Développement outre-mer et zones d'opportunité

Brandon: D'accord, Robert et Russ sont les bienvenus sur le podcast BiggerPockets. Heureux de vous avoir ici.

Robert: Je suis ravi d'être ici. Oh mon Dieu.

Russell: Vraiment bien d'être ici. Merci Brandon.

Brandon: Oui, donc je disais juste à ces gars-là que nous avions commencé à enregistrer comme ce spectacle, c’est ce que j’attendais avec impatience depuis cinq ans et demi, six ans. Parce que c’est comme… Je ne sais pas si vous le saviez, mais comme si nous avions lancé le podcast BiggerPockets parce que j’étais obsédé par les podcasts, mais que j’étais obsédé par un seul podcast, c’était votre podcast. Comme j'ai écouté tant d'heures. Comme si ma femme et moi écoutions des centaines d’heures probablement, j’ai beaucoup appris sur l’immobilier en vous écoutant. C'est comme une fan fille ici, ça va être génial.

Brandon: Mais en fait, je ne sais pas grand-chose parce que vous êtes très très très informatifs dans votre émission et que vous enseignez beaucoup de choses vraiment bonnes, mais je ne vous connais pas beaucoup. Vous ne parlez pas beaucoup de votre passé et de vos histoires, alors c’est le plaisir d’aujourd’hui… Du moins, vous savez, quand j’ai écouté, nous allons aujourd’hui creuser dans ce sens, je suppose. Et nous commencerons tôt, je suppose, celui qui voudra y aller le premier. Comment êtes-vous entré dans l'immobilier? Présentez-nous ce premier voyage dans votre premier contrat.

Robert: Très bien, peut-être que je vais commencer car je suis plus un spécialiste de l’immobilier, comme vous l’apprendrez dans une minute. Russ est un excellent stratège financier et un grand partisan des idées. Il s'intéresse beaucoup aux chiffres. De toute évidence, les chiffres comptent dans l'immobilier. Je suis née dans une famille de l'immobilier. Mon père était un courtier immobilier, mais avant cela, il était un investisseur immobilier. Il a acheté sa première propriété en 1957, et je viens juste de la contourner et je ne savais pas si j'allais être dans l'immobilier, mais assez rapidement, il a clairement indiqué que je devrais obtenir un permis et le tout premier chèque de commission que j'ai jamais reçu. J'ai acheté un duplex.

Robert: Je vivais dans la moitié et ensuite loué l'autre moitié, et mon plan initial était d'acheter une maison tous les deux ans et de ne garder qu'une traînée de maisons derrière moi. Ne jamais vendre, juste acheter. Et c’est ainsi que je collectionnerais les biens immobiliers. Et puis un de mes grands mentors a dit: «Eh bien, Robert. Pourquoi voudriez-vous garder une maison comme location si vous n’achetiez pas spécifiquement comme location? »Vous pourriez peut-être acheter quelque chose de plus stratégique, et cela a conduit à une tout autre chose, mais j’ai eu le virus au tout début et Je me suis rendu compte que l’immobilier était un tel véhicule pour de nombreuses raisons dont vous parlez toujours.

Brandon: C’est génial. Où était ce duplex à?

Robert: C'était à San Jose en Californie. Donc je suis né dans la région de la baie. Nous avons commencé notre spectacle dans la région de la baie, il y a 22 ans. Aujourd'hui, ni Russ ni moi ne vivons en Californie. Nous ne vivons même pas dans le même état. Mais grâce au pouvoir de la technologie, nous faisons toujours notre spectacle chaque semaine. J'ai longtemps été un investisseur californien. Et puis j'ai eu un grand changement, une grande épiphanie qui pourrait être intéressante. J'étais à un événement immobilier et je parlais à un gars et à l'époque nous avions le même nombre d'unités. Même nombre de portes, et j’ai répondu: «C’est intéressant,» sauf qu’aucune de ses unités n’était en Californie, alors que nous habitions en Californie.

Robert: Et 100% de mon portefeuille était en Californie. Alors, j’ai pensé: «Wow, nous avons quelque chose à dire ici.» Et il a dit: «Eh bien, étant en Californie, la loi sur les propriétaires de locataires n’est pas bonne. Les prix sont chers. »J'ai dit:« Pourquoi voudriez-vous être ailleurs? L’appréciation est excellente et c’est beau. »Nous avons donc eu une longue conversation et cela m’a fait réfléchir de penser à d’autres lieux d’investissement. C’est pourquoi aujourd’hui je dis toujours vivre où vous voulez vivre, investir où les chiffres avoir un sens. Si vous voulez vivre dans un endroit magnifique et que cela n’a pas de sens du point de vue de l’immobilier, c’est bien. Vous pouvez investir n'importe où.

Brandon: Ouais. Et j’aimerais vraiment approfondir cette question aujourd’hui, car je pense que c’est un sujet… Vous savez, David a écrit ici un livre intitulé Long Distance Real Estate Investing sur le même sujet. Comme si vous n’aviez pas à vivre, car David vit également en Californie et investit hors de la région. Et maintenant je viens juste d’emménager à Hawaii et j’investis maintenant sur la terre ferme, mais je vis ici à Hawaii. Oui, c’est faisable et je veux vraiment en faire une bonne partie de la série d’aujourd’hui, car vous semblez vraiment très bon pour ça. Mais avant d'y arriver, Russ, alors qu'en est-il de toi? Où avez-vous… Comment êtes-vous entré dans ce jeu?

Russell: Je suis donc le contraire de Robert. Je n'ai pas grandi dans une famille d'investisseurs immobiliers. J'ai grandi dans une famille entrepreneuriale. Mon père était un entrepreneur de haute technologie dans la Silicon Valley et, comme beaucoup de gens dans la trentaine, et j'étais déjà adolescent alors, il était à cet endroit de la vie où beaucoup de gens se retrouvent là où ils sont sur ce tapis roulant. dans la cabine de l'entreprise. Et il regarde le monde et il pense que je dois trouver un moyen de se libérer, et il s’intéresse à l’immobilier. Alors, à 17 ans, je suis allé suivre un cours sur les principes et les pratiques en matière d’immobilier au collège communautaire local. Je pense que j’ai acheté ma première maison à 18 ou 19 ans. À 24 ans, j'ai eu mon premier bien locatif et je ne savais vraiment pas ce que je faisais. Je n’avais pas de véritable mentor, mais j’étais juste en train de fouiller un peu, de semer le chaos et d’essayer de comprendre.

