovated market rent is 1000. And the renovated is 1, 200 or whatever, you can put in 0 and get up there. So what I’m usually looking for is I want markets where I can actually not renovate and that are below the unrenovated market rent that requires zero work.

[00:35:21] Real Estate God: All you’re doing is changing the number on a lease and you’re 100 percent going to get there because you’re still the lowest number in the market. You’re still the lowest end. So I guess to answer your question. Yeah, we do look to add value, but in general, we’re trying to do as little as possible.

[00:35:36] Real Estate God: And in, for example, that deal we just sold, it was like 6 months ago. We only renovated 8 units and it was a 5x because the unrenovated market rent was so much higher. And we just didn’t have to do much from a renovation perspective. So it’s a matter of buying right? So this is the thing in real estate too, is that everyone always talks about operations, it doesn’t matter.

[00:35:57] Real Estate God: Like the entire, if you look at a stabilized yield formula, 90 percent of it is your purchase price. So you can try and flail around and figure out that last 10 percent as much as you want. It’s not going to matter, right? If you buy wrong, it’s over. There’s no point in trying to be like the operational genius.

[00:36:12] Real Estate God: There’s no point of being like, Oh, like this is what we do where the property managers, we do this and that. It’s like the deal is done. Like you just cut your losses and move on at that point. So it’s all about the acquisition. And by the same token, right? If you buy right, you could literally have a monkey operate the property.

[00:36:24] Real Estate God: It just doesn’t matter. And if you buy right and you’re going to stabilize high, it does not matter. It is nearly impossible to mess up. I’m sure someone can do it. So I won’t say it’s guaranteed, but it’s nearly impossible. 

[00:36:35] Patrick Donley: So what’s generally your exit strategy? How old, you’ve mentioned an evergreen portfolio, but I don’t think that’s what you’re doing.

[00:36:41] Patrick Donley: You’re generally selling these in what kind of timeframe? 

[00:36:45] Real Estate God: I’m generally targeting a three year timeframe. But if I can do it quicker, I do it quicker. Honestly, if ideally I’m selling everything just after a year, just so I don’t have to pay short term capital gains. But I’m trying to get into that as much as possible.

[00:36:57] Real Estate God: I know a lot of people don’t like doing that. They’re big on the tax advantages. To me, every single time in my life, I’ve made a decision based on taxes. I’ve ended up losing way more money on the back end. So I’m just, I’m very fine with paying the taxes. Not that I obviously would like to not do it, but it’s just what I’ve learned over time.

[00:37:12] Real Estate God: And that kind of allows you to be very Quick in and out with these things, which is another thing too, a lot of people don’t realize that they have this idea they’re gonna hold forever. And it’s like you have a lot of expenses that come up when you’re running a business, right? You have, especially when you’re running a real estate, private equity business, right?

[00:37:28] Real Estate God: So just to give an example, right? So you’re buying $5 million deals and you’re doing three of them a year, right? And you’re putting in, let’s say the equity is just to make the numbers clean. You’re putting in 1.5 mil of equity into those deals. You’re 10, 20% of the equity. Usually I’m 30 to 40% of the equity with my business partner.

[00:37:45] Real Estate God: Let’s say you’re 20 percent of the equity, right? That’s 300k you’re putting into every deal, right? You buy three deals a year, that’s 900 grand. It takes two more years to actually get the money out of that first deal. So by the time you’re done, you’re into it for 2. 7 mil, just on what you’re investing into the deals, not to mention you’re paying taxes, your life expenses.

[00:38:05] Real Estate God: everything right so I think a lot of people out of this idea will just hold forever it’s like you need money in the door actually in the beginning you need a lot of money in the door otherwise it’s gonna be really difficult you’d be like living on ramen, which I don’t really like doing. So I’d rather pay the taxes upfront, have a lot of fun, and spend the money.

[00:38:20] Real Estate God: And whatever, you make it up on the back end. 

[00:38:23] Patrick Donley: There’s a lot of directions I could go right now. You had mentioned triangle investing. When you do liquidate and you exit a deal, do you consider a triangle investing approach for yourself? Are you only focused on plowing it back into more real estate?

[00:38:37] Patrick Donley: Or do you have other aspects that you’re investing in? 

