BiggerPockets Real Estate Podcast - 337: Next Level Wealth-Building Through Overseas Development and Opportunity Zones with Russell Gray and Robert Helms

Episode Date: July 4, 2019

Want to learn from two guys who have weathered several real estate market cycles and come out on top? You’re in the right place! In this episode, Brandon and David sit down with Russell Gray and Robert Helms, longtime hosts of the Real Estate Radio Guys program. In this wide-ranging discussion, Russell and Robert cover a TON of subjects, from house hacking to investing in overseas resorts. The guys share the lessons they learned from the 2008 crash (hint: don’t rely too heavily on credit) and explain how they’re preparing for the next one. They break down how multifamily investing is just like running a business, and why hiring an assistant is the most important first step when scaling up. Russell and Robert also tell us why having an A-student mentality can hinder new investors (and make them a target for gurus), and why you don’t need to know every step in order to just get started. You’ll learn why Robert is about to make his 137th trip to Belize, why he and Russell stopped investing in Mexico and Australia, and why you should design your own personal investment philosophy, too.  If you’re a big-picture thinker interested in using the tax code to your advantage and staying on top of market cycles, this show will blow your mind. Listen here or on your favorite podcast app, rate and review us, and subscribe so you won’t miss the next one! In This Episode We Cover: How these guys inspired Brandon What an entrepreneur does How gurus take advantage of hungry new investors How they are preparing for the next real estate downturn Their strategy for building big wealth in other countries How they learned the lesson about needing sufficient reserves the hard way What to do when available credit goes away Why they invest in resorts Where we are in the market cycle Why they are locking in long-term debt right now What they learned from the 2008 crash How to prepare and win for the next downturn What an opportunity zone is and how to use them Why they study global economics And SO much more! Links from the Show BiggerPockets Forums BiggerPockets Real Estate Podcast Robert Kiyosaki BiggerPockets Podcast 052: Buying Apartment Complexes, Raising Millions, and Building a Profitable Business with Ken McElroy Peak Prosperity Brandon's Instagram David's Instagram Learn more about your ad choices. Visit megaphone.fm/adchoices

This is the Bigger Pockets podcast show, 337. Well, the essence of business and investing is harnessing the efforts of others. I mean, an apartment building is just a way to get 125 people to get up every day and go to work for somebody else. You don't have to supervise them. You know, you don't have to worry about it. Somebody else does it. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the height,

You're in the right place. Stay tuned and be sure to join the millions of others who have benefited from biggerpockets.com. Your home for real estate investing online. What's going on, everyone? This is Brandon Turner, host of the Bigger Pockets podcast here with David Green, my co-host, The Man of the Hour again.

What's up, buddy? What's up, brother from another mother. I miss you, man. I haven't seen you for like at least a month. I know. You got to come out here to Hawaii again. Come hang out and do some snorkeling or snuba or scuba. or whatever we do.

Yeah, there's something to be said for just hanging out with buddies and having really high-level conversations. Every time I leave Hawaii, I come back and I'm more like pumped up. So now I'm interviewing buyers agents and I'm, I've almost hired a second assistant, but I'm interviewing for another assistant role. When you go out and do fun stuff, it motivates you to get through the muck of what you don't like that's in your life or your business or your issue so you can get back out there.

And you got to stop and smell the roses to keep yourself motivated. And speaking of assistants, we actually talk about that on today's show with our guests. We talk about the importance and the need for one and how to kind of kind of get one in your life. That's a really cool part of today's show. In fact, we cover so much in today's show. So our guests today are two guys that I've looked up to for like a decade now. They were podcasting before podcasting was a word.

I mean, they are legit. We're talking with Russell Gray and Robert Helms of the Real Estate Radio guys. Again, a fantastic show. Been around for like 20-some years. Legends. Legends in the business. In fact, like, the reason you right now, everybody listening to this, the reason you are sitting here right now, this would not have been possible if it were not for these two gentlemen right here because back before we started the Bigger Pockets podcast,

this was the show I listened to and I listened to it so much. I was like, dang, I got to start a podcast. And that's when I came to Josh and I started the Bigger Pockets podcast was because I was inspired by these guys. So this has been almost, what, six years now in the making, something like that. And really good show, very high level. And what I mean by that is we don't just talk about like, here's how to find that first duplex. We do talk about duplex. We talk about the keep the cookie on the lower shelf.

But we also talk about like the global economic market. And before that scares you off, like this stuff is so important. Understanding different markets, how they work. Really good stuff. And they make it really easy to understand. They're very good explaining this stuff. They talk a lot about investing outside the U.S. So we talk a little about how they're doing that and why they're doing that.

In fact, one of the guys that's taking a 137 trips to a certain. in South Central American country. You're going to hear about that. You're going to talk a lot about the collapse. Like if a recession comes, how do we prepare for it? How are they preparing for it? And they're doing some pretty shocking things that I was surprised, which is interesting. And then, of course, later on, we talk about something known as an opportunity zone,

which is, if you understand an opportunity zone, like, you'll hear why it's one of the most powerful and amazing strategies for real estate investors, yet still largely untapped. And so you're going to hear why that is and how you can kind of start taking advantage of the opportunity zones to build some really, really good wealth over the next decade. Very, very cool stuff. So again, all that's coming up here on our interview with the real estate radio guys. But first, let's get to today's. Quick tip. Now, today's quick tip is very simple.

If you're not checking out the show notes of each of our shows, for example, to this show, so the show notes can be found at BiggerPockets.com show 337. If you're not checking that out, you're missing out because there's a lot of stuff there that I would highly recommend. Even if you're listening to this on a commute in the car, when you get to work, when you get home, whatever, pull it up and check out the show notes because there's a lot of stuff we put in there, including we are now adding transcripts of every show. So if you're sitting at work and you can't listen for some reason, you can read through the entire show of every new episode of the Bigger Pockets podcast written down, which is kind of cool. There's also links to all the same we're talking about in the show. You can see pictures, there's even video of us. And in fact, if you have the ability to either listen to audio of today's show or video of today's show,

I'd actually recommend watching the video of it because there are two guests, Russell and Robert. And so you'll be able to kind of keep track of that a little bit easier. But it's not too bad. Their voices are pretty different. So anyway, that is today's quick tip. Most investors spend all their time talking about their high level returns. But that's not the number that actually matters. What actually matters is what you keep after taxes.

and that's where multifamily real estate quietly stands out. With built-in advantages like depreciation, the right deals can generate steady cash flow while reducing the tax drag. Bam Capital structures its multifamily investments around those fundamentals, pairing tax efficiency with disciplined operators and a long-term approach.

This isn't about chasing hype or guessing market timing. It's about building durable, tax-aware wealth over time. Learn more at biggerpockets.com slash bam. Here's the thing about traveling. you buy food at the airport, a burrito, salad, bag of peanuts, you start wondering if you should have opened a savings account for snacks. So wouldn't it be great if you could actually earn money while you're traveling? Well, you can. Airbnb has something called the co-host network. While you're away, you can hire a vetted local co-host with hosting experience to help take care

of things, communicating with guests, preparing your space, managing reservations, everything runs smoothly while you're off making memories. Your home might be worth more than you think. Find out how much at Airbnb.com slash host. Managing properties can feel like a full-on circus. You're juggling vendors, tracking payments, chasing approvals across multiple properties, and maybe a few HOAs, all while trying to keep tenants happy and owners confident.

One delay can throw everything off, and suddenly your day is all clean up, no progress. That's why hundreds of property managers rely on bill to streamline their finances. Bill for property management lets you add all your property. Appoints, assign permissions, pay bills, and receive payments quickly and efficiently, without the usual bottlenecks. It syncs with platforms like QuickBooks, Zero, NetSuite, and Sage intact, so your accounting stays aligned. You can automate bulk payments across properties and HOAs.

Choose flexible payment methods like Same Day ACH, International Wires, Card, or Check, and set custom roles in approval policies. There's even a dedicated bill inbox for each property to keep everything organized. Ready to simplify your workflow, book your free demo at bill.com slash bigger pockets and get a $100 $1,000 Amazon gift card. That's bill.com slash bigger pockets. And now with that, let's get to today's incredible show with the real estate radio guys, Russell Gray and Robert Helms. All right, Robert and Russ, welcome to the Bigger Pockets podcast. Good to have you guys here. So great to be here. Oh, my goodness. Great to be here. Thanks, Brandon.

Yeah. So I was just telling these guys before we started recording, like this show, is one I've been looking forward to for the last like five and a half, six years because this is like, I don't know if you guys knew this, but like we started the Bigger Pockets podcast because I was obsessed with podcasts, but I was only obsessed with one podcast and that was your podcast. Like I listened to so many, so many hours. Like my wife and I would just listen to probably hundreds of hours. And I learned a lot about real estate by listening to you guys. So this is a, this is like a fan girl right here going. This is going to be great. So, but I actually, I don't know a lot because you guys are very, very, very informational on your show and you, and you teach a lot of really good stuff.

But I don't know a lot about you. You guys don't talk a whole ton about your past and your stories. So today's that the fun, or at least that, you know, back when I listened. So today we're going to dig into that, I guess. And we'll just start early on, I guess, whoever wants to go first. How did you get into real estate? Walk us through that beginning journey into your first deal. All right. Well, maybe I'll start. Since I'm more of a real estate guy, as you'll learn in a minute. Russ is a great financial strategist and idea guy and really looks at numbers a lot. Obviously, numbers matter in real estate. I was kind of born into a real estate family. My dad was a real estate broker, but before that he was a real estate investor, bought his first property in 1957. And I just got around it.

And I wasn't sure I was going to be in real estate, but pretty quickly he made it clear that I should get a license. And the very first commission check I ever got, I bought a duplex. I lived in half and then rent it out the other half. And my initial plan was, I was going to buy a house every couple of years and just keep a trail of houses behind me, never sell, just buy. And that's how I would collect real estate. And then a great mentor of mine said, well, Robert, why would you keep a house as a rental that you didn't specifically buy as a rental? You might be able to instead buy something more strategically. And that led to a whole other thing.

But I just got the bug early on and realized that real estate was such a great vehicle for so many reasons that you guys always talk about. That's awesome. Where was that duplex at? That was in San Jose, California. So I was born in the Bay Area. We started a show in the Bay Area 22 years ago. Today, Russ and I, neither one of us lives in California. We don't even live in the same state, but through the power of technology, we still

do our show every week. So I was a California investor for a long time. And then I had a big change, a big epiphany that might be interesting. I was at a real estate event, and I was talking to a guy. And at the time, we had the same number of units, same number of doors. And I said, well, that's interesting. except none of his units were in California, even though he lived in California, and 100% of my portfolio was in California. So I thought, wow, we got something to talk about here. And he said, why would

you be in California tenant? Landlord law is not good. Prices are expensive. And I said, well, why would you be anywhere else? Appreciation is great, and it's beautiful. And so we had a long conversation, and it really jarred me to start thinking about other places to invest. And so today, you know, I always say live where you want to live, invest where the numbers make sense. If you want to live at a place It's beautiful and doesn't make sense really from a real estate perspective. Well, that's okay. You can invest anywhere. Yeah.