Russell: J'ai gagné beaucoup d'argent tôt. J'ai tout raté. J'ai l'habitude de le faire. Je gagne beaucoup d’argent et puis je fais sauter tout ça. Alors que… j'ai compris que j'avais besoin de plus que cela, alors je me suis vraiment intéressé à comprendre ce qui se trouvait sous l'immobilier et ce qui la faisait ressembler à l'immobilier, et j'étais bien plus un entrepreneur que j'étais un spécialiste de l'immobilier. . De plus, j'étais hyper analytique et le problème, c'est que vous vous analysez sans rien faire.

Russell: L’une des choses que j’ai appris dans la vie est de me rappeler les gens enclins à l’action. Robert Helms est l'un de ces types. J'ai donc créé une société de crédit hypothécaire à la fin des années 90. Je suis parti à la recherche d'un moyen de commercialiser cette société. J'ai décidé de me spécialiser la semaine prochaine en travaillant avec des investisseurs immobiliers. hors des ventes aux entreprises. J'aimais mieux les entreprises. J’ai préféré faire affaire avec des professionnels que avec des consommateurs. C’est ainsi que j’ai rencontré Robert, puis c’est à peu près tout. Et la plupart de mes investissements immobiliers se sont produits après ma rencontre avec Robert, à la suite de ce que nous faisions ensemble, bien plus que ce que je faisais moi-même.

Brandon: D'accord, on dirait que Robert est l'homme des gens. Il est le réseauteur, il monte là-bas. C’est l’aimant qui attire les gens vers vous. Et puis, Russ, vous aimez probablement le filtre, qui regarde tout et qui ressemble à: «Très bien, choisissons tout ce que nous venons de nous apporter, quelle sera notre meilleure opportunité?

Russell: En quelque sorte. C'est en fait devenu un peu différent. Je veux dire que nous sommes des vieux et que nous existons depuis longtemps.

Brandon: Tu n’as pas l’air si vieux.

Russell: Fais-moi confiance. Donc, après l’accord de 2008, parce qu’avant 2008, nous n’étions qu’à plusieurs marchés, types de propriétés. Nous avions tellement de choses à faire. Nous étions dans l'immobilier. Nous avons eu l'émission de radio, nous avons eu l'émission de télévision, nous avons écrit le livre. Nous avons eu le programme de mentorat et les séminaires. Nous nous sommes impliqués dans le développement immobilier, car c’était vraiment la passion de Robert. Mais il était sorti de C Class Apartments, nous faisions donc C Class Apartments. Nous faisions du développement au sol. Nous achetions de nouveaux condos de grande hauteur dans plusieurs marchés.

Russell: Je veux dire que nous faisions tout, et tout ce que nous avons touché s'est transformé en or. Je veux dire que c'était génial jusque vers 2008. Et puis tout s'est effondré, puis fin 2008, Robert et moi-même nous sommes assis et nous nous sommes regardés et nous nous sommes regardés et avons pensé: «D'accord, vous savez, nous avons été à cela un moment. Nous savons comment gagner de l'argent. Nous savons comment investir. Il ne s’agit plus de gagner de l’argent », même si nous avions besoin de gagner de l’argent car nous en avions perdu un peu. "Que voulons-nous vraiment faire?"

Russell: Et ce genre de concept de Jim Collins Good to Great Hedgehog. Qu'est-ce que tu aimes faire? Qu'avez-vous la chance d'être le meilleur en classe? Et que pouvez-vous monétiser? Et nous avons misé sur le développement immobilier dans des marchés très spécialisés, et Robert peut en parler un peu. Et nous avons décidé de nous concentrer sur la syndication afin d’y parvenir, car cela nous évitait d’attendre nos propres ressources. Nous n’avons pas eu à attendre pour récupérer. Nous pourrions simplement devenir gros tout de suite, et c’est ce que nous avons fini par faire.

Brandon: D'accord, alors vous êtes partis de… Vous venez de commencer avec quelques petites affaires. Avec quelle rapidité avez-vous été à même de commencer à faire toutes ces choses si diverses? Avez-vous passé des années et des années à faire un petit pas ou vous en êtes-vous tiré le plus vite possible?

Robert: Eh bien, pour moi, c'était plus long. J'étais en train d'acquérir de l'immobilier. Je me considère un peu comme un collectionneur de biens immobiliers, alors je le faisais en Californie. Encore une fois, partout en Californie, mais beaucoup de marchés différents et quelques types de produits différents, mais presque tous les immeubles à revenus résidentiels. Propriété commerciale ici et là, propriété à usage mixte, mais aucun développement d'aucune sorte. Et je pense que pour moi l’intensification a eu lieu quand je gagnais beaucoup d’argent, et un gars qui s’occupait du projet de développement m’a approché. C’est une longue histoire qui ne vaut pas la peine d’être racontée, mais c’est une très belle opportunité. pour moi de mettre seulement 50 000 $, éventuellement, dans un développement commercial.

Robert: Et je n’étais pas seulement intéressé à faire un retour. Je voulais apprendre. Donc, je traînais avec ces gars et je restais assis dans les salles de conférence, et ils me permettaient et je (inaudible 00:09:35) par dessus leur épaule et puis j'ai eu le bogue pour commencer à se développer et ils ont vraiment a tenu ma main. Ils avaient un arrangement en vertu duquel ils mobilisaient des capitaux et réalisaient un projet. Ils rembourseraient le capital dans un délai de 18 à 24 mois, car il s’agissait d’une nouvelle construction et, chaque fois que j’investissais avec eux, ils dépassaient les délais. et ils auraient battu le retour, ce qui est plutôt cool. Alors j'ai commencé à dire: «Hé, puis-je faire venir des amis?» Nous avons commencé à parler de gens et il n'y a pas eu d'échange d'argent pour cela. C’était juste: "Hé, ils font un excellent travail."

