Escaping the Drift with John Gafford - Did John buy a Rolls Royce? EP14

Episode Date: September 24, 2021

The Power Move Episode 14This Week:Are high-rise condo's a good investment?Did John Buy a Rolls Royce?Living life with intentionWith Chris Connell and Colt Amidan

From the art of the deal to keeping it real. Live from the Simply Vegas studios, it's The Power Move with Jon Gafford. The Power Move. Back again for episode 14. My name is Jon Gafford. I am your host with, I don't know, I'm not going to call it the most. That's a little conceited, I think, to say some shit like that. Well, I'm not saying, see, I got to go hostess on me, Colt.

That's where you're going? Is that what you went with? So next to me, as always, Colt Amidon. Hi, Colt. How are you today? Well, doing better. Better. You got a bunch of nerds.

Yeah, just. Star Wars nerds. I'm going to go and throw it out there if you didn't listen to episode 13 you might want to go back and look at it because I don't know if it was because it was episode 13 or not but it definitely came off the rails and if you want to learn all the things

you never thought you would know about Colt that's probably a good place to start because with us also is Chris Connell Esquire who was leading that chart I think baffled is a good way to put it. I believe I was responding to that charge. Because sometimes in life you come up across something where your brain hasn't made a neurotic connection.

No. Your brain goes, what? That's why time goes faster the older you get. So at 18, your life's half over perceptively. Isn't that frightening? From 18 to 80 feels the same as get. Yeah. So at 18, your life's half over perceptively. Yeah. Isn't that frightening? From 18 to 80 feels the same as 0 to 18. Really? That's why summers as a kid went on forever.

That's why a bee perceptively lives a long time in a bee's mind because it's seeing time very slowly, whereas you see. Yeah. So that's in the psychology of perception. They will find how when your brain has these neurotic pathways, things become less unique to you over time, right? You stop noticing. So you can control how you see time.

It almost felt like time slowed down during that conversation. It did. It did. It did. When Colt goes on his, I've never seen a Star Wars, I hate Tom Hanks. It's a case study. Yeah. I mean, yeah.

Tom Hanks is horrible. And his wife is so annoying annoying what's his wife's name rita rita's annoying i was married to rita probably make bad movies too to go four months a year four months a year out of okay tom hanks if you're ever watching this know that this is one this is one opinion of one man definitely is not a private ryan was a wonderful wonderful film of the entire porn movie that's saving ryan's private thought my neighbor was in that one that's a little that's a little different so you know i'd like to kind of uh today before we start shooting i did uh you know put out a call to say what do you guys want to hear about on the uh the old power move here and overwhelmingly

man i got a bunch of questions about real estate investment. And that's kind of the forte of what I know. I mean, for those of you who don't know, just being introduced to me, I own a 500 agent brokerage here in Las Vegas. We also own mortgage. We own title as well as we own mortgage and title operations across the country. We partner with great agents. I've been in this business for 15 years. I have flipped hundreds of homes. I am well versed in all assets of this. Colt is agent, even though he could have just operated that way under his law license. He is actually a member of our board, which is fun. So I want to talk about a couple of things. One of the questions I got today was, are high rises a good investment? Is it a good idea to invest in a high rise? So I'm going to give you my two cents on that, and then I would love to hear what you guys think, because my answer in short is depends.

It absolutely depends on what it is and depends on a couple of things. Number one is you got to figure out what you want, what your goal for it is. All right. If you're looking for a property, this is, this goes with all of this stuff we're going to talk about today. Everything with real estate investment, you've got to decide what you're trying to do. Are you trying to capture a place where you can use it sometimes? Are you trying to capture cashflow? Are you trying to capture a good return on investment when you liquidate it? Are you looking to capture appreciation? What are you trying to do? Because it's kind of like a stool. You're not going to get all the legs. You're not going to get everything. Sometimes you hit a home run, sometimes you don't. And how involved do you want to be with that asset? So when you're talking about high rises,

I'm specifically going to talk about high rises here in Las Vegas. And there's a lot of different ways you can go with this. So we have product in Las Vegas, like let's go with the Martin or those towers, Panorama, those towers. Those are towers where you can buy individual units. You own them. If you want to lease them, you can on a long-term lease because short-term leases are against the law here in Las Vegas, if anybody's curious about that. We have a little industry here that that doesn't jive with very well. Haven't heard of it yet. Yeah, down in the Strip. So we're never going to really have legal short-term rentals in the city of Las Vegas or city of Paradise, I should say, which is a lot of people don't realize that, that the Strip is not actually

in Las Vegas. But you're not going to have those legalized Airbnbs down there. So you can do long-term rentals on them, which is fine. Most of the big towers that are residential towers have incredibly high HOAs. Unbelievable. Unbelievably high HOAs. So when you're looking at those investments, you really need to make sure, for me, that's one of the first things I'm looking at, is what's the HOA?

How is this going to play into a monthly cash in a scenario for me? What's the highest HOA you've seen in town, Colt? What do you think? Oh, the highest one? It's Queens Ridge, I think, is objectively. Well, I mean, no, I'm pretty sure. You get like Turnberry,

it's per square foot. So I've seen stuff that's like $10,000 a month. Yeah. And the Waldorf is brutal. You know, I don't see a lot of that turnover in the Waldorf. You're probably right. But I thought Queens Ridge had like two bucks a foot or something. Yeah.

It can be bad. So when you go down there, make sure that you know what you're getting with the high-rise air. Now, if your goal is to have a product that you're running out on, you know, we have condo hotels here in Vegas, which was a thing during the boom where essentially they built these towers that were associated with the hotel. The MGM. The MGM signature. Palm's Place is that way. Trump was that way as well, where you essentially you're purchasing a hotel room and you own it. The product, you look at that and that looked like a relatively safe deal if it went in

their rental pool, but you look at something you didn't even think, think happening. Think about the people in the Palm's place. For those of you who don't know this in Las Vegas, what's going on? What's going on? Palm's gold.

Absolutely nothing. It's closed since COVID. It's getting sold to the Native American tribe out of California. And yeah, could you imagine paying all this money to sit in a condo that you can't even go down and use the amenities? Yeah, you can't do anything. You can't do anything. Nobody saw it. Well, more importantly, the draw of that product is that you're getting in the rental pool for the hotel. So the hotel can book, you know, when people call a reserve at Palms, they could book your room as well. And that's

where your income is coming from. That's the driver. So if you don't have that- Probably a bad long-term investment. Yeah, probably bad. But here's the thing, Signature and MGM, which is attached to them, I actually like that one. And the reason I like that one is because it has the most flexibility of all of the condo hotels. You can put it in their rental program. If you want, you can pull it out. If you want, you can live in it. If you want, yeah, you can do whatever you want. You can, there's actually a, there's a sub leasing company that like, if you want to put in the alternative leasing program, there's a company that does nothing but lease those, those,

those buildings out. That's fine. Uh, if you want to rent it out for six months, a year, it's super flexible what you can do. But I'll say, have you heard this? I heard this, and this was interesting. I don't understand. Apparently, they're being completely non-cooperative with future owners and or realtors there now. Really? Yeah. When you go there now, number one, they won't even talk to you at all. If you go ask the HOA anything about uh the programs or anything else they'll say we can't talk to you for not an owner they won't talk to you and if you want to preview units you can't park there anymore you got to park at mgm and walk through the tunnel really walk all the way through the tunnel to get there they will not let you park there which i didn't

understand that at all that was weird you think that it's just, do you think that somebody's trying, you think that MGM REIT's trying to take it back over? I think you'd have a fiduciary duty to treat your tenants in a certain way. So MGM, whoever the LLC that, one of my former employers had a couple of those units. And they rented them out and did all those things with them. And they were pretty easy to work with, I thought. Yeah, I mean, back in the day, they were super easy to work with. I kept fighting.

