The Money Mondays - Make More, Invest More with Sam Taggart & Jerome Maldonado | E23

Episode Date: July 3, 2023

Sam Taggart is an accomplished business expert and entrepreneur known for his passion for sales and business development using door to door sales strategies in any industry. Sam's leadership skills and ability to think outside the box have enabled him to build multiple successful ventures at a young age. Taggart helps people create custom training systems in direct sales to drive higher conversion rates and overall sales revenue with commission structures. His focus is on training committed sales reps who want to succeed and thrive in direct sales. Sam founded D2Dcon, D2D Experts and also hosts the D2D podcast and YouTube channel to help door-to-door salespeople achieve better results and set their own growth trajectory for success. --- Jerome Maldonado has built an 8-figure empire mentoring people from around the world in sales, real estate, and business. His unique ability to streamline results is what makes Jerome’s training high in demand as his methods are NOT found anywhere but inside of his teachings. What captivates people to Jerome’s story is that he started from scratch and struggled for many years to get his business off the ground. Through that experience, he learned what it really takes to build millions from the ground up with very little startup support or capital - now he shares those lessons to help others shorten the learning curve. --- The Money Mondays is a business podcast here to teach you how to make money, invest money, and donate money by showcasing some of the world's most successful people and how they do the same. Hosted by serial entrepreneur Dan Fleyshman, the youngest founder of a publicly traded company in history, this money podcast gives you an exclusive behind the scenes look at how the wealthiest celebrities, entrepreneurs, athletes and influencers make, invest and donate money. If you want to learn more business and investing while you work to improve your financial life, you're in the right place! Subscribe for new weekly episodes: https://www.youtube.com/@themoneymond... Dan Fleyshman, The Money Mondays

Ladies and gentlemen, welcome to the Monday Monday's where we talk about three topics. How to make money and invest money and give it away to charity. Our guest has done all those things at a big scale. He's throwing live events, invested over 100 units. He has something called the D2Dcon. Last year, he had over 3,000 people at it. He's going to be on his seventh one coming up next. So we're going to go over, how does he invest?

Talk about door to door, that whole industry and everything about it since obviously he owns the whole convention about it. And then we're gonna talk about charity and the things that he's done in the charity space and tied in door to door into that, which I absolutely love. Please welcome Mr. Sam Tagger.

Thanks for having me on the show. This is awesome. All right, so we are sitting here in a RV motor home right here at the ranch at the wild jungle. You can hear a blitter background noise. People are driving by because Samus throwing an event 12 feet away from us inside there. Talk to us about why you like events, why do you like masterminds, D to D. Cons. Walk us to the event side of your world. Yeah, I think like selfishly I started masterminds about six months ago or six years ago. And I just wanted to surround myself

with cooler people. It's a way to kind of, like a podcast. You get to like an excuse to go hang out with somebody for an hour, right? So my mastermind was kind of an excuse for me to do cool things. We're going to Tahiti this year, and to Switzerland last year, and Guatemala,

and do epic stuff, this fun ranch experience, we meet up every quarter. And for me, it's like, they always say, like, you are the five people you surround yourself with. They're like, you know, show me your network and I'll show you your network and that's always a concept. But I'm like, what are we actually doing to be intentional around cultivating

and networks and experiences that we want to be part of? And so we started a few different masterminds. This one's all of our CEOs. We've got almost a hundred CEOs in our expert circle and then we have like a sales management one, etc. So that's far here. So from a members perspective or an attendees perspective, why should they go to something like D2Dcon, join a mastermind, why should people go to live events? I think some, I go to a lot and I think sometimes like people go without an intention.

So I'd say don't go if that's not the point, right? And I found like, if you go with like, maybe I need to meet this kind of person, or maybe I need to take this one thing. Like my whole thing is like, go and get one thing that can make a million, five million, 10 million dollars if you just implemented it. What's your ROI on a $500 event? Or like a, I don't know, whatever they charge, right?

I just went to Scotland for three days and spent 30,000 on a three-day event And people are like why'd you do that? I'm like just because there's other business owners and who knows what the opportunities and maybe there's a Partnership there maybe there's a lesson that I learned that I implemented this equity structure with my team and profit share And I took this and now I've already executed on it. I'm like boom. That was the one thing I need to take away. That was it I'm good. I felt like I'm at 30 grand worth. So take us back a bit. How did you even start D2D con? Were you in the door door space yourself? Were you out there knocking on door? Like, why don't you get to D2D con part one?

Yeah. So I did door to door sales since I was 11 years old. Oh, wow. So like, that's all right. I've never had a W2. No, he's written me a wage. I remember the first year I was 18. And I had a curb painting business all through high school. And then I graduated high school. I go start doing alarms. And I went on a two year service mission, again, knocking doors in Argentina.

And I get a call from my dad. He's like, hey, you need to pay your taxes. What the hell is that? What does that mean? What is that? It's like, well, you're a wrong number. Yeah, you're a 1099. You should have to file your own taxes. And I had to learn. I mean, like, I just didn't even know that nobody What does that mean? What is that? Well, you're a wrong number. Yeah, you're a 1099.

You should have to follow your own taxes. And I had to learn, you know what I mean? Like, I just didn't even know that nobody ever told me W2 versus 1099. Like, nobody, I just, that was how all I did. So fortunately, I've always been a carnivore in a sense of what you kill, which has then helped translate into running different businesses, et cetera, because I believe everybody's a door knocker. I don't care if you're running a hair salon

to running investments, whatever, like the people that are willing to go knock doors and go find the opportunities that lie behind the door are the ones that are winning in this world. So, you know, I did that for 15 years, and then I realized that there was a big hole in this industry, whether it was solar, pest control, alarms, or whatever, that there was a lot of like bad mouthing and slander and everybody's like, oh, you're a door to door sales guy, when are you getting a real job?

And I was like, what do you mean this is a real job? Like we make great money, you know, as a millionaire by 23, like what do you do? You know what I mean? And I was getting on a shit and I was like, no, that's not cool. So I started this mission to unify up level and bring honor and integrity to the door of space. And that's where DDDCon and DDD podcast and DDD University and all the masterminds, everything is kind of stem from that.

So when you say make great money, can you walk us through? I've heard stories. I've spoken a lot of solar events and pest control events and I see some kids with 21, 23, 25 years old with Teslas and Ferraris and Bentley. So I'm like, what the heck's going on? Can you walk us through just the, not all the glitzing lights. We're like, walk us the real numbers.

And what can someone make working door to door? Zero. You would get your face kicked in. If you were a lazy piece of shit, zero dollars. Zero dollars. And that's what I think a lot of people are afraid to do is because there's no base. And I'm like, well, there you go.

Break out of the vortex and realize that the entrepreneurs of the world and the people that are actually creating value have ultimate job security. Nobody's gonna fire me working for their sales company because it contributed millions and millions of dollars. So I'm of course entitled to a good portion of that, whether I'm selling solar, pest, alarms, whatever.

So I was the number one rep at Vivment and just in personal sales that year, I mean this is 2014, now commissions have even gotten better. This is an alarm, I was making over half a million dollars a summer. So it's like, wait, it's summer? Summer, four or five months. Oh my God. So I'd go play, I went to Bali for a month,

I went to Europe for a month, I'd go snowboard every day, and then I'd go sell for four or five minutes, and I'd go knock, I went to Bali for a month. I went to Europe for a month. I go snowboard every day and then I go So for four or five minutes and I go knock and people are like I mean granted I'm an outlier, but like I think people Shit on that they're like oh you're a door to or that you see them come to your house and you're like you're a piece of crap I'm like they're actually willing to do what most people aren't willing to do in hopes of a commission and hopes of a a Better life like it's a of an opportunity to break free. Whether you're selling roofs or pests,

or I mean, there's a lot of things, water softener's windows, I mean, I could list off so many things. But it's like, the cool part is, is to eat when you keep killing mentality, and no owner is gonna be like, stop selling, like you sold too much. That's a good idea. And if you work out a commission structure,

it's like, I'll just keep going until I make as much as I need to. And I think a lot of people put a limitation because the opportunity is endless. I know guys making a million dollars a year. Plus, two, three. Just knocking on doors, selling solar and pest control and knocking on doors. So bottom line is zero, they can make zero.

