KGCI: Real Estate on Air - Michael Banovac, What the Top 1% Know That You Don't!

Episode Date: February 7, 2025

Welcome back real estate rock stars. I am Shelby Johnson and I am here with Michael Bannaback. He is a solo agent out of Paradise Valley, Arizona, has closed $12 million in the past year, but over the course of his agent life has closed, built, or remodeled over 200 homes with a value in excess of $200 million, so just a little bit there. And he now niches down into the luxury real estate development in sales role, although it was not always that way. And if we had to pick a specialty for Michael, it would be converting commissions into net worth with rental and real estate acquisition. So Michael, so excited to have you here. I'm so excited to be here. Thank you, Shelby. Yes, let's do it. Okay, hit me with some context. Like, you didn't just like pop out,

freaking selling electric real estate. So take us back and how did you get to where you are? So I was really blessed. Both of my parents were entrepreneurs, and I grew up with that at a very young age. My dad told me at age 18, he says, as soon as you graduate or as soon as you turn 18, you must get your real estate license. So literally the day I turned 18, I was taking my state exam. And I didn't know anything. I didn't know anything about a binser, an inspection, how to write a contract.

I was clueless. But what he did tell me, I think that the listeners could really utilize is no matter where you are in your life, you're going to always use a real estate license. And then he also told me, he says, you have to be different than most people. And you have to be different in the fact that I look back on my life. He made and lost hundreds of millions of dollars. And what he basically told me was the goal is to acquire and hold. You play a monopoly like you play life, right?

Your goal is to buy properties, hold those properties, build hotels, put houses on there and charge as much rent as possible. So I did that over the course of a decade and built my real estate empire and built my net worth, not necessarily through commissions, but using those commissions that I had to acquire long-term rental real estate and development. And then that obviously grew my net worth. And now I just hope to educate others on doing the same and achieving financial independence. So that's always been my goal.

Your dad sounds pretty cool. Smart dude. What's up? Michael's dad. Shout out. Okay. acquired, what did you use it for in the beginning? So actually, I was in college when I got it. So I got it, graduated at college at 21. And then my dad, this was 2011. So this was the bottom of the real estate

market actually in Arizona, right? Vegas, Arizona, Florida. We had a 45% rescission in home values. And so I had a fork in the road, so to speak. And the fork was, do I go into PWM, which is private wealth management or do I join my father into building a flipping business? And it was all the rage at the time. If you remember, Doug Hopkins had to show property wars and all of these things. And it was a hot topic to go to the courthouse steps and acquire homes. So we did that. My dad took a loan from one of his best friends for three or four hundred thousand and we got our flipping business off the ground. It was slow for a while. We lost money on a lot of deals, made money on a few. But then our volume picked up.

And actually, we got called to do a national article. It was in Fortune magazine, which was really cool. It picked up by money, fortune. It was how multiple real estate investors are losing money, flipping houses. But we actually didn't lose money. We didn't lose money. But what we did realize was through the volume, you acquire knowledge, right? And through that knowledge, you're able to tweak your ability to do less work and obviously

have an higher output. So at our height during that five-year time span, we had 186 fix and flips in the Phoenix metropolitan area anywhere from eight to 12 a month. And that really gave me a boots on the ground, I guess, master's degree in real estate, right? Location, you know, granite, you know, carpet, what do you have to do to market it? You know, twilight photos versus regular photography, pricing photos, all these different things gave me a crash course. and I really began to realize the money isn't in getting in and out of real estate. It's getting in at low interest debt and holding in perpetuity. And that's what really changed trajectory of my life.

Okay. So in the beginning, there's like a million different directions. But that's why. I'll just put it. So in the beginning, you are, you're pumping out fix and flips. You guys are acquiring them probably in ways that we can no longer in 2023 because the has changed so much. I even look back to, I got into real estate investing really heavy in 2018, 2019. And I feel so bad now when people are like, how do you do it? And I'm like,

in a different way that you will be able to because that world does not exist anymore. But I love how you also said, like, the reps, you know, I'm doing 186 flips. It's like you get so many reps and you get so good just by those real life experiences that you can't learn in a textbook. The hypotheticals will never get you there. But then you realize, is that, you know, flipping that high volume turnover, you know, that's also kind of, that's like a job in itself, finding the deals, renovating, you know, all that stuff. And so at what point did you realize that you didn't want, and what did it shift into? Like, did you ever consider doing like the Burr strategy and keeping the properties or you were like, I don't want these little ones. I'm

to shift the luxury. What did that look like? Well, it changed because a lot of that money, we didn't have any money. So, you know, my dad had tons of money. And then he went to 2008. And he had to file personal bankruptcy because he had over 350 million in personal debt. It was the third largest bankruptcy in Arizona State history. And so we had to start over. So when I graduated college, you know, I went from the top of the mountain to the bottom of the mountain.