And something you can do, by the way, tax assessments. So I was fighting tax assessments for them. And I lodged, but I went down to the city and did all this stuff. And we won and got certain rates lowered and whatever. But at the end of the day, they were pretty reasonable and they were kind of helping us fight that because they didn't want those assessments to go up as well. Yeah.

Maybe that's why they were friendly at the time, but yeah. Well, I mean, you know, again, that's the kind of hotel product. Yeah.

But if you're looking at the other towers, you know, you're looking at the panorama, the Martin, the Ogden now, the Ogden now, a weird, there's one right in the middle strip. Cosmo actually has a couple of units. Yeah. You're looking at the Panorama, the Martin. The Ogden now, too, which went through a weird thing.

There's one right in the middle strip. Cosmo actually has a couple units. Yeah, not a lot. Just a couple, not a lot. But the thing that I always tell people is when they're buying those units on the strip or in any major high-rise, here, if you get in another market, I mean, obviously, you look at New York City, the apartments are different. You can have vastly different improvements in an apartment in the same building here pretty much all these buildings are improved exactly the same way they

haven't they're not old enough to where they've been gutted and people have gone and totally redone them i mean sure some of them have been jazzed up the penthouses might have been sold gray shell and then oh they yeah panorama had that situation yeah where they sold some of the penthouse exactly so i'm not saying it's a situation. Yeah, where they sold some of the penthouse. Exactly. So I'm not saying it's a blanket statement, but for the most part, all of the units are pretty much the same. So when you buy in a high rise,

it's really like cans of soup on a shelf is really what it is. And the one that's marked the cheapest is the one people are going to reach for first. So it's very easy for someone to panic or have to force sell or have to do something and dramatically affect the value of all the insurance. We've seen the price of those things go up and down and up and down elastically as it goes along. So my advice like everything is this, and this is how I look at it, especially with those units.

Right now, especially in the Las Vegas market, it's very overheated on pricing. I'm not saying, again, if my $10,000 crash, is still there, maybe once a bit, me 10,000 bucks, there'll be a crash next 24 months. I'm happy to take that bet. But for me, what I'm looking for when I get an investment is I just need to make 500 bucks a month. If I can get 500 bucks a month out of it, it's a good investment for me. If I can't, I don't do it because it's got to generate at least that much. If it is, and it's a secure asset and I don If I can't, I don't do it. Because it's got to generate at least that much. If it is, and it's a secure asset, and I don't have to worry about it, I'm fine.

It makes 500 bucks. Your cash flow is above me on your cash to cash. Yeah, that's it. So if I'm levered, if I take a mortgage, and my payment is X, and then I add in my taxes and insurance is there, plus the HOA, plus if I'm going to use a management company

to manage it for me, call another 10%. Again, that gets back to our working for your dollars again. I've had situations where, well, let's be honest. When I've managed my own properties, my wife was a property manager.

She was the one chasing stuff down and having to go pick up rent from people that didn't want to pay and this and that. She's retired. She's your lagatha. Yeah, she. She's kind of, she's retired. She's your lagatha. Yeah, she is my lagatha, but she's retired from that job.

She said, I'm not doing this ever again. I'm not going to chase money. Because she just didn't have the heart to push people out and do whatever we needed to do. But again, if I can make $500 a deal, I'm fine with that. But I want to be as hands-off with that equation as I can. There's some people that are very hands-on. They buy fourplexes in the worst part of town and want to go down and try to chase rents. And I'm like, dude, I have no interest in doing that at all. I have no interest. But if you want to do

that, that's fine. But as far as the high rises, really, man, I would just look at get with a good realtor, get with somebody that understands what they're doing, understand what the market rents are for that unit, understand what the vacancy rates are, figure out what it's going to take for you to rent it. When I always run performance on my $500 a month, I always run two months vacant just in case. And then I can do my 10 months. If that pencils out to 500 bucks,

it's a good enough deal for me and I'll buy it. And it works. As long as I can be hands off. Cashflow of 5,000 bucks a year. Yeah, that's what I'm looking for. That's great. That's what I'm looking for. Now, that's the high rise answer.

I mean, again, it really depends. The HOAs can eat up profit there so quickly. Yeah. So quickly. I think on HOAs, they're not HOAs. On the high rise, you have to look at it. What type of investment is it? The one, like you said, one you want to come and use for three months of the year.

One that maybe, you know, you want to retire in Vegas and you want to come and use for three months of the year, one that maybe you want to retire in Vegas and you want to just have that high-rise living. There's different types of investments that way. Have you ever lived in a high-rise? No, I have not. You know, I could see the – I hate it. No, I could see the –

I have a different story. See, I think you could. You're either going to love it or hate it. You know, I think that – All right, what if Tom Hanks built a high-'re either going to love it or hate it um you know i think that all right what if tom hanks built a high-rise would you love it and i go burn that so i lived in this the ogden when it was called the streamlined okay yeah i remember that sure back when it's the streamlined towers 2010 to 2012 good job sam cherry getting that built there we go sam cherry um and the building was 10 occupied when i lived there i had the entire 12th floor to myself oh my god tell me literally tell me you ran around with a

chainsaw like american psycho i god damn it john i'm gonna talk to you know it's so funny too it's one of my favorite movies how did you not think to do that there's still people in like the 14th and 8th but you got the whole 12th floor you told they wouldn't hurt what i did is my daughter and i would play like ball in the hallway so i actually had a very extended yeah but the daughter the daughter would probably be i had a two-year-old so i wasn't running out of the chainsaw but um i had the the gym on my floor it was cush and it was a great way to live and i was single and i lived on fremont street across the street from my favorite watering hole the grip thing you know that to me was a fantastic moment in time for what it was. Now I didn't have storage.

I, you know, parking cars, all that stuff's a real pain in the ass and you couldn't pay me to do it. Everything, everything, dude, that's what I lived in a high rise in Oklahoma city years ago when I lived

there for a short period of time. What? Yeah, dude, I'm telling you again, when you, when you, when you graduate from Hooters University, they tend to move you around quite a bit.

And Oklahoma was one of my stops. Hooters America bought out the franchisee there, and they shipped us all out there to turn those stores around, which we did. And so I had to live, and I lived in a high-rise there, and I thought, this is going to be the greatest. This is going to be the coolest. Until you have to go to the grocery store. Until you have to go to the dry cleaner.

So you have to do everything. grocery store. Yeah. So you have to go to the dry cleaner. So you have to do everything because you got two choices. And in the lower end buildings, which this was, I mean, I was, I was 20 something when this happened. So I probably wasn't living in a flossy building. So you're lugging all that stuff yourself. Or what's worse is in the higher end buildings, you are, I mean, you better walk around with a pocket full of pocket full of money because you're going to be breaking dudes off left and right.