You make zero. You're a piece of crap. But I'm gonna say this like this. I would say so many people think they're so cool until they go get their face kicked in for a week. And then you're like, oh, I'm not that cool. Like it's a huge reflection of your mental toughness, your emotional resilience, your actual like commitment to something where they give up after three days.

And they're like, I can't do this. This is for me. You're telling me that the, there's a million dollar opportunity in front of you and you're, you're going to push the ad after three days. I just want to go back now. Yeah, because 20 people said no, go put your tail between your legs. Come on.

So that's what's fun about our industry is like at D to D Khan, it's a bunch of bad asses because they're, they're willing to get their face kicked in year after year, door after door, and they make good money. So it's not. Walk us through like that first moment right. People are that are nervous the hardest part whether it's to get on stage to speak or to get to that first. Right. What is the when they're getting that

first rejection. Let's we're not gonna get into like how do you deal with you know, rebuttals and things. But like that first rejection how do people get over rejection number one five ten twenty to like keep going. I think the more you can disassociate, it's not me. It's just the scenario. I think so many people when they get rejected in life, they take a personal, right? So they're like, he didn't like my shirt. It's like, no, he doesn't care about you.

He just needed to think of the fastest thing you could say to make it yourself. Sounds like a dick. So you ran away. So it's like, when you can have what we call selective hearing, when you get rejected, there's an element of like selective amnesia too of like, what do I forget? And what am I choosing to hear? And how do I move on to the next, right? And that could be objection after objection after objection.

Let's say somebody's like hammering me. I'm just like, oh, that's cool. Oh, thanks, man. Oh, you're so awesome. You know, whatever if I'm kind of moving through rebuttals or that could be door after door, customer after customer. But I think like anybody, I don't think anybody can disagree with the law of averages. It's like if you know your

numbers, if I talk to this many people, present this many times, have this closing percentage, it's a simple math equation a lot of times. So I have selected a menecia. I had an energy drink business back in the days, and we were in 55,000 retail stores. I got into 43 distributors. I met with all 43 distributors, and I met with every major chain store.

I also would go to local liquor stores, car washes. We were, Salt Lake was actually our biggest, we had nine Budweiser distributors throughout Salt Lake. The Salt Lake State Fair was called the Huzzy Daddy Energy drink State Fair for two years. Let's start. In partnership with Smith grocery store. And when I say Select with Amnesia,

I'm telling you that right now, if I put a lie detector test right now, I don't remember one single retailer or distributor saying no. Yeah, you just remember all the wins. I physically don't remember anybody saying no. Not one, not one. Not like even like a glitch of a twinkle.

I can't remember anybody saying no. But it's like how many doors did you knock on to create? Incident. Like you were. That's all I did. you were just sitting there calling knocking going out meeting car wash liquor store I didn't care I would go to everybody I had a Energy drink T-shirt on energy and cat on energy drinks in my pockets in my backpack in my car And I just went everywhere and just But how many kids are people or adults in their grown-age?

They're broke. They're about to lose their home Are too cool to do that. To put on a cool little beanie that says energy drink, get a cool little energy in your pocket, whatever the thing they're slinging. I think that's the problem, it's just like their ego, their timidation, whatever it is.

I'm like, dude, you got your backing, it's all right, you're about to lose your house and you're not willing to get out. Right. Good, you deserve to lose your house. There was a company I worked with, a tech company called MoPro and they had all this funding and my friends said,

hey, we joined the advisory board and I was like, no. So what do you time when we're like brothers, we're like dear friends and I was an investor in a bunch of companies and I was like, you raised tens of millions of dollars and you've built this amazing product that's gorgeous but you don't have people out there selling door to door. And you're just like, what do you talk about? I said, give me a short amount of time.

Let me hire a team. I'm gonna go hire 40 sales reps. And I'm gonna take them out to conventions and trade shows and then go door to door in between on the weekdays. We're gonna go door to door on weekends. We're gonna go trade shows. Yes. We got 1100 accounts at $5,000 per contract

times 1100 in four months. That company went on to raise $70 million and like, whoa, whoa, because we just went out and built a whole crazy to acquisition model. And I think the people are afraid to manage people, you know, the managed 40 headaches, you had to keep them accountable. Yeah. But it's like business, like if you broke it down, I call it the

DDD formula. It's reps, meaning 40. What if you had 80, right? What if you had 20, right? Times opportunities. How 40, what if you had 80? Right. What if you had 20? Right? Times opportunities, how many people are they actually talking to? Right. And then they're closing percentage.

Right. And anybody is trying to scale their business, like, I want to make more money. I'm like, okay, how many of you are there? So just you, well, you can only talk to so many people. Yep. And then you're only talking to five people a day, you're talking 20 people a day,

or 50 people a day. And then what's your closing percentage? How do you get better at sales? And that's where I moved into as I realized there's no support training on sales and it came to cold calling. There's no support on recruiting. Like how do I go build the sales army? And so that's what we became experts in is just building cultures and systems that teach sales, teach culture, teach recruiting, teach growth, and scaling businesses. So I and hired these 40 kids and all I said was we're going to go see 20 units a day, 20 doors a day, okay?

Because we would go to like strip malls, office building, etc. If you knocked on 20 doors, I just need to get four appointments and close one lead. If you do that, I guarantee you $100,000 for the year. 20 knock on 20 doors, get four appointments, close one, and you get a hundred grand. Because there's a $400 commission. So if you made two grand a week, it's a grand a month, it's $96,000 for the year, just by the basics.

If you just kinda suck, you're gonna make a hundred grand this year. And so I had these kids out there just knocking on 36 doors and 41 doors and running around Up and down they're making 1200 bucks a day 1500 bucks a day in commissions Just selling tech like selling this basic thing. Well, all we were selling honestly was how to make a website We're just making websites for people back in the you know, 2004 anyways all right So let's shift gears When you start to decide I'm gonna throw a conference. There's a lot of moving parts to throw events.

You know, both you and I love throwing events. There's a lot of moving parts to it. Cautious with the word love. Okay. We do events. And it's fun. But there's a lot that goes into it. So you have the idea for your very first conference.

It's show time. How do you get butts and seats? How do you decide how big or smart you're gonna go for it? And how the heck do people know what it's gonna cost them to throw? Just give us the main idea of throwing D to D con number one. Okay, first off, if I would have had a podcast like this, that would have been great. Yeah, because I had never been to a conference, let alone thrown a conference. We have vendors, we got like, we're renting

other huge like convention center. And I was like, oh my gosh, to hang the pipe in drape cost 40,000 to all of her. So I'm like, we were talking like putting up some pipes and some like, wait, you want us to move the chairs for 200 bucks a chair? Yeah, you're like, why? Like, can I just move them?

No, you can't touch them. It's the union. You're like, what is the union? You're like, what is the union? What is the, why does two them, it's the union. You're like, what do you mean like, what is the union? You're like, what is the union? What is the? Why does that two guys to move one chair? Yeah, you're like, what is this? So like, first off, I had no idea.