Robert: Et le directeur s'est assis avec moi et a dit: «Vous savez, vous avez collecté plus de la moitié de l'argent sur notre dernier contrat. Nous avons un accord en tête, nous pensons que vous pourriez être le développeur et que nous allons simplement utiliser une arme à feu. "Et j'ai dit:" Eh bien, je ne suis pas un promoteur immobilier. "Et ils ont dit:" Eh bien, ce n'est pas si dur. Pourquoi ne pas vous asseoir dans cette chaise et nous allons nous asseoir dans cette chaise? "Et bien sûr, nous avons fait cela et c'était incroyable.

Robert: C’est donc le moment où, pour moi, cela a été renforcé. Je veux dire, nous avions déjà les plus grosses unités. Vous savez, nous sommes passés de quatre plex et duplex à vous le savez, les immeubles de 20, 30 et 40 unités. Nous avions plus de 100 bâtiments. Mais le développement a plutôt retenu notre attention et il était toujours d'actualité, alors que les conditions étaient bonnes avant le crash, et pourtant, le développement est à bien des égards un peu résilient, selon ce que vous construisez et où. Et c'est juste devenu un type d'immobilier complètement différent. Je pense que pour moi, c’est ce que nous avons vu dans l’échelle. Mais je pense que nous avons été séduits par beaucoup de choses différentes. Et nous avons essayé tout un tas de choses différentes. Et parfois, vous devez faire cela pour comprendre où se situe votre cœur.

Brandon: D'accord, donc c'est tout à fait vrai. Beaucoup de gens viennent dans l’immobilier pour écouter cette émission en ce moment. Ils sont très nouveaux et ne savent pas quoi faire. Ils n’ont pas découvert que le développement me concernait ou si vous savez, je devrais acheter ce duplex et ce que nous appelons le piratage domestique. Vivez dans une moitié et louez l'autre. Ou devrais-je sauter directement dans le renversement de maisons ou vous savez… Avez-vous des recommandations si vous êtes nouveau dans l'immobilier, comment déterminez-vous ce que la meilleure chose pour vous est? Parce qu’il ya tellement de choses là-bas.

Russell: Oui, je vais me lancer là-dessus. Robert fait cette excellente présentation intitulée Philosophie de placement personnel pour aider les gens à comprendre cela. Et pour moi, parce que vous jouez avec de l’argent réel et du crédit réel, et votre temps, et surtout si vous décidez de collecter des fonds, je pense qu’il est vraiment très important de faire venir beaucoup de gens qui font beaucoup de choses différentes. Nous sommes donc de grands fans de réseautage, de rencontres en direct, de rencontres, d'activités dans les clubs, de discussions avec de nombreux investisseurs, de sorties sur le terrain, de sorties dans le monde réel et de voir ce qu'il y a, puis tout simplement. voir ce qui vous intéresse.

Russell: Une fois que vous avez trouvé quelque chose qui vous intéresse, essayez de trouver un moyen de jouer de manière passive si vous le pouvez, ou du moins jusqu'à ce que vous puissiez avoir un aperçu du terrain et que vous sachiez vraiment que les personnes avec lesquelles vous traitez sont de bonnes personnes. , ce sont des gens compétents, engagés envers vous. Et puis, lorsque vous avez un peu de succès, vous pouvez parler de développement très rapide. Donc, pour moi, le secret ne concerne pas tout ce que vous apprenez, car vous allez apprendre. Mais vous ne pouvez pas tout apprendre.

Russell: Je pense que l'un des défis et Kiyosaki en parle tout le temps quand il parle de la mentalité des étudiants A, et nous l'avons souvent vu dans notre programme lorsque nous étions ensemble dans la Silicon Valley. Beaucoup d'ingénieurs sont venus, et ces gars sont des étudiants de niveau A et ils ont l'habitude de tout savoir. Et si vous vendez de l’éducation dans le domaine de l’immobilier, vous pouvez faire de la monnaie à ces gars-là, car ils veulent tout savoir. Ils veulent savoir comment faire une évaluation, ils veulent savoir comment faire des inspections. Ils veulent savoir comment faire du droit des contrats. Ils essaient d'être le gars de l'impôt. Ils essaient de tout faire et vous pouvez leur vendre 40 ans d’éducation avant qu’ils ne fassent jamais quelque chose. Je pense que c’est une grave erreur.

Russell: Je pense vraiment qu’il n’ya que peu de choses pour réussir à les maîtriser. Il s’agit vraiment de former une équipe et de savoir poser des questions, avoir une conversation, quel que soit le sujet traité. Et ensuite, apprendre à poser les bonnes questions et à prendre les bonnes décisions lorsque vous obtenez les réponses. Une fois que vous maîtrisez cela, vous pouvez commencer à aller très vite. C’est beaucoup plus sur les gens que sur le savoir. Et vous apprenez en faisant.

David: C'est un très bon point. Et vous savez, Russell, je n’ai jamais vu personne lier le fait que les gens pensent qu’ils ont besoin d’apprendre tout ce qui concerne l’immobilier à la vulnérabilité que des gourous peuvent leur reprocher et en tirer profit, car dites: «Hé, si vous ne savez pas tout, vous pouvez perdre votre argent. Alors venez payer 50 000 $ et nous vous apprendrons tout. »C’est tout à fait vrai, car ceux qui le font à un haut niveau ne maîtrisent que rarement plus d’une ou deux parties. Comme s'ils s'associent avec d'autres personnes qui sont bonnes. Ils savent: «Je ne suis pas un gars de chiffres» ou «Je ne suis pas un gars» ou «Je ne suis pas un gars d'opération, je suis un gars d'idées.» Oh, j'adore ce que vous avez mentionné ça, parce que ce n'est pas que vous… Ce n'est pas que l'ignorance, ça va. Quelqu'un doit le savoir, il n’est pas nécessaire que ce soit vous et si vous attendez de tout savoir, vous mourrez probablement avant que vous ne preniez la moindre mesure.

Russell: C’est vrai.

David: Dans cette affaire. Pouvez-vous nous dire comment vous les gars… Le saviez-vous dès le départ? Avez-vous appris cela en cours de route? Y a-t-il un déclic qui rende cela logique pour vous?