And we were sharing a two-bedroom condo for $1,000 a month. And I was driving a Porsche Carrara convertible. We were broke. And so we had to utilize our brain and utilize our resources to use other. people's money and then we implemented hard money investors and hard money debt to acquire these properties. And if we could have kept them and used the birth strategy, we would have. But we didn't have that opportunity, unfortunately, because it wasn't our money. So we had to build it the hard way, which is a lot of what these agents are having to do or thinking they need to do now. And then the light

bulb went off and I said, I got to convert a lot of these commissions into hard assets that I own personally and my only partner needs to be the bank. And how did you do that? So someone's sitting out there and they're like, I have commissions. I don't have rentals. What do I do? So that's a great question. So again, I got out of college at 21. And by 23, I was looking at all of our portfolios and some of the houses that we couldn't sell right off the bat because it was a tough time economically. I noticed we were renting and we were getting really good outsized rents versus what we were paying for the property. And I thought, let me take a flyer and maybe buy a house for myself, because I knew that was the way to success. I just didn't know how to do it. So I was 23. I bought my

first house for $253,000. I put $8,500 down, which at the time was all the money in the world that I had. And I got a regular conventional loan at 5% down, right? I used my 3% commission as part of my down payment. And then I lived in the property, six to seven months. And I said, the only way I can make money on this is not by living in it, but actually renting it. So I rented the property and actually had an arbitrage spread of about $400 a month, which was the difference between my rental and my mortgage. And that got me hooked. Right. As soon as I saw that extra $400 a month coming into my account, I made a promise to myself that every two to three years, I would buy another house for myself living it, rent it,

do it again. And that's what really changed trajectory of my life. Yeah, so like essentially, you know, the house hacking-ish strategy, except you're not living in it when you're renting it out. But like, okay, so if I'm an agent and I'm sitting there and I'm like, I have these commissions and I don't know where to start, they could do what you did, which is instead of search for the like traditional investment property that, you know, maybe they think that they need to do, they could say, hey, I could buy using either a primary residence convention loan or an FHA or USD. or VA, whatever, I could use my commission on that closing to cover the expenses and then living it for X amount of time until it's time for me to do it again. Yeah. And the other thing that a lot of agents don't realize, and I didn't realize this until I did a lot of fix and flip volume is our commissions as well as our taxable income on flips was very high. You know, I mean, I was paying so much in taxes that I said, I got to find a system where I can actually

hold properties and offset properties through either depreciation and or capital gains. And that's why I took the primary residence route because, A, I get better terms on my loan, right? I can buy down the rate through seller concessions, et cetera, when I purchased the property, or I could refinance, I can rent, I can live in it. There's all these things I could do which gave me optionality. And I realized really quick that that optionality was the pathway to financial freedom because if you ever needed the money, you had an asset that you could borrow from herself. So that was really the turning point. If I am sitting there and I have less than two years. So I guess my question before I get this whole example, how did you get approved for your primary residence loan? Because if I'm sitting there and I'm a

newer agent, I don't have two years tax returns and I'm like, man, I can't do it. Or did you wait two years? What did you do? No, actually, what I did. What I did? this is what I recommend to all agents, befriend your local banks and your local mortgage people as well. And the reason you want to do that is you want to befriend underwriters that actually have the ability to underwrite their own loans. And the reason you want to do that is because you want to cultivate a story. A story is very, very important. And what I mean by that is no different than writing a novel, your credit report, your income, your tax returns tells a story. But you have to direct that story. the way that you want banks to read it, right? So how I got my first loan was I was a student

right out of college. And then what I did is because I worked for myself in theory and my father, I concocted a way basically to pay myself a strong W-2 year one. And then I had my college degree for year two in tax returns. And that's how I was able to qualify for the loan because I told a good story and I knew if I couldn't live in it and enjoy it, I could always rent it and cover my mortgage. So that's what I really recommend that agents do is even in a high, high interest rate environment that we are now. Focus on growing your down payment, fixing your credit history. And then if you're in the process of buying a home in the next year or two, focus on pumping up your W-2 income that you pay for yourself through a PLLC or an LLC so you can actually create

sustainable income that a bank will utilize the down payment. Okay, this makes sense. So they're out there busting, bust in their butts to earn this commission. They are building relationships, which sounds like, yeah, build relationships, develop the story at your own risk. But, and then from there, did you do this once a year? Like, did you do this every single year or how frequently? I did it as often as I could, right? And so the thing that I realized was I wasn't making a ton of You know, when you really look at commission structures, I think the most I ever booked was $200,000 a year off of CGI and stuff like that. But my net worth was growing quickly. You know, from 22 to 27, I became a millionaire on paper, not because of earned income, but because of money that I made in the appreciation of these homes and the leverage that I had in these homes that was offset by low interest debt.