And I definitely want to dig in that today because I think that's a topic. You know, David here wrote a book called Long Distance Real Estate investing on the same thing. Like you don't have to live because David also lives in California, you know, now and he invest out of the area. Now I just moved to Hawaii and I now invest in on the mainland, but live here in Hawaii. And so, yeah, definitely doable. I definitely want to make that a good, you know, chunk of today's show because you guys seem to be really good at that. But before we get there, Russell, what about you? How did you get into this game?

So I'm the opposite of Robert. I did not grow up in a real estate investing family. I grew up in an entrepreneurial family. My dad was a high-tech entrepreneur in Silicon Valley. And like a lot of folks do in his 30s, and I was already a teenager by then. He was at that spot in life where a lot of people get where they're on this treadmill in the corporate cubicle,

and he's looking at the world, and he's thinking, I need to find a way to get free. And he took an interest in real estate. And so at 17 years old, I went down and took a real estate principles and practices class at the local community college. And I think when I was 18 or 19 years old, I bought my first home, 24 years old, got my first rental property. And I really had no idea what I was doing. I didn't have any real mentor, but I was just out there just kind of poking around, making a mess and trying to figure things out. I made a bunch of money early.

I blew it all. I have a pattern of doing that. I make a bunch of money and then I blow it all. So that, that real, I realized I needed more than that. So then I really took an interest in understanding what was underneath real estate and what made real estate kind of tick. And I was a lot more of an entrepreneur than I was a real estate guy. And the other thing I was hyper-analytical. And the problem with that is you analyze yourself right into not doing anything.

So one of the things that I've learned in life to do is align myself with people that are prone to action. Robert Helms is one of those guys. And so I started a mortgage company at the end. of the 1990s and went out looking for a way to market that company. And I decided I wanted to specialize in working with real estate investors because I came out of corporate sales. I liked corporate better, like dealing with professionals, better than dealing with consumers. And so then I met Robert. And then kind of that's where it all took off from there. And really, most of the real estate investing I did happened after I met Robert as a result of the things

that we were doing together a lot more than what I'd been doing on my own. Okay. So it sounds like Robert is the people guy. He's the networker. He gets up there. He's the magnet that pulls people to you. And then, Russ, you're probably like the filter that looks at everything. It's like, all right, let's pick out for everything that we just got brought to us, what our best opportunity is going to be. Kind of. It's actually gotten a little bit different. I mean, we're old guys and we've been around a long time. You don't look that old. You know, well, trust me. So after the 2008 deal, because prior to 2008, you know, we were just out there. multiple markets, multiple property types. We had so much stuff going on. We were in real estate. We had the radio show. We had the TV show. We wrote the book. We had the mentoring program and the seminar business. We got involved in real estate development because that was really Robert's passion. But he had come out a C-class apartment. So we were doing C-class apartments. We were doing

ground-up development. We were buying brand new high-rise condos and multiple markets. I mean, we just were doing everything. And everything we touched. to gold. I mean, it was great right up until about 2008. And then everything fell apart. And so at the end of 2008, Robert and I sat down, we kind of looked at each other and thought, okay, you know, we've been at this a while. We know how to make money. We know how to invest. This is no longer about making money, even though we needed to make money because we'd lost quite a bit. What do we really want to do? And that kind of that Jim Collins, good to great hedgehog concept, what is it you love to do? what do you have a chance to be best in class at and what can you monetize?

And we gravitated towards real estate development in a very nichey market. And Robert can talk a little bit about that and decided to hone in on syndication as a way to get there because it meant that we didn't have to wait for our own resources. We didn't have to wait to recover. We could just go big right away. And that's what we ended up doing. Okay. So you guys went from, you got started, you know, with a couple small deals.

how quickly did you scale up to start doing all these huge variety of things? I mean, it was like years and years you spent on the small stuff, or did you just get out of that as quick as possible? For me, it was longer. I mean, I definitely was acquiring real estate. I kind of view myself as a collector of real estate. So I was doing that in California, again throughout California, but lots of different marketplaces and a few different product types,

but almost all residential income property, commercial property here and there, mixed-use property, but no development of any kind. And I think for me, the scale-up happened when, I was making a lot of money, and I was approached by a guy who was doing a development project, and it's a long story, not worth telling, but it turned out to be a really great opportunity for me to put just $50,000 passively into a commercial development. And I wasn't just interested in making a return.

I wanted to learn. So I would hang out with these guys, and I'd sit in the conference rooms when they'd allow me, and I'd peer over their shoulder, and then I got the bug to start developing, and they really held my hand. They had an arrangement where they'd... would raise capital and they would do a project and they'd return the equity in 18 to 24 months because it was new construction. And it seemed every time I invested with them, they beat the timeline and they beat the return, which is pretty cool. So I started saying, hey, could I bring in friends?

We started referring people and there was no money exchanged for that. It's just, hey, they're doing a great job. And the principal sat out with me and said, you know, you raised more than half of the money on our last deal. We've got a deal in mind that we think you could be the developer on and we'll just write shotgun. And I said, well, I'm not a real estate developer. And They said, well, it's not that hard. Why don't you, you know, sit in this chair and we'll sit in this chair. And sure enough, we did that. And it was amazing.

So that's when, for me, it scaled up. I mean, we'd already gotten to bigger units. You know, we went from fourplexes and duplexes up to, you know, the 20, 30, 40 unit buildings. We had over 100 unit buildings. But then development kind of got our attention. And it was still in, when times were good before the crash, and yet develop it in many ways, is a little resilient, depending on what you're building and where. and it just became a whole different type of real estate.

I think for me, that's what we saw the scale in. But I think to Russ's point, we got enamored of a lot of different things, and we tried a whole bunch of different things. And sometimes you have to do that to figure out where your heart lies. All right. So very true. A lot of people come to listen to the show right now, and they're very new, and they're not sure what to do. They haven't found that, is development right for me?

Or is, you know, should I go buy that duplex and what we call house hacking, live in half and rent the other one out? or should I jump right into flipping houses or, you know, do you guys have any recommendations? If you're brand new to real estate, how do you determine what that best thing for you is? Because there's so much out there. Yeah, so I'm going to jump in on that one. Robert does this excellent whole presentation called personal investment philosophy and help people understand that. And I, to me, because you're playing with real money and real credit and your time,

and especially if you decide to raise money, I think it's really, really important to get around a lot of people that are doing a lot of different things. So we're big fans of networking, getting together in live meetings, doing meetups, becoming active in clubs, talking to lots of investors, going on field trips, getting out in the real world and seeing what there is, and then just kind of seeing what interests you. Once you find something that interests you, then try to find a way to play passively, if you can, or at least small, until you can get the lay of the land and really know that the people you're dealing with are good people, that they're competent people, that they're committed to you. And then when you have a little bit of success, then you can talk about scaling up

real fast. So to me, the secret isn't about how much you learn, because you're going to learn, but you can't learn at all. I think one of the challenges, and Kiyosaki talks about this all the time when he talks about the a student mentality. And we saw this a lot in our program when we were together in Silicon Valley. We had a lot of engineers come in. These guys are A students and they're used to knowing everything. And, you know, if you're selling real estate education, you can make a mint on these guys because they want to know everything. They want to know how to do appraisal. They want to know how to do inspections. They want to know how to do contract law. They're trying to be the tax guy. They're trying to do everything. And you can sell them, you know, 40 years of education before

they'll ever do anything. I think that's a huge mistake. I think really there's only a few things you have to be good at. And once you master those, it's really about building a team and knowing how to ask, be conversational in whatever the subject matter is, and then learning how to ask good questions and make good decisions when you get the answers. And once you master that, then you can begin to go pretty fast. So it's a lot more about people than it is about knowing and you learn by doing. That is such a good point. And you know, Russell, I've never had anyone tie the fact that people think that they need to learn every single thing about real estate that there is to the vulnerability that like gurus can go after them and take advantage of them because they're saying, hey, if you don't know at all, you could lose your money.

So come pay $50,000 and we'll teach you everything. That's exactly right. Because the people that actually do this at a high level, they rarely ever are masters in more than one or two parts of it. Like they partner with other people that are good. They know I'm not a numbers guy or I'm not a people guy or I'm not an operations guy. I'm an idea guy. Oh, I just love that you mentioned that because it's not that you, it's not that ignorance is. okay, somebody has to know. It just doesn't have to be you. And if you wait until you know it all,

you'll probably die before you ever actually take any action in this business. Can you, can you tell us how you guys, did you know that right off the bat? Did you learn that along the way? Was there something that clicked that made it make sense for you? Yeah, I think for me, I, you know, I'm just very aware of my own weaknesses. And it's easy because there's so many of them. But the thing that I was really good at, I think, is going and getting what I needed. So I read it. So I read, recognized because my dad was an entrepreneur, and the essence of being an entrepreneur is to just go get what you don't have. And so my dad didn't get a college degree, yet he started a high tech company. He wasn't an engineer, yet he found a way to create brand new products that were high tech.

I never even understood what he did. It was just fascinating to me. But what he was was an organizer. He was a guy that would go out and he would get the money. He would write the plan. He would recruit the talent. He would set the vision. And then he would lead the team.

And more often than not, it wasn't him answering questions. It was him asking questions. And a lot of it was, what do I need that I don't have and how can I go get it? And so I learned that. I mean, I learned that early on. And I couldn't be bothered to go to college. I lasted for one quarter. I wanted to play football.

I played one quarter of football. I had a wife and kids. A recession came and I had responsibility. So I quit doing that. And I just went into sales because it was a short. path to making money. And then as I began to stabilize my income and look for other things to do, I realized that in order to change, I needed to get into a different industry. And the first time I tried to know everything there was to know, and I failed badly, the second time I realized I didn't

have to know that much. What I needed to do was meet the right people. And it was on that journey of out looking for the right people that I met Robert. And Robert was the right person. Robert brought connections. He brought, he had a cachet of reputation. He already had the real estate guys radio show. It was probably three years old at the time. And so I had a seminar company going. And so there was there was a good foundation that we could work together on. I found a way to add value to the relationship. I brought the mortgage side and I had a business model for teaching and mentoring. And we adapted that to him and his talent. And pretty soon it just took off. So, you know, where it, where it click for you is when, to me, and anything that you're going to learn when it clicks is when you see

somebody else doing something and you learn how to take what they're doing successfully, that principle of success and then apply it to your own situation. And I saw what my dad did in terms of being a true entrepreneur. And I thought, okay, I can apply that even though I'm not high tech, I can find a way to apply that to what I want to do. That's fantastic. You said something in there real quick. I want to point out, because this is something I've had coaches over the years tell me this over and over and over is, you know, business coaches. It's not about how. It's about who.