But I think the imperfect action is better than perfect in action. So I had this mission where it was like calling me and I didn't want to do it. Like, I literally was in the desert for three days on a meditation retreat, kind of in the woo-wooism order, day two, I'm fasting for three days, and I had a vision, and it was this me

speaking on this big stage, and I was like, what is that? What is that? I was a VPS sales of a solar company at that time, and I was like, wait a minute, and God was just like, hey, throw this event, I'm like, no way, like it's gonna be a straight up boxing match, like people are gonna kill each other,

they're so competitive and cutthroat, they're all taking each other's reps, it's a very like competitive world, especially where I come in Utah. And I was like, I put it off for a couple of weeks and just kept eating at me. So first off, step one, don't throw an event if you're committed to the long term of throwing the event.

I think people think, I'm a throws event, I'm gonna make a ton of money. I didn't make money until year four. So like it was like, okay, this needs to be an industry conference because yet there is no industry conference. So I'm like, I'm gonna create this new ocean and the first year lost like 30 grand.

And I was like stoked on that. Like I was like, I only lost 30 grand and it lose my short. Right, huge for your brand. Yeah, and I was like, the marketing would have been worth the 30 grand price. Of course. I had 800 people there.

800 your first one? My first one. Oh wow, okay, that's big. So my first one, I'm thinking. Oh wow, okay, that's big. So my first one, I'm thinking, we're three weeks before the event and we sold like 200 tickets. And I'm like, yes, if we could get 500 out of stoke, I was like, do 500 in a room, that was like a big goal for me, because to get 500 people your first event would be a really

good event. For sure. Especially when people are paying 100 to 400 bucks or 300 bucks, right? And What happened the week of was Vivant who I used to work for now no longer had for a couple years Decides to rent the space right down the hall in the same convention center and Brought current card on and through a free event at the same time as door to orcon. Oh my gosh So I was like I get a call on Monday. He's like hey, dude. I just want to give you a heads up We're actually throwing an event. We couldn't do it at the Vivant arena Oh my gosh. So I was like, I get a call on Monday. He's like, hey, dude, I just want to give you a heads up. We're actually throwing an event.

We couldn't do it at the Vibran Arena. So we're gonna do the Salpale at the same time. Just bring everybody for free. I was like, no, no, this came the truth. I was like, are you up and kidding me? So I hang up, I'm like, I call my buddy Vivint. I was like, dude, is this happening? Do you know of like a good speaker coming in this weekend?

Comenties like, no, I haven't heard anything yet. Like, you would know if you're gonna have put $100,000 into an event. Right. So I hang up, cause me back two hours later. He's like, dude you would know if you're gonna have put $100,000 into an event. Right. So I hang up, it calls me back two hours later. It's like, dude, is this what you're talking about? He's like, that's messed up bro. Like, and they had a big lettering that said,

hashtag OnlyVivient and they was like a recruiting event and they were doing everything that I was against. Where I was hashtag only unity, the mission was very pure and I kept it that way. Even during the event, I just didn't even say anything. Like I was just like, shut your mouth, with a high road. And you see half the, yeah, like I'm zed it out.

I'm like, I'm like, okay, and half the room, kind of like slowly leaves. Yeah, of course. But it was crazy, it actually helped rally everybody. And the reason I say this is, it's like, number two, is you've got to have people that are willing to rally behind you. Like what you do really well at events is you get us all involved you're like bring your audience you bring your audience you bring your audience Give me a reason to rally behind you and

Everybody hated the Vivian Orange giant because they're the bulldog in the industry and so when they heard that all the sudden people are like If that I'm coming I get calls from like owners of these big companies are like I'm coming to you to speak What do you need me to do all by fifty tickets and like all the same i was like i was like it's like paying turned into like kind of a blessing just to stick it to that right and like my buddies to tell me you might know him he like calls me like let me speak at the same time as cardon like cardon gets there he like turns the corner is like they're like no that's the wrong way like what

what's that he's like like it, no, that's the wrong way. He's like, what's that? It's like, oh my god. Like, it was like a crazy mess. And then like, it backfired on him because they kept saying like, you know, why wouldn't you work for us? And it was just like this ego driven event and half the people left halfway through the event of theirs and came back.

And I was like, who's a testament of like, if you're gonna throw an event, what's the mission of the event, right? Like does it have a purpose? Or is it just for your own cloud and just another business conference? Is it like, remind us to unify, to up level, to bring honor? And it was like needed. There was a true pain point, and it created controversies.

It did all to this day. It texts the CEO of Sunrun, and he texts me back. I was like, hey, you should have the, you should have him come speak. And I was like, he's like, why? I don't know if there's a conflict here. And I was like, what do you mean the conflict? You're one of the largest door door companies in the country. And our mission is to unify an up level

and bring honor and integrity to the door door space. Why wouldn't you want to participate in that? How's that anything conflicting of what you stand for? Well, you know, it doesn't really brand for us and blah, blah, blah, I'm like, it's scarcity. And I was like, you know, what's fun is you can build an event that creates polarity. It creates opposition.

It creates noise. There's actual value in that, where I think if you're just another cool training, like, it doesn't have as much legs. And it's been a battle. Like, COVID was an interesting year. Like, you know, it took, like I said, it costs that first year. We did everything on a budget. I'm like, 3 a.m. painting frickin' foam letters

in my garage myself. You know what I mean? I hadn't even had time to prepare my own speech. I'm getting up there and I'm like, oh yeah, I'm up. Oh, I didn't even put slides together. You know what I mean? It's a lot more that goes into it

than I think people anticipate, but I'm grateful that I sent it. And so now, as you just had 3,000 people at your last one, what's the future of DDDCon? I think the goal would be, there's these industry's conferences. It's fun. When you create a new ocean, other people start following suit, right?

So solar cons popped up, roof cons popped up, all of these other side things. I'm actually meeting with one of the owners of one of those this week here. And I think there's an opportunity for collaboration and connectedness instead of competition. So, you know, finding opportunity to partner or finding opportunity to say, is there a roll-up of conventions? Like there's a net profit and a value.

And it's kind of like, is this a Sam show all the time? Or is this like an industry show where my face doesn't always need to be the face? Right. So I think it's just creating strategic partnerships of, I mean, even you and I, like if you're throwing these big personal developments instead of like, let's do them on the same weekend or we, oh, I just went to his thing two weeks ago, like, why would I go to your thing? I just flew over there. I think there's opportunity of similar networks of saying, how do we share networks? How do you create unique experiences where it's like, no, if you're into like, woo, as I'm going to this one, if you're into like, you just want

business to advice, go to this one, and there's a common message where people can tee up their calendar for the next 12 months and be like, business here, real estate investing here, and then like, zanned out here, and then boom, boom, boom, and I kind of planned out my year, you know what I mean? Yeah, if somebody's, I've been hoping that someone makes just like one main calendar. Yeah, so we can all see what's coming up. So also we don't want to entrepreneurs ourselves. We don't conflict. The event organizers don't conflict with each other because we've had that happen.

I was speaking in Dallas last month at Ryan Stumman's event because he throws a big conference every year, the hardcore closer. And I had the teleport over to Andy for sellers because he has summer smash and they on the same weekend. Yeah, that's easy to either avoid or I can plan my flights better. I just think it's a lot of people that know those aren't similar conferences, which is very friend, you know, similar audiences. And so I just think it's important if we could all talk or run away. When you sent out the calendar for the years, I was like, thank you. Only residing to Avengers for the second year, I was like, well, I can only make one of the events of it. And I've

already planned this calendar. So I can give you my calendar for 2024 and be like, oh, I can still move. We're early enough where I could move or you can move where nobody's like, I booked flights for February or 2024 right now. Right. People don't do that. Exactly. So I think my world is like, how do we invest and create relationships that really collaborate on these events? Because at some point, certain people are like, I'm conference out and I've seen Ed my let 17 times no offense, but like, it sells the same story every time. Like, how do you create a unique experience?