And so what I always say is the quickest way to wealth is through leverage. And the only way you can leverage yourself safely in a way where you're not taking huge risk is if you actually put earned income into passive income in the form of equity in a home. And instead of being the provider of buying and selling for your clients, you should do all that, but you should practice what you preach and do it yourself. That makes sense. It does. And you submitted a super fun tool.

for our toolbox. And if this is the first time you're ever hearing about our toolbox, listeners, go to real estate rockstars network.com and you'll see the toolbox. But that is a net worth tracker. And I guess let's take it back just a little bit. Let's say this is my first time ever hearing what network is. What is net worth and what's this tracker? So net worth is simply your assets minus your liabilities. And what I sent in, which helped me dramatically, is I always say one thing to a lot of my students in ages. If you can't track it, you won't be able to stack it. Meaning, anything you want to grow in your life, you must track it. Excel became my best friend. A lot of people that I talk to, I always ask them a couple questions and it tells me exactly

where they are, right? How much are you worth? What did you make the most during a year and what's your asset portfolio? And if they can't answer those questions honestly or directly, I can tell you they're struggling financially. And it's okay. I was in that place myself. But it gave me the knowledge to understand and speak to people that had more than me. And I was a sponge, right? I was just soaking up as much information as I could. And the net worth tracker that I put in the toolbox everyone to use gave me the ability to not be discouraged. Right. When I look at what I look at, and I know real estate agents are a lot of the same in my book as well. When we look at our monthly movement, we sometimes get discouraged because maybe we don't have a closing now.

month or maybe a closing that we thought fell through. We don't have the income that we thought we had. But by using this tool, we know our net worth is growing over time. And in doing so, we know that we're going in the right direction or we're going in the wrong direction. We have to make a change. So that's why I added that to the toolbox. Yeah, it makes sense. And I'm looking at it right now. So if anyone's listening and they can't see it, it has by month like January through December, an Excel format that breaks down everything that would be considered an asset. So it has like checking in savings accounts, stocks, bonds, car, cash, real estate investments, etc. And then beneath that, the liabilities.

So anything that you owe out there, that rent, student loans, car loans, mortgages, et cetera. And then it tallies it down. So it's pretty cool because you can see in one snapshot all the list of assets as well as any growth or, you know, progress or falling off month by month. Yeah. And in agents out there, again, it's a really difficult business that we're in. And a lot of young people and older people that I talk to that are looking to hit the reset business in their careers.

You know, I always say, is this your goal to be a real estate agent or is your goal to be financially free? And there are two very different things because unless you have a team and you have all the things that Shelby talks about on her show to implement systems that can take you away from your business, you're not worked in your business. You'll never be financially free. I was on a podcast the other day. And I said, how many billionaire real estate agents do you know?

I don't know any. I don't know one. But I know many billionaire real estate investors that became developers and or had passive income through other avenues. And so it's using that knowledge that you have that you work so hard to create to not only help your clients, but also enrich yourself over a period of time. Yeah, I was just at, I was at Tom Ferry last week, the Tom Ferry Summit. And one of the things that they said up there was,

when was the last time you went to a retirement party for an agent? It's like, doesn't exist. It didn't exist. So I'm with you. Like this stuff is real, real near and dear to my heart. But okay,

let's talk about, so we're with you about you're buying a primary residence. You're living in it a little bit. You're getting someone into, you know, rent it out afterwards. You're using commissions in that way. But you jumped from that.

What was the next? step. The next step was we saw that those opportunities were drying up, right? As property prices kept rising, there was less meat on the bone, so to speak, to do fix and flips. And so I remember getting a call three or four years later saying, hey, I'd love to get into your business. Can you, can I pay you $10,000 for you to teach me everything that I know? I said, hey, man, that train left the station about four years ago. So you always have to be smart, right? You always have to be learning. You have to be able to calibrate. You have to be nimble. And so what I did with my father and our team is we said, let's go into luxury development. Let's figure out how we can create our own equity.