And I love that you said your dad would say, like, well, what do I need to do and who do I need to get to do that? Like, you know, like, it's not always like, how do I learn how to do this particular thing? It's who can I find that already knows that? Who's already a rock star at that? Pull them into my world and get that done. I just want to point that out because that's fantastic.

Yeah, really good. Yeah, that's gold right there. In fact, David, my answer is just a little bit different than Russ's in that I wasn't as strategic about thinking through that and observing. I was a guy that just wanted to do it all until I realized I wasn't really good at a lot of stuff. And I would try to take on too much and I would try to figure it out. And then I'd find someone who could do it better, faster, cheaper and go, wow, that seems

like a much better solution. And so there are a few, a handful of things that you will be masterful at and set your life up so that those are the things you do. And the stuff that you don't like to do or you're not good at, that has to be done. find somebody else whose joy and gift is in doing those things. That is the key to success. Yeah, yeah, that's so true. Do you guys have assistance in your life,

like real estate assistants or people that work? I'm wondering, like, if so, when did that come into your life? When did you hire somebody to like your first like assistant in your life? Yeah, I think we have a lot to say about this because we grew a big company with a lot of people and decided that wasn't the way to go. I'll let Russ tell that story. I heard pretty early on that. In real estate transactions, you need somebody watching the ball.

And most real estate salespeople are good with people and networking and selling and not necessarily paperwork. So you see it a lot in the real estate industry. I sold real estate for 18 years. And my business really exploded when my dad and I, who worked together in real estate sales, got our first assistant at the urging of a mentor who told us the first thing you should do is hire an assistant, which is a hard mindset when you're like, well, I can barely make enough money to survive. how can I afford to pay somebody else? Well, when would you expect that to change?

And it's the whole concept of anything you're doing that somebody else can do. You should delegate and learning to delegate. And having a right-hand person, ironically, one of the great assistants we hired, I think our third or fourth assistant in our real estate practice, was Russ's daughter. We met Russ and his daughter, Stephanie, at a seminar. And at the end of the seminar, it was a thing we did called Jump Start Your Real Estate Business, teaching new real estate agents how to be rookie of the year, basically, you know, collapsing timeframes, stuff we took us 20 years to learn.

Let's teach you in a shorter period of time. And we hired Stephanie at 17 years old. And that's really how our relationship started. And that brought Russ into the picture to help us systematize even more. And it's one of the arts. Hiring and delegating and getting help is difficult at best. So spend some time doing that. You can't really scale up very well without some help.

Yeah, that's so true. It is something that for years I struggled with that about bringing in an assistant. And finally I did. And I, it helped, but I probably brought in the wrong assistant. What I did is I just hired somebody who was available rather than somebody who was good necessarily. And hopefully she's not listening to this. And so I struggled for a year. And today I have a fantastic assistant. Even he's moving beyond assistant role to just like running my life and company and everything. But yeah, a huge difference in my life. And I had the same mental thing. It's like I can't afford this person. or at least I didn't want to afford that person, but I needed that person. And anyway, made a huge impact of my life. So those listening to this show, maybe that's what you need in your life. If you need to be more organized,

you're simply to keep your eye on the ball and all that stuff while you go and generate leads, you're generating, you know, analyzing deals or whatever it is you're looking for. It could be a really good option there. There's a bigger lesson to that too, Brandon, and that is that's a core skill set that you have to have. Yeah.

You have to have the ability. First of all, you have to have the mindset that you're not spending money. it's an investment. I mean, when we go to buy a piece of property, we don't look at the money we're putting out as an expense. We look at it as an investment. We expect it to make us money. When you have an expense in business, it's exactly the same thing. When you have an expense in business, you expect it to make you money. You shouldn't be making the investment if you don't have a direct path, if you don't have a plan for it to make money. So you have to develop the skill set of knowing how to

make money on other people's efforts. Fortunately, it's not that complicated because you just keep a time diary and you figure out all the things that you're doing and how much money you make at each of those tasks. And it becomes pretty apparent, pretty fast that you're doing a lot of things that don't make very much money that are easily replaced so that you can then invest more of your time on the things that give you the highest return on your time. And if you do it right, eventually you can build a business as completely run by other people and all you do is own it, which makes it a lot like a professionally managed property where you don't have a lot to do. You just collect passive income. businesses can be the same as an apartment building in that regard.

Yeah. Yeah. You know, sometimes I never thought a lot about, but businesses are a lot like owning rental properties if you do them, right? Like you can build it the same way. You can get the cashful from it. Yeah,

very, very good point. Well, the essence of business and investing is, is harnessing the efforts of others. Yeah. That's it. And once you learn how to make profit on other people's efforts,

you master that. These other, they're just vehicles. I mean, an apartment building is just a way to get, 125 people to get up every day and go to work for somebody else. Pay you 20, 25, 30% of their income. You don't have to train them.

You don't have to supervise them. I love that. Somebody else does it. If I start a business and I've got a bunch of work to do, then I just bring people in to do it at less than I charge to do that work. And I make a spread. And so when you understand that's the essence of what you're building to create passive income, to create a portfolio, to build a business, whatever it is,

then you just concentrate your efforts on mastering that one component. I wish somebody would have told me that in my 20s, because I didn't figure that out until I was in my 50s, until I really understood that concept. I had the same mental block that hiring people was an expense and that I was diminishing my bottom line. But if you imagine investing in real estate with that attitude, I can't make a down payment.

I mean, I've got to save my money. Yeah, it wouldn't make sense. It's something, Brandon and I get asked a lot, And I bet you guys get the same question of how do I find a mentor where you mentor me? They basically want someone to teach them the entire business without them having to learn on their own. And I like the point you just made, Russ, that you want an ROI on the money you're paying an employee just like you would on an investment. Are you investing in the right person or was that person a bad investment? And I would say to flip that around if you're the person looking for a mentor is if somebody decided to take you on and teach you or hire you and pay you, give you time, give you,

give you education, give you money. Are you a good investment? Would you make that person more money because they invested in you than they would make if they didn't have you? And I don't think many people look at it that way. They don't understand that as an employee, your job is to be the best investment possible because what do we do with our best investments? We put more money into them.

That's right. Well, that thing's performing amazing. Let me go rehab it. Let me put more energy into this. Let me build off of it. You do the same thing with your best employees. That person is doing so well for me. can I give them more opportunity and more responsibility?

And I feel like in 2019, that's one of the big things, just it's kind of missing from the world as we've had, what has it been like 11 years of just straight and improving market? And it's gotten kind of easy to make money. And people don't understand. It's not always like that. Which might be a good segue into what happened in 2008 when a lot of people lost money in real estate.

Can you guys talk to us about what the mindset was at the time and what it was like when it shifted, what you learned from it so we don't make those mistakes again, stuff like that? Oh my gosh, we will have to collapse the timeframes here a little because that's a long story. We, I will say, are much better prepared for a change today than we were back than having gone through it. It was pretty rockin there, right? 2003, four, five, you know, Russ talked about everything we touched seemed to work and made us think we were smart.

And now we're pretty clear that wasn't the case, right? The market was good. And any real estate investor can make money when the market's good. It's hard not to. the key is to be able to make money in any kind of a market. And that does take this perspective of time. So one of the things we did is we're big lovers of leverage. And so we found lots of ways to get lots of property with not a lot of money down.

And that's actually not a bad strategy because if you have too much exposure to a property in terms of, say, of a 50% loan to value, now if there's a challenge in the market or in the economy, you've got some equity someone can target. So it's not a bad idea. It's just we got ahead of ourselves. And I think we weren't looking out the signs of when is the market going to change and so forth. And so the mindset shifted pretty quickly, right, when it all fell apart. And I think instantly people thought, well, real estate's a bad investment because look at what happened.

And of course, that wasn't the case. It was the right real estate, the right market, the right situation. and boy, we learned a lot. I know Russ has some things to say about that. Well, yeah, I mean, the first thing you learn is you learn that you're not smart. And you're actually, the smartest people I know are humble. They ask a lot of questions. They look for people who have expertise.

And so, you know, I'll just speak for myself. But I took a lot of pride in being the smartest guy in the room. And I learned real quickly that that was so stupid. So that was one part of it because we had people who were warning us, People that had been investing longer than us, they told us these things come in cycles. The guy that mentored me in my mortgage business told me when the credit market sees, it's like somebody just takes a spigot and turns it off. It stops instantly.

It's like a power failure. It's not, it doesn't just dim down. It just shuts off. And yet, if I would have taken two minutes and really looked over our entire business, I would have recognized that we were 100% dependent on credit markets, healthy credit markets and not studying the credit markets, not understanding what drove them or what threatened them, I couldn't even recognize the warning signs when they were there. And so when they seized up exactly what he said what happened, all of a sudden, you couldn't get your projects funded.

You know, I've been mortgage company. I couldn't get any loans funded. I was, we were running everything on credit lines. We didn't have any cash. We were fully deployed because having cash in the bank was a waste of money. So we said, well, we've got all the liquidity we need with credit. Well, when those credit lines got shut off, not because we weren't paying, not because we were a credit risk, just because everybody was reducing their exposure. And if you were around back then, you may remember some of that happening. Then all of a sudden, we were illiquid, we were upside down, and we couldn't generate revenue. That's a bad combination. And so we learned that, you know, the fact, it was really interesting because Robert always does the interviews, especially all the major interviews, but we had this one

circumstance back in January of 2015, where we ended up in Iowa, of all places, to go to a farm investing conference where Donald Trump, pre-president, pre-presidential candidate, Donald Trump was a keynote speaker, and they ended up having a press room, and we ended up in the press room. But Robert had to get on a plane to go to Belize. And so I ended up being stuck in the press room, and I got an opportunity to asked Donald Trump's just one question. And I asked him, I said, well, Mr. Trump, you know, you've had great times and you've had, you know, downtimes. And what did you learn in the good times and what did you learn in the bad times? And if you, you know, end up running for president and winning, how would that help you? Well, he didn't answer the last question because he wasn't

ready to announce yet. But he said, you got, I didn't learn anything in the good times. in the down times, I learned it's always good to have some cash to be liquid. And that's the voice of experience right there. So I think being liquid, real liquidity, not credit liquidity, but real liquidity. Being liquid, having some cash on hand is probably really important. And of course, having good solid positive cash flows, which was something else. We were running negative cash flow on the portfolio and positive cash flow on the business, and you put those in a blender and it looked good.