How do you create a unique audience that then collaborates with each other? Because I think the opportunity and conferences is the networks of the attendees that come So I've created different layers of events so I've elevator nights, which is totally free There's no tickets no sponsors no sales on stage. We've thrown 52 times now I've operation black site. It's 20,000 per person for the year That's where they learn military training and had a fight. Yeah, it's very intentional Yes, that's what we have here. That's why we have the ranchers. We built a whole military training and how to fight. Yeah, it's very intentional. Yes, that's what we have here. That's why we have the ranchers.

We built a whole military training course here. We have 100 million mastermind, which is $100,000 per person. And that's obviously for business owners doing 5 million or more. We have the charity events, the world's largest toy drive. I was fun. By the way, I was there. Exactly. And we're going to do it again this year for our 10-year anniversary.

I was trying to really destroy the record. But I think it's important because it allows people to go to a free event, a super expensive event, a charity event. I just want people meeting each other. Yeah, one step happens. The group text that you have for Utah legends, one, I feel like badass. I'm like, I'm on this talk, too. But two, it creates the community, right?

Like you're like, hey, we're all doing this toy drive. And I'm like, oh, Steve, what's up? Oh Jimmy, what's up? Bro, hey, this guy, you know what I mean? And it's like, I start to connect. And the only time that I would connect is if I actually went to an event, I'm not gonna call him on a Friday

and be like, hey, when I'm gonna date nine, maybe everyone's well, but like, business has been done where Steve now is a vendor of ours and we've sent him hundreds of thousand of our business. Now, Jimmy and I have done, I mean, we've done deals for the last 10 years, but like, but like we've created these networks of like opportunities and you've been a big catalyst to that. Thank you. All right. Let's put on our investing hats. Said you ever on a hundred doors? What does that mean? Like, what, what, what, what, talk us

through like, why do you invest? Why do you own units? Like, what is that? Well, every dumb summer sales guy, door to door, goes and buys a BMW or a nice truck or a dumb car. Cool. Cool you dude. I remember I went to train a guy and this kid held Louis Vuitton wallet and I was like how much was that wallet bro? Yeah. I was like where's your first investment property bro? You bought a wallet when you could have like started taking the shoes and the wallet and the sunglasses you have on right now. And that would have like partnered in on a deal that I would have helped you make a hundred grand. Or you just bought a cool Louis Vuitton. That's cool. You'd probably lose it like a really nice sunglasses I've ever bought. So I stopped buying nice sunglasses. So I drove a Kia Optima until I was, I mean it was like a hybrid. I rented out my basement. I was, my whole thing

was live broke, pretend I'm broke and put all my money in real estate. And I was one my whole thing was live broke, pretend I'm broke, and put all my money in real estate. And I was one of the unique ones that had the long hair and the genie pants and drove a Kia, and I was like, who's this guy? I'm like, I don't care. You're like, I have no ego. Like, cool. Even your boat.

But you have no real estate. So I bought a duplex. And I bought another duplex. And I bought threeplex. And I bought a couple fourplex. And I kept doing it every year since I was 22. I bought real estate. And so if you look at the last 10, 12 years,

you're like, okay, I want appreciation. I bought my first one for 220 grand. The same house today, I'd be like 800 grand. So it's like, I just kept doing 1031. 1031 of this apartment complex, 1031 that apartment complex into multiple apartment complexes. And I just kept doing that. And I made it an intention to find people that are complex in a multiple apartment complex is and I just kept doing that and I made it an

intention to find people that are operators in the real estate space that are winning in the real estate space and just piggyback on the real estate. So I invest in a lot of real estate by never investing real estate. Yeah, I do it to everybody else. I was like, no, I've been to my apartments. I have a trip in Dallas and I was like, I probably should stop by the one that I've owned for two years. I don't even know where to go. I'm not sure the address on it. I know, so I was like, I went to one in Utah that I bought because it was down the street twice. When I bought it and when I sold it,

and I made a video about it, I'm like, yeah. But when I make a million bucks on that, when I turn a million into two million or 2.4 in two years, like, and I just went one time, I think people don't think that way. I don't think they... They don't, that's what the whole point of this podcast is. Yeah, my guys, and I talk about my trainings a lot.

Like, people think investing's hard, and I like that you talked about stock market. You could literally put a hundred dollars a month into the stock market and say, I'm an investor. And there's no shame in that. Because I take the same logic people say, I'm a giver, or I'm a donator, I'm charitable. If you're not charitable when you're broke,

you probably won't be charitable when you're rich. If you're not an investor when you're broke, you probably won't be an investor once you have money. You probably just keep spending it and you'll still be broke. Yeah. And I think if you just started to change the mindset around the money of investing of like, I'm an investor, whether it's a hundred bucks this month

or a hundred thousand dollars this month, I'm putting aside money to be an investor and just find those vehicles that fit your quantity or or risk tolerance. So I've said this story before our advance and it's based on what you just said. I went to this old man's house and I known him for many years but when I got to his house it took like six minutes to get up the driveway. That's how rich he was. Just to give you an idea of how big this house was. And he asked him about his business. And he said he never had a business. All he did was every year, he bought a house or a condo. That was only like a hundred K to

under K. And then next year, he bought another house for a hundred K to under K. And then on the year three, sometimes he would refinance one of the first houses and take that money out and buy a house is three, four and five. And he was old. And he was like, after a while, I had hundreds and hundreds and hundreds and hundreds of units. And I never sold any of them. I'd just keep buying cheap places over and over because people are always going to need cheap rent. Huge.

And this guy's house had a six minute driveway. And so I still think about that every single day because it's mind blowing how simple the concept is Because you did it. You just every Another duplex duplex duplex triplex. All right guys, it's important to have these discussions Because we all grew up thinking it's rude to talk about money or money is the root of all evil When in fact, we just talked about what money can do for charity, you get to travel, you get to throw events, you pay for your car, gas, food, your mom's health situation, like money is useful for so many different things, the evil part is tiny that very few people actually do,

if you'll try to focus on that part and forget all the things that money actually does as a function. I want to tell you one quick story because it's relevant to this. There was a young men's pastor, a youth leader that came to my class, 30 of us, when we were 14, and he owned a ranch like this. So that's why I was like, oh, we're in this ranch. We call it Fogg's Ranch, I was in Fresno, California. And he came and he said, I will set up his ought's trade account, like an investing account for everybody in this class. And tomorrow I'll match the money that you bring me. Wow.

So if you bring me a thousand, I'll give you a thousand. Bring me a hundred, I'll give you a hundred. Out of 30 kids, I was the only one that showed up with money the next day. And what's cool is he sends me a message, I've seen about this, like Fog's ranch and I was here and I was telling like Shannon about this. He sent me a message about two years ago.