Your door guy, your delivery guy, all these these people it's just a constant never-ending flow of breaking them off that's how people live in new york though yeah like that's literally we went and saw a friend who was in dental school at nyu and he was on houston and they had a fifth story walk up or something and i remember walking up these stairs to go see him and it's we're on the third floor i'm like you do this every day when you leave your hat in the car oh god like you know what i mean like those the little inconveniences of life yeah are why ultra wealthy people sometimes have five thousand square foot houses instead of 20 yeah yeah you know what i'm saying like there's just sometimes

you get this could you imagine having a dog living in that and take it down all the time no and i i oh god i didn't have a pen at the time because i'm not doing that i'm not going in and out i did when i was younger i lived in an apartment building i had a dog so i was you know one of those people that you know built a a place where the dog could pee off the balcony like in a in like a right right whatever garden but looking back on it's it's disgusting. Yeah. Yeah. I, the little pee pad for the dogs. Well, it was like a built area for the dog and it didn't really affect anything, but it was disgusting.

It's just not a, it's not sanitary. Have you, I don't know if I've ever seen a good investment in the high rise. If you're not going to utilize it and use it, have you? You do a lot more. No,

no. People that bought during. Yeah. Well, in Panorama. Yeah. Those guys are turning some of those, especially the townhomes, those two stories. Yeah.

They got the H-A-Ways, but those are very unique and they got a ton of amenities. So there's people that always want to live there. Yeah. I think that, and it's funny too, because some of the school thought like something you just said that people don't think about. Like you said, oh, I lived on the 12th floor and I had the gym there. Right. It was awesome.

But did you know, like I just sold two units in Sky for, again, the same guy that fed me, you know, super expensive wine yesterday because he's moving to Russia. Exactly, Michael. And I just sold two units in Sky and his units were on the amenity floor. And they sat and sat and sat because people are like, I don't want this many people walking by my door. I did live where nobody else lived though. Yeah.

So people were traipsing through my hallway. Maybe it would have been different, but my experience with it was very convenient. Yeah. It just, I think, but all those little things matter. And I think anyone to look at the high rise again,

the view, I mean, you know, certain buildings, you know, every building is going to appreciate a little bit per floor as it goes up based on the view. And you need to understand what that is. It does matter. It's such a weird market. But I think for me, man,

I am a single family house guy. I am a multifamily guy when I can get a deal that makes sense, if I can get money into all of those things. And I think primarily single family investments are where kind of most people start out when they do this. And, you know, one of my, one of my, one of my mentors, one of my friends in my mastermind group, a guy named Kent Clothier has got something that is amazing. It's absolutely amazing what Kent does. And I want to talk about it. And you can, you can look this up or you can hit me and I'll connect you. But Kent flips, this dude flips like 200 houses a month. Wow. But how they do it is really exceptional. So he's telling me this idea and this is what they do.

So they operate in 12 markets across the United States. They, they buy direct basically from consumers. They, I mean, they, they buy off them. They buy everywhere,

but anyway, they buy, they buy direct basically from consumers. I mean, they buy off, they buy everywhere. But anyway, they buy these properties. They renovate them in every market they're at to just make them perfect, right? They renovate them, modernize them, do everything they need to do. Then they get a tenant. They put the tenant in them. And then they sell them-

To an investor. To an investor. And they continue to manage the property. Yeah. So they are now probably one of the bigger property management companies in the U.S. They manage the whole thing. And they're selling them at like 13, 15 cap rates, which is, that's a great return. And if you lever, you know, even kind of better on that.

And, you know, so I'm going through this thing, and I'm a guy that's flipped a bunch of homes. I'm a guy that's done this. And I'm like, man, you know, that's just stupid. You're missing the profit margin of the original acquisition to this buy. You're missing that. It's going to screw your IRA. It's going to screw all this stuff up. I'm going through this. And then I go back to what Ryan Steumann Hardcore Closer said, which is don't work for the same dollar twice. And I'm like, I can put money in this asset. I can get all the depreciation. I can get all of the benefits of owning it, all of the things I can write off.

And I don't have to ever go see anybody because they're handling the management. They're just sending me a check. So is it going to a pool or do you own a fee sample? No, you own the asset. You own the actual asset. So, for example, I said to Kent, I said, how long would it take me to get a house? And he goes, well, you know, based on the current list we have of people getting them, I can probably get you something in probably about 65 to 70 days based on our current run rate.

And I said, how long would it take me to get 10? And he said, well, you know, I can probably fill that with a new house about every 10 days. Because they're in 12 markets. Because here's the thing. Like, people get so hung up on the fact that they need to be in the market that they're in 12 markets. Because here's the thing. People get so hung up on the fact that they need to be in the market that they're in. And I'm like, man, but these guys are in all of these markets where you can still buy a house in Birmingham, Alabama, in Huntsville, in Kansas City, in these markets where you can still buy a house for $150,000, $200,000.

There's still cash flows in those teens that will still hit all of those boxes. You can't do that in Las Vegas right now. It's almost impossible. So they're managing it for them too? Everything. So then they're taking – They're triple dipping. Oh, dude, he's killing it.

I mean, I think it's millions of dollars in long term. You know what's funny about that, John? You bring that up about triple dipping. But the way I see it, it's like everybody should get paid for what they do. A thousand percent. I'm not a lot of, I'm not mad at them. No, no, no, no, no, no. I know, but I think sometimes people have this thing where they go, well, I could move to Birmingham, Alabama, take over that market as opposed to just being, what am I comfortable with? I think a lot of people, when they think of investments and money, it's about, Hey, what's that guy getting on the other end of it? I deal with this frequently as an attorney right there's a lot of times where somebody made you a two thousand dollar offer then i come in as an

attorney and i get you a twenty five thousand dollar offer and i get to eat keep eight thousand three hundred on a contingency i take a third but instead of you going hey you got eight thousand of that i only got sixteen six six oh yeah they look at yeah it's like, no, no, no. You're up $14,000. Why do you care what I got? Yeah. Well, dude, that's kind of, I mean, honestly. It doesn't happen to me. But I'm saying just the concept of people that think, well, why are you getting this much money?

Dude, that is in the business of what we do now. In my main core business, which is open, we find large real estate brokers across the country. We open joint venture partnerships with title and mortgage with them. And it's not a franchise, dude. We're not selling that. It's a straight 50-50 JV of just the mortgage and title. I don't want any part of their real estate business. You keep your brokerage. I'm good. I'm not asking you to brand over your real estate brokerage. I don't care if you're a REMAX. I don't care if you're a 21. I don't care. We are going to build a mortgage entitled company on top of your existing brokerage. And we are going to split it 50 50. And we have seen that when we modeled this out for people and I can see it going in their heads, I can see this. And it's happened a couple

of times already where we've had brokers see that, see the model coming and all they see when they see those giant numbers is what we're getting. And that to me is this scarcity mentality. It's this whole starvation thing where it's like, well, I don't want to go to a feast because then you're going to get to eat these giant, you know, Turkey drums. Yeah. It's like, well, wait, what are you eating? What do you care what I do? You had cheese and crackers before. Now you're eating caviar. What do you care how much caviar I'm eating with you? Yeah. That's the mentality that's for people. So that, that scarcity mentality is poison. Well, and here's the thing, you know, we spent millions and made every mistake in the book doing

this. And what's funny is, you know, especially when it's mortgage, when I, when I see it happen with this, and it's happened now twice, which I don't like, we had two deals that we were, we were, we were on our way to do, we were on our way to getting done on our way to doing, and all of a sudden hard left turn from the broker because they're going to do it with their existing mortgage guy. They have, they have a lender, an LO that's been with their office forever. They've known that all of a sudden that guy is now gone from, I'm a loan officer to, I am a mortgage executive. No, I'm worse. I am a, I'm an exec. I'm a CEO level executive. Yeah. But I can get this done. And I'm just, I watched them and I wish them well, and we send them on their way.