But when the business failed because it was largely mortgage driven, at least on my side of the business, the cash flow stopped. And then the properties were underwater and I couldn't get out. And it was just disastrous. So that was the big lesson. Do you think that having a good amount of money flowing through the businesses gave you this false sense of security you about the criteria of the investments you were making? Yeah.

Oh, absolutely. I mean, when you're making six figures a month and you only need, you know, 10 or 15 to live on, you can have a lot of negative cash flow. And my attitude was, hey, if I can own $5, $10, $20 million in real estate and it's going up 5% a year, you do the math on that, the negative cash flow versus the equity growth. It was, you know, it was great. The problem is equity is, is, is, phantom. I've learned that capital gains unrealized aren't really real. I mean, stock market investors

find this out all the time. But you know, you look at the real estate market. The real estate, you know, has never gone down or never substantially gone down. Or if it does go down, it's back in 10 years. Yeah, but you've got to survive those 10 years. Yeah. And so cash flow is the thing that really makes you stay. At the same time, we were developing a friendship with Kiyosaki and Kenny McElroy. And we watch Kenny operate through that crisis. And he had a very different approach. And well, everybody else was selling, everybody else was strapped, everybody else was underwater, everybody else was losing. Kenny was out there acquiring $300 million in real estate, and he was very much focused on

value add and cash flow. We learned a lot in watching all of that. And then, of course, we started hanging around Peter Schiff, and that's a whole different discussion, but we learned a lot from him too. So let's talk about what happened then after 2008. So pre-2008, it sounds like you guys were doing a lot of different things, including development, right, at that time. And then what happened after?

what did you shift to and then can you bring us up to where you are today on like how did that journey go from 08 now to here we are in 2019 yeah what did you get to today certainly yeah and and i think every every investor has an evolution there are some people who are doing what they did 20 years ago but i think for most people you know russ talked about this idea of personal investment philosophy which is getting in touch with who you are as a real estate investor and why real estate is interesting to you what's the why and if you get that figured out then the vehicle can change change over time. You try something for a while. Markets change over time. With real estate, it's hard to pop in and pop out because of the sales costs involved. So we say you get married

to a market when you pick a real estate market, plan to be there for a while. But you can definitely shift. And I know we shifted a lot. I started in C-class apartments, which are, you know, management intensive. You better keep your eye on the ball. But a lot of money can be made. But it just takes a lot an effort. And we really shifted our focus when we went through the crash and said, okay, starting over, and we didn't get completely annihilated, but we definitely got punched in the stomach pretty well, it's like, well, okay, knowing what we know, what would we do differently? And the first thing we did is we started to get around people that saw it coming because we didn't see it coming. I mean, there were a lot of people smarter than us that didn't see it coming,

but we certainly didn't see it coming. But there are people that were not as many as claimed that they did. But there were people who were ringing the bell. like Russ talked about. So we started to get around them. And we made a big shift in kind of our show even. We were all about real estate. We went to real estate events. We got asked to speak at real estate events.

When we were at live events, it was real estate events. Then we shifted to go to a lot more economic events, events that were broader picture, events that talked about the financial system and trying to understand the Federal Reserve and the way money works and all that. Because that was a key to really understanding every more. market, not just the real estate market. And then a big part of it was deciding what do we want to do with our time. I think this is critical. If you're brand new in real estate investing or if you've been doing it a while and you feel like maybe you're bumping your head against the wall a little

bit, you know, there's people that say, well, if it's not broke, don't fix it. And there's people that say if it's not broke, well, then break it. Right. Break out to something new. Try something different without, you know, giving up what you have. And so we discovered that there were a lot of things we enjoy doing better than managing tenants and managers and deep. dealing with all the, you know, stuff surrounding C-class. And so we made a conscious decision to be more in the development business and more in the higher-in property business and land development and things like that. And it was great.

The biggest shift from a structure point of view was real estate syndication. Well, we still invest in our own portfolios. Most of what we do today is investing with other people, which gives just a lot of exposure to different folks and different markets and different types of products. and you can accomplish a ton, and it's a bit of diversification as well. You know, generally, diversification can be a recipe for mediocrity. You know, I think of stock investors, they buy 20 stocks. Okay, well, two are going to do well and two are going to tank and the rest are going to do okay.

And at the end of the day, not much happens. But in real estate, you can get so much more specific. And based on those skills that you have and the relationships you have, you can outperform, as you guys know. So I think us just getting in touch with our inner investors and deciding what do we want to be when we grow up. I remember the day. I mean, I remember sitting in the conference room of our building, which, you know, was now vacant.

It was like a morgue. And we're sitting there and we got out the whiteboard and we listed all the things that we had to work with. You know, it's a typical strategy session. It's like, okay, you know, what do we want to do? What do we have to work with? And we took that Venn diagram from good to great and started talking about that. And we said, okay, let's let's keep the radio show. Let's keep the radio show going.

let's really focus on growing the radio show and developing it more into a business, because up until then, it had been something that was kind of a little bit off to the side. It wasn't center mass. And so we did that. And we like the seminar business and teaching. So we said, let's keep that and marry that to the real estate guys radio show, which we did. And then the other part was we had the development company. And Robert really loves developments.

And well, you know, let's take a look at that. I decided to get out of the mortgage business, but I wanted to stay in capital. And I saw that the capital markets were broken. The flow of money from savers to Main Street was broken. And it was very difficult to get loans back then. So I thought, okay, the flip side of every problem is an opportunity. There's going to be a big opportunity in private capital. Well, fortunately, Robert and I had a lot of experience raising many millions of dollars.

We said we can teach people how to do this. And so if we teach people how to do this, we can help kind of heal the market. We can create opportunity for ourselves. We can fund our development projects without debt, just using equity. and now we can continue to go and we can actually go bigger faster than we could before when we were just investing with our own resources. So that's what we ended up doing. And then when it came down to really what we wanted to do, it's like, okay, well, you know, we have to focus on markets that actually demographics of people that have money. So we not only shifted

to the financial conferences because we were interested in the subject matter, wanted to understand the bigger picture of what was happening in the bond market. in particular in the symbiotic relationship between debt, the cost of debt and real estate, but also because that was a demographic that had more accredited investors, more affluent people, more passive type investors, that would be the kind of people we would want to know and develop relationships with for syndication. We ended up doing that. And so, you know, that shifted what we're doing with our annual investor summit at sea and the types of people we were bringing in for the first 10 years. It was pretty much Robert and me and our team. And we were the gurus and we were the gurus and we

taught. Since then, it's been pretty much, we're the hosts and the MCs and, you know, we put it together and then we run around and we just bring people that are a heck of a lot smarter than us, investors that are really, really successful. And we learn from them and they learn from each other. And so in looking at where we could we invest and derive rents from the affluent and marry that to what we like to do, we decided to hone in on resort property investing. And so we have this really, really narrow niche that we do personally, that we don't talk about a bunch on the show because we don't like the show to be about what we do. We're really interested in just helping people do what they want to do and kind of discover their inner investor and then facilitate that.

But for us, that's what we ended up doing. And when I say we, I use that term very loosely because it's primarily Robert and our other partner in the development business that do all the work, at least as far as I'm concerned, you know, I spend my time just kind of organizing the business side of the real estate guys and keeping that rolling. But it's fun. It's fun because it's a fun place to visit. It's a great demographic. It's a super sexy story. I'm not qualified to tell it. Robert Kahn, if you're interested. But it kind of took everything that we like to do and put it all together in a ball and we've been able to focus on it. It's been great. Yeah, I really want to dig on the resort investing thing because that's fascinating. I do want to

pull out one piece of information you said there that I thought was just so smart. As you guys sat down and said, you know, where do we want to get to? You know, where do we see ourselves in the future? So many newbies don't do that. It is like, I'm going to go buy real estate because that's what I heard was cool. That's what it's going to make me rich. And you guys are like, this is where we want to be. And here's what we want to do here. We don't want to do. Okay, we think, you know, even down to what I love is like, even down to like, hey, we're going to do the summit at sea and we're going to change the type of people we bring in to make sure that we're surrounding ourselves with the type of people that we want to get to know. I mean, how many people like really

go that deep in their thinking that it's not very common. Anyway, I love that. I just want to pull that out that you guys are just so like, you know, driven on what you want and how you're going to get there. I think that's awesome. Yeah. Stephen Covey says, always begin with the end in mind. And so you have to think about that. And a lot of people do the two-step. I think the biggest mistake I see investors make in their careers is they do what I call the two-step. And that is they say, okay, I'm going to go do whatever I can do to make as much money as I can. And then once I make as much money, then I can live how I want to live. And, you know, I've just, you get to a point in life where you go, you know, life is too short to live that way. And so many people die just trying to finish phase one.

They never get to phase two. And, and they die and they never have fulfilled their dreams. So to me, it's more about being a business model or an entrepreneur, strategist and saying, okay, how do I want to live? And what do I need to build that will pay me to live that way? And whether it's a business, whether it's a portfolio. And so, you know, you may say, hey, I can make a bunch of money, doing whatever. But if you hate doing whatever, Robert and I had a chance. We got called in by a friend of ours. It was real estate agent in Las Vegas. And she called us in and she said, look, I've got this client and he's got, I don't know, 150, 200 condos that he's aggregated into this giant apartment complex. He runs into an apartment complex. He wants to sell. And so we went in

and, you know, good sales technique is, you know, seller motivation. So we're interviewing him and we're sitting there in his office. In his office, flea ridden fleas are climbing on my leg, bite my leg on Like, this is awful, right? And this guy's explaining to his situation. He works 16 hours a day, seven days a week. He clears over a million dollars a year. And he hates every single day of his life. Hates it.

And he wants to get out of it. Meanwhile, this wife comes in and she's all dollied up and she's out shopping. Remember this, Robert? Remember this guy? And Robert says to him, because, you know, we have people in our program right now that would give their eye teeth to be you. And that's when, for me, bulb went off and I thought, you know what, money is not the answer. If you know, if you

could live, if you owned nothing and you had no money, but you stayed in four and five star resorts, you traveled, you ate well, you had a roof over your head, you got to do what you wanted, you were healthy, aren't you rich? I mean, what's the definition? So to me, when you think about what you're really doing with your life force and the precious amount of time that you have on this planet, if you can figure out exactly how you want to live and what you want to do and design a business and a portfolio that will pay you to live that way, you're rich and you're retired. And it doesn't matter how much money you have or don't have because you live in the life. And that's what Robert and I figured out how to do.