And he goes, you remember that one time when I actually helped you set up your first Scott straight account because he talked about compounding interest It's like if you're 14 you get 200 bucks When you're 50 this is gonna be something. Yeah, I mean, we're talking like he just showed us the principal compounding interest So I had that I still have the Scott straight account. Oh really? Yeah, that's fun and he calls me and he's like, hey I just want like I've I then since moved right after I graduated high school, but I'm talking like He calls me and he's like, hey, I just want, like, I've, I've then since moved right after I graduated high school, but I'm talking like, hits me up on Facebook and he's like, dude, out of all the kids, I still tell the story when I public speak, he's like a big speaker

now and he's done some cool stuff and he's like, you were the only kid that invested. And he's like, look where you're at today. Right. And I think that like, if you're not teaching your kids this principle, like, I have an app called Greenlight that teaches kids money and it gives them like actual credit card kind of thing. If you're not helping the mindset of being an investor young, I think you're doing yourself and your family to service sometimes because he's now gone on to have charities and host ranches like this and you know I look to guys like you and and I want to be that guy that like yeah I can pay for my I just pay for

man long to go to Hawaii two weeks ago you know I mean like I want to be the one that says hey I have so much money I can give whenever I need to. Yep. Alright last topic we talked about how to make money, how to invest money, let's talk about how to give some of it away to charity. So charity is not always about money it's also about sweat equity, your cell phone, energy, rallying the troops, like getting people together behind a cause. You have a cause of your passion, but when you tie it in with your actual industry and

business, walk us through what your chair is and give us the background. Yeah, so it's called Street Smart, so you can find it streetsmartsu.com. So if anybody's listening to this, has a high school kid or a middle school kid, we'd love to get them involved. What it is is I was like, what made me different? Like why am I successful? It's because I paint in curbs all through high school. So I was like, what if I could give people a simple business model to where it wasn't

like the business entrepreneur class with like, I've been vented this app that's going to cost me a billion dollars in some way to go. Right. I was like, what if I could help you start a business right now? And you start making money instead of working at Everbull, you go work in your own business, whether that's lawn mowing, painting curbs, window cleaning, car detailing, things like that. So, we have courses online and we have twice a week of a mentor that actually meets with them.

So, we do these six week kind of turnarounds where they meet twice a week, they have a class, virtually and in person in Utah, we have our mentors. But it's like, we want to have like a handhold. Here's your business. Let's have some mentorship on how to teach young kids to learn street smarts, not just book smarts, which I think so many people put so much emphasis on book smarts, but I'm like, there's a good combination. You've got to learn how to get rejected. You've got to learn communication skills. You've got to learn like business and accounting. And I found the other day, my dad like brought over the laptop with a hard drive, and it had all

of my accounting ledgers from when I was 13 to 17 of all my curb painting. At 11 of my buddies working for me in high school. Wow. So we call ourselves the gutterman. I'm not talking to everyone's in a while, I go out. I had 11 employees that are... Probably more like that. You know, I'd say, it's 15 bucks, you keep 7, I keep overhead and profit.

I had stencil kits, I give out area, I had them bring in the cash. It was a thing. And I was like, man, I learned management, I had stencil kits, I give out area, had them bring in the cash. Like it was a thing. Yeah. And I was like, man, like I learned management, I learned people skills, I learned dedication, I learned to get myself out on my bicycle to go to a neighborhood to knock doors. I learned all of that at such a young age. And I was like, what if I could build a platform,

it's nonprofit that can help parents plug their kids in to not just some rest camp where they go play soccer. I'm like, what if you got them learning how to make money and manage money? That's amazing. I know. Stop. I love it.

Stop. All right, guys, you're listening to the Money Monday. Make sure to follow Sam Taggart across social media, especially on Instagram. Check out the DDDCon, all the things he's doing. StreetSmartzU.com, if you have any middle school, high school kids that when I learn how to make some money and have some real functional charity, it's not just like charity, they're actually going out there and learning a lot of skills.

But we have one request every single time here. We need you guys to have these discussions about money with your staff, your friends, your family, your followers, et cetera. We need to have these open discussions. It's really important for us as a society to get through these hard times in our world and get through the chaos that's going on out there by having discussion about money. So visit us at themoneymundays.com. We do a live Q&A every Monday at 4 p.m.

PST, which I'm about to go do right now. And share this with your friends. Make sure we have discussions. Follow Sam Taggart. And we'll see you guys next Monday. If you put in $100,000 and you're making 7% of $100,000 on a 7 cap, a 7 cap means you're making 7% of what you paid into the deal when you pay a property cash. The cap rate is the amount of money that you make as a return on your investment. And so if you invest $100,000 in your cash on cash return, it fits divided on equal shares of equity, you're making 7% on your $100,000. Ladies and gentlemen welcome to a special edition of the Money Monday's. We talk about three

topics. How to make money, how to invest money, how to give it away to charity. Today's guest has over $600 million in real estate assets under management. You are in for a treat to talk about all things real estate, money, investing. Please welcome Mr. Jerome, Ma Dunahto. Thank you Dan. Appreciate you having me. It's exciting to be here man. Okay, when I say 600, talk me through that. Like, when people are out there listening, that just sounds like a lot, a lot, a lot, a lot.

Like, how does it start? Was the first just sounds like a lot, a lot, a lot, a lot. Like, how does it start? Was the first investment a couple hundred thousand, a couple million? Like, walk us through the beginning of how the heck you got to this place. It's been a journey, more than it has been, just a place that you get to, right? And we truly come from just consistency

of everything that we've done. When I started, I started, really, with a 460 credit score, and I started with about $106,000 in debt. And I bought a little rental house. I had a little construction company. I started after getting put out of business. The FTC shut down direct sales company that was part of it back in the 90s. And I started in 1998. And it's 25 years of just consistency and just little assets growing from one single family home to duplicate it to two, then eight, then 12, and then taking that money at the same time and revolving it into commercial assets, retail, getting crushed by the recession, thinking that we were going backwards, we were actually peddling forward

and it's actually the 2008 recession that really perlated us. And then it was a decision that we made in 2016 that I was stagnant, and it was the means of us going out and actually scaling our means of creating capital from investors. And then from 2016 to where we are today is really where we expanded and grown.

I've learned a lot along the way. All right guys, so we'd like to keep these episodes to under 40 minutes because the average workout is around 45 minutes and the average commute to work is around 45 minutes. So we'd like to make these episodes just under 40 minutes so you guys can take it in at home. We also have the moneymundays.com.

We do every Monday live Q&A sessions at 4 p.m. Pacific Standard Time where I do like actual live Q&A in speeches. I gotta do one in a couple do like actual live Q&A in speeches. I got to do one in a couple hours because it happens to be Monday right now. So Jerome, this is really important. When someone wants to first consider getting into real estate, what are the first things they should be doing? Is it studying, is it finding a mentor, is it researching, just diving right in?

What should people be doing when they first want to get involved in real estate? I tell them just keep it simple, but yeah, absolutely 100% they need a mentor. I didn't have one. I did it through the means of banging my head against wall, and that's why it took me 25 years to get to where I'm at now. I could have probably done what I'm doing now in less than 10 years, but I didn't have a mentor

in the early years. I had a mentor, a business mentor. I had guidance through mentors that I had in the business arena, but not in real estate. And so the first thing they should do is educate themselves, the basic stuff, you know, and for anybody that's an athlete, it's the same thing is going back to the basics.

Well, coaches tell you to do when you're, even a professional athlete, it's what all the best of the best do. And the same thing in real estate, we people tend to complicate things. And so if they take it back down to the basics, where they're learning how to underwrite deals, the simple profit and loss stuff in real estate,

that's probably the number one most important thing that they need to do. And having some type of guidance with a mentor is probably the key component to success. So in the real estate space, there's flipping houses, there's short-term rentals, there's Airbnb, there's section 8 housing, there's multi-family, there's so many options.

How do people choose their first time investing in real estate? I would say just invest in something that makes sense to them. Because really, even though it's widespread, they all do flow together. I started in single family rental homes. I've evolved over the years. We, I hate it single family rental homes. It just, I just didn't like them.