And I just kind of put in my calendar, this guy's going to be calling me seven months when this just goes down. You're not terribly precious about your idea, too. Here's the thing. It doesn't take a genius to go, hey, I have an idea. But it does take skill, ability, knowledge to execute. And we talk about that a lot here,

about people think their ideas are worth something, and they're not until you do something with them. So these people go hey wait this guy wants to jv with me and just have a mortgage and a and a title company stacked yeah as well as concierge or whatever else you have next but yeah they're going to stack but they're going to take half the business i generate for what yeah right as opposed to going well shit i'm not doing it now and i was not going to do it yeah yeah and and i have these relationships with lending officers i have relationships with title As opposed to going, well, shit, I'm not doing it now. And I was not going to do it. And I have these relationships with lending officers. I have relationships with title companies.

But what, they sent me a Christmas basket? No, what's even worse are these cats are making like, here's some free sushi in a conference room. Here's a free sushi in some conference room. Yeah, and some bagels. Here's some swag. Here's a Tumblr with my lending company name on it. And it's like. Who hosts a CRE.

Well. I'm like, that's not. Part of it's a compliment because I guess we make it look really easy. Right. It ain't easy. No, no. That's what I'm saying. But people think that, oh, I have this idea.

Well, this guy approached me with an idea. So I'm going to run with it. Right. And you're going. It's not like that is a bad, you know, what I'm saying is a lot of times people get on these, oh, I want you to sign this NDA because they think it's going to protect something because their idea is so revolutionary that nobody's ever done it, right?

Now, vertically integrating real estate, title, and mortgage makes a ton of sense for people that have been in the business. Yes. Implementing that, however, navigating everything that comes along with it is something that is so complex that it's not like you, John, sit in your office and just strike some papers and it gets done. No.

You hire talent. No, no, we have very talented people to do this. Very talented people to do this. So these brokers sitting out there in their other market, and this isn't a pitch for your company, but these brokers out there thinking, well, this guy who's a loan officer for this company, he's just going to come do that.

It's like, no, you're not talking about the same level. I'm setting up a real company. Yeah. And people don't realize you might sit there and say, oh, well, they're taking 50%. Well, go do it on your own. It's not that people come to me all the time. Why don't you just start your own real estate brokerage?

I'm like, it would cost me way more than what I give my current brokerage and for the record and for the record i'm kicking you off the podcast i thought i was getting kicked off but no it's people don't look after the star wars but i don't think people realize a if you go do it your profit margins maybe are five percent better what's your deal E&O coverage? With 80% more headache. Well, if you can even get it open. 80% headache for 5% of more income, right? Here's something John and I deal with all the time.

Things like E&O coverage. As an agent, okay, go buy your own for what? What are you getting for what you're giving up? Which is skyrocketed, by the way. What am I giving up compared to what am I getting? Well, I think, you know, it's, I saw some saying, I'm not, I'm going to, I'm going to quote it terribly, but it was like, if I spent 15 years learning how to put a screw in the wall and I come to your house and it takes

me five minutes to do it, you're not paying me for the five minutes you're paying me for the 15. It's that deck building analogy. Yeah, exactly. That's what it is. And it's like that, that's what you're paying us for. And I think it's just, you know, we actually had a conversation where like, man, maybe we need to dumb the profitability of the real numbers down a little bit. Cause it's just, I think some of these guys see some of these numbers and we get, we get some big brokers and these numbers, I mean, there's seven figures. I mean, these are big numbers. Do you want to do business with people that don't understand things like economic addition or value add? No, but at the same time, I see a little bit of myself in there as well.

Because even in anything in life, when somebody comes to me, I'm always looking for the mothership. Anybody that comes to me and says they have a service, be it social media marketing, be it whatever it is, I'm always like, okay, you're probably an affiliate. There's probably a mothership behind you. And I immediately go to the internet trying to find a mothership and I'm pretty good at finding the mothership. Sure. And then I can just cut the affiliate out. So I get it. I just had that happen. Yeah. But when you're ground up vertical, you know, vertical integration situation, these are complicated companies. Yeah. These are complicated companies and you have people running at it. And this isn't a pitch it's just the idea to me if i was a simply group the best thing you can do for your real estate company today but here's the thing what's the cost yeah what are you giving up

to yeah your headache and your time you start exactly if you're a broker and you have to make the one thing like john's always he's always wanting a new car, but he's afraid how it's going to come off, right? Because he's afraid of how people will look in the brokerage, right? We've had this conversation. Yeah, we've had this conversation. Did we have it on the air? I don't know if we've ever had this on the air.

I think we did. Yeah, we did. It's a 911. But here's the thing. Did I tell you this? Okay, because we had the Wraith conversation back and forth. I did spend $150,000 on a new vehicle the other day. No, you didn't.

Yes, I did. Oh, you bought an airplane. No. That vehicle that I invested $150,000 on, I invested in the same ghostwriters and editors that wrote Tillman Fertitta's book, Tell Me You Write a Book. And I guarantee you that vehicle will take me a hell of a lot further a hell of a lot further than that

Rolls-Royce Wraith would have been really really that's what you and that's what I I stroked that check uh four days ago I thought about me and the wife talked about it for like a day because I mean that's a decent clip I mean 150 grand for something that there's a minute there's no there's no like normally when I make an investment it it's all – it's math. I look at the data sets. I look at historicals of like investments and I try to figure out. Yeah, there's no quantitative return for this. But these guys wrote – it's Kenny Anderson Associates.

You can look them up. They wrote Tillman Fertitta's book, Joe Biden's book. They have a string of New York Times bestsellers. We did a long interview with them. Made me feel good. They don't take everybody. It's not like just because you can write a check, they don't take it because they want to keep

their string of success running. And yeah, it's a lot. And it was a big investment. But it was like, I can go blow this on a car or I can blow it on this. And if nothing else out of it, like I told my wife, I said, look, if nothing else out of it, when I'm long on the ground, you know, my grandkids, grandkids can at some point dust off a book and say my great grandfather. Yeah, I agree with doing things for posterity. Yeah.

And, you know, until they get to chapter six about, you know, how many strippers I bang when I run nightclubs in Atlanta. That may not be the good move. But yeah, that's okay. That's okay. Good for you, Granddad. Whatever. Who's that guy, Max, the guy who wrote the book about being an asshole or whatever?

I don't know. Asshole's finished first or whatever. I know who's living it. I know who's living it. That guy made his claim to fame. I'm pretty sure. I'm not an asshole. Tucker Max.

No, no, no, no. So Tucker Max has a great product, which is called Book in a Box. Tucker Max has that. And he's a smart dude. But he limped into it through that publishing deal about his time as a fucking restaurateur's son. Yes. No, no, no. 100%.

And I looked at that product. And I was like, okay, but there's a lot of heavy lifting that you're doing yourself with that. Oh no, I completely think that you should deal with professionals when you want to limp your real vision. And if you want to be a SoundCloud rapper, do you literally want, yeah, there's different ways of going about it. And I think you can be successful either way, but John, you're not going to SoundCloud rapper way.