People ask me, what do I do? I'm semi-retired. I mean, because everybody gets up every day and, you know, does what they need to do. I get up every day and do what I need to do. but I get to do what I want to do when I want to do it with who I want to do it. I have plenty. And I always want more, but I'm very, very happy in my life. And I think that a lot of people do the two-step and think, I'm going to go do something

I hate. I'm going to hold my nose. And then I'm going to make a bunch of money. And then I can buy the life I want. I think that's the biggest mistake any investor or entrepreneur can make. Yeah, that's deep. Can you guys share a little bit about how you built your portfolios and then what your portfolios consist of now?

I would say, you know, at first, real estate was part-time, like it is for many people, and many people it stays that way, right? If all you did was buy a nice little rental property every three, four, five years and just stay at it, you can develop a nice income stream, and then that will appreciate perhaps over time, right? So early on, we were just collecting properties, finding great markets, collecting properties, and it really comes down to this personal investment philosophy idea, but for me, I need. never buy a property I can't see having in my family for the next hundred years. So that's just a screen I use. Don't flip properties. I did it once, made a bunch of money. That was fine. Learn

that. That's great. To us, flipping properties is a great job, but it's not investing. Investing, it's where you put the money out, and it comes back with friends, and it continues, right? Legacy. And then I think the development business was also a way that we could collect properties because several times we would do a small development and keep a building. And that was a way to take our profit, if you will, in real estate. But the whole act of turning dirt into dollars is very, very different than just passively accumulating income. So we continued to build that up. And then when you're in the development business, now it really is more of a business than it is an investment. And so to make sure we were investors, we would hang on to property. We would develop some things for our own

portfolio. But we've always had a heart to bring people along. And you've got to be careful about this, right? For some people, partnerships aren't healthy, and many of life's problems do come with hair on top. So you have to enter partnerships lightly, but I will say that almost everything I do in my business life, I do with a partner. So I just think that power of 11 that Napoleon Hill talks about, you know, when two people get together, it's not just the sum, it's greater than the sum, because of the synergy and because of the ideas that will foster between two people, make that three people gets even better. But at the same, time, right? There's, there's, it's, it's personally figuring out for you what makes sense.

So today, a lot of what we do is, you know, investing in bigger projects with partners. Sometimes we're the, the syndicator, if you will, we're the master partner and sometimes we're not. My favorite thing to do today is to invest alongside other people that are doing great stuff. It's a form of leverage. And sometimes people say, well, you invest in a syndication. There's no leverage. Well, I think it's exactly the opposite. It's the ultimate leverage. You're levering somebody else's experience and time and relationships and market knowledge. And you get to glean from that if you choose to and make a financial return. So, you know, I think it is smart to have a niche of some type, get good at something.

For me, it was small residential properties, typically four, six, eight units. You know, there's that financial difference between one to four units and five and above. But sometimes that niche is difficult because it doesn't have as many economies of scales. So you have to get in the bigger, the bigger stuff. So it's been an evolution for us. Today, we're kind of all over the world. In fact, we talked about that earlier. You know, this live where you want to live, invest,

where the numbers make sense. We'll ask an audience of people who thinks it's risky to invest outside of the U.S., right? And there's hands that go up. And then you say, well, who thinks it's risky to have all your investment capital tied to one nation's economy and currency? And then a whole other set of hands comes up. So it's not right or wrong. You can become wealthy and successful and never leave your county.

But to us, it's a big world out there. And there are so many places to invest. And the harder you search, the better there could be opportunity if you choose to. So a lot of what we do today is outside of the United States. It's not just outside of the United States. It's not that we don't like U.S. property. It's that there's just different opportunity. And there is some diversity.

And there also is part of the thinking is, what happens when, not if, but when there's a downturn. Or if the U.S. dollar continues, it's climbed downward like it has for 100 years, you know, trying to be both offense and defense at the same time. Yeah. I think there's one interesting thing in there that, you know, we talk about the lessons learned in 2008. We couldn't tell the difference between a bubble market and a resilient market.

And what we realized is that the markets that really shut up and then crash, were the ones where there was a lot of leverage. And Texas was a market that did not crash hard. And it wasn't just because it had some good economic bones that were rooted in energy. And that was part of it. But part of it was because they had some restrictions on how much cash out you could take. And so their lending restrictions created less leverage in those markets. And so kind of extrapolating on that, we went and said, well, gee, what about if you could invest in markets where there's no leverage at all? yet. And of course, that's hard to find in the United States. One of the things that drove us offshore was finding markets that don't have leverage yet with the idea that at some point in time they probably will. And I'd rather be in before that happens than afterwards. And of course,

then once you study any market, the big question is what's the appropriate product type or demographic that you want to serve in that particular marketplace? And for us, because we wanted to spend time in exotic locations. And we found a place that had the right supply and demand dynamic. The question was, is what's the right product? And it ended up being resort property. So to come full circle, that's how we ended up kind of in that resort property niche. And then indication was the secret to getting it done. And then there's a little, I guess, probably a secret sauce factor that's in it that we won't talk about that makes it a real interesting investment for us. in terms of passive income.

So that's where we primarily focus our attention for these last eight or nine years, I think it's been. So if you say you're outside the U.S., can you guys give us some examples of locations that you've invested or that you are currently investing in? And do you have lots of resorts or is there like a massive, huge thing that you're working towards? Yeah, great question.

So we started out first other country that I invested in was in Mexico. And in Mexico, you know, anywhere, as soon as you cross a state line, laws are different practices are different right so there's a level of education you need you don't need to go pay 50,000 dollars to learn it but you do need to understand there's you know mortgage states and deed of trust states for example as soon as you go to another country well now the very basis of law can change as it does in Mexico Mexico's based on Napoleonic civil law that's different than what we're used to to you in the U.S. and in Canada and places like that and so in the zones we were in coastal property areas in Mexico, you don't actually own the land. You own a bank trust, something called a Fita Camiso. So that takes a while to get your mind around. Like, I don't have fee simple title. Well, isn't that scary? Well, it can be, right? So there's the learning curve there. But Mexico is the first place we went. And we bought some property passively there. And then we developed two projects in Mexico,

which was great experience. Today, I don't know that I have interest in doing anymore in Mexico. It is the opposite of a tax haven. Very political, very difficult. Very difficult. Very different. to get things done, in my opinion, but it was a great learning experience. And how do you operate in a completely different country with a different language? So that was tough. We invested a little bit in the Dominican Republic. That's in the news a lot today, the Dominican Republic. But today, just passively, you know, interested in that market. My next market was Australia. Australia was interesting for a lot of reasons. They almost speak English, right? It's a long way away. But we had an opportunity to invest with a huge company with a giant track record owned by a big conglomerative

that is publicly traded. And so there was some security and stability in that. It was new construction in a great area. And that turned out to be great. Again, lessons about team and who's behind any project. And most of these were just one z's and two zes. And then after we made this strategic decision that Mexico probably wasn't our long-term development home, we went on a two-year search. And we wanted to find another company and another country. And I think a preface to this is what really set me off on this direction was when Las Vegas, Nevada went up 52.6 percent median home price in one year. We knew something was wrong, right? We didn't know what it was and we made a ton of money doing it, but it's like, wow, this can't sustain. Now, today, we're probably better educated

about those things. But at the time, there was just something tugging at me. And I had been attracted to Cabo San Lucas, and that was the first market in Mexico we went into, and that turned out to be pretty good for us because, again, not leveraged, unleveraged down there. So unleveraged properties don't get into trouble when the mortgage market explodes. And then we sat down and said, okay, let's find another market. Mexico had a lot of great things to offer, but also a lot of negatives. And we went on this two-year quest. We went to every country in Central America, most of the Caribbean. We wanted to stay closer to home. My investing in Australia taught me that, I want to be within a few time zones of where I live, just easier to conduct business if you're active.

If you're passive, not as important, but if you're active. And if we're going to go there and wants to be a place we'd enjoy going, so we ended up in the country of Belize. And Belize had a ton going for it. It's the only English-speaking country in Latin America. So everyone speaks English. The laws in English. So contracts are English. It's postcard beautiful.

Where we are is like a Corona commercial. The water's 82 degrees. There's palm trees and white sand. I'm about to make my 137th trip to Belize, and I never once have looked on my calendar and said, oh, man, I've got to go to Belize next week. It's always great. I take my family there. We vacation there every year.

It's extraordinary. Now, that wouldn't be enough. There'd also have to be a real estate opportunity there. And so to answer your question, specifically, Brandon, the largest project we have is in Amberger's Key, Belize, and it's the single largest hotel by room count in the country. Now, it didn't start that way. That sounds all impressive, but we really just started to try to come next to the great operators in the country and provide what was needed. There was a real demand for quality hotel rooms that wasn't being met.

And again, financial construction is difficult there. You can't really get a construction loan very easily. And that's actually a good thing. It means that you don't see too many broken projects, but it is hard to get off the ground. And so it's been such an amazing learning opportunity. It seems like it's always two steps forward, one step back. But it's extraordinary. And we've got a bunch of great folks behind us.

And it's humbling to go there now and walk around and go, wow, we built this thing. Yeah. That's so, that's super cool. When you say you don't have a construction loan, does that mean you're financing the entire syndication basically via all, I mean just all raising money for 100% of it. You're not using bank financing at all? Pretty much. That's what it means. And that's a heavy lift, right? So first of all, first money in is our money. So we're at risk and we're all in. And then rather than go to, we, you know, have some good connections and we thought about, hey, we'll just go, you know, grab a bunch of

money for this thing. And instead, we wanted to empower people to be able to go out and raise money themselves. So we created kind of an environment where people could syndicate three or four rooms inside of a Hilton Hotel. Well, that's a hard thing to do. How do you buy four rooms of a Hilton? Well, you don't. That's not something that's typically available. But we figured out a way that folks could do that and raise the money to do it.