And let's figure out how we can create higher margins for less work. Right. So lower input, higher output. And so instead of doing a lot of volume, we did less volume, but we did higher price points. Same amount of work. Way bigger end result games as far as commissions and or you know, income raised, if that makes sense. And so that was the next step. In 2014, we built our first home in Paradise Valley, sold it for two and a half million. What kind of put me on the map as an agent at that time, I was 27 years old. And I was the youngest primary listing agent in the state of Arizona to sell a $3 million house at 27. And, you know, I got a lot of publicity at the time because at that time, there were not a lot of $3 million homes being sold in

Arizona. Now it's a dime a dozen. It's not a big deal. Back then it was rare. And many fallacies that you believe is kind of that past fallacy. Oh, I did it once. I could do it again. I could do this the rest of my life, right? $90,000 commission checks are just going to roll in, no problem. And then you realize if you don't have a system in place and you don't have a toolbox in place, which what you guys preach, it's very difficult to duplicate those same results. So that's when I started looking at my life and started realizing, where am I going to get the best results, not on metrics that other people find value, my competition, but how am I going to change the trajectory of my life, right? How am I going to acquire more assets? How am I going to drive the car that I want to drive, live where I want to live, create the passive income that I want to have?

And you really got to step back and analyze what's going right, what's going wrong, and make those concessions quickly. And that's what I did. The higher output, lower input, it makes so much sense to me. My first year, I'm sort of listeners have heard me say this before, but I closed 48 deals as my first year. And I was like, yeah, friggin average sales price was $155,000. Oh my God. So painful, right? So now I'm like, you know, if I could go back and do it all over again, man, I'm going luxury. Like I'm doing less trans, less reps and then have how much higher output. So all about that. If I'm listening though and I'm like, man, that sounds good, luxury development. How do you, how does you even get your foot in the door? How do I start with

that? The first thing you got to do is learn your market. So whatever you want to do, you have to learn exactly the process with which to do it. I was lucky because my dad was a licensed commercial and residential contractor. So I was able to piggyback off of him and let him take the risk while I learned the business. And it was a fascinating business, difficult business. I think the best return on your investment long term is still the rental game. But the development business is high risk, high reward. If you hit your timing correctly, especially in Arizona, you can two to three X your money

in a year or two, which is very difficult to do in other forums. But just again, if you hit a bad patch, you could just as easily break even or lose money as well. So you've got to have to do a balancing act, so to speak. And if you want to get into it, the best way to do it as an agent is to try to get contractors to list with you and then shadow them so you understand the processes in your city or in your area from start to finish and how to actually build a house. Because it's a fascinating, difficult process, especially through city approvals, utilities, you know, all your subcontractors that are required to do it at a high level. but once you get a pretty good base, you're going to do very well. And it took us a decade to get over 300 subcontractors. And I think having those subcontractors is the gold, right?

If you look at wealth, and I know a lot of people listening into your podcast and wants to become more wealthy, it's really being the coordinator. It's really being the middleman or middle woman that is the person that makes the most money. Meaning, I have access to 300 subcontractors that are the best of the best. And if you want access to them, you got to go through me. me. And that's the way it really works and it works well in our business is because someone says, hey, do you have an electrician you can use? Yeah, I have the best electrician, but you got to hire us in order to use them, right? And so that's how you cultivate a construction business and how you

make it work. Okay. So you have a construction business going on and then you're listing any of your luxury developments. And okay, I guess I'm trying to understand like lanes, roles and responsibilities because clearly you have a partnership with your dad, right? He is the licensed contractor for commercial and residential. Awesome. You are real estate agent also have a lot of reps and a lot of grit and energy feels like. So what what do you guys do? Well, basically what we do is we find opportunities in areas that we like, in areas that we understand, in areas that have high margin. And so we'll find raw land and or we'll find tear downs and primaries. You know, the first thing I remember in real estate school is what's the three

most important rules in real estate location, location, location. And I think the biggest mistake looking back on my rental portfolio that I made, and I hope the listeners can listen in and hear this, is I focused on less expensive areas because they were more accessible. The riches are with the rich. meaning if you want to make more money and have a higher profit margin, your best bet is to be in the absolute best location that you can afford in your area where the wealthy reside and get into the lowest price point in that area. Because no matter the product that you build or no matter of the product that you bring to market, if it's in the right location, there will always be a buyer for that property. And that's what I really began to realize when I analyzed all my assets was the more I paid for the best location and the best place. product, the more I made. Okay. So you guys are out there. You're finding opportunities with raw land and tear down. Do you have a, you already talked about systems. What is your process for

finding those two things? It's a great question. So the best, the best process I've realized is a, I scour ARMLS, which is our MLS system every single day. Secondly, you got to get involved in your community. And one of the things that I'm well known in in my community is personal branding. You know, I wrote a book in 2017 about relationship development. And I think the best thing that you can do is meet people, not just anybody, but meet people that are doing equal or more than you. And if you're interested in something, you have to be in the realm of conversation with these people.