I didn't like dealing with attendance. So I got into commercial real estate. I found that with commercial tenants, they'd signed three year, five year leases, ways you're to manage. And I was able to buy it at distress prices and I was able to stabilize them almost, nothing's I was able to stabilize them almost nothing's risk-free but with a lot less risk and my upside with almost the exact same amount of money that I put in a single family home I could buy a retail building

that was distressed and spend $250,000 on that, dump a little bit of money into renovations and have four times the income flow and the safety. So I like distressed assets when you're getting started. And I think the place where people should invest in, in my opinion, would be more distressed commercial retail or distressed office or repositioning of those assets as opposed to single-family homes. Although I wouldn't discourage them from any of them just to get the experience. But the first, the most important thing, when they first get started to get into something

that they're gonna win on because the first one is the most important, whether it's a $500 win, a $600 win, a $10,000 win, they just need a win on their first one. That's the biggest thing. So, when is it like start time? You know, I'm working my job, I'm making 60 grand a year, 80 grand a year,

100 grand a year, and I've been saving up some money. How do I know when am I financially capable to actually start my first real estate investment? When you make a decision, it's all, it's a conscious decision. It's like any business owner. Like, when did you know that you were, you had enough finances to start your first business? Because I knew I was 17. I saved up $43,000 working at three different jobs, some peanuts and cracker jacks and at the stadium. And I said, I'm 43 grand. I knew I was 17. I saved up $43,000 working at three different jobs on peanuts and cracker jacks at the stadium. And I said, I'm 43 grand. I thought it was gonna last me for two years and two months later I ran through all the money.

Yeah, and so it's the same thing. It really comes down to a decision. It has nothing to do with having a certain amount of money in your pocket. Everything in entrepreneurship, real estate, the off flow and alignment, it really comes down to a decision and it's time. And like there's no perfect time to get married,

there's no perfect time to have kids, there's no perfect time to start a business. It's when you make a decision that the time is right. And so it's today, you know, if you wanna get started real estate, today is the day you get started and real estate. So how did you know this was the thing, like that real estate was going to be your thing?

I didn't. I got started. I got started. I was looking for anything that would make me money. I just wanted to make it, you know, when you're a kid that comes from the other side of the train tracks and you're, and I was taught in a young kid that people only got wealthy if they would inherit wealth or they won the lottery. And so my parents would tell me, I go, I remember we go out to eat and we go to places, even

just as simple as Ruth Chris. And they say, well, those restaurants aren't for people like us. Those are for the attorneys and the doctors and the people that are wealthy. And I said, well, what the hell is the difference between me and those people? And one of the big things is just making a decision. And for me, when I got started investing in real estate, I didn't know it was my thing. I was looking for a vehicle that would protect me from going broke long term. And I was pouring concrete because when we, what landed up happening was we were in the direct sales

industry, we got shut down in 1997. I opened up a little door to door sales company in 1997 just to make ends meet. We were selling to companies like pizza hut, dry cleaners, big o' tires, and we were making a little bit of money, but we weren't getting wealthy. And so I got into construction on accident. They were, you know, the waterfall on the top of your hill over here, that's a fake faux rock. Well, I took a little seminar on that stuff, on how to do that stuff.

And we started bidding projects like the Rainforest Cafes. There was a restaurant called Margaritas down in Utah, in San Diego, Utah, that they did indoor diving on. Well, those were like my claim to fame, because I bid those projects. And when I went in there, I was at a point where I was in financial distress and I felt like I had nothing to lose and everything to gain. So I said, I said, screw it. If I'm just going to bid these things if I get them, then great, I'm going to figure out a way to do them. And I just knew I had

enough money in there to figure them out. And so by the grace of God, what I thought was a lot of money wasn't a lot of money because I didn't have a lot of overhead and I got some of those jobs. And so by the grace of God, what I thought was a lot of money wasn't a lot of money because I didn't have a lot of overhead and I got some of those jobs. And from that, I started investing in little pieces of real estate. So I have an asset that I had something tangible that I had to show for my money. And that was as simple as it was. And I continued in traditional business. And I would make a few million dollars a year, you know, at a company that would do like two million, they grew to like four million. And then we did a little house building company that we would buy lamb build houses.

And I would take that money, and I would build a few homes a year, make a few hundred grand net profit, and I invested in more real estate. And then just through growing those asset bases, it grew to retail where I was building them brand new in 2004, and then four years later into the recession, we almost got crushed with retail. set basis, it grew to retail where I was building a brand new in 2004. And then four years later into the recession, we almost got crushed with retail.

And so I wanted out a real estate. I wanted out, but I needed a means to be able to pay for all this stuff without going bankrupt. So I started buying more real estate in Phoenix, where it was really financially distressed. And we started picking up like single family homes for like $25,000, $40,000. We started picking up four plexes for like $25,000, $40,000. We started picking up four plexes for like $35,000, $40,000. And I built a little portfolio of about $4 million with a real estate for about, I was all out of pocket for just under 900 grand. Wow.

So we were able to evolve and real estate kept pulling me back for some reason. And it wasn't until really 2016 where I had a portfolio of maybe about $15 million worth of real estate. I said, we need to scale this and we need to do something that's going to take care of as long term forever. And so that's when we actually started raising capital and that's when we really started scaling stuff. And that's where I really decided.

And I can 2016, I said, okay, this is it. Everything that we've all done this far is great active income, but this is the only thing that we've done that gives us passive income that we can scale and we can actually have and rely on long term. So when you raise capital, do you do it through syndication for one deal or through a fund or like walk us through what's the main idea when you raise capital? So you can do it multiple ways. We've done all of the above. One of the things that we do is is if we're doing a syndication, it is property specific. So we'll go in

and there's different laws and different regulations. So you're going to buy a $20 million apartment building. Yep. And you're going to raise. So if we can do $20 million apartment building, you know, you're going to usually raise, but right now you're going to raise one third of that in capital. So $7 million. Yep. So you're going to raise raise, but right now you're going to raise one third of that in capital. So seven million bucks. Yep. So you're going to raise seven million dollars. You go to your SEC attorney. Yep.

And if you could either do it with friends and family, you can do a regulation 506B through friends and family or you can advertise it and you can do a 506C. And so just depending on what you're, what you're bound with is like you're a social media person. So if I had bound with social media, I would go more after the 506E. Because I can go out and raise capital through the means of people I don't know. If I want to, if I have a big network of wealthy people

or not even wealthy people, but I'm going to meet ups and I'm going out and have relationships with other people that are in real estate I can do a 506b and just do friends family and colleagues that are through a 506b and I can raise it privately And so when someone invests, let's say I'm the person at the events and you say hey damn put in 50 grand 100 grand 500 grand a million whatever the number is

What is an investor? What should I be looking for when someone approach me with this indication deal? You should be looking at the experience. You should be vetting the experience of your general partners. What they've done in the past, how they've managed assets, what they've given in returns for their internal rates of return, what they're doing as far as their cash on cash returns. And I don't know what the sophistication is of the audience is watching this right now, but your cash on cash return is the amount of money that you bear on the money you invest. So the immediately. So I put in a hundred grand and walk me through it. So yeah, so if you put in a hundred thousand dollars and you're making seven percent of a hundred thousand dollars on a seven cap, right? A

cap rate of seven percent. What's the seven cap mean? A seven cap means you're making seven percent of what you paid into the deal or what you paid what a cap rate is is when you pay a property cash. You buy a property all cash and it's paid off and if you're buying it for a 7% cap rate or a 6% cap rate, the cap rate is the amount of money that you make it as a return on your investment. And so if you invest $100,000 in your cash on cash return, if it's divided on equal shares of equity, you're making 7% on your $100,000. Okay, annually. That's your cash on cash return. Your internal rate of return is the amount that you're making when you sell the asset. So it's your money's part, it's like compared to stocks. It's when the stock goes up and the appreciation

and the value of that stock is sold. It's what you make when you sell the stock. So in real estate, when your internal rate return is the appreciated value that's in that real estate when you sell it. And it's the return you make after you sell the asset. Very cool. Yeah, so someone approaches me and says,

hey, Dan, put a hundred grand into my $20 dollar property. I'm raising $7 million, Dan, put a hundred grand. I'm hoping to make around 7% a year for X money years. Yeah, so usually there's a call time. With most syndications, they're three to five years. So our business model is a little different. We do syndicate and we'll syndicate existing properties, but we do a lot of ground up construction.