Russell: Ouais. Je pense que pour moi, vous savez, je suis très conscient de mes propres faiblesses et c’est facile parce qu’il y en a tellement. Mais je pense que la chose pour laquelle j'étais vraiment bon était d'aller chercher ce dont j'avais besoin. Je reconnais donc, parce que mon père était un entrepreneur et que l’essence d’être un entrepreneur est d’aller chercher ce que vous n’avez pas. Mon père n’a donc pas obtenu de diplôme universitaire, mais il a créé une entreprise de haute technologie. Ce n’était pas un ingénieur, mais il a trouvé un moyen de créer de nouveaux produits de haute technologie. Je n'ai même jamais compris ce qu'il a fait. C'était juste fascinant pour moi. Mais ce qu'il était était un organisateur. Il était le gars qui allait sortir et il aurait l'argent. Il écrirait le plan. Il recruterait le talent. Il définirait la vision. Ensuite, il dirigeait l’équipe et, le plus souvent, ce n’était pas lui qui répondait aux questions. C’était lui qui posait des questions, et c’était souvent: «De quoi ai-je besoin que je n’ai pas et comment puis-je aller le chercher?"

Russell: Et c'est ce que j'ai appris. Je veux dire que j'ai appris cela tôt. Et je ne pouvais pas être dérangé d'aller au collège. J'ai duré un quart. Je voulais jouer au football. J'ai joué un quart de football et j'avais une femme et des enfants. Une récession est arrivée et j'avais des responsabilités. J'ai donc arrêté de le faire et je me suis lancé dans la vente, car le chemin était court pour gagner de l'argent. Et puis j'ai commencé à stabiliser mon revenu et à chercher d'autres choses à faire. Je me suis rendu compte que pour changer, je devais entrer dans une industrie différente, et la première fois, j'ai essayé de tout savoir, et j'ai échoué. La deuxième fois, j’ai réalisé que je n’étais pas obligé d’en savoir autant. Ce que je devais faire, c'était rencontrer les bonnes personnes. Et c’est dans le cadre de ce voyage de rechercher les bonnes personnes que j’ai rencontré Robert. Et Robert était la bonne personne.

Russell: Robert a créé des liens. Il a apporté, il avait une cache de réputation. Il avait déjà eu l'émission de radio Real Estate Guys. C'était probablement trois ans à l'époque. Il avait donc une entreprise de séminaires et il y avait donc de bonnes bases sur lesquelles nous pouvions travailler ensemble. J'ai trouvé un moyen d'ajouter de la valeur à la relation. J'ai apporté l'hypothèque et j'avais un modèle d'entreprise pour l'enseignement et le mentorat. Et nous avons adapté cela à son talent et à lui, et très vite, cela a juste décollé. Donc, vous savez, là où ça clique pour vous, c’est quand pour moi, dans tout ce que vous allez apprendre, quand ça clique, c’est quand vous voyez quelqu'un faire quelque chose et que vous apprenez à prendre ce qu’il fait avec succès, que principe de réussite et appliquez-le à votre propre situation. Et j’ai vu ce que mon père avait fait pour devenir un véritable entrepreneur et je me suis dit que c’était bien, je peux l’appliquer même si je ne suis pas à la pointe de la technologie. Je peux trouver un moyen d'appliquer cela à ce que je veux faire.

Brandon: C’est fantastique. Vous avez dit quelque chose là-dedans que je veux signaler. Parce que c’est quelque chose que les coachs me disent au fil des ans, encore et encore, et c’est que… Vous savez, les coachs professionnels. Ce n'est pas à propos de savoir comment, mais à propos de qui, et j'adore ce que vous dites, c'est que votre père disait: «Qu'est-ce que je dois faire et qui dois-je pouvoir faire cela?» Comme vous le savez, ce n'est pas toujours comme cela Est-ce que j'apprends comment faire cette chose en particulier? C’est qui puis-je trouver qui le sait déjà, qui est déjà une rock star? Amenez-les dans notre monde et faites le. Je veux juste souligner cela, c’est fantastique.

Robert: Oui, c’est audacieux. En fait, ma réponse est un peu différente de celle de Russ et je n’étais pas aussi stratégique en matière de réflexion et d’observation. J'étais le gars qui voulait juste tout faire jusqu'à ce que je réalise que je n'étais pas vraiment bon dans beaucoup de choses. Et j'essayais d'en faire trop, et j'essayais de comprendre. Et puis, je trouverais quelqu'un qui pourrait le faire mieux, plus vite, moins cher, et je dirais «Wow». Cela semble être une bien meilleure solution. Et donc, il y en a quelques-uns… une poignée de choses que vous maîtriserez et que vous organiserez votre vie pour que ce soit ce que vous faites. Et ce que vous n’aimez pas faire ou que vous n’êtes pas doué (e), il faut le faire, trouver quelqu'un d’autre qui a la joie et le don de faire ces choses. C'est la clé du succès.

Brandon: Oui, oui. C'est tellement vrai. Avez-vous des assistants, des assistants immobiliers ou des personnes qui travaillent? Je me demande si oui, quand cela est-il entré dans votre vie? Quand avez-vous engagé quelqu'un pour… votre premier assistant dans votre vie?

Robert: Oui, je pense que nous avons beaucoup à dire à ce sujet, car nous avons développé une grande entreprise avec beaucoup de personnes et avons décidé que ce n’était pas la bonne façon de faire. Je laisserai Russ raconter cette histoire. (inaudible 00:18:39) tôt dans les transactions immobilières, il faut que quelqu'un surveille le fond. La plupart des vendeurs en immobilier sont bons avec les gens, et le réseautage, et la vente, et pas nécessairement la paperasse. Donc, vous le voyez dans le secteur immobilier. J'ai vendu de l'immobilier pendant 18 ans et mon entreprise a vraiment explosé lorsque mon père et moi qui travaillions ensemble dans la vente de biens immobiliers ont obtenu notre premier assistant à la demande d'un mentor qui nous a dit que la première chose à faire est de recruter un assistant. Ce qui est un état d’esprit difficile quand vous dites: «Eh bien, je gagne à peine assez d’argent pour survivre. Comment puis-je me permettre de payer quelqu'un d'autre? »Eh bien, quand pensez-vous que cela changera?