[00:38:39] Real Estate God: Yeah, it’s a good question. I look at a lot of stuff now. I think in general, basically the, if you’re really good at what you do. And on the real estate side, you don’t even actually need to be that good at what you do, just because you’re our general partner.

[00:38:53] Real Estate God: And if you think about the fees you get on a standard deal, if you’re any bit good, you’re making a three to five X on your money, right? Any bit good. And just to run you through the math on that, because I know some people are like, Oh, you’re lying. Like it’s honestly simple math. The, So you buy a deal for a million dollars, right?

[00:39:08] Real Estate God: 750k debt, 250k equity. You’re putting in 10 percent of the equity as the sponsor, right? So you’re putting in 25 grand. You charge a 1 percent acquisition fee, which is honestly probably low for that. You could probably do 2%, but we’ll say it’s 1%, right? That’s off the bat, right? That’s 10 grand in your pocket.

[00:39:23] Real Estate God: All right, so you already made, what is that, a percent of your money back, right? Then you have asset management fees of 2 percent of the equity, right? For five years, let’s call it, just call it a five year hold. All right, so 250k, that’s what, five grand a year? So that’s another 25k. So at this point, you’ve already taken 35k back out.

[00:39:41] Real Estate God: You get your other 25k back out, right? Because that’s your principal. You’re already over 2x your money, not even counting profit in the deal. You get any sort of profit in the deal. It’s a three X easily. And that’s, that goes as you scale up in, in volume two, obviously the math is the same. So when people ask me, they’re like, Hey do you put, you’re putting your money in the market?

[00:39:58] Real Estate God: It’s like, why would I do that? I can’t outperform a three X in the market. Like it’s insane. It would be, it would, you’d have to be like an insane person to actually put your money in the market instead of just making a three X on a very mediocre real estate deal. So what starts to happen is your opportunity cost becomes so high that it’s really hard to put money anywhere else aside from another business.

[00:40:18] Real Estate God: So I look at a lot of other businesses and I’m looking at actually starting and buying a few right now. But that’s the only thing that could possibly hit the same return hurdle. And even then, you really have to think about it because the risk you’re taking on a multi family deal that you know really is really low.

[00:40:31] Real Estate God: So you basically have a, I’m not going to call it a risk free, but a very low risk 3 to 5x. And if you outperform, it’s way, way harder than that. Versus going into a field you don’t know well, stuff you may not be able to control. It’s why would I do it, 

[00:40:45] Patrick Donley: yeah, so you’re looking at a couple businesses right now.

[00:40:48] Patrick Donley: Are they service based businesses? What are they mismanaging? What are you looking for? What’s your kind of buy box? You’re interested in

[00:40:55] Real Estate God: a lot of service based stuff. Really? Actually, there’s 1 thing I will go into. I think what a lot of people I’ve actually didn’t know in the beginning when I started running businesses is.

[00:41:05] Real Estate God: Just how much of it is based on revenue, right? Obviously you think there’s a lot of it is based on how you run it, your fulfillment, your operations, everything like that. And meanwhile, like if you have a good sales team, you’re going to be the richest guy in the world. It doesn’t matter what you’re selling, right?

[00:41:18] Real Estate God: If you knew how to create a sales team, you could be selling TVs, you’d be selling jacuzzis, you could be selling real estate, private equity deals. It does not matter. So that’s the entire thing. And that’s how people get really rich if they create great sales teams. That’s how people do it in business.

[00:41:31] Real Estate God: And I think that’s one of the things that really just started hitting home to me. in the last few years. So it’s really about, I’d say my focus now is all on the side of generating that revenue and figuring out whether it’s one, you’re bringing the leads in the door yourself, or two, you’re buying leads and you’re able to convert them in a way that makes sense at scale.

[00:41:48] Real Estate God: And those are really the two things. And once you crack that, say you crack being able to buy leads for your business, right? And that could be call center leads. It could be email leads. It could be whatever, right? It doesn’t matter. Once you’re able to crack that and you just know you’re Basically your return on the cost of every single new customer, it’s done, right?

[00:42:06] Real Estate God: Like you could be selling anything. And I think that’s one of the hardest things to crack. I’m not going to say it’s an easy process, but once you do, that’s how people become really rich, right? That’s it. You need to find a business where you can either generate a lot of leads where you can buy a lot of leads.

[00:42:18] Real Estate God: And you just scale it. So that’s what I’ve been looking at most recently. 