You're going Warner brothers, a Warner brothers. Here's my album. Here's an option it's good i understand i have to pay for studio time and it's it's real but i'm using your lawyers services you're and that's on and this is end-to-end representation on it which is which is which is legitimacy well let's take a break so uh colt can get a refill and uh i don't know just we're gonna take a break we'll be back in a minute. Hey, that's awesome. That is so cool. Hey, it's John Gafford. If you want to catch up more and see what we're doing, you can always go to thejohngafford.com.

We'll share any links of things we talked about on the show as well as links to the YouTube where you can watch us live. And if you want to catch up with me on Instagram, you can always follow me at thejohngafford. I'm here. Give me a shout welcome back welcome back to part two of today's episode of the power move episode 14 where we are talking about real estate investment i am course m john gafford to my left is colt amadon and with us also chris connell esquire to keep us out of trouble or hopefully from getting canceled which yeah we might get canceled. We might not.

I don't know. It never goes. But, you know, for the break we were talking about, I just made a pretty lengthy, stroked a pretty big check to my book, on my book deal. Wrote a check out to get a book written. Look, you know, I'm a smart dude.

I'm quippy. I tell a lot of good stories, but writing is not a forte for me. So rather than me try to personally write a book that was going to be garbage, I went out and basically solicited the best people in the business to do this for me, to help me with this book.

And I'm excited about it. It's going to be good. Do I get a chapter in this book? There's going to be a whole case study on you. I think there'll be a whole case study. But you asked me, Chris, before the break. Actually, hold on, John. Before we get into that, maybe some things we can leave out.

Yeah, some things we can leave out. Some things we could leave out. But no, so you want to talk a little bit more about that. Also, later in today's episode, I want to talk about Airbnb arbitrage, which is something I just learned a lot about. It's a concept that I do really like. We'll talk about that. But again, back to talking about the book deal.

So even during the break, you asked me, you said, man, I love that. That's talk about that. But again, back to talking about the book deal. So, you know, even during the break, you asked me, you said, man, that's, I love that. That's a good deal. And what do you do? And how do you come to that? I don't know if it's a good deal. I haven't priced it up, but I think that's the right thing to do is invest in yourself always. Yeah, yeah, no, it was, it's, it's, this is the, this is the Rolls Royce of what this is. There's no more expensive place to do this or have this done. But they're the best people in the business to business to end and help me get, help me accomplish what I want. So, you know, how do you get there? How do you make a big decision like that? And how do you do this? Well, you know, there's a saying in for a penny and for a pound is kind of what I would go with with this. So when I kind of started doing this and the whole purpose for, and I'll be honest with you,

I'll tell you the whole reason if you're enjoying this podcast, if you think it's great, if you're watching on YouTube, if you're following on Instagram, I'll tell you the whole purpose for this. So as we started doing the national expansion and doing joint venture partnerships with brokers, large real estate brokers across the country with mortgage and title, we have a great CEO that came to our company. He was head of franchising at Realogy. He was the CEO atising at realogy he was the ceo at another franchise real estate company called jpar out of texas very well known in the industry but we were still bumping into this who the hell are these guys you know because in vegas we are very big fish but you know it's outside of vegas who the hell are these guys so i made a commitment

that i needed to develop a national brand and it would be things that people would know. I need to get on more stages. I need to be more omnipresent among all channels and everything we're going to do. So I start looking for the best guys in the business to coach me on this and help me do this. And a company came up and that company is called monopolize. It's actually owned by Brett Knudsen. He's lives here in, it's oddly enough, the guy, we could hit a driver,

well, Colt, maybe three drivers and hit his house from where we're sitting. He lives across the street in McDonald Highlands. I am amazing. Yeah, lives across the street

and he has a company called Monopolize. They handle marketing and brand imaging for a lot of companies. It is hyper expensive and by that, I mean a monthly retainer

with these guys is take what you, take what you, I think the Golden Knights are oneer with these guys is take what you take, what I think the golden Knights are one of his, one of his clients. So take what you think they would spend on social media branding, but what, what, what a company like that is. And then understand there's no real drop off for an individual, just what it costs. So it was a massive investment in that. And you start, you go down that road and now all of a sudden you're like, okay, I'm doing

this, I'm doing it. And now all of a sudden you're like, okay, I'm doing this, I'm doing it. And now all of a sudden you're like, well, if I'm doing it, I gotta really do it. So you hire content editors that are cutting this thing up. If you're seeing this on TikTok, on Instagram, on YouTube, I'm not editing this up. I've got- Is this on TikTok?

Everything. I got virtual assistants. That's it. Yeah. As the kids do. Yeah. Great. See, we just picked up like a thousand 10 year old followers. Nice job, Chris. Nice job. No, but, but you know, I got VCs are cutting this stuff up. They cost money. And then it's like, you know, you go into this and you're like, okay, if you're in, if you're doing it, you can't do half of it.

You can't do part of it. So by the time this whole experiment is done, and again, this is a tough, it was a tough investor for me because I only normally invest in things that I can quantitatively look at a return. I can say, here's the data sets. Here's everything. This is the expectation. Based on previous, I can do this. In our business here, I know my cogs. I know everything that we do here.

I know how to turn those dials to make more money to cut costs to do things. I know, I mean, with agents here, I know how many, if they just make this number of calls a month, I know that this is going to turn into this amount of money. I, I, all of that is a data set. So to take that leap of faith off of the cliff, if you will, and spend the kind of money that I'm spending on this whole adventure, it's a lot. Can we, can we bring this back to like a nineties references and see how totally see how hip-hop suburban dads we really are okay i love it let's see it ain't no such things as you lost me halfway crooks did you have that one colt of course i didn't have that one i don't think i did no i didn't have where was that i mean obviously i don't know if you listened to it.

Was it Mobb Deep or whatever? It was an eight mile, Colt. It was an eight mile. Remember the whole crowd? The spaghetti. Yeah, yeah, yeah. Halfway Crooks. Yeah, you should like that movie.

Tom Hanks was not in it. You can like that movie. That was actually a good movie. Here's one for Colt because he's from Utah. There's no such thing as half pregnant. Oh. I'm going to go there. Oh, boy. Soaking. Soaking

that one in, Chris. Soaking. Soaking that one in. Soaking that one in. You don't want to know that. If you don't get that reference, you don't want to get it. Hard to get pregnant soaking in. The thoughts and feelings of Colt Aminat do not reflect that. I didn't say nothing. I said, nope.

Not going there. I have a Utah team. Moving on. We're going for a soak as a completely different meeting. Sorry, John, but the point is that in for a penny, in for a pound. In for a penny, in for a pound. Which Colt isn't about the cheapest. I thought that was about my neighbor, but okay.

No, so that's it. So, again, you know, back to investing, because we were talking about this before we talked about the high rise market, how it is. We talked about single family. I, you know, I think that, that four plexus and apartments is a whole nother show. I mean, that's literally, it's a whole podcast to talk about that stuff. Cause you can talk about that. I mean, there are very unique tax advantages of buying apartment buildings. I mean, the number one being accelerated depreciation.

If you're a high net worth earner and you're not investing in apartment buildings, just simply to get to the accelerated depreciation tax laws, you're nuts. Or a qualified opportunity zone, depending on what kind of timing issues. Let's save that for a whole nother show. But back to single family homes.