And so we only did one syndication ourselves just to build the model homes. And from then on, we found folks that we want to come in and syndicate. You know, when you syndicate, every day you wake up with two problems. You got to find a deal and you got to find money. And our premise was, imagine a scenario where you didn't have to worry about where the next deal was going to come for, because you'd just buy another lot and have another four, you know, five or three hotel rooms. And folks could just continue to raise capital in a market they understood

and in a market they were talking to their investors about. So that's how we did it through a army of syndicators. And it's been, it's been quite a journey. That's cool. So there's something I want to make sure that I understand, right? One of the things you guys mentioned was you're investing in countries that don't have financial leverage, which meaning like it's hard to get loans to buy real estate. And if I understand you correctly, what you're saying is that if you go buy real estate

when it's not easy to get a loan, when that funding does come, when their government does like what Arge does, where they support Fannie Mae, Freddie Mac type loans, now people can afford to spend a lot more to buy that same leverage because they could borrow money at a cheap rate, which makes the value of it go up a lot. Is that the basic premise? Bingo. That's exactly what happens. I mean, look what happened to housing when Fannie and Freddie were created. They basically introduced subsidized debt into the system.

And the purpose was to make housing more affordable, but it made it more expensive. Look at what happened to college education. They instituted student loans. The idea was to make college more affordable. It actually made it more expensive. Same thing happens anywhere debt gets introduced because you pull purchasing power from the future into the present. And then people can take, for example, a 6% 30-year-free. fully amortized loan, $300 a month means I can pay $50,000 more today for that property.

Well, if you're the owner, you know, the seller of that property, that person's $300 a month is $50,000 cash to you right now based on their ability to bid up based on cash flow. And so until that shows up, there's no debt service in the marketplace. So the cash flows are very solid. And once it does show up, typically it begins to push the rents a little bit too. In this case, it's overnight rentals because you have to build in the cost of debt service, so you end up pushing the higher end of the market. But the point is that it pushes up the pricing.

And so you're always looking for those kind of opportunities to get in early. But that's exactly how it works. When you bring purchasing power from the future into the present, and it doesn't just have to be that country, I'm not holding my breath for how long it's going to take for Belize to figure out to bring financing. But what we experienced in Mexico was that at the height of 2006, 2007, U.S. lenders had made every loan they possibly could make in the United States. Part of the reason we had the crash is because now I understand this.

I didn't understand it back then is we have an economic system that requires perpetual exponential growth of debt. And when you have lent to all the good borrowers, you have no choice but to lower your standards and lend to the marginal borrowers. When you've done that, then you've got to go look for new markets. It's just like any company or anybody who's trying to grow, you've got to get out on the margin. The problem is, is when you're doing that in debt markets, debt markets can collapse. Anyway, so they were moving into Mexico.

Now, of course, the crash came, and then all the lending potential in Mexico went away. Yeah, I'd cut back. But we're back at that phase. So at some point down the road, as long as this expansion of global debt continues, global lenders are going to be looking for premium properties to loan it. Yeah. And so, you know, for us, they're not going to be lending on single family homes in the country of police. It's a third world country. It's very poor. But Primo Resort Properties on a tiny little island with no capacity to expand where you've got a big brand name development, big developer, great product. We think, and we don't know, we'll find out. But we think that at some point, that's going to make great collateral. And either private or institutional lending is going to come along and want a piece of it. it. When that happens, you know, the folks that get in before all that happens are probably going to ride an equity wave because that's typically what happens. I can't say that's going to happen,

but it wouldn't surprise me. Well, for anyone who doubts that, all you have to do is look at what happened in 2001 through 2007-8. That's what drove prices to go so high was the lending standards were lowered and opened up and money flooded in there and people, they would pay whatever they had to for a house if someone would give them the money. That's the thing. If the money's there, they're going to take it, they're going to pay more. It was great if you owned a property like what you were saying. Your values went up. People kept buying it.

And then it's not sustainable. You also mentioned that and it ended crashing. But that principle is absolutely proven through that time period. When you say why was housing so expensive, it was literally because banks would give you the money. That's why houses became so expensive. Well, I call that the air in the jump house. You know, when they've got the pump on and they're pumping a lot of money into the economy, they got a lot of air in the jump house.

and everybody's jumping around and having a good time. You know, when somebody trips over the cord and the air stops, the thing deflates all of a sudden, it's not a party. It's a cluster. You're good, yeah. Head to the concrete underneath it. It doesn't feel so good anymore. Exactly.

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Airbnb has a great feature called the co-host network, which makes hosting your home so easy. If you live far from your property or are away for extended periods, you can hire a local co-host to take care of the hosting for you. These co-hosts are vetted locals who already have experience hosting on Airbnb. A co-host can handle all the details like messaging guests, creating your host space, and managing reservations. So everything runs smoothly. It's a practical way to earn a little extra money, maybe even some cash toward your next trip.

Plus, you get to share your place with someone traveling to your area while you're off making memories somewhere else. Your home might be worth more than you think. Find out how much at Airbnb.com slash host. Wouldn't it be great if your houseplants paid rent while you were out of town? I mean, they've got the whole place to themselves, lots of sunlight, zero responsibilities. But no, they just sit there waiting for someone to spray them with some cool mist like a bunch of leafy loafers. But guess what? Your home actually could be earning you money while you're not there. Airbnb has a great feature called the co-host network, which makes host. your home so easy. If you live far from your property or are away for extended periods,

you can hire a local co-host to take care of the hosting for you. These co-hosts are vetted locals who already have experience hosting on Airbnb. A co-host can handle all the details like messaging guests, creating your host space, and managing reservations. So everything runs smoothly. It's a practical way to earn a little extra money, maybe even some cash toward your next trip. Plus, you get to share your place with someone traveling to your area while you're off making memory somewhere else. Your home might be worth more than you think. Find out how much at Airbnb.com slash host. So I want to ask you guys a question about, I'm sure you're asked this all the time,

but you talk to a lot of investors. You guys are looking at the world market, but you're also, I mean, still in America, so you're looking at the U.S. market. Where are we? Like, what ending are we in before a crash comes again? Is it going to be a big one, do you think? I mean, obviously none of us have crystal balls. But what are you seen in the U.S. economy right now?

And what are you doing to prepare for it? Such a great question. And you're right. Everybody asked that question. I was on a panel two days ago, and that was the question they wanted to know. We had Dr. Doug Duncan, you know, Senior Vice President of Fannie Mae and their chief economist on our summit for two years in a row. And one of the things he said last year was, you know, these cycles don't die from old age. There's something that happens that creates the change.

And so, yeah, we're long in the tooth, but at the same time, our Federal Reserve has done an amazing job of kicking the can down the road. And that's not necessarily a compliment. But I think we're late. I think we're near the top of the cycle. There's all kinds of reasons to think we're there. I don't think that we all ought to be pulling out every dollar and sticking into the mattress quite yet. But I think you need to be proactive.

You need to be thinking about when the next downturn comes. How can you be best prepared? Because I know that in 2008 we were ill prepared. And in 2019, we are much better prepared. Well, I was just going to say, this is, you know, I spent a lot of my time studying this because it's fascinating to me, you know, coming from the money side and understanding that this is all financial market and economic driven. You know, it is hard to say because I think anybody who's an observer recognizes that

the central banks around the world have been passing the baton around the globe, taking turns devaluing the currency and pumping up debt and pumping liquidity into the global financial system. How long can that go on? I don't know. But, you know, the point is you have to be prepared to weather the storm. And I think real estate is arguably the best investment to do that. I could do a whole dissertation on that, but I won't. But I do agree with Robert, and I think it's a general consensus that we're closer to a top than we are to a bottom. And so now's the time to be thinking about hedging equity. It's thinking it's a good time to be getting liquid. It's a good time to be locking in long-term debt on properties that you expect to be keeping long-term.

And just being prepared, you might miss a little bit more of the upside, but you'll more than make up that by being liquid when the time comes, when there's blood in the streets. And, you know, it's, I used to, like, really resist the idea of, like, a vulture fund or the idea of capitalizing on other people's misfortune. But the reality is, having been the blood that was in the street, you know, somebody could have come along and bailed me out by buying a property out and mitigating some of my loss. They're actually helping me. And I would be okay with that. I didn't realize that back then. The other thing is, is we talked about this a lot on the show, because, you know, it shows. been going on since forever.

And so we went through that whole 2008 thing. And we talked about Healing America, one house at a time. And so when somebody comes in and buys a house, investors are like the white corpuscles in the economic system. And they run around and they clean up all the garbage and they get rid of the bad debt. They get rid of the bad properties and they put things back in service. So there's going to be a lot of those kind of opportunities. So again, it's just a matter of being prepared, you know,

so that it doesn't really matter which way things break. You've got a plan if you're only geared for one for sunshine. And even though the forecast is sunshine, it doesn't cost you that much to pack an umbrella. And I really think that from a financial perspective, you know, everybody should be taking a look at their portfolio and looking at their exposure to rising interest rates, not saying they're going to rise. I mean, they're currently going down, but they could. And then how liquid are they really? And what are they exposed to? And then really tightening up, the properties that they have, making sure that they're really operating optimally, that, you know, you've got competitive rents that you're not at the top of the market. I think right now

would be a dangerous time to be top of the market in a product niche, in a market that's a high end of the market. In other words, when things contract, you've got to have somebody above you to bring some pressure to where you are. So the good news is real estate's not an asset class. Because it's not an asset class, whatever goes on in the macro really doesn't matter. It only matters. is what goes on at the micro. But if you're in a market where people who living in a more expensive area, when down times come, will move to you, then you actually will get some upward pressure when everybody else is feeling downward pressure. So I think market selection is real important. Product niche in the demographic you're servicing is very important. Price point

is very important. How your portfolio, your balance sheet is structured in terms of liquidity, that's very important. Making sure that you don't have exposure to the potential for rising interest rates, even though you might pay a little bit more for that right now. I think it's good insurance. So there's things that you can be doing in a market like this without completely disengaging. Have you guys seen those companies that are literally giving you the down payment for your house in exchange for a share of the equity in the property? No, I haven't seen that.

It's like a Silicon Valley tech startup type thing. But they'll say, hey, we'll give you 10% or 20% or whatever, the down payment of your house. But we own 30% of it. And when you go to sell it, you have to pay us back then. Wow. That's how much money is. floating around that people are putting into real estate that are not thinking. Well, based on that, I think we're higher to the top that I invite me.