Robert: C’est tout le concept de tout ce que vous faites que quelqu'un d'autre peut faire et que vous devriez déléguer. Et apprendre à déléguer. Avoir la bonne personne, ironiquement l’un des meilleurs assistants que nous avons embauchés, je pense que notre troisième ou quatrième assistant dans notre cabinet d’immobilier était la fille de Russ. Nous avons rencontré Russ et sa fille Stéphanie lors d'un séminaire. À la fin du séminaire, nous avons baptisé Jump Start Your Real Estate Business et avons essentiellement expliqué aux agents immobiliers comment devenir recrue de l'année. Vous savez, la réduction des délais, des choses qui nous ont pris 20 ans à apprendre, vous permettent de vous apprendre en moins de temps. Et nous avons embauché Stephanie à 17 ans, et c’est vraiment ainsi que les relations ont commencé. Et cela a amené Russ à prendre conscience de la situation pour nous aider à systématiser encore plus et c’est un des arts: embaucher et déléguer, et obtenir de l’aide est tout au plus difficile. Alors, passez un peu de temps à le faire. Vous ne pouvez pas vraiment très bien évoluer sans aide.

Brandon: Ouais. C'est tellement vrai. Pendant des années, j'ai eu du mal à trouver un assistant, puis finalement je l'ai fait. Cela m'a aidé, mais j'ai probablement fait venir le mauvais assistant. Quand je l’ai fait, j’ai juste engagé quelqu'un qui était disponible, plutôt que quelqu'un qui était nécessairement bon… et j'espère qu'elle ne l'écoute pas. Et j'ai donc lutté pendant un an. Et aujourd’hui, j’ai un assistant fantastique, même au-delà de son rôle d’assistant. Il est juste comme courir ma vie, et compagnie, et tout. Mais oui, une énorme différence dans ma vie. Et j'ai la même chose mentale. C’est comme si je n’avais pas les moyens de payer cette personne. Au moins, je ne veux pas me payer cette personne, mais j’avais besoin de cette personne et de toute façon, cela a eu un impact énorme dans ma vie.

Brandon: Alors, ceux qui écoutent cette émission, c’est peut-être ce dont vous avez besoin dans votre vie. Si vous avez besoin d’être mieux organisé, de prendre tout en charge, de garder l’œil sur la balle et tout le reste pendant que vous générez des leads, ou si vous générez, analysez des offres ou tout ce que vous recherchez pourrait être vraiment une tâche difficile. bonne option là-bas. (diaphonie 00:20:58). Peut tu –

Russell: Il ya une plus grande leçon à tirer de cela aussi, Brandon, et c’est une compétence de base que vous devez posséder. Vous devez avoir, vous devez savoir… vous devez avoir la capacité. Tout d’abord, vous devez avoir l’esprit de ne pas dépenser d’argent, c’est un investissement. Je veux dire lorsque nous allons acheter une propriété, nous ne considérons pas l’argent que nous dépensons comme une dépense. Nous considérons cela comme un investissement. Nous espérons que cela nous rapportera de l'argent. Lorsque vous avez une dépense en entreprise, c’est exactement la même chose. Lorsque vous avez une dépense en affaires, vous vous attendez à ce qu'elle vous rapporte de l'argent. Vous ne devriez pas investir si vous n’avez pas de voie directe. Si vous n’avez pas de plan pour que cela gagne de l’argent. Il faut donc développer les compétences pour savoir comment gagner de l’argent grâce aux efforts des autres.

Russell: Heureusement, ce n’est pas si compliqué, car il vous suffit de tenir un agenda et de déterminer tout ce que vous faites et combien vous gagnez pour chacune de ces tâches, et il devient assez évident, assez rapidement, que vous faites beaucoup de choses qui ne rapportent pas beaucoup d’argent et qui sont facilement remplaçables, de sorte que vous pouvez ensuite consacrer plus de temps à ce qui vous donne le meilleur rendement. Et si vous le faites bien, vous pouvez éventuellement créer des entreprises entièrement gérées par d’autres personnes et vous en êtes le propriétaire, ce qui en fait un lieu ressemblant à une propriété gérée de manière professionnelle où vous n’avez pas beaucoup à faire, vous collectez simplement revenu passif. Les entreprises peuvent être les mêmes que les immeubles d'appartements à cet égard.

Brandon: Oui, c’est une chose à laquelle je n’avais jamais pensé, mais les entreprises ressemblent beaucoup à la possession d’immeubles locatifs si on les fait bien. Vous pouvez le construire de la même manière. Vous pouvez obtenir le paiement en espèces. Oui, très bon point. (diaphonie 00:22:23).

Russell: Mais l'essentiel de l'investissement dans les entreprises consiste à mobiliser les efforts des autres. C'est tout. Une fois que vous apprenez à tirer profit des efforts des autres et que vous comprenez que ces autres… ne sont que des véhicules. Je veux dire qu'un immeuble d'appartements est juste un moyen d'inciter 125 personnes à se lever chaque jour pour aller travailler pour quelqu'un d'autre et à vous payer 20, 25 ou 30% de leur revenu. Vous n’avez pas à les former, vous n’avez pas à les superviser. Vous savez, vous n’avez pas (diaphonie 00:22:49).

David: J'aime ça.

Russell: Quelqu'un d'autre le fait. Si je lance une entreprise et que j'ai beaucoup de travail à faire, je demande simplement à des personnes de le faire à un prix inférieur à ce que j'ai demandé de faire et je fais une scission. Ainsi, lorsque vous comprenez l’essence de ce que vous construisez pour créer un revenu passif, pour créer un portefeuille, pour créer une entreprise, quoi que ce soit, vous concentrez simplement vos efforts sur la maîtrise de cet élément. J'aurais aimé que quelqu'un me le dise à l'âge de 20 ans, parce que je n'avais pas compris cela avant d'avoir 50 ans. Jusqu'à ce que j'ai vraiment compris ce concept. J'avais le même blocage mental que l'embauche de personnel était une dépense et que je diminuais mes résultats. Mais pouvez-vous imaginer investir dans l'immobilier, je pense que cette attitude? Je veux dire, je ne peux pas faire d’acompte. Je dois économiser mon argent.