What do you need? You need buyers and sellers. You need homeowners. You need property landowners. You need banks. You need mortgage advisors. You need private wealth managers. You need people that are in the actual.

business of building the property, right? You need photographers. You need people in the media space. So you can promote yourself or promote your property. And you need to grow your Rolodex, right? It's called Rolodex repetition. And the more people that you have that are successful and that can help you and you can help them in your Rolodex, the more successful you're going to be. So what I always say to agents is I said, look, you cannot be a secret agent. If you're not doing well, and I'm not just talking about CGI. I'm talking about net worth, which is really the main thing, is your balance sheet and your report card of what you actually have assets versus liabilities.

It's really simple. It's because you're a secret agent. If no one knows you, as Grant Cardone says, no one can flow you. It's as simple as that. You have to be well known. Whether you like it or not, you have no choice but to get out there and promote yourself in a positive, elegant, kind way, but you have to be well known in order to be successful. I went to GrowthCon, Grant Cardone's GrowthCon in 2019, and he said, best known beats best every day of the week.

And I was just like, you know, you overthink everything. You're overthinking your conversations. You're overthinking what you put on social media. And if you can just remember that best known beats best, just get out there. I'm like, damn, you know, Grant Cardone, he does, for all his being polarized, He really does get me going, you know? Yeah, he's very intelligent. You know, Elena, I've had the pleasure of being partners with through EXP for many years now.

And I've met Grant about 15, 20 times. And I can tell you, he's so encompassing in the way that he analyzes people and opportunities. And I think he is polarizing as he is, has a few takeaways that I think would be helpful to the listeners. And one is, you really have to put yourself around people that are, equal or more than you. And a lot of people are going to occupy your time. A lot of people, once you reach an echelon of success, are going to want to monopolize your time. But if your goal is to be financially successful, you have to be ruthless in who you allow into your calendar book and who you're trying to help. It's one thing to spend time with someone because you're

trying to help them or give back and have a sense of altruism. It's another thing to spend time with someone for no reason. There's really no point to that if you're trying to grow your business. And so as you move up the scale, as you move up the pay grade, what we coined in my book is called layers of legitimacy. And I think this is really important if you want to jump into the luxury space. You look at Tiffany and Coe, which is owned by LVMH now, right, Arnold, which is the third wealthiest person in the world. And what they do extremely well is they have layers of legitimacy, meaning what is the feeling that is cultivated when you see that little turquoise blue box, right? wealth, scarcity, excitement, right? They were able to cultivate a huge marketing campaign. Where are their flagship offices? Fifth Avenue, Paris, Rome, London, right? The best places in the

world. Who are the people that buy those products? Celebrities, people from the past, Elizabeth Taylor, all these people that a lot of individuals look up to. And so a personal brand, which is what many, many agents need to cultivate is probably your most important marketing tool on the planet. How people view you, how people see you, what you wear, what you say, where you go. All of those things are going to determine subconsciously what market you enter. And as sad as it sounds, I did a split test implementing that into the luxury space. And I realized it full fold that if you want to be in luxury or you want to go to a higher end sales price, you have to speak their language.

their languages travel, wine, family, food, all of these things that, you know, money, all of these things that people at a higher level are thinking about that everyone else isn't and they want to see you as an equal, not as someone who they are going to use and discard. That really changed my life. Oh, this is so cool. What's that name of your book? So the name of my book is called How to Be Irresistible to Men, the Truth Behind Sex Style and Seduction. And so actually, it was, a book on relationships. Yeah. And honestly, I always say this. And this is a big takeaway for the agents. Relationships are the most important game of your life. And so many people settle for convenience as opposed to settling for their dream. And so what I went out in how I conducted my

business and my book is my goal was to create the best version of other people so they could attract the best version in themselves. And when you look in the mirror, you have to be confident. You have to be well spoken. You have to be knowledgeable. You have to be gregarious and nice to people. And I think through osmosis and through that energy, people will see that authenticity and they will be magnetically attracted to you, as will your dreams. I mean, for example, and not to brag, but I think this is important. When I was 17, I had this dream of owning and driving a black Ferrari. It seems so distant and so crazy. And then on my 34th birthday, I bought that car that I always dreamed of. And it changed my marketing because now I got a driving billboard that everyone sees and says,

wow, this person must be successful. I always wanted to live in a certain area. And, you know, actually this Friday, I'm closing on the house that I'm going to build for myself. It's two and a half million dollars in Arizona. And I'm 34 years old. So again, it's these dreams. I don't say this to brag. I say this because you have to dream bigger. You have to get your mind around. anything is possible with the right people and the right steps to take place. So many people are in a malaise of their business and in their life, right? They're hanging around their friends from college from high school. They're hanging around people making $30, $40, $50,000 a year.