That changes your opinion a little bit. I know. I think Brandon and I met a guy who worked for one of those companies a couple years ago in Hawaii. And then, because I live in the Bay Area in California. And one of my clients works for that company. And he, like, that's actually part of his job is to help them find houses that they're going to give money to. And then like, well, five or 10 years later, when they go to sell it, we're going to get all this

cash. I'm like, that is, that's like gambling. Literally, that's a gamble that you have zero control over, but it's a legit business doing it. And Russ, I think you made a really good point that we often criticize the vultures, but a vulture serves a purpose. If you didn't have vultures, you'd have dead carcasses stinking up the place everywhere, right? Exactly. And that's kind of what Blackstone and some of these hedge funds did after the last crash is they were the vultures, and we all criticized them because they swooped in and they took everything. But that's also what cleared up the mess that all the people that had spent too much money for a house had made. So rather than criticizing the vulture, ask, well, how can I be prepared to be that vulture? Maybe you can pick a better animal. I'll be

a hawk or eagle or something. Yeah, but I mean, that's the idea. So part of it in being resilient, and we talk about this a lot with our friends at peak prosperity, the concept of resilience is they talk about eight forms of capital, but one of them is social capital. One of the things that Rob and I spend a lot of time working on is our network. We have, I think, arguably, one of the best networks in the business. And because of that, when there is opportunity, we have a lot of people that will take our phone calls. We have a lot of people we can talk to that have resources. And the thing is typically the way the Fed responds to economic crisis is to help the rich get richer. They believe in this trickle-down thing. If we just help the rich

get richer, there will be plenty of money in the system. Eventually, it'll find its way through the system to the little guys. That may or may not be true. I'm not here to debate. The pros and cons are relative merits of that. It doesn't. matter because nobody's asking me, but I just observe it. And I can see that that's the way it works. And so if you have relationships with lots of people that are on the winning end of quantitative easing and loosening of money and printing of money in order to stimulate the economy, then you're going to be able to aggregate that capital and put it to work because the people on the other side of that, when they end up with all those gains are like, okay, now what am I going to do?

Like right now, there's something going on. This whole Opportunity Zone thing is really interesting. It's like, to me, step two. And it's really interesting because you say, okay, President Obama, who was on one side of the political spectrum, passed the Jobs Act, the Obama administration created the Jobs Act, and buried inside the Jobs Act was the ability for purveyors of private placement syndicators to advertise to accredited investors.

Before you had to have pre-existing relationship, where you had to have publicly registered security, which was extremely prohibitively expensive for small deals. And so that really opened up the ability for people to find investors and for investors to find deals. And so we talked about that a lot on the show back at late 2013, 2014, when that first broke. Now, this new thing with Opportunity Zones and the tax law that the tax law that the Trump administration pushed through has elevated real estate to being arguably the best tax shelter there is. And on top of that, the Opportunity Zone thing has now made it possible. for people who have unrealized capital gains in anything, including their stock portfolios for

the folks like Robert that bought Apple computer, you know, way back in the 70s or whatever it was. Nice move, Rob. And they've been sitting on it. They've been sitting on it because if they sell it, they're going to have to pay the tax. They want to pay the tax. So they borrow against it, but they don't sell. And yet they recognize every day that if the markets do blow up, they're at risk. They can't diversify.

Well, today with the new Opportunity Zone's Law, they can't. They can sell those properties. They can roll that money in. And it's done in such a way, if you really break it down, and we've done a few shows on the Opportunity Zone thing, that when the money moves into a marketplace, it has to be invested in rehabbing and done on a mass scale. So whereas none of us as individual investors,

even a group of investors, a group of syndicators, aren't powerful enough to turn an entire neighborhood or to turn an entire community. But the Opportunity Zone thing has the potential to do that. The hedge funds, just like the Blackstone's got involved in cleaning up the single family housing mess now are very much interested in they're aggregating a bunch of capital billions and billions and billions of dollars that are going to come in. You as a small investor may not decide you want to do that, but as a syndicator,

you can go in and buy these little small projects in the same areas and get in on that action, that flood of capital. I mean, the essence of trying to catch a wave is just figuring out where the capital is going to be moving and then getting in on the action. So these are two kind of related things. They came from two very different administrations, but all are boating extremely well for real estate investors and real estate syndicators in particular right now. And if you want to know how to catch a wave, there's no one better to ask than Branden Turner. Now they show them Hawaii. Yeah. We call it the buy in Hawaii. Catch a wave, but I can show you where to find one. All right. That was awesome. Yeah. Opportunities zones are something

that intrigues me. And we could do an entire, you know, a dozen shows just on that. And then The other problem I have with Opportunity Zones is I feel like, I mean, not a problem. The thing that's interesting about them is if I ask a dozen attorneys or Opportunity Zone experts about exactly what it is, you'll get a dozen or 13 answers, right? Like, I find that, which doesn't necessarily mean it's a bad thing. It just means it's something that like there's a lot of opportunity and opportunity zones right now. It's early. It's early. It's super early.

You know, it's like we were talking about who do we have that's an expert on that? Well, just nobody because up until a few weeks ago, and even now it's not. finalized, right? Every part of the wording of every law is not finalized. So it'll be interesting to watch. And I think big picture, it's going to do a lot of good. And like everything else, there'll be, you know, folks that rise up and there'll be those other folks too. Yep. Yeah. I get conflicted about it, you know, partly because like, you know, the phrase like the pioneers are the users with the arrows in their back out in front of the, you know, like, I part of it. Yeah. Yeah. Exactly. Right. So I don't want to be the first necessarily. But also,

the first sometimes end up being the Steve Jobs and the Bill Gates. And so it's a, you know, I'm not saying there's not opportunity there, but it's definitely a, yeah, I'm not sure which, where to jump in. I haven't yet, but, you know, maybe. I think the biggest thing to me is that the, what the opportunity zone opportunity does is it allows people that previously were not really that interested in real estate. They were investing in companies or metals or equities. And now the reason they're not selling and appreciated assets,

like Russ talked about is because of the tax thing, and here's a potential chance for them to sell and defer and diminish their tax and then to invest in something that is truly tax-free. So someone that previously wasn't interested in my apartment deal is like, wait a minute, I could be interested in that just because of the tax law. Now, we always say don't let the tax tail wag the investment dog. Don't make an investment just because of tax. Because tax, as we just learned, can and does change.

But at the same time, the tax benefits are, are huge in real estate and we definitely want to take the best advantage we can. So I'm with you. We haven't jumped into it, but we're certainly eager to watch. Yes. I think it was a brilliant idea, though, from the government. Let's figure out a way to get other people to fix up these areas that we cannot do efficiently by getting people smarter than us with money to put their own stuff into it.

And if they can trick people into doing what you just said not to do, do it just for the tax break and that's it. Like, I would bet when you guys were in the 2008 area, you talked about you're making all this money in your business and you're buying deals. A big reason why you bought deals that didn't cash flow was because the tax savings that you were getting off of the money that you were making. If you were getting, you know, accelerated depreciation and you can use cost segregation at the time. And it seemed brilliant until the bottom dropped out. So that's what scares me about opportunity zones is your motivation is that this is a sound financial thing based on good

fundamentals and principles. It's, oh, we can save all this taxes. So let's go do that. And then the next thing you know, your money's stuck in something you don't want. Yeah, I think I think what I'm saying though, is that you don't necessarily have to do it for the reason that everybody else is doing it. What I'm saying is this is a giant wealth redistribution plan. And normally when you hear that, you hear about tax and spend. Well, that's one way to do it. Another way is to create tax incentives and motivate wealth to move. It's two different ways of doing the same thing. So the Trump administration is gravitating towards the idea of getting the government out of the way and creating a tax incentive that is going to incentivize people who have money to take a tax break and move it.

What I'm saying is that when they choose to do that, we've identified where that money is going to go. And we can get in to those markets ahead of that money or alongside that money. And it's going to be easy to see it happening. Similar to what you guys were talking about with other countries, right? Try to get in before the leverage comes to bring up the value. If you know that money's going to be flooding into opportunity zones, you want to be there first. Yeah.

It's the old Wayne Gretzky quote. Figure out where the puck is headed and, you know, skate to where the puck is headed. We kind of know where the money is going to be headed. We know that real estate is hot right now. I mean, you know, we've got at least for another two years or a year and a half and maybe more. We've got a real estate guy in the White House. We've never had a real estate guy in the White House. People are trying to figure him out.

I mean, love him or hate him, at least it's easy to figure out the way he looks at life. He likes debt. He thinks everything is a deal that needs. to be negotiated. He doesn't deal with things in groups. He doesn't deal with commodities. He deals with individual relationships. So, you know, he's the only guy, only president, you know, that I've ever met, even though I didn't meet him after he was president. And he's the only guy that I feel like we have, we kind of know a little bit and understand a little bit because just we're friends with people that he's friends with and have been around, you know, him just because he's a real estate guy. And we've been a real estate guy

for a long, long time. But the point is, is that we can see where the capital, where the government wants the money to move. The tax code is telling us where they wanted to go. And they've specifically identified these geographic zones, which are not hard to identify. And so now it's just a matter of just paying attention and getting in position and being ready to ride that wave as it continues to be. That's fantastic.

All right. Well, this is a very different type of show. So I'm going to actually skip a couple sections that we normally do. Normally do the deal deep dive and then we do the fire round, which are questions from the forums. But this was just so good and in depth. I want to move towards kind of the closing here. Make sure we don't tie this up all day.

So the next segment to show that I want to get to is called our Famous Four. All right. Before we get to The Famous Four, let's see what's going on this week over on the Bigger Pockets business podcast. Hey there, everyone. This week on the Bigger Pock's Business Podcast, we are talking beer. Our guest is a guy named Dave Thibodeau,

and we'll hear how he went from living in his car to building a brewing company that's now going head to head with some of the biggest companies in the adult beverage space. This show is for anyone who's looking to take on big competitors or who's working in a constantly changing industry, which is pretty much every entrepreneur I know,

including all of you real estate folks out there. So go check out the Bigger Pockets Business podcast in your favorite podcast app, and subscribe today. Now let's get to the famous four. All right. With that, let's get to the famous four. So for the last 300 and some episodes,

we've been asking the same questions, final four questions to every guest. And so we're going to throw them at you guys. And you guys can answer separately. I'm assuming you have different answers, but maybe you have the same. But the first one is, do you have, other than maybe your own?

Because I know you guys wrote a book, but other than maybe your own, do you have a favorite real estate-specific book, some book about real estate that has stood out to you? You know, since you've been doing this so long, I noticed that a lot of the folks have some of the same books. There's not that many great real estate books. I'm going to throw out one that's not a bestseller and it's not that well known,

but it's really well written in its total contact. It's called Construction Funding, written by Collier. And it's just a no-nonsense book. If you've ever been wondering about how construction or development projects get funded, it's got a really sizzling, sexy name, construction funding. But a brilliant book, and you'll learn from it for sure. That's great. Russell?

I'm not that clever. I really do like our book. The reason we wrote it is because we felt like the world needed it. Of course, that was 15 years ago. Yeah, I write another one. But I know. Well, we need to update the one we wrote. It's on our to-do list, but it hasn't made it to the top of the list.