Brandon: Ouais. Cela n’aurait aucun sens.

David: C’est quelque chose. Brandon et moi, on me pose beaucoup de questions. Je parie que vous posez la même question, par exemple, comment trouver un mentor? Voulez-vous me guider? Ils veulent fondamentalement que quelqu'un leur apprenne toute l'entreprise sans avoir à apprendre par eux-mêmes. Et j'aime bien ce que vous venez de dire, Russ: vous voulez un retour sur investissement de l’argent que vous payez à un employé, comme vous le feriez pour un investissement. Investissez-vous dans la bonne personne ou cette personne est-elle un mauvais investissement? Et je dirais que, si vous êtes la personne à la recherche d’un mentor, c’est si quelqu'un décide de vous prendre en charge et de vous enseigner, ou de vous engager et vous payer, vous donner du temps, vous éduquer, vous donner de l'argent, Êtes-vous un bon investissement? Gagneriez-vous plus d’argent à cette personne parce qu’elle a investi en vous qu’elle ne gagnerait si elle ne vous avait pas? Et je ne pense pas que beaucoup de gens le voient de cette façon. Ils ne comprennent pas qu’en tant qu’employé, votre travail est d’être le meilleur investissement possible, car que faisons-nous de nos meilleurs investissements? We put more money into them.

David:                        That thing’s performing amazing, let me go rehab it. Let me put more energy into this. Let me build off of it. You do the same thing with your best employees. That person is doing so well for me, can I give them more opportunity and more responsibility? And I feel like in 2019 that’s one of the big things just kind of missing from the world is we’ve had what? Has it been like 11 years of just straight an improving market and it’s gotten kind of easy to make money, and people don’t understand it’s not always like that. Which might be a good segue into what happened in 2008 when a lot of people lost money in real estate. Can you guys talk just about what the mindset was at the time and what it was like when it shifted? What you learned from it so we don’t make those mistakes again? Stuff like that?

Robert:                      Oh my gosh, we will have to collapse the timeframes here a little, because that’s a long story. We, I will say, are much better prepared for a change today than we were back then having gone through it. It was pretty rocking there, right? 2003, 4, 5. Russ talked about everything we touched seemed to work and made us think we were smart. And now we’re pretty clear that wasn’t the case. All right? The market was good, and any real estate investor can make money when the market’s good. It’s hard not to.

Robert:                      The key is being able to make money in any kind of a market, and that does take this perspective of time. So one of the things we did is we’re big lovers of leverage, so we found lots of ways to get lots of property with not a lot of money down. And that’s actually not a bad strategy, because if you have too much exposure to a property in terms of say about a 50% net loan to value, now if there’s a challenge in the markets or in the economy you’ve got some equity someone can target. So it’s not a bad idea.

Robert:                      It’s just we got ahead of ourselves, and I think we weren’t looking at the signs of when is the market going to change and so forth. And so the mindset shifted pretty quickly when it all fell apart, and I think instantly people thought well, real estate’s a bad investment, because look at what happened. And of course, that wasn’t the case. It was the right real estate, the right market, the right situation, and boy we learned a lot. I know Russ has some things to say about that.

Russell:                      Right, yeah. I mean, the first thing you learn is you learn that you’re not smart. And you’re actually, the smartest people I know are humble. They ask a lot of questions, they look for people who have expertise. And so I’ll just speak for myself, but I took a lot of pride in being the smartest guy in the room, and I learned real quickly that that was so stupid. So that was one part of it, because we had people who were warning us. People that had been investing longer than us. They told us these things come in cycles.

Russell:                      The guy that mentored me in my mortgage business told me when the credit markets seized it’s just like somebody just takes a spigot and just turns it off. It stops instantly. It’s just like a power failure. It’s not, doesn’t just dim down. It just shuts off. And yet if I would have taken two minutes and really looked over our entire business I would have recognized we were 100% dependent on credit markets, healthy credit markets, and not studying the credit markets. Not understanding what drove them or wheat threatened them. I couldn’t even recognize the warning signs when they were there.

Russell:                      And so when they seized up, exactly what he said would happen happened. All of the sudden you couldn’t get your projects funded. You know, I had a mortgage company. I couldn’t get any loans funded. We were running everything on credit lines. We didn’t have any cash. We were fully deployed because cash, having cash in the bank was a waste of money. So we said, “Well, we’ve got all the liquidity we need with credit.” When those credit lines got shut off, not because we weren’t paying, not because we were a credit risk, just because everybody was reducing their exposure. And if you were around back then you may remember some of that happening. Then all of the sudden we were illiquid. We were upside down, and we couldn’t generate revenue.

Russell:                      That’s a bad combination, and so we learned that … You know, in fact it’s really interesting because Robert always does the interviews, especially all the major interviews, but we had this one circumstance back in January of 2015 where we ended up in Iowa, of all places, to go to a farm investing conference where Donald Trump, pre-president, pre-presidential candidate, Donald Trump was the keynote speaker and they ended up having a press room and we ended up in the press room.

Russell:                      But Robert had to get on a plane to go to Belize. So I ended up being stuck in the press room and I got an opportunity to ask Donald Trump just one question, and I asked him. I said, “Well, Mr. Trump, you’ve had great times and you’ve had down times, and what did you learn in the good times and what did you learn in the bad times? And if you end up running for president and winning how would that help you?” He didn’t answer the last question, because he wasn’t ready to announce yet, but he said, “Yeah, I didn’t learn anything in the good times. In the down times, learned it’s always good to have some cash, to be liquid.” And that’s the voice of experience right there.

Russell:                      So I think being liquid, real liquidity, not credit liquidity, being liquid, having some cash on hand is probably really important, and of course having good solid positive cash flows which was something else. We were running negative cash flow on portfolio, and negative cash flow on the business, and you put those in a blender and it looked good, but when the business failed because it was largely mortgage driven, at least on my side of the business, the cash flow stooped and then the properties were under water and I couldn’t get out and it was just disastrous. That was the big lesson.