I kind of want to hear more about this book, John, that process. Or is this the SFR? No, no, no. I kind of want to hear more about this book, John, that process, or is this the, no, no, no, I mean, no,

we're not very far in it so far. I mean the book, I mean, so far we did, we did about a, we did about an hour interview where they kind of found out, does this guy have anything of substance? We can actually translate into a book,

you know, I mean, actually Colt, they do coloring books. Apparently it's much cheaper. So you may want to look into that. I was to say see your you heard oh my book deal is going to be way bigger when you guys have a two-time olympian and multiple sports oh my book deal is going to be huge okay it's going to be but you know what i feel like you just need a dragon on your cover

john and you'll just anything with a dragon if you're going to be huge. Okay, it's going to be huge. But you know what? I feel like you just need a dragon on your cover, John, and you'll be a rock door. Just anything with a dragon, and you're going to be good. They're going to be good. No, so we did the interview for about two hours to make sure that I had some knowledge in my field and knew what I was doing. So they interviewed you.

They interviewed me, and we could tie it together in kind of an interesting way. And after that, they were like, cool, we'd love to work with you. We want to do this. And then they slowly slide. Actually, that's not true. I knew the price going into the event.

They were very transparent. They're like, look, this is what it is. This is what we, if you want the full enchilada, here's the number. I mean, that's what it is. It just, and they're not hurt for business. What questions are they asking you during those? Or is it just like, tell me your story? No, no, no.

There was like four, like, do you know Cole Domodan? Which I thought was weird. Like, if you know him, you got to have a story. That's three or four chapters. No, it was just give us your background. Give us, you know, challenges. Give us what you teach people. You know, give us where you think the, you know, give us the direction of the book.

Is this a business book or is this a personal memoir? No, it's not. It's not a personal memoir. What it is is, you know, I believe that success leaves clues. I believe that failure leaves more. I've had my share of both. And I want to kind of go through that. But I think the overall theme of the book is going to be intention. And what I mean by that is there's too many people floating through the ether of life, not doing things intentionally. Like even my mastermind this

weekend, like even that man, I, you know, not to, I'm not going to call anybody out, but there was a couple of people that like, you get in the little, you get the table groups, you get in the little table breakouts and they're like, what, what did you come here for this weekend? And people are like, I don't know. I just, you know, I wanted to come. It's like, dude, how did you come to this? How did you come to this with this level of intelligence hanging around and not have like a thought out agenda. You know, obviously when you go to those things, you know, my first thing is I want to bring value. I want to try to like use my help as many people as I can. That's the first place. The third thing I want to do is I want to bring value to others. But also I've got a mental checklist of, I need to spend time with

this person. I want to try to learn this from them. I want to get some advice from this person on this. I have specific conversations that are set up in my mind before I even go. What about the philosophy that you don't know what you don't know until you realize you don't know it? So maybe some people are coming. I'm just wondering. I'm not going to play devil's advocate. But do you think sometimes people go there without an agenda or intention? I don't think in that.

Not in that level of a mastermind. See what comes up when I know there's really smart people. I don't think you really. There's a million masterminds nowadays out there, and I want people to realize your mastermind is on a whole different level than the quote on, hey, I got an attorney, I've got a real estate guy, I've got an insurance guy. We meet every Wednesday. This is a – these guys are flying now on private jets. These guys are doing big, crazy deals. I mean, we do a lot of investment deals and stuff and you'll come in

all excited, like, listen to what these guys are doing. And it's a whole different level. It's another level. But to your point, there are things that when I go there, I don't know what I don't know. And something will come up and then I will seek somebody out to learn more about it. Or if somebody says something, you know, I really try to connect the dots as much as I can at these things. Like if somebody says, oh, I need help with cold traffic, I'm like, I know exactly who you need to talk to. And I'll go grab that person and connect them and say, like, you need to talk to them. And there's times when somebody will come and grab me and say, you need to talk to this guy, and we have a conversation. And it's really good in that group that way.

But I think going just, you have no, like, I literally am like, I've researched every single person in that group. Oh, yeah. And I know. If you know kind of your breakouts or you know. No, no, no, no. I'm talking about, I mean, I try to figure out as much as I can the individual skill sets of every single person that are in this group before I go, because if I do that now I can network with intention. Yeah.

Yeah. Now I can intentionally do what I do. I think so many people wake up and don't do anything with intention. And I'm not saying ulterior motive that's evil, but I'm saying just live an intentional life is a really good point. It's like people that give the charity say, well, you're only doing that. I don't care why you're doing that's evil. Right. But I'm saying just live an intentional life. That is a really good point. It's like people that give the charity say, well, you're only doing that. I don't care why you're doing that. Yeah.

Just do it. Who gives a shit why you did it? The intention behind something, people always think that just because you have an intention, it's nefarious. Yeah. You should have an intention to get better, to grow. And everything. Experience life.

You're on this rock. You're flying in space. What do you want to do here? Right. And go do those things that support that. So I'm not the intention thing. I completely get that. And I probably don't do it enough because I worry about some of the day-to-day challenges of being an attorney, being a father.

You're kind of walking through it a lot of times, trying to survive sometimes. What's worse is you get on autopilot. Yeah, autopilot. And I think that's where we go. Okay, for example, case in point. My son is obviously the lacrosse thing. My son's been playing lacrosse he's trying to get better trying to uh trying to improve as much as he can and every day he's out there on the repeater and last night i kind of looked out there and he was on the repeater and he was just throwing the

ball and i could just tell i don't know where he wasn't even thinking about it and and i walked down i was like are you doing this to do it because you know you need to practice 30 minutes a day or are you doing it with intention that every single time you throw that ball against that net, you're trying to get better. You're focused on one singular place on that net that you're trying to make that ball land exactly in that one square inch and you're trying to catch it back exactly the same way every time. That's the difference between Michael Jordan and someone like Ben Simmons.

Intention. So Ben Simmons has got all the talent in the world, but you can see that he doesn't carry with him the desire to be excellent. That's why he's a shitty free throw shooter. You can tell why Ben Simmons is a bad free throw shooter or whatever. Michael Jordan, though, always went out with intention. LeBron James lived with intention. So that's the difference between superstars and stars.

Here's my question. I was thinking about this earlier i was listening to some podcasts some football thing and somebody brought up the point about in life you will get 50 of the way by showing up the whole concept of the greatest ability is availability okay okay people that show up on time to their job not early not late don't you have to come and be a superstar if you're there just show up you are literally halfway to success now you're talking about the difference you're talking about the nuance it's when you sharpen the pencil that's it but you got a writable pencil if you just fucking show up 99 of the time yeah oh that's like you're and i love that because showing up with intention showing up with

intention is a way to become a superstar right but you can be pretty goddamn successful tom hanks and get successful just because you show up i mean it's almost like there's this double-edged thing about life where you go okay i today am gonna go into autopilot yeah right like this whole thing it's so easy to slip into that it's so easy to slip into that. It's so easy to slip into those times of just coasting through everything. My point is I think it's okay to do that as long as you know how to get back out of it. I think that it's okay. Like I don't live, I don't need to live with intention every day. Some days I go, today I'm going to intentionally go out of my way to not do –

do you know what I mean? Are you saying like stress – maybe stress – less stressful day is going to be one that's just on autopilot, right? Let me give you a great example. That's what I would say. I'm going to go play golf this afternoon. Let me give you a great example. One of the guys that was speaking this weekend, I don't remember who this was.

I don't remember who said this. And they weren't even talking about intention. It wasn't even what they were talking about, but somebody asked a question or somebody said something about, you know, because this person traveled a lot and was on the road with business a lot and did a lot of things. And they said, do you regret missing time with your kids? Was, was the question. What was your regret? Are you, are you feel like you're missing out on your kids? Cause you only got till they're 18 and then they're gone. And the answer was this. The answer was when I'm with my kids, I am so hyper-focused on them.