[00:42:22] Patrick Donley: Your background really was as an analyst, but you evidently, you’ve obviously got really strong sales skills as well. Where did you develop those? 

[00:42:31] Real Estate God: I have no idea what I think I just learned over time. I think a lot of that too is I did a lot of pitches as an analyst.

[00:42:38] Real Estate God: And I think you realize how you just, you mess up so many times with that. And even like when I was pitching people, my first real estate deals, my first pitches were horrible. And I’ll even get that now. Like when I’m pitching someone on a new deal, I’ll think about it afterward. I’m just like, what am I doing?

[00:42:52] Real Estate God: They’re like, why did I pitch it like this? And it usually takes a few iterations to be like, okay here we go. This is actually the right way to do it. But I do think that loop becomes quicker and quicker every time. And once you understand the process, what you’re selling, your demeanor, because a lot of it is just, it’s just the confidence level.

[00:43:07] Real Estate God: And then a lot of it too, is once you get to a certain point. Especially this happens on the real estate side a lot now. We’ve done so well for people on deals that you don’t really need to sell much. If anything, a lot of the time you’re just talking about the risks, so people don’t hate you later on if it goes bad.

[00:43:20] Real Estate God: Because they think every deal is going to be like a 5x again. You’re like pumping the brakes, right? And obviously you think you’re going to do well, but you just want to set expectations. So I think a lot of it turns over to that. What I think has been humbling is I’ve actually taken, and on the online side, my, basically my coaching business and all of that.

[00:43:38] Real Estate God: I’ve tried doing a lot of the sales calls and I think it’s humbling when you realize you’re not as good as the sales people at that. And it’s one of the only things that you can directly track the metrics of. And I remember I was just looking after one month. I was like, all right let me check my metrics.

[00:43:51] Real Estate God: It was just horrible, like just total crap metrics. And I was like, all right, like literally no one to blame but myself, and in a really good way too, it allows you to delegate then. Cause you’re like, look, it’s not even like I’m better than them. Like I’m going to give it to someone who’s better than me.

[00:44:05] Real Estate God: That’s fine. I’m just going to let them do it. I think stuff like that was pretty cool too. Cause I’ve always been like, Oh yeah, I could do it. Like I’m going to be really good at it and I’m good at it. I’m just not as good as the people who are great at it. So you might as well just have the people who are great at it.

[00:44:15] Real Estate God: Do it. 

[00:44:17] Patrick Donley: Yeah. Let’s get into that further. Your whole Twitter persona, real estate guy and creating content and writing. I’ve been, like I said, a really big fan of your stuff. There’s several that I like. There’s creating your own yacht. Which I want to talk about. There’s engineering luck and creating your environment.

[00:44:32] Patrick Donley: But I want to first touch on Twitter. Like when did you realize what the power of Twitter and what it could do for your career? 

[00:44:40] Real Estate God: That was a while ago. I think I got on four or five years ago. I don’t know the exact date, but I think that honestly might’ve been from following Wall Street Playboy’s Twitter account.

[00:44:49] Real Estate God: And then going on from there, I don’t know if I would credit them with the whole, like everything else, because I think I did a lot of the rest that organically, but I think they were the first reasons why I went on there because I’ve never been a social media guy. I have zero personal social media.

[00:45:00] Real Estate God: I just think the whole thing is so embarrassing, but I think once you learn what you’re doing and you understand distribution, this is what I was talking about before with the sales cycle, right? And understanding how to get leads, it’s one of the most effective ways in the world to get leads.

[00:45:13] Real Estate God: And if you look at the people who really crack it, and this guy, Andrew Tate, I don’t know if you know him, he obviously gets a ton of hate. He is easily one of the best business people we’ve seen in the last 10 years. What he’s done on the organic side of marketing is just, I think it’s unparalleled.

[00:45:30] Real Estate God: And regardless of what he’s selling, he could be selling whatever. But the way he’s been able to do it, I think, is insane. And when you look at people like that, they’ve been able to scale their leads to such an extent that it’s the business that is insane. The mode’s insane. Everything’s insane.

[00:45:45] Real Estate God: It just, it becomes such a crazy good business. So I think that’s one of the things you learn pretty quickly too. It’s like, when you have this distribution channel, you can use it for whatever you want. And whether that’s, for example, like I’ll tweet, I’ll be like, Hey, look, I’m looking for deals, send it over.