David:                        Do you think that having a good amount of money flowing through the businesses gave you this false sense of security about the criteria of the investments you were making?

Russell:                      Yeah. Oh absolutely. I mean, when you’re making six figures a month and you only need, you know, 10 or 15 to live on, you can have a lot of negative cash flow. And my attitude was, “Hey, if I can own five, 10, 20 million dollars in real estate and it’s going up 5% a year.” You do the math on that, the negative cash flow versus the equity growth, it was great. The problem is equity is phantom. I’ve learned that capital gains unrealized aren’t really real. And stock market investors just find this out all of the time. But you know, you look at the real estate market, but real estate has never gone down or never substantially gone down or if it does go down it’s back in 10 years. Yeah, but you got to survive those 10 years. So cash flow is the thing that really makes you stay.

Russell:                      At the same time, we were developing a friendship with Kiyosaki and Kenny McElroy, and we watched Kenny operate through that crisis and he had a very different approach. And while everybody else was selling, everybody else was strapped, everybody else was under water. Everybody else was losing, Kenny was out there acquiring $300 million in real estate and he was very much focused on value adding cash flow. We learned a lot in watching all of that. And then of course we started hanging around with Peter Schiff and that’s a whole different discussion, but we learned a lot from him too.

Brandon:                   So, let’s a talk ait about what happened then after 2007. So pre-2008, it sounds like you guys are doing a lot of different things, including development at that time. And then what happened after? What did you shift to and then can you bring us up to where you are today and how did that journey go from ’08 now to here we are in 2019? What do you (crosstalk 00:31:59). Yeah, where did you get to then?

Robert:                      (inaudible 00:32:01)and I think every investor has an evolution. There are some people who are doing what they did 20 years ago, but I mean for most people we’re always talking about this idea of personal investment philosophy, which is getting in touch with who you are as a real estate investor and why real estate is interesting to you. What’s the why? And if you get that figured out then the vehicle can change over time. You try something for a while, markets change over time. With real estate it’s hard to pop in and pop out, because of the sales cost involved. So we say you get married to a market when you pick a real estate market plan to be there for a while, but you can definitely shift and I know we shifted a lot. I started in C Class apartments, which are management intensive, and you better keep your eye on the ball, but a lot of money can be made. But it just takes a lot of effort and we really shifted our focus.

Robert:                      When we went through the crash and said, “Okay, starting over.” And we didn’t get completely annihilated, but we definitely got punched in the stomach pretty well. It’s like well, okay, knowing what we know what would we do differently, and the first thing we did is we started to get around people that saw it coming. Because we didn’t see it coming. I mean, there were a lot of people smarter than us who didn’t see it coming, but we certainly didn’t see it coming. But the people that … There were, there were not as many as claimed that they did, but there were people who were (inaudible 00:33:19)like Russ talked about, so we started to get around them and we made a big shift in kind of our show even.

Robert:                      We were all about real estate, we went to real estate events. We got asked to speak at real estate events, we were at live events. It was the real estate events. Then we shifted to go to a lot more economic events, events that were broader picture, events that talked about the financial system, and trying to understand the federal reserve and the way money works, and all of that, because that was the key to really understanding every market, not just the real estate market. And then a big part of it was deciding what were we going to do with our time? I think this is critical.

Robert:                      If you’re brand new in real estate investing, or you’re been doing it awhile, and you feel like maybe you’re bumping your head against the wall a little bit. Those people that say, “Well, if it’s not broke don’t fix it, and there’s people that say it’s not broke we’re going to break it.” Break out to something new, try something different. Without giving up what you have. And so we discovered that there were a lot of things we enjoyed doing better than managing tenants, and managers, and dealing with all the stuff surrounding C Class and so we made a conscious decision to be more in the development business and more in the higher end property business and land development and things like that.

Robert:                      And it was great. The biggest shift from a structure point of view was real estate syndication, where we still invest in our own portfolios and most of what we do today is investing in other people. Which gives just a lot of exposure to different folks, and different markets, and different types of products and you can accomplish a ton and it’s a bit of diversification as well. You know, generally diversification can be a recipe for mediocrity. You know, think of stock investors with like 20 stocks. Okay, two are going to do well, and two are going to tank, and the rest are going to do okay and at the end of the day not much happens. But in real estate you can get so much more specific and based on those skills that you have, and the relationship that you have, you can outperform as you guys know. So I think us just getting in touch with our inner investors and deciding what do we want to be when we grow up.

Russell:                      I remember the day. I mean, I remember sitting in the conference room of our building which, you know, was now vacant. It was like a morgue and we were sitting there, and we got out the white board, and we listed all the things that we had to work with, you know, just a typical strategy session. It’s like okay, what do we want to do? What do we have to work with? And we took that Venn Diagram from good to great, and started talking about that and we said, “Well, okay, let’s keep the radio show. Let’s keep the radio show going and let’s really focus on growing the radio show and developing it more into a business,” because up until then it had been something that was kind of a little bit off to the side. It wasn’t center mass. And so we did that, and we liked the seminar business, and teaching, and so we said let’s keep that and marry that to The Real Estate Guys Radio Show, which we did.

Russell:                      And then the other part was we had the development company, and Robert really loves development, said, “Well, you know, let’s take a look at that.” I decided to get out of the mortgage business, but I wanted to stay in capital and I saw that the capital markets were broken. The flow of money from savers to main street was broken, and it was very difficult to get loans back then. So I thought okay, the flip side of every problem is an opportunity. There’s going to be a big opportunity in private capital. Well first thing Robert and I have had that experience of raising many millions of dollars. We said we can teach people how to do this. And so if we teach people how to do this we can help kind of heal the market, we can create opportunity for ourselves, we can fund our development projects without debt, just using equity, and now we can continue to go. We can actually go bigger faster than we could before when we were just investing with our own resources.