And I am with them with a great level intention that I have a better connection, I have better memories, and I have a better relationship with my kids than somebody that sits on the couch all day and stares at their phone and or the TV. I actually couldn't agree with that statement more. And here's what I learned as a parent that had my first daughter 50-50, is that when I had her, I had her. Yeah. And I planned around. And that's kind of almost my question is,

you're talking about living with intention. So with my first daughter, I lived with intention when I had her. And then when I didn't, I didn't sit there and, you know, like, you know, I did, I had a. And then when I didn't, I didn't sit there and, you know, want like, you know, I, I did, I had a mental kind of a bridge where I went and crossed it when I needed to. Yeah. And I think sometimes people think to be success. And I would bring this up because the young, you know,

the young people that want to, I want to grind in real estate. I want to hustle. I want to do all this stuff. I think you're going to burn out. I think you're going to burn your ability to. No, but again, let me talk to that point. I would say you need downtime by intention. Okay, so that's how. You need intention. I'm not saying I'm going to take the best shower I have ever taken in my entire life. That's not what I'm saying.

Is the best shower to you cold or hot depends on what i'm doing depends no no no i gotta tell you it depends on what i'm doing if i'm if i'm out of the dry sauna cold cold better i like the cold better shrinkage it's cold i don't like cold showers why would you like cold showers i hate getting in a cold pool. He's never seen Star Wars. Can we just leave it at that? Is that?

I feel like that's a positive thing. I think it's a positive thing. This is like a perfect time for a Han Solo joke. Oh, God. No, here's the question. The question becomes. Is that what you do when you don't have your daughter in 50-50, the other 50s Han Solo? All right.

How the hell am I going to make the bumper for the episode 13 and try to squeeze that mayhem that happened into like 15 seconds? Just have it on repeat about Darth Vader. Nothing but Darth Vader? Just go with that? I need a book deal. So to your point, but that comes down to almost like definitional truth, right? For yourself. And to me, what I'm saying is I'm living my life with

an intention and it's a greater, it's like a Maslow hierarchy. It's my top down thing. And John, you know what my intentions are. We're going to go satisfy someone. Yeah. I want to go do Epic shit with my life. Yeah. I want to be able to look back at it and not think I've left a lot of rubber on the tires. Right. Yep. Now with that comes being a good husband. It could be a good father. It's all that. I watched the Saqqara. I watched that documentary. Did you? It's spectacular. It's pretty impressive. So you're about to go embark on history that I know that's going to be in the book. I know. Yeah. Oh yeah. It is. And so living with intention, living with intention, accomplishing things and going to see things in Dubai for 24 hours. Okay.

So, oh boy. So anyway, that was my only point. You're going to get me killed. I think that, I think that some people, they don't understand what it means to have balance and that balance is a part of intention. Yeah. So to your point, yeah, I would agree. As long as people don't mistake the word intention.

Well, yeah, I think what you kind of mean it is, but no, no, no, but, but in all things, it's the drift that gets you the drift. Yeah.

The drift, the drift is what gets every great thing that I've ever accomplished in life or every great thing that's happened to me has happened to me because I went after it with a high level of intention. Right. Every, I mean, even my wife,

man, I mean, I gotta tell you people that are dating today and you know what you, I mean, I guess you can kind of use the text thing, but back the day i was living in florida when i met my wife and i'm telling you the aol instant messenger which is how i used to talk to my wife on the uh on the old computer with our whatever it was but the aol Messenger, that thing was the greatest ever because you had a little delay. So you could think about like, okay, it was like playing chess.

You could be smooth and funny and interesting. And to this day, I don't know if I would have gotten my wife without having that delay where I could just not type something like, i'd never seen a star wars movie life with uh internet you know how it was having a dial up having to meet human beings in real life dial up do you want to hear a crazy story not a crazy story but colt the answer to that from you is always yes yes so i was a junior in high school, and I was in Spanish class, and my teacher hated me with a passion for no reason. Por qué? No sé. Por qué, Colt? No sé, pero.

Señor Colt. She hated me. And so we're in, like, the third and the second term, and I totally forgot we had, like, a four-page paper we had to do in Spanish. So I get online. This is before, like, translation sites or stuff. So the translate sites were pretty horrible, but my Spanish was horrible, so it looked like I did.

Well, the problem is I got two paragraphs into it. Someone called in, got back in. The default was French. So I turned my Spanish paper in. She's like, is this French? And some idiot in the class, he's an idiot. He speaks six languages. It's like, oh, you speak French?

Start speaking to me in French. And yeah, didn't it? But I got an A from there on out. That teacher loved me. I see. So the mark on that is 21 minutes and 15 seconds for the editor. I'm just saying. So if you're still listening.

And you know what Colt's first two sentences were in his spanish who says uh han solo is bueno dark vader is diablo dark dark dark vader well let's uh you know one of the back to investments i guess we'll talk about that i will try to uh one of the things that i learned about this weekend i heard a lot about i've known a little bit about it but i thought it was an interesting concept i don't want to talk about that. I will try to. One of the things that I learned about this weekend, I heard a lot about, I've known a little bit about it, but I thought it was an interesting concept. I don't want to talk about it, which is this, which is Airbnb arbitrage. Now, what is Airbnb? What is Airbnb arbitrage? It's where essentially you rent someone's property, you take control of it, you furnish it, and then you use it as an Airbnb, right? And so when I say that, what is your first thought? What is your first thought when I tell you that?

People don't understand this through arbitrage. Arbitrage is a risk-free process. So arbitrage means I've already sold it before I bought it. Yeah. Well, it means there's a spread. You're scraping the spread. But it's a guaranteed spread. It's a guaranteed spread.

It means I got the buyer and the seller already. So when I sign one contract the other time, I have a risk-free spread in the middle. I mean, it's risk-free. Are you saying, but on yours, are you saying that these guys are maybe leasing out properties and then personally turning those into Airbnbs? Yes, they're renting someone's house

and then turning it into an Airbnb. I need $1,000 for your house, and I have two weekends already rented for $1,500. Yeah, so what? No, no, no, no, no, no, no house, and I have two weekends already rented for $1,500. Yeah, so what? No, no, no, no, no, no, no, no. Like, I'm going to give you a 12-month lease. Yeah. That's how this works.

Oh, my phone's gone. My partner's gone. Sorry, we'll call him back. No, it's literally a deal where it's like, it's a 12-month lease. They lease it from the landlord, and then they turn it into an Airbnb. And my first thought was, why in the hell would someone let you do that?

Right? That was my first thought is, why would someone let you do this to the property? Here's what they do. And it's pretty slick. They approach the landlord, and they say, hi, I represent corporate housing. We bring professionals in to train, to relocate temporarily, and we need some corporate housing to temporarily house our professionals. If you're interested in leasing your house to us

to use for temporary corporate housing, let us know. Oh, wow. That's the pitch. Smart. So the landlords think you're bringing in Nancy, the accountant, to sit here for a couple of weeks, and that's how it is. Now, I know what you're thinking now. You're thinking, oh, man, if there's a party, the landlord's going to be pissed, pissed right and these guys have all those verbiage they put in the lease saying that you're allowed to do this now they check the county ordinances to make sure it's not illegal if you need a permit they get a permit that's fine all of those things that they do there's a website that they utilize let me pull up the website what it was. There's a website. It is called... Because a lot of these landlords, they don't even care because they bought this as an investment that they just need. Yeah, they just... And it

sounds like a good idea to have a bunch of professionals that roll through your deal. So here was the letter they did. I'm going to read you the letter. This is the contact letter they actually send out to the client or to the owner. It says, hey, blank, this is blank, and I run a corporate housing business where we host working professionals in the area. We host professionals who are training and or providing their services locally. They prefer to stay in the comfort of home that reminds them of their home rather than a hotel, especially with social distancing. I have references available upon request and would like to see if you would be interested in renting me your property for 12 month lease. Here's how it works.