[00:45:57] Real Estate God: Or, Hey, I’m trying to get clients for my coaching business or whatever it is. Or even half the time, I’m just like, Hey, look, like I have a bad insurance quote, can someone help me out? Just basic stuff, right? Or I don’t know this market well, can someone help? Or I’m going here. Does anyone know someone who knows that?

[00:46:11] Real Estate God: Just the network you get in the distribution you get, it allows you to do so many things. And I think that’s really me.

[00:46:19] Patrick Donley: Let’s get into some of the articles that you’ve posted on Twitter. Talk to me about creating your own yacht. You mentioned Aristotle Onassis. Can you talk about that story a little? 

[00:46:29] Real Estate God: Yeah, that honestly that happened to me. I was reading his autobiography or not, maybe not autobiography, but his biography.

[00:46:34] Real Estate God: And just the whole concept of how he ran business was so insane to me when you compare it to how people run it now, and basically everything he did was just bringing people to him, right? He basically ran the business from the yacht. Just the idea of that every time you stepped onto the yacht, you’re basically like completely seeding, like any sort of like position you have over to him, right?

[00:46:54] Real Estate God: You’re just like, you’re totally in his territory. Everything’s on his terms. And I think the way he was able to do that was so brilliant. I think it works so well too, because he was in the shipping business. So it paired really well with that. But basically that entire concept is like, look, you’re bringing people to you.

[00:47:08] Real Estate God: And once you do that, a lot of things start happening simultaneously, but you don’t have those kinds of boring interactions or low level interactions that most people have where it’s like, Hey, who are you? Whatever. Where’d you go to school? What do you do now? What do you do? That doesn’t happen, right?

[00:47:23] Real Estate God: Cause everyone knows who you are. Everyone’s already impressed by you and everyone wants to meet you. And it doesn’t mean you have to do it in a gaudy way. I think he was definitely a bit of a showman. I think there are a ton of different ways, and I talked about that in the article, how you can do it in a more effective way that’s a value add for everyone.

[00:47:37] Real Estate God: But basically the concept is like, look, instead of meeting them as a Joe Schmoe, you meet them as someone, right? And you meet them on your own terms because they’re coming to you. And you basically engineer situations. 

[00:47:47] Patrick Donley: I think you may have mentioned this, the example you gave Moses Kagan comes to mind and creates reconvene.

[00:47:53] Patrick Donley: It’s a perfect example of he’s the guy, and people are coming not only for him, but largely, he’s the guy that’s in charge of the thing. And it’s a great benefit. 

[00:48:02] Real Estate God: Exactly. You just and it doesn’t even need to be that extreme. Maybe you’re just. In an extremely low level example, maybe you’re just holding a Super Bowl party every year, right?

[00:48:10] Real Estate God: But just as long as it’s on your own terms, people want to meet you, engineer the event in a way that is tasteful, you end up getting a lot of meeting a lot of people and generating a network that you wouldn’t normally have generated. And I think you obviously can do it in a way better way than the Super Bowl party.

[00:48:23] Real Estate God: I think it’s a low level way, but even something like a social media account, just the amount of inbound you get from running something that has a follower base. It’s really pretty insane. And the way I look at it is you want to engineer as many situations as possible where it’s on your own terms. And I think almost no one does that in life.

[00:48:40] Patrick Donley: I had Sieva Kaczynski on the show a couple weeks ago, and he met Sam Parr, had a book club when he was like, nobody knew who Sam Parr was. And he just started a book club and Ziva Kaczynski showed up at his book club, met him. Tim Ferriss shows up later down the road, it’s just and Sam was the guy leading the book club.

[00:48:59] Patrick Donley: Anybody can do that. But not everybody takes the time to organize it and do it. The benefits are huge. And like you said, it could be anything like. It could be a simple Super Bowl party. 

[00:49:11] Real Estate God: It really could be anything. The whole thing is you’re bringing people together who wouldn’t have been there, and you’re bringing them together on your own terms.

[00:49:16] Real Estate God: And that’s really the crux of it. Obviously, there’s higher levels to it. Like I said, Reconvene is probably on the higher end. I think a social media account is probably on the higher end, just because the scale you can reach is actually infinite, essentially. But yeah, anything you could do, any situation you can engineer like that, it helps.