You know, I got to say for me, it sounds kind of crazy, but I'm just going to say rich dad, poor dad. And the reason is, is because that was really what helped me understand what passive income really was all about and the importance of passive income. I kind of understood it before, but it took a long time. I mean, a couple of reads and a lot of spending time with Robert himself to really begin to understand what it means. I know it's technically not a real estate investing book, but it's such a paradigm shifting book. And I think you can't do anything until you shift the way you think. Agreed. So Rich Dad. 100%. All right. What about your favorite business books?

Yeah, that's a tough one. We read so many businesses. books and you look at your bookshelf in anticipation of being on the show. It's like, gosh, I have a hard time with favorite, too. People say, what's your favorite beer? It's like, which is your favorite child? You know, it's like under different circumstances. But the book I'm going to go with is Stephen Pressfield's turning pro. Not a business book, but an entrepreneur book, and it's a kick in the butt. And you'll feel like he wrote it just to you. And it's a quick read, Turning Pro by Stephen Pressfield. I'm actually halfway through that one right now. I'm always halfway through like a dozen books, but that's one of them, I'm halfway through. I'm loving it. Yeah.

And it was the War of Art was his first one? And the War of Art, which is a great book too. Definitely. Those two books together, read them like one book. Yeah. Good stuff. Russ? How about you, Russell?

Yeah. Well, I already mentioned Jim Collins good to great. I think that's a great book. But I'm just going to go with a classic. Sorry, I'm in classic code today. But E-Mith by Michael Gerber. I just think that, you know, really what a business is. And people say all the time you should run your real estate investing like a business.

And you all the time, you should run your real estate investing like a business. And you all, to run your business like a business, even though a lot of people know they run it like a hobby. But a business is just a system of processes, you know, even getting ready to come on to do this podcast with you guys, you guys have a process. And you know, we have the five forms you send and this process that we go through and these little formulas. And it just makes life so much easy, so much easier, so much more efficient that I'm just going to say that nobody explains that better than Michael Berber. That book was transformational for me. Huge. Yeah. Cool. All right, number three.

Number three, what are some of your hobbies? Music for me. I love music. I love going to shows. I've been playing in band since I was in junior high school. What do you play? It's the one thing I can play guitar and a couple other things. But it's the one thing I do that really has nothing to do with anything else. Although we do certainly push the boundary there. But I just think music is great. It's so impactful. And there's music to help you through anything. And whether it's working out or just you're down to the dumps or whatever it is, Music is magic. Brandon, he's a musician as well. And he wrote a song while I was in Hawaii called Somewhere Over the Rain Burr. Oh, or is an acronym that we use. And I just wrote the Burr book and I think it was to commemorate.

Pretty much. But it's hilarious. I mean, I just cannot look at that video without laughing at. That's awesome. Your Burr book is on my bookshelf behind me because I think you guys sent us a couple copies of that. Right on. We sent you guys an advanced reader copy.

Awesome. Well, and we're happy that you guys will actually sing on your podcast for now. And we certainly don't do that. I try to limit that. Brandon peer pressures me into it. He's always, I'm like, Brandon, I'm not comfortable. I don't want to sing.

You're going to like it or I'll find another co-host. That's it. He's like a bully. Yeah, I don't think I've done that. Anyway, Russ. Robert would be just the opposite with me. You better not sing or I'm going to find another co-host. That's for sure.

I have a reputation. What about your hobbies? Russ, what do you do for fun? You know, I thought about that. Actually, I'm kind of in a hobbyless mode. I'd say probably my number one hobby right now is still, I study economics. I mean, it's a boring hobby. I took up my saxophone.

I kind of broke out my old comic book collection the other day, and I collect coins. So I've done different things over my life. But in terms of what I probably actively spend most of my time doing, which is probably related to the show, is I just study economics. I just think we're living in the most interesting economic time. I really do think that somewhere along the lines, the global system is going to reset. I think we just happen to be fortunate enough to live at a time where we're going to get a chance to get a front row seat and watch all that happen. And in the chaos, there's going to be a lot of opportunity. I just want to make sure I'm on the right end of the chaos on the opportunity side.

So that's what I spend most of my time. I feel like that could be a whole podcast right there on the future of the global economy. But people have to listen to your show for more on that, I guess. There you go. Number four, what do you believe sets apart successful real estate investors from all those who give up or they fail or they just never get started in the first place? For me, I think you've got to focus on the why and not the what. If your what is to put money in your bank and to collect a lot of doors, that'll only be exciting for so long. But if you have a compelling, passionate why that drives you every day, whatever that is for you, it could be personal, altruistic.

some dent you want to make in the world, if you'll focus on that and let real estate be the tool, the vehicle that drives you there, that will keep you in the gain. And we see so many people get all enthusiastic and then dwindle off to the next thing. But at your core, if what you're put here to do can be enabled by your investing in real estate,

then you'll never quit. Beautiful. I'm going to say relationships, I think that a lot of times that investors spend too much time focusing on the money, they focus on the transaction, they focus to Robert's point on the how to. And, you know, once you've got the why, which I think precedes everything, because you're not going to do anything until you have a compelling why, the first thing you really want to spend your time doing is relationships. And I see so many people play their

relationship cards poorly because they're trying to extract a little bit extra profit from the real estate agent or from the deal or from their service provider. or from their property manager. And it's just the stupidest thing ever. I mean, you know, create abundance and invest that abundance in relationships and creating abundance for other people. And if you do that, plenty of abundance is going to be in your life, too. So to me, it's the biggest mistake I see investors make

is not putting enough emphasis on relationships and the most successful investors I see put all of their effort into building quality relationships. That's a great answer. All right. Well, David Green, you want to take us a final question? Last question of the day. This has been an awesome conversation with you guys,

just tons of wisdom spilling out of it. For people who want to find out more about you, where can they go look? Well, we decided to make it easy for everybody. We're old school. You can just send an email to us at BP, like Bigger Pockets, at real estate guys radio.com. And we will send you an email with information

about all the stuff that we do. We're easy to find realestateguysradio.com, but if you send an email to BP at realestateguysradio.com, it'll just land right in your inbox full of links and you can click away and learn all about us. Perfect, perfect. All right, very, very cool. And we'll put links in the show notes as well. I think we're at BiggerPockets.com slash show 337. So we put a bunch of links in there as well, things we talked about today as well as where they can find all your different resources and different things like the Summit at Sea and the syndication seminar

and all that good stuff that you guys have going on. You guys are prolific. It's awesome. We should get you to come one of these days, Brandon. I would love to. It's pretty fun. Yeah, it's kind of a who's. We just appreciate what you guys are doing.

It's amazing. And just the community you've built and the help that is available and just the nature of what you do is extraordinary. We couldn't be more thrilled for your success. And it's been just an honor to be on the show. Oh, thank you guys. Absolutely. Congratulations on everything you're doing.

Great job. Oh, thanks, guys. I appreciate it. That's awesome. All right. That was our show. Oh, man. those guys are legit.

Every time I hear from them, I've only talked with them like once or twice in my life. But every time I hear them like talking or I listen to their show, like my mind like grows like an inch. Like I'm like, it hurts. But yeah, they're so smart. It's hard to find the people that are kind of seasoned and experienced and they've been through highs. They've been through lows. And you notice when people have been heard a couple times, like they've had a couple crashes that they don't just say how do I find my next deal. They're really looking at the inner workings of what makes this whole thing move, what drives an economy.

what makes markets go up and down. What are the team members? They gave some really, really good insight into the right mindset where you don't need to know it all. That you don't get from some, you know, they've been in the market for three years and they're crushing it in their first three years. You don't see that level of kind of, you know, like depth of insight. Yeah. Yeah, it's very true. And I love the fact that they're doing a resort.

Like, they're doing a resort down in Belize. How cool would that be? I got to take a business trip to go check out my investment. I'm packing sandals and some board shorts. Yeah. Now I need to go take a trip. Belize. Not 137 of them, though, but I got to check out Belize. Anyway, all right. Well, dude, that was a lot of fun. So I guess we'll get out of here unless you want to chat for a second.

You do anything fun these days? I went for two hikes over the weekend. That was really good, trying to slowly get myself back into shape. I'm studying to get my broker's license because I'm going to start doing loans. I'm like those guys like 20, 30 years before. Yeah, real estate and loans. I just love everything there is to know about real estate. And once I figured out, I want to help other people doing it the right way. So that's, I mean, I still geek out over those little nerdy type things. But hopefully someday you and I are sitting in their seats and we're educating the entire world even more so on everything there is to know about all of real estate. It's fun stuff.

Yeah, there you go. Well, very cool. We'll keep up the hikes and come out here to Hawaii sometime and do it hike. And yeah, actually, you know, one thing we talked about today with Russ and Rob was basically how they use this summit at sea, which if you guys haven't checked that out, you should definitely check out their summit at sea. I haven't been on it yet, but I have a lot of friends who have. It's basically a cruise for like they went like nine days to like the Caribbean and like just talk about real estate with really high level people. It's super cool.

Anyway, inspired by that, I'm actually going to start probably doing something like that out here in Hawaii as well. Similar stuff like have just super high like functioning people. Like they're just smart people hanging out in Hawaii doing fun stuff, you know, surfing all that stuff. So anyway, I might be doing that sometime coming up soon. So keep an eye and ear off of that. You can find out more about that if I do it over on my Instagram at Beardy Brandon.

And of course, David will always be involved in those kind of things, I'm sure. So you can follow him at David Green 24 and follow Bigger Pockets at Bigger Pockets. And that's about all I got. So I guess we'll get out of here. I'm going to go. Thanks. I'm going to go to the gym. I went three times last week.

I know you were telling me to go to the gym. I went to three times. You're really trying to get me to move to Hawaii. We're going to have a bless. I'm actually going to the gym when we get done with this too. Well, have great. Go get your pumping iron. cheesy selfies of our ears.

Send them to each other. We should wear the same outfit at the gym. And then we could take selfies of each other. We're in the same outfit and send them to each other. If you guys think that's a good idea, comment on our Instagrams and tell us that we should do that. We'll start posting there. That's such an awful.

Building wealth and biceps. Guns. Same time. I had guns. Guns. All right. All right. Let's get out of here before we embarrass ourselves anymore.

All right. This is David Green for Brandon. voice like a combination of Fergie and Jesus Turner, signing off. You're listening to Bigger Pockets Radio, simplifying real estate for investors large and small. If you're here looking to learn about real estate investing, without all the hype, you're in the right place. Be sure to join the millions of others who have benefited from BiggerPockets.com. Your home for real estate investing online. Thank you all for listening to the Bigger Pockets Real Estate podcast.

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