I would rent your property for 12 months. I will pay the amount of your listing every month, days early. The property will be deep cleaned by my professional staff and will remain in the same condition as when I took it over. Let me know if you have any questions. Crazy. They're both named blank. I know.

Both named blank. So they get the lease done, right? And they put in the lease that they're allowed to at least at short term. What they're looking for is a 50% win on an 80% occupancy. So if the rent costs a thousand dollars and there's a website, that's when I went to look up and see what it was. There's a website where you can actually look up and see where this is and the website is called nope the website is called where's the website i think it's called mashup i think what it is that does not sound right no that doesn't sound right it sounds like when you put your face on celebrity and it turns it into i agree which isn't that that is fun which is which which isn't that fun

sounds like a jib jab of colt with uh tom hanks i know i can't i can't i'm sure you know what is your favorite time why he's doing this what's your favorite private ryan dude but that's why you keep defaulting to one good movie um now forrest gump was horrible horrible it was a story about a man who had all the odds against him in life you did not let that stop his ability go ahead back to private right back from private ryan so they just use the google machine you can find it you can find a website you can well you can find a website where it shows you in there that's yes he was it was leonardo cabrillo and him he was trying to catch him see now you See, now you got me. Now you got me on.

So, but there's, there's a website you can look and find out what the average rates and vacancies are for Airbnb in a given area. Just use the Google machine. I'm not sure what the site was. It's true. You'll find it.

They're looking for a, if the place runs for a thousand dollars a month, they want a net 500 bucks and on an 80%, on an 80% occupancy. They want to try. They don't want to try to go. They want to go for like 20 or no, it's less actually less than that.

It was, it was 60 because they say 20 days rented is what they want to do. And they're looking for a 500% win based on what they have. Then you hire a cleaning person. When you hire the cleaning person, you basically say you have to clean seven days a week. You have to be available seven days a week, whenever I need you holidays,

Christmas, whatever, you got to do that. And you've got to be available if they need something, a blanket or whatever, and you need to restock. And you need to be able to restock the shampoo and stuff and get all this stuff done.

They essentially become your property manager. Right. And you're paying them in cleaning. Now, the cleaning is free because it's a pass-through charge to Airbnb to wherever it is. And then they just turn them loose, man. They just furnish these things and turn them loose.

And they just, this cat that was laying this out, I don't remember his name. He wasn't part part of our group they just brought him in to talk about it but he was they had like 500 of these across the country i met a kid that dude it might have been the same kid because that kid had at the time it was it was like years ago and he had like 80 or something yeah so i'm looking at this and i'm thinking dude if you're one of those people out there it says i don't have the money to invest in real estate. I don't have the money to get started. I mean, you can go to Ikea and buy some furniture for not very much.

Yeah. Yeah. You are facing probably a lot of legal consequences of that though. That is where I would pump the brakes. Here comes counsel. Okay. But keep in mind a couple of things about this. Number one, as long as you disclose it and he says you make sure within the lease, you get permission from the landlord to rent it short term. You also get permission to change the locks. It's in the lease that you sign. It's an additional term. I permission to change the locks because we had to put a digital lock on it to give our people access. It's fine. And then also what they do is, here's the key, because what's the biggest fear? I forgot to talk about this. The biggest fear you're going to have is they do what? Damage it. They'll party and damage it, right?

He said the number one way to know if you're going to have a problem, don't rent to anybody within the city that you're in. If you have one of these in L.A. and somebody from L.A. wants to rent it, there's a good chance they're going to have a party or cause a problem in it. Some guy from Nashville, yeah, they'll rent it out. Some guy from Nashville, they'll rent it out. He's like, you don't have to rent it to everybody. You can just say no.

What they're doing is pretty much saying, hey, look over here. It's corporate housing. Corporate housing. Yeah. But what they're probably doing is putting in their leases, this kind of stuff. And he's probably glancing over like, oh, yeah, they're corporate housing and just kind of glancing. It is what it is. But also remember that, again. Did your counsel look over that draft is. But you can also, but also remember that again,

council look over that draft, by the way, before you send solicitation texts like that, make sure that I think it should be worded in such a way as you just say corporate short-term leasing. Okay. As opposed to like our, anything that hints that like,

this is a controlled, you know who they are, damage issues. I would just be very cautious and conscientious of the exact wording so that it's not misleading because if it's misleading that could be fraud and if there's treble damages and has all these things all right again no no no again this is information i heard from a stage you look into it yourself look into yourself don't quote me for anything don't come back and say i told you to do this there are probably ways to do this that is not one that we are recommending or endorsing but at the end of the day yeah

john's point remains that there's a dude that's just smart just shows you can do what you need to without the capital but again again you can you can install decibel meters around the house there's things you can do to control this to make sure there's no problems there's lots of things of things you can do. Um, and again, the thing, good thing about Airbnb is you can see the reviews of people before. If there's any damage to the property, you have their credit card. Yep. You got within, I think if, as long as you make the claim within the, before somebody else checks in, they're going to pay for it. It's part of the Airbnb thing. You can make a claim through Airbnb and they will hit their card. So the the risk is pretty low yeah there's a way to do it right absolutely um just how you phrase that and how you solicit was my only concern so if we learn anything in today's show

i think that we've learned that we learned what have we learned some of us up was in uh yeah he's the federal agent that busts them. Yes. That's why I didn't like that show then. Because I feel like that movie was great. It was real life. Just to let you know, a lot of that stuff in that movie was bullshit. It didn't happen. Yeah.

That's every movie made into a movie. But very specifically about Catch Me If You Can is that Frank Abagnale, the con artist, was on that game show. And a lot of what they took was at his word of what he said on the game show. It was not fact-checked. It was not background-checked at all. This whole wildlife he was running and cashing checks and flying Pan Ams, whatever, a lot of that was apparently bullshit. Nobody's – well, shocker.

It's funny that a movie about a con artist conned people into making a movie about a con artist. Oh, yeah. No, completely. It doesn't surprise me. The inception level of connery in that one is amazing. It's shocking. It's shocking. Well, time to wrap it up, boys.

Again, guys, if you like what we do, you can always check us out over on YouTube. If you're on YouTube, you can check this out. We were streaming it. Make sure you like and subscribe. Make sure you subscribe to the podcast. Check out some of the other episodes. I mean, especially, I'm going to tell you right right now you need to check out episode 13 it was bananas we'll just leave it at that and if you like what we do make sure you tell somebody and if you hate

it tell two because it doesn't matter if they're talking about you if you think tom hanks oh my god it's when they stop talking you got a. We'll see you next time. Sorry. Hey, it's John Gafford. If you want to catch up more and see what we're doing, you can always go to thejohngafford.com where we'll share any links that we have things we talked about on the show, as well as links to the YouTube where you can watch us live. And if you want to catch up with me on Instagram, you can always follow me at thejohngafford. I'm here. Give me a shout.