So what we do, like our business model, and I'll kind of explain this, this is a little nontraditional than what most people do. The way we've actually scaled to where we're at, and we retain 100% equity. Now that money is tight right now, and this for all the listeners, they're listening.

This is a business model that you can do even on a smaller asset. So if you're in construction, if you're doing fix and flips, if you're doing value add, and you're already doing renovations and stuff in the construction trade, listen to this because this is like gold for most people. And the reason we've been able to do this is because I have a construction background

and we also have a real estate background. But what we do is I raise capital to buy the land. And so what I typically do is I raise debt. And so when I go in and I raise debt on the land, the land is non-entitled, meaning that it doesn't have the permissive use to be able to build like an apartment complex on the land for sake of example.

So what I'll do is I'll buy the land at a very discounted price, maybe under a million dollars for five acres worth of land. And then what I do to create value in my land is I'll maybe raise two million dollars so I can get through entitlements, which is the actual permitting process, where we pay for architects, engineers, unlike let's say a 20 million to 50 million dollar development. And we'll go in and we'll entitle the entire property. We'll pay about $300,000 for the architects, the engineers. We have some, those are all called your soft cost. And then when we're all done with the entitlements, the land value will more,

a lot of times be worth three times or more, what we buy for it. So if we get like, we can put 200 units of apartments, that land's probably worth somewhere close to $6 million. Right? So when money's cheap, we land up going in for a construction loan and the money is in the plans. So after we get all the entitlements, we go into the construction loan, we go in and we go to the bank with a retail value

of building it out. So when we do a retail value of building it out, we go in and we build the product out ourselves. We collateralize the land. We exit all the investors out on our first straw for our construction loan. And then we own the entire property, free and clear of any investors.

And the only part we have in the entire deal is the bank. And then we've done a building out the entire asset, we stabilize it, and I've been able to retain 100% of the equity in my deals that way. And so what we're doing now to raise capital since we own 100% most indicators give away 70% of their deal in syndication. What we're doing now is we're carving off 30% off the top end to reduce our liability because money is expensive right now. Construction loans are costing 10 to 11%. And what we're doing is we're reducing down our liability by giving out about 30% of the equity in our deals

and still only partnering with a bank and then picking and choosing who we actually work with as far as our investors. But it gives us a lot of bandwidth for growth. So I'm at that same party. Someone says, I got a $20 dollar property. I'm needing $7 million. I'm raising a dam, put a hundred grand. But they offer me like 19% a year or 23% a year. What number is

like too good to be true when it comes to syndication deals? So, so when you say the percentages, you know, typically anything over 12% is typically too good to be true unless you're talking about your internal rate of return, you know, for an internal rate of return, because it's not based on an annual basis, your internal rate of return is your return, and you may be a return of 20%, but it's collateralized over three years worth of time. So if you have a 20% IRR, internal rate of return, it's a 20% over the course of the time you've owned the asset

on your money, not over an annual basis. Now, when you're talking about your cash on cash return, anything over 12% a lot of times is too good. It's 20 foot snake just walk by, sorry. Get it right. Yeah. We're live.

You're at the ranch right now. There's a big snake just walk by. Go ahead, sorry. It's awesome. They have it on their shoulders. Yeah. Okay. So someone, you know, approached me at that same event and they say, I have a fund. Hey, Dan, I'm raising a $20 million fund.

To my fund, we're going to buy storage units, apartment complexes, RV parks, et cetera. What should I be looking for as an investor when someone says, I'm raising $20 million for a real estate fund? Yeah. You need to look at their deal flow. Most important when you raise, because with a fund, the difference is that you're not investing in one asset, you're investing in multitudes of assets that are within that fund. And so, in the law is that you have a hundred percent disclosure anytime you invest in

a fund or a syndication. And so it is your duty to request the documents of what consists within that fund. And so my recommendation, anybody that is looking to invest in a fund is know exactly what they're investing into, what the parameters are, and make sure that, you know what your risk tolerance is, because some funds can be extremely high risk. You know, like right now,

people that are doing regular apartments indication funds, I wouldn't invest in them unless I knew the general partners and I knew the strength of their books. So I would audit their books right now in a market like we're seeing today because a lot of these guys, like I'll give you an example, there's a fund, I won't mention the name of the group,

but we just bid up against them on a deal down in Tucson, and the deal is worth $28,000, $27.5 million, that's all it's worth, and that's based on a 5% cap rate, okay? And that thing's sold for $34 million at a 5% cap rate, and it's because they have inventory already in that market That was the justification of the brokers, but the reality is that The return on investment you can take your money right now down and you know

You could put it in the bond market and get 4% right now and it's safe Why in the world did you go in and ride a five cap? That's not even a real five cap because once you dilute it to $34 million you're probably a four cap and put that type of risk out when you get to stuff your money in a bond market and then just get a return in two years, three years that's safer than investing in some fund. So you got to be careful. You got to make sure that you yourself have a little bit of a little bit of knowledge on underwriting some of these deals and that you really trust and vet the people that you're working with for their experience

more than anything. So the person that's managing the syndicate or managing the fun, what is the typical fees I should be looking for when they approach me? For the fees that they're taking? Yeah. Well, some of these guys, they make a living on their fees and that's that's one of the reasons I'll continue buying deals and so Two and a half percent is good some of these guys will charge us high six percent. Well, that's a big difference It's a big difference. Yeah, it's a big difference and and they're hidden, you know between management fees they're hidden between

asset fees and you just have to know that the fees that you're looking at when you're looking at the P&Ls there's a separation between the property management fees and the asset management fees and so when you're looking at the it's a profit and loss statements and you're looking at your expenses because most people don't know they they get at this long 200 itemized number, profit and loss statement, and they're sitting there and they're looking every line, and they say, property management. And it says management.

Well, it might be an asset management. What kind of management is it? And so, two and a half percent to five percent is pretty typical. You start getting outside of that realm, it becomes pretty high risk. These guys, they're making their money. It's not on the actual real estate. They're making it on the management fees. So someone's thinking to themselves, man, I can invest in a syndicate or I can invest in

a fund or I can try to do it myself or I can try to do it with my friends. When there's so many options, how do they know what they want? How do they figure out for themselves? How do I decide when there's so many different ways to go? As an investor? Yeah. Just as an investor strictly. So there's obviously reefs that people can invest in, right? So those are publicly traded. And you can go in and you can get a 3.6% return

with BlackRock right now on a dividend, you know? So when you look at it, you have to look at it from a perspective. And I'm a bad person. Asked this to the reason why is because I'm very conservative when it comes to investing. So I would never personally invest in somebody else's deal unless it's getting over an 8% cap rate. And unless I'm getting an internal rate of return in excess of 20%. And so how do you bear those numbers? Well, the only way to bear those numbers right now is to get a good deal, and there's not a lot of them out there. So, you have to be underwriting deals all the time.

And that's why we started building was because in 2018, I noticed that people, Capriets, were getting compressed. The amount that, and values were going through the roof. And so, once values go through the roof, Capri rates get compressed, there's only one way down from that. And that it becomes a high risk investment. So I figured, shit, I'm gonna mitigate my risk by building these things. I can walk into these things at a 12% cap rate.