If you want to be a multimillionaire or a billionaire, you cannot hang around those people. You have to cut them out, put them aside, spend time with them when necessary, and you need to further your mind and further your brain as to what you believe is possible. That's the only way to hear dreams. How do I get in the door? Let's say I'm dreaming big. I know I need to elevate my circle. And I'm like listening.

I'm expanding reading the books, listening to the podcast, all the things. But how do I get in the room or take myself into that next level? So the best thing to do is what I call the halo effect. And we really document this in the book. It's no different than finding a guy or a girl to date or to marry. And so the biggest way to do it is you need to put. yourself in rooms with successful people. And the best way to do that is through social events, gala, you know, places where they're giving a lot to charity, car events, high-end sporting events,

etc. And you need to do your research on these people that you're trying to meet. And the best entry point in doing so is you need to access someone that's close to them that they hold in high regard and get to know them well. And the reason you need to know that is because you need to access point before you get to the king or the queen. You need to know the knight or the pond before you get to the king or the queen, right? You ever see a queen's gambit? That's a great show on Netflix. Great, great lessons about life. So you need to know the gatekeepers before you get to the CEO. And how you get to know the gatekeepers is you're kind, you're interactive, you take authentic, you know, desire into knowing who they are. And then here's how you access the CEO.

Write this down, take notes, because this will change the objective. of your life. Let's say Shelby works for a billionaire. And the billionaire loves Shelby. Shelby is amazing. I really hold her in high regard. I go up to the billionaire. He doesn't know or she doesn't know me from Adam. But I said, hey, so and so I really wanted to, you know, say hi and introduce myself. Shelby speaks very highly of you and told me that I should come over here and introduce myself and say hi. Now, what does that do? Immediately it takes their guard down and immediately, it qualifies you as a person worth talking to because you had, at least in their mind, the blessing of their gatekeeper.

And once you have the blessing of their gatekeeper, now you have your ear, now you can tell your knowledge, and now you can get to the next level of your life. Oh, that's so good. Okay, but I'm there, though. You know, the gatekeeper has let me in and I'm talking to them, hey, I just want to say hi. Is there, what is your goal? or what are the steps from that first meeting onward? The goal is to get close to them.

And the way to get close to them is to offer anything that they require. Right. And so I've been blessed because I've been in the proximity of many, many, many celebrities. They're all shut down. They all think someone is out to get something from them. It's all the same. And most people are. But the way to do that is ask nothing and just give.

Give, give, give. And the best thing that you can do is highlight your story. And so the reason I started my podcast, I have two of them myself. And I love this platform, by the way. So I'm so glad that you did this is podcasts are the best way to associate yourself with someone more successful than you. So why I started a podcast was really selfish in the fact that I wanted to interview people that I wanted to learn from that I thought were more successful than me in some form of knowledge that once their name goes online, once that SEO is hit, once their name, name is next to my name immediately. They're going to know who I am. They're going to remember the podcast and they're going to have an entry point where it's like, yeah, I know Shelby. She's a good person.

I'll talk to her. Why not? We did a great podcast. And that gets you in the door. So always lead with the servants mentality. Always lead with a knowledge based mentality. Always lead with I'm not here to take anything. I'm just here to learn. And I'm here to garner you whatever it is that you require to get to your next level. Give to get. Make so much sense. Okay, I have to loop it back to luxury before, because I could honestly, I love this stuff, and I could talk about it all day, but we are real estate rocks and we're going to bring back. Okay, so luxury development, you said in the beginning, you know, we are going to get into, we're looking for the raw land, the tear downs, and we're doing that by scouring the MLS and

involved in the community, building your brand, which led us into these relationships. Are there any other tips, pointers, et cetera, that jump to mind in regard to getting in the door or things they should do in the beginning of the developing luxury. You've got to have a grid partner architect. And so you have to have people that when you acquire a piece of land or you put a piece of land at a contract, someone that could analyze it for you in the 15-day look period or 30-day look period to say, is this viable for what we're trying to accomplish? And most importantly, more than even finding the land, is you,

you have to find the money. And the money is the most important, important relationship that you can find. And that's why I can't stress for you agents listening in, get two or three local banks, not the top big three, because Chase B of A and Wells Fargo isn't going to finance your dreams to becoming multi-millionaires. But local banks in your area just might if you have a great relationship with them. And two, learn and befriend high net worth individuals in your area as well as hard money lenders in your area. Because if you have a relationship with hard money lenders, having taken a lot of hard money, you will be able to create multiple business opportunities leveraging cash buy as opposed to a finance buy.