[00:49:31] Patrick Donley: Let’s get into a little bit about the Real Estate Guide University Acquisitions Bootcamp. Talk to me a little bit about that and what you’ve been up to lately with it. 

[00:49:40] Real Estate God: Yeah. So Acquisitions Bootcamp is basically, to take a step back on how I created the program. I think the way a lot of investing is taught right now is completely wrong, right?

[00:49:49] Real Estate God: Basically, you get handed a book of what Warren Buffett did 50 years ago and you say, here’s how to invest. Which, I don’t think makes sense for a lot of reasons, but mainly because every person’s different, right? Every person’s looking for, they have a different risk profile, they have a different skill set, they have a different, they have different goals, right?

[00:50:07] Real Estate God: So all those things mean that what I would tell someone to do who’s 65 is not the same thing I’d tell someone to do who’s 25. By the same token, someone who has a 10% risk tolerance, I wouldn’t tell them to do the same thing as someone who has a 5% risk tolerance. But in the conventional sense, they’re all taught the same way.

[00:50:22] Real Estate God: Like when you go to an MBA class, no one’s taught differently based on the risk profile, which to me makes no sense. But that’s how I created the program. And basically what the program is, it’s 8 weeks. You’re working one on one with either me or my business partner. We don’t like to farm it out to anyone at all.

[00:50:36] Real Estate God: And the first week is all about understanding who you are and creating a business strategy that will work for you specifically in real estate. So week one we understand all those parameters, right? Your risk profile, your skill set, your goals, everything like that. And we basically create a personalized strategy for you that makes sense for you to best make money in real estate moving forward.

[00:50:55] Real Estate God: And I think no one’s ever really done something like that before to some degree, I think, because it’s hard. But in reality, once you get the process down. I don’t think it’s that hard. And I think it also ends up helping a ton because you end up, I’ve dealt with so many beginners at this point and people, even non beginners who are trying to switch over from certain other asset classes or switch from single family to multifamily, whatever it is.

[00:51:14] Real Estate God: And the biggest mistake they make is they spend two years not knowing what to do because they don’t have a plan. So I always think the first thing you do is create a plan. Second thing is on the underwriting side. So that’s week two. Week two is all about underwriting. It’s about underwriting the right way.

[00:51:27] Real Estate God: I think a lot of people focus on 30 different metrics. That’s just not what I do, right? Basically, I’m looking at two things. One is On your in place income, we’re looking at the DSCR, just to make sure you can source bank debt. On the stabilized income, we’re looking at basically your stabilized yield above the market cap rate.

[00:51:47] Real Estate God: That’s, you really have to simplify it. Obviously, we get into depth with full models and everything like that once we get into the program and everything, but that’s one of the biggest things I’ve seen. And based on what I’ve, how many clients I’ve dealt with so far, I would say less than 5 percent of people, even people who have real estate experience have underwritten directly.

[00:52:04] Real Estate God: Everyone always has some big mistake in there, which is just, it just goes to show, the complexity of which is taught right now for just no reason. Week three is really all about picking a market, right? So understanding how to pick a market the way I explained early in the call, where we’re not just running around, like looking at statistics for no reason.

[00:52:19] Real Estate God: We’re trying to find places where you can actually make money with a stabilized yield above the market cap rate, and that day one, you’re walking into it. Making money week four. It’s just understanding the closing process. And basically what that is due diligence checklist, lender checklist, closing timeline, everything like that to really make you, and really get you to the point where you can do it yourself.

[00:52:37] Real Estate God: ’cause that’s the point of the entire thing. And then weeks five through eight are all just out in the market underwriting deals and trying to find a deal. And that’s the goal of the program is to get you a deal. So that’s really how it works. Basically that mechanically there’s content released every week for the first four weeks, and you basically complete the assignments.

[00:52:52] Real Estate God: It doesn’t take long. It’s around probably 15 minutes a day. And then weeks five through eight is really all on the sourcing side, underwriting deals. And we’re trying to get a deal under contract. That’s the program. It’s done great so far. I actually really enjoy doing it too. And I’m just excited to keep doing it.

[00:53:05] Patrick Donley: That’s awesome. I’ve had several of my early guests on. I’ve mentioned Casey Miracle. There’s several others that had done so. You’re early, early on, it was called what the, it was like real estate God university, or you had a community, right? And they said the value of it was just immense, that they, and this is not to blow smoke or anything like that, but truly they said, it’s better than anything else out there.