And then I own a hundred percent of them. And I was stabilizing these things at about a 35% equity standpoint from the bank. So we were walking in fully stabilized at 35% equity in these deals from the time we actually got a stabilized loan. So I'm a bad person asked because I would never invest in anything that didn't have at least a 7 to 8% cap rate. And I push closer to the 8% cap rate mark. So when people are asking me, I'm telling them look for a 7 to 8% cap rate, 7% at minimum, or at least a business model that's going to bear you

8% once a good manager takes over the asset and can get that property up to an 8% cap rate within a reasonable amount of time, which a reasonable amount of time is less than 18 months. And if it's a stabilized asset less than 16 months, I mean less than six months. So what do you like to invest in too? Since you have so many options, how do you decide for yourself will you invest in to? So I like to stress assets. When I decide, I decide my investments are all based on time and the value of my time on my return. So what I look for is I look for opportunity where other people aren't looking. Like right now, a lot of syndicators don't know anything about construction.

So where I benefit, the benefits I have that they don't, is that I understand construction really well. So if somebody's looking at just a financially distressed asset to buy, I'm looking at also physically distressed assets. And so if you understand the financial end of it, plus the construction end of it, I'm looking where there is distress, because where there's distress, there's money to be made, and there's upside on it.

Can you give an example of distress? You mean like husband, wife, or divorce thing? Someone's going bankrupt, like what does it distress me? Yeah, so it's all the above. I mean, if you're looking at smaller single family stuff that a husband and wife are going through divorce, going through financial hard times, maybe somebody sick and ill and can't work. That stuff's going into bankruptcy, that's one form of it.

But when I talk about financial distress, I'm looking at a more big picture. Since we're on money, money Mondays, I'm assuming that a lot of the demographics that we're hitting is looking at being able to scale up with a little bit of what they're doing, right? So when I'm talking about distress, I'm talking about financially distressed assets, stuff that people have overpaid for. Because when times are good,

people think that those good times are gonna continue going forever. And you and I both know that that's not the case. You've lived through a couple of recessions. I've lived through three recessions. And you get bottlenecked. When money's good, times are good. When money gets tight, when money gets expensive

like it does now, distressed assets become extremely attractive. When I say distressed, I'm not just talking about physically distressed, I'm also talking about financially distressed. Because financially distressed assets come when people have over leveraged themselves. And right now, there's a lot that's coming to the market

where people had, for example, five one arms, which is basically what that means is it's an adjustable rate mortgage after five years, it becomes adjustable to the market. So if they had it at a two and a half or three percent interest rate, and their note is now called and they're on a fluctuating rate mortgage, they may be paying seven percent

on that. Now if they bought that asset at four percent return, how do you pay a four percent return if you have a seven percent interest, right? You can't even afford your debt. So now it becomes a financially distressed asset because there's a teeter-totter effect where do you get it back in alignment? And that's what we come in. So if it's financially distressed, through the means of relationships and shopping for this stuff, we're able to come in and offset that balance and find some of these deals where they're financially distressed and people can't do them.

They're staring bankruptcy in the eyes and it opens doors and opportunities for investors, from single family, to multifamily, to retail, to office, and all around. All right, so we talked a lot about making money and investing money. We like to wrap up when talking about giving some money away to charity. How do you decide for yourself what type of charity

invest into, and for the listeners that are out there, how can they look around to make decisions for themselves about what type of place that they can donate money to? Yeah, so that I think each individual, it's where your heart sits, right? So early childhood development for me is real important. I grew up dyslexic. I was never a straight-A student in school. In fact, I was always the kid that was throwing spitwatchs to get out of reading in class, right? So I'd rather sit in a corner than I'd rather sit in a corner in trouble than have to read aloud in class. So early childhood development for me, I think sometimes

charities are right at the heart of who you are as a person. My wife, it breaks her heart when she sees homeless mothers, there's kids or animals on the street. I know you do a lot with homeless. So I think you have to pick a charity that and do something around where your heart space is. Yeah, so I started the homeless charity 10 years ago. It's called the Model Citizen Fund. We make backpacks for the homeless.

The 150 emergency supplies inside. Half of its food and drinks. The other half of its poncho, watch, sleeping bag, cleaning supplies books, etc. to help them get their back on their feet We've get away millions and millions of items to the homeless over the years and then the other passion We have is called Trina's kids' foundation. We do four chair events for a year for the last nine years We do a back-to-school day drive where kids bring in there All the you know, we get them back packed and things like that.

We have a report card day. They got to bring in their report card. And so depending on the level of the grades of what kind of prizes and presents that they get, we do a Thanksgiving food drive, which is really big every year. And then our biggest thing is the toy drive. You know, last year we broke the Guinness Book World Record

for the largest toy driving history. This year we're going to try to do 10 cities because it's our 10 year anniversary. So we're going to go crazy and try to do it all over the country. But the toy drive is my passion project. The charity that I run is Model Citizen Fund is for the homeless. My passion is the charity for the kids because I want people to give out toys. They don't have to do it through me. The reason we post about charity so much is that they replicate us. Meaning, Jerome, you don't have to donate to the toy drive, you do a toy drive. You don't have to

buy a backpack for the homeless. You a backpacks for the homeless. You make backpacks for the homeless with your kids and zip-lock bags and give it out to the homeless. I want to just showcase how easy charity can be when you put your mind behind it. I love that. Not as much about the money, not as much about the money part, just your time, energy, and passion, into something you care about. Last question. We are in chaotic times, right? People are nervous, people are scared, there's a lot of opportunity when that happens. I always say to stay calm during the chaos. What would you say to people that are considering investing during the chaotic times? If they've never

invested before, I tell them to take a deep breath and learn, get educated right now. Right now is a great time to get educated. I will tell you that it's hard because right now there's so much opportunity, right? But if you're not careful and you haven't educated yourself, you can land up losing big during these times. So education is key. And in times of distress, there is massive, massive opportunity, but everybody has the golden, bucket of gold at the end of the rainbow. And one of the biggest problems in the entrepreneurial space is that people are looking at it through their phones and social media and they feel like they're missing out on something. 90% of these people are broke.

And so you got to be careful what you're investing in. And so if you don't know yourself, what to invest in, my recommendation is to educate yourself first. Get good at one thing. And I think so many people have the shiny objects syndrome, they're everywhere. And one thing that I've done down over the years is I've always stayed focused in my lane. There's been times where I've had friends

that have gone in, they've made a shit ton of money in the finance space. Or they've made a shit ton of money and courses and education. They've made a shit ton of money doing the finance space. They've made a shit ton of money in courses and education. They've made a shit ton of money doing some, doing debt consolidation. And I've always been the guy in the construction. When you're out there pouring wet concrete,

they'll be running a construction company and someone else is out on the beach because they have a, it's real easy to get distracted. But over the last 25 years, when my wife and I look at everything that has come and gone in front of us One thing has been consistent. We've most of them not everybody but almost everybody We've out earned them and we're still here and so I tell people right now And there's so much blood on the wall and the things are in chaos either educate yourself extremely well

But don't get so broad that you lose yourself. Stay focused on one thing that you can get really good at mastering these times and invest in that. Because there's money in anything as long as you stay focused. And the biggest thing is so much distraction most people can't stay focused or consistent. All right guys, we're listening to the money Mondays. Make sure to follow Jerome across all social media platforms. It's really important that we have these discussions about money because we all grew up thinking it's rude to talk about money. We think it's rude to not talk about it because the majority of capital that you use, it's

not the root of all evil. It's for your health, your family, your mortgage, your rents, your clothes, your everything, your food, your gasoline, your car. Every little basic thing is money related to okay to have discussion about money. It's part of why we have the money Mondays. So if you can, continue to like, subscribe, comment, share with your friends, go to themoneymondays.com and we will see you guys next Monday.