And so a lot of people negate hard money because, oh, the interest rate is too high. Oh, it's 12% or 13%. Well, I hate to tell you guys, 30-year fixed rates are 8% right now. So to pay an extra 4% to possibly make a half a million or a million dollars on your next deal, well worth the risk. That's for sure. So we've got the GC. We've got you. We've got the grid partner architect and the money.

Are there any other key players that are, of course, there's a lot of little ones, but like big ones that jump out. Well, you got to know your timeline, number one, because as soon as you take down money, as soon as you borrow money, you better go, right? And so you really have to understand city approvals, right? In Phoenix and Paradise Valley right now, it's taking two years to get permits. It used to take four months. And so the barrier of entry is so high, which is good if you're able to go through that pain to get to the pleasure, right? Because it's not like we have a lot of competition. But for novices, your carry time, and your money output has to be, you know, put into your timeline as to how long this is going to take, right? And you got to know your numbers.

That's why that net worth tracker and understanding Excel and understanding all your line items for your holding costs and your homes are so paramount. Because if you don't know the numbers and you don't have a 20% concession on top of what you think it's going to cost, you might get burned. And you don't want that in this market. How are you running the numbers for these deals? Like are you in different Excel spreadsheet or how does that? Well, again, I think it knowledge is power. So you really got to understand an area and niche down, right? Hoss Pratt, one of my coaches and one of my members, basically told me this.

He says, the riches are in the niches. And so you really got to focus. If you want to be rich, volume is not the way to do it. It really isn't. You've got to go to the ultra wealthy. because to the ultra wealthy, 50, 100, 200, 300 grand isn't going to move the needle necessarily as much as 50 or $100 or $1,000 is to someone making $50,000 a year. And so that's why you've got to go in the high end.

And when you go in the high end, it's all relationship-based. So how do I do it? What do I look for? I look for strategic partnerships that can get me to the finish line as quickly as possible. So again, knowledge is power. I underwrite the deals by knowing, okay, when this product is done, what is my price for square foot? What are my holding costs? How much am I paying for the raw land?

What am I paying for my architectural fees? What am I paying for concrete? What am I paying for framing? Where is lumber right now? Lumber is down because obviously new home construction is down. So it's a good time to build if you have the Cajonis, so to speak. And then you got to understand, okay, what am I paying for my finishes, right? What am I paying for my wolf and subzero appliances?

What am I paying for my French oak floors? My M-Tech door handles, all of these things that add up to creating something that everyone wants. I think it'd be really cool. Next time I'm in Arizona, Paradise. Where is it, Paradise Valley? Paradise Valley, yeah, Phoenix. Dude, I'm going to hit you up and I'm be like, can I just shadow you? You don't have to teach me anything.

Just let me listen and learn because even right now you're speaking a different language. because again, I was, I was slum on it. You know, when I was doing, and I, I'm very interested in everything you just said. And if you, that's why I was like, do you have another Excel sheet? Because I was going to be like, give me more. But that's okay. So Michael, looking ahead, you're doing so much cool stuff right now. Where does the next five, 10, 15, 50 years? I know that's a big range. Hit me with whatever you got the vision looks like. I think in order to be self-liss, you have to be self-ish. And I really mean that because I think you have to become your best self. We look at ourselves. I'm very critical. I've always been my biggest cheerleader and my biggest critic.

And I think your whole thing has to be in alignment. And so I always talk about the three Bs, your body, your brain, and your business. And in order to create a different sense of your mind and your mindset, you have to work out. You have to move. Movement creates opportunity. Walk if you don't want to lift weights. lift weights, go to the gym. It's very important. What you put in your body will cultivate your mindset. The second thing is in your mind, you have to really have a strong mindset of what's possible. When you look at the biggest people that changed this planet, it was someone that dreamt big. Stop drinking small. Stop thinking small. Stop thinking that you're, you're relegated to where you live or what you make just because your parents thought that way. A lot of us are really in a bad state because of what our parents thought were possible, not what we believed to be possible.

And so really open up your mind as to what's possible and be around people that are achieving it. And last but not least, your business. What systems do you have in place that every month you are growing that net worth? Every month you're growing that little drip of passive income, whether it be through, you know, rental opportunities, through corporate bonds, through stocks, through investing. in yourself through media, you know, through growing your personal brand, through Instagram. There's all these different things. And as long as you're moving that needle, I think you're going to wake up 10 years from now and be really, really excited about what you've accomplished. For me, I'm never satisfied. So for me, it's like keep throwing that golden ring further.