[00:53:26] Patrick Donley: Better than a university degree that takes four years in real estate, whatever. This is compressed time. It’s so useful and actionable and all of that. Pretty cool, like what you’ve created. 

[00:53:36] Real Estate God: I appreciate that. It’s pretty funny to say that I was actually, one of my friends is in business school right now and they had a case, it was actually a Harvard MBA case study that they were just doing.

[00:53:44] Real Estate God: And he was like, Hey, you might help me out with this. And it was one of the dumbest things I’ve ever seen in my life. So I don’t know what they’re doing in college right now, but it just seems like it’s just so useless. And I know from the people I’ve talked to who have gotten their master’s in real estate and stuff like that, all of them have said it, It doesn’t teach them anything, like they were just like, it was like a waste of time aside from the networking.

[00:54:04] Real Estate God: So I do think it’s pretty cool to be able to deliver what I think is a superior product for a significantly lower price across the board. And do it in eight weeks or whatever. Exactly. Yeah. You try to compress the entire timeline from two years to eight weeks. 

[00:54:16] Patrick Donley: And the community is huge. I imagine everybody’s talking, sharing what they’re up to.

[00:54:21] Patrick Donley: And so many people talk about it. The importance of having a mastermind and community, like the growth, the exponential growth that takes place when you put yourself in those situations is massive compared to just you on your own, trying to do it alone. 

[00:54:33] Real Estate God: A hundred percent. I think that’s one of the biggest things too, is once you actually want to start making money, it’s being around people who that’s what they do is they make money, right?

[00:54:41] Real Estate God: Because most people don’t make money, right? That’s not what they do. They don’t spend time thinking about it. They don’t spend time doing it. But if you’re around people, that’s what, that’s all they do. And one of them, I’ve always said too, it’s If you lock yourself in a room for 16 hours a day for 365 days a year, you’re going to make a lot of money, right?

[00:54:56] Real Estate God: The hard part isn’t actually making the money. The hard part is finding, getting the ability to lock yourself in a room for that long. So I think people really complicate what’s difficult and what isn’t there, but if you spend all your time making money, you’re going to make money. It’s you just will. And I think that’s the same concept is once you start dealing with the people who make money, they have that same.

[00:55:14] Real Estate God: mentality, it really helps. 

[00:55:17] Patrick Donley: Yeah. You’ve got so much going on. You’ve got the acquisitions bootcamp, you’re working one on one with people, you’ve got your own deals going on, talk to me about just the habits in your daily schedule. How do you prevent work from bleeding over? Because you could work 24 hours a day, right?

[00:55:30] Patrick Donley: I’m in the same situation. And I’m struggling with this actually, like how do you structure your time and your life? 

[00:55:36] Real Estate God: So you’re not working all the time. I don’t think I’m the guy to talk to for this. I think okay, I think I’m pretty much out of my mind with this stuff, but I’m pretty much always working.

[00:55:44] Real Estate God: I don’t know if I’ve taken that many days off. I’m very bad. I would say the whole work life balance thing. And usually what makes me, I think uniquely bad at it is I’m very prone to like sprints. So like I’ll regularly go through a period where I’m just, I’m literally doing nothing but working and then I’ll go through another period where I just don’t touch anything for a while and just I’m doing whatever and then you just have to switch back and forth to which I think drives my business partner someone insane sometimes, but I don’t think I’m the guy to ask for this.

[00:56:09] Real Estate God: I don’t have a schedule. I’m not really good at that stuff. I’m very much like a ride the wave type of guy, which I think helps me a lot in a lot of ways. I think it’s really useful when you’re in a business deal. where it is sprints, right? Basically, when you’re closing a deal, it is all about sprinting.

[00:56:23] Real Estate God: But I think in a lot of ways, it probably hurts me on the operational side of a lot of things, just setting up systems and stuff like that, I think is definitely not my strong suit, which I’m trying to be better at. But, and I think that’s one of the things as you try and scale operations are really important, right?

[00:56:36] Real Estate God: Just being able to set up those systems, like I was saying, and really on the sales side, it’s like, how can we get leaves in the door? How can we convert those leads? And that’s every single business. It’s really all you’re doing, all you need to figure out. And then you have the fulfillment side, but fulfillment’s almost never the hardest part of the business.

[00:56:50] Real Estate God: And I think a lot of people are always like, Oh, like when you buy the deal, like the work starts, no, it doesn’t. Like the work starts, the work is done. If you bought a great deal, like that is done at acquisition. The hardest part of the deal was buying something for 2 million. That was worth 5 million.

[00:57:03] Real Estate God: That’s by far the hardest part after that. Like I’m happy to work on hammering nails, but that’s not difficult. That’s going to get done. So that’s how I look at it. And I think it’s definitely a bit of a difference, a change in mindset when you move over to that.

[00:57:19] Patrick Donley: So what’s the end game? Do you have an X number? Once you hit X, I’m out, I’m done. I’m going to go surfing or whatever. Or do you like the game? Do you see yourself continuing to contribute to this community you’ve got going and doing deals and buying businesses? 

[00:57:34] Real Estate God: I don’t think I’ll ever stop.

[00:57:35] Real Estate God: I think what I do will probably change a bit over time. I don’t think I’ll ever stop buying real estate. I think it’s one, I think I’m very good at it. And two, I think it’s almost impossible to replace just everything I’ve said before with the returns I get, the risk reward, the tax benefits, all of that.

[00:57:49] Real Estate God: But I think in general, like there are, I’ll probably end up switching through a lot of things as time goes on, just because I get bored, just whatever I’m doing. And I think I’ll probably like what I do. What’s appealing to me is just being able to, especially these deals that I sell out of pretty quickly.

[00:58:03] Real Estate God: You can choose to like, change direction at that point. Whereas if you build a really large organization, you can’t really change direction. Like you’re on the Titanic, right? It’s going to take forever to turn that. And I think a lot of people, I’ve talked to a lot of people who run private equity firms of a kind of medium scale.

[00:58:17] Real Estate God: And they feel a lot of them feel trapped because, You can’t really get off the ship, you can’t really turn the ship, and you’re just like, stuck making money that you like, you really wish there was a little more, but you can’t do much about. So I’d like to avoid that. But yeah, basically how I look at it is that there’s a few other things I’d like to do.

[00:58:30] Real Estate God: I’d like to run some physical businesses. I think I’d be good at that. I also really, this, the only thing I’d actually want to be an employee for is I would consider copywriting. I think I’d be really good at long form copywriting. And I’d like to do that for one of the big affiliates one day, just in a pure project role where they’re like, Hey, look, you have two weeks to create a script we’ll handle. I don’t want to deal with any of you. The media buying or anything like that. I’ll have them do it. Just be like, look, like just create it and we’ll run it. And I think that’d be really cool to do too. 

[00:58:57] Patrick Donley: That would be cool. Have you studied a lot of copyrighting?

[00:59:01] Real Estate God: No, but I think the way I write is essentially copywriting. And when I’ve written copy for a lot of my own products. I’ve actually found that I was better at it than the copywriters I hired, so it’s something I enjoy doing. I think also if I spend some time actually studying it, like you just gave me two weeks and like every sales letter, I think I could do a really good job of creating a killer sales letter for a product.

[00:59:21] Real Estate God: So it’s something I’m not going to say I’m going to do right now, but I would like to just spend a month doing that probably at some point.

[00:59:28] Patrick Donley: I have the same kind of thought process. I’m listening to David Senra’s Founders Podcast. I don’t know if you’re familiar with that one. It’s really good.

[00:59:35] Patrick Donley: He just reads biographies and does basically his key takeaways. And I listened to the one on David Ogilvie, the Ogilvy and Mather guy and Confessions of an Adman. Really good and inspiring. And, His writing was so good. And it’s, I don’t know, I love to write and read and the two go hand in hand for me, but we’ll see that’s really cool.

[00:59:54] Patrick Donley: Is there anything we didn’t get a chance to talk about that you wanted to touch on?

[00:59:58] Real Estate God: I honestly like the affiliate marketing side, I think I would really like it, I think you would, it gets a little touchy with just. And you’re always in a gray area. From what I understand, I have a lot of friends in the affiliate space, but I think that would be really fun.

[01:00:10] Real Estate God: I think copywriting will be really fun. I also think doing a true type service business would be really fun, which I’m looking at doing that right now as well. So just across the board, but in general, like if you gave me the choice, I would stay in real estate over all those, I just think real estate is just like I said, it just, once you get it and you understand it, it’s just so simple and you’re really not taking that much risk.