And my biggest hope is where I get to a point where I feel financially independent, which technically I am now, I just don't feel it that way, where I could help and empower people to do the same in their lives. That's why I really like Alex Hermose and what he's teaching, because it's a blessing to see someone young, who's my age, probably a year younger or so that's done 10 times more than me, and helping the community at large create that in their own lives. I think the biggest thing we can do is pay it forward. And so that's what my destiny is to help people be enriched in their life, whatever that may be for them. I love it. I also love that you mentioned Alex Hermosie because when Ramon and I were doing, which listeners, Ramon is the

reason why Michael and I got connected. That's a great guy. Yeah, dude, he's awesome. But yeah, we had this moment also about Alex Ramofi. So, yeah, if you don't follow him, you should. He's really incredible. And I don't fangirl that many people, but like, I'm on the train, man. He's a great guy.

Yeah, now he teaches a lot of people. And again, it's not where you start. It's where you finish. So what I think people realize is when you're wealthier, when you have means, the problems are still present, they just become bigger. And so your self-talk really becomes important. I'd say this in my book, whatever you perceive yourself to be, you must feel within yourself. If you look in the mirror and you feel like you're an imposter, you have imposter syndrome and you're not who you want to be, you've got to change your body and you got to change your mind. You have to project happiness,

success, fulfillment, and friendliness to all people. And you got to stop making judgments. You know, when I was young, I thought I could do it all on my own. I was making judgment. I was making judgments and judging other people. And when I really look back on it, it was just because of insecurity and myself. You know, so it's not a measuring game of who's better or who's worse. It's really just a cultivation of collaboration of how we can all grow and be who we want to be. If listeners are listening to this and they want to see you in person or on the gram,

what events are you going to, if any, and where can they find you? They can find me on Instagram at Michael Banovac. That's the one I checked the most. LinkedIn, Facebook. What else am I on? TikTok. I just started TikTok, which is interesting. I don't know a lot about TikTok, but it's been fun. Instagram is my biggest one. So that's the easiest. As far as personal events, I wing it. You know, I wing it because I believe that when you have stuff in your calendar, it's great. But really what's in my calendar is building up my brand and building up my home and building out my business. And so anyone that wants to say hi, what I do is about once every two months, I do something called coffee is on me.

And actually my co-sponsor is one of my banks, Western State Bank. And we host it at the bank. So there's no more legitimacy than that, a bank actually hosting your event. And basically we bring in people that are, you know, successful, more than successful than me. And educating agents and other people on how they can achieve financial freedom. What marketing tips, what financial tips, what moves, you can make. Because when you really look at it, the most valuable commodity we have is time. We have a 40-year work span, if we're lucky, and time is running out. So instead of thinking about,

oh, God, what do I need to do? Who do I need to compare to? You need to create and cultivate your best life. Create your dream life and do whatever it takes, regardless of what other people think that is correct. That makes you happy. And whatever that is, you know, if we can serve you, I'm sure Shelby, you're on this bandwagon, too. If we can help you in any way, just DM us and we'll be happy to help. Totally, totally on the bandwagon. Okay, last question. Any final thoughts, closing words, anything you want to pour out into the universe?

Yeah, the last, I would say, quote of my book really resonates with me and where I'm at. And I always say this because the last chapter of my book was about my grandmother's death. We were very close. She was in hospice and she looked back on her life over 71 years. And her biggest, I would say, accomplishment was her family, her boys, right? Her family. And she passed away and she said, all I want to do is die with a smile on my face. And she did.

And so I didn't cry. I was actually relieved because she felt she had a life worth lived. But here's a quote I will leave you with. You're never the best version of yourself you want to be. Rather, you are the lowest version of yourself that you're willing to accept. What will you accept in your life? And too many listeners and myself included are accepting too little. Raise the bar and create the life that you want.

I didn't know this was going to be like a pump sesh. I'm like, I'm trying to keep it together over here because I'm like freaking hyped, man. Like, I'm a little sweaty. Like, I'm ready to go. Yeah. Dude, thank you so much for hanging out with us today. And listeners, again, if you want to see more of Michael, he is on the gram at Michael Banna Vac, like a vacuum ship. That's right. You got it. And we will also, of course, link this in the show notes.

And guys, as always, if you want to hang out with me or the owner of the show, we are the Shelby Show and Aaron Amugasagie on the gram. Please hit us with feedback. We want to know who you want us to interview, what topics you want us to dig into, how we can make this thing better. And one final reminder is if you are an experienced investor, you all know, Aaron is hosting an event in Austin. in this September. If you want to go, it's pretty exclusive. Go to investor deep dive.com to check it out. And y'all, that is all we have for today. Michael, thank you so much for coming on the show. Thank you. Really appreciate the opportunity. Best ever. Okay, cool. Real estate rock stars. Thanks for listening.