[01:00:30] Real Estate God: You get, your return you’re getting is really unparalleled and the tax advantages are unparalleled. So it’s almost impossible to give up that income stream just because it is so good. And even, like I said, like I’m not overly passionate about any of these things. Like I can, I could go between all of them, but I just think the risk reward there and the money you make is just unparalleled.

[01:00:47] Patrick Donley: And what’s the alternative? Like you said, the it’s not going to be in the stock market, you’re not 

[01:00:51] Real Estate God: Every time someone gives me an alternative I run the numbers. I’m like, this makes no sense. Yeah, I don’t know. I don’t know why we’re even discussing this and I’ll get it all someone to be like, Hey have you thought about pumping some of this money into like X, Y, and Z stock?

[01:01:02] Real Estate God: Like, why? So I can have a management team. I don’t even know what they’re doing. I can’t control any of it. And are they going to 3x my money? Almost certainly not. And even if they do, is the risk reward worth that versus me controlling it and 3x even close. Are you a Bitcoin guy at all?

[01:01:17] Real Estate God: I used to own a fair amount of Bitcoin, Ethereum, mostly Ethereum. Had some run-ins that we could probably get into, but I lost a fair amount and made a fair amount in there to keep it simple. Currently, so I’ve sworn that off for a bit just because basically what I realized is, look, you can make a lot of money in those spaces and I think those spaces will continue to grow.

[01:01:37] Real Estate God: But when I control my own money, I tend to do extremely well when I put it in the hands of. Whatever you want to call Bitcoin and Ethereum, there’s a lot more factors at play. So to me, it’s just look, I could probably make some fast money in that, or I could just keep doing what I’m doing.

[01:01:51] Real Estate God: And if I keep doing what I’m doing, I’m going to make a lot of money, right? There’s just, there’s no doubt about it, just based on the numbers. So why take the risk, right? Why go into that space when you have a sure thing? 

[01:02:00] Patrick Donley: My dad had the same advice. He’s a real estate guy. And he’s You make money in your own business that you know well, and you lose it when you go outside of your circle of competence and try to make it somewhere else.

[01:02:11] Patrick Donley: And I kind of joke he’s invested in the stock market and he’ll get emotional and sell it at exactly the wrong time. I’m like, just do exactly the opposite of what my dad does. And you’re going to do pretty well, but he’s done well in real estate, but nowhere else. 

[01:02:23] Real Estate God: And the thing with real estate too is obviously it’s harder to panic sell because of this, just because it’s harder to transact in, but it’s also harder to panic sell because the value is so easy to calculate for yourself.

[01:02:35] Real Estate God: Like when you have, let’s just say, all right, cap rates go up a hundred basis points, but you still have the same 500k coming to you every month or every year, whatever you want to call it. What do you care about? You’re just going to keep taking the money. It’s not like a stock where, yeah, obviously it’s operating off fundamentals and there’s cash flow there, but it’s not as tangible to you, right?

[01:02:51] Real Estate God: Especially if it’s a non dividend paying stock. It’s not as tangible. Like you, you don’t really know how the value is being computed as much. You don’t see the cashflow coming in. It’s not as much of a real thing. And I think that’s where people get tripped up. But like whenever I have a good real estate asset, the market turns, I never care.

[01:03:05] Real Estate God: I’m like, okay, cool. Like the money’s still there. What do I care about? 

[01:03:09] Patrick Donley: This is a good place to stop. Real Estate God, thanks so much for your time. How can people find out more about you, get in touch with you, learn about your acquisition bootcamp, stuff like that? 

[01:03:17] Real Estate God: Yeah. So all on Twitter, it’s at TheRealEstateG6, or if you just search TheRealEstateGod, and then everything’s in my bio there.

[01:03:24] Real Estate God: So you can just search from there. 

[01:03:26] Patrick Donley: Yeah, I highly recommend your stuff. Great content that you’re putting out and really a great service to people just getting started and people that have had a lot of experience as well. Yeah. 

[01:03:36] Real Estate God: Thank you. I appreciate it. I had a great time on the call.

[01:03:38] Patrick Donley: Okay, folks, that’s all I had for today’s episode, I hope you enjoyed the show and I’ll see you back here real soon.

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