Russell:                      So that’s what we ended up doing and then when it came down to really what we wanted to do it’s like okay, well we have to focus on markets that actually … demographics of people that actually have money. So we not only shifted to the financial conferences because we were interested in the subject matter, we wanted to understand the bigger picture of what was happening, in the bond market in particular and the symbiotic relationship between debt, the cost of debt, and real estate, but also because that was the demographic that had more accredited investors, more affluent people, more (inaudible 00:37:26)investors that would be the kind of people we would want to know and develop relationships with for syndication.

Russell:                      So we ended up doing that, and so that shifted what we were doing with our annual investor summit at sea. And the types of people we were bringing in for the first 10 years, it was pretty much Robert and me, and our team. And we were the gurus and we taught. Since then, it’s been pretty much we’re the hosts, and the emcees, and we put it together and then we run around and we just bring people that are a heck of a lot smarter than us, investors that are really, really successful, and we learn from them and they learn from each other. And so in looking at where could we invest and drive rents from the affluent, and marry that to what we like to do, we deiced to hone in on resort property investing. And so we have this really, really narrow niche that we do personally that we don’t talk about a bunch on the show because we don’t like the show to be about what we do. We’re really interested in just helping people do what they want to do and kind of discover their inner investor and then facilitate that.

Russell:                      But for us, that’s what we ended up doing, and when I say we I use that term very loosely, because it’s primarily Robert and our other partner in the development business that do all the work, at least as far as I’m concerned. You know, I spend my time just kind of organizing the business side of The Real Estate Guys, and keeping that rolling. But it’s fun. It’s fun, because it’s a fun place to visit, it’s a great demographic. It’s a super sexy story. I’m not qualified to tell it. Robert can if you’re interested, but it kind of took everything that we liked to do and put it all together in a ball and we’ve been able to focus on it. It’s been great.

Brandon:                   Yeah, I want to dig in on the … Yeah, I really want to dig on the resort investing thing, because that’s fascinating. I do want to pull out one piece of information … or thing you said that I thought was just so smart. Is you guys sat down and said, “Where do we want to get to? Where do we see ourself in the future?” So many newbies don’t do that. They’re just like I’m going to go buy real estate, because that’s what I heard was cool, that’s what’s going to make me rich.

Brandon:                   You guys are like, here’s where we want to be and here’s what we want to do or we don’t want to do. Okay, we think, even down to … What I love is like even down to like hey, we’re going to do this summit at sea. I want to change the type of people we bring in to make sure that we’re surrounding ourselves with the type of people that we want to get to know. I mean, how many people really go that deep in their thinking. It’s not very common. I don’t know, I love that. I just want to pull that out of there. You guys are just so like driven on what you want and how you want to get there. I think that’s awesome.

Russell:                      Yes, Stephen Covey says, “Always begin with the end in mind,” and so you have to think about that. A lot of people do the two step. I think the biggest mistake I see investors make in their careers is they do what I call the two step. And that is they say, “Okay, I’m going to go do whatever I can do to make as much money as I can, and then once I make this much money then I can live how I want to live.” And I just, you get to a point in life where you go you know, life is too short to live that way and so many people die just trying to finish phase one they never get to phase two. And they die and they never fulfilled their dream. So to me it’s more about being a business modeler, an entrepreneur strategist, and saying, “Okay, how do I want to live and what do I need to build that will pay me to live that way?”

Russell:                      And whether it’s a business, whether it’s a portfolio and so you know, you may say, “Hey, I can make a bunch of money doing whatever,” but if you hate doing whatever. Robert and I had a chance, we got called in by a friend of ours that was a real estate agent in Las Vegas, and she called us in and she said, “Look, I’ve got this client and he’s got,” I don’t know, “150, 200 condos that he’s aggregated into this giant apartment complex. He rents at this apartment complex. He wants to sell.” And so we went in, and you know, good sales technique is seller motivation. So we’re interviewing him and we’re sitting there in his office, and his office is flea ridden and fleas are climbing on my leg, biting my leg, and I’m like this is awful.

Russell:                      And this guy’s explaining to us his situation. He works 16 hours a day, seven days a week. He clears over a million dollars a year, and he hates every single day of his life. Hates it, and he wants to get out of it. Meanwhile, his wife comes in and she’s all dollied up and she’s out shopping … Remember this, Robert? Remember this guy?

Robert:                      Yeah.

Russell:                      And Robert says to him. He goes, “You know, we have people in our program right now that would give their eye teeth to be you.” And that’s when for me the light bulb went off, and I thought, “You know what? Money is not the answer.” If you could live … if you owned nothing, but you had no money, but you stayed in four and five star resorts, you traveled, you ate well, you had a roof over your head, you got to do what you wanted, you were healthy, aren’t you rich? I mean, what’s the definition? So to me, when you think about what you’re really doing with your life force in the precious amount of time that you have on this planet, if you can figure out exactly how you want to live and what you want to do, and design a business and a portfolio that will pay you to live that way, you’re rich and you’re retired. And it doesn’t matter how much money you have or don’t have because you’re living the life.

Russell:                      And that’s what Robert and I figured out how to do. People ask me what do I do. I go, “I’m semi retired.” I mean, because everybody gets up every day and, you know, does what they need to do. I get up every day and do what I need to do, but I get to do what I want to do when I want to do it, with who I want to do it. I have plenty and I always want more, but you know, I’m very, very happy in my life and I think that a lot of people do the two step and think I’m going to go do something I hate. I’m going to hold my nose and then I’m going to make a bunch of money and then I can buy the life I want. I think that’s the biggest mistake any entrepreneur can make.

Brandon:                   Yeah, that’s deep. (crosstalk 00:43:06).

David:                        Can you guys share a little bit about how you built your portfolios and then what your portfolios consist of now?

Robert:                      I would say, you know, at first real estate was part-time, like it is for many people. And many people it stays that way. If all you did was buy a nice little rental property every three, four, five years and just stay at it you can develop a nice income stream and then that will appreciate perhaps over time, right? So early on we were just collecting properties, finding great markets, collecting properties. And it really comes down to just personal investment philosophy idea, but for me I never buy a property I can’t see having in my family for the next 100 yeas. That’s just a screen I use.

Robert:                      Don’t flip properties. I did it once, made bunch of money. That was fine. Learned that, that’s great. Just flipping properties is a great job. It’s not investing. Investing is where you put the money out and it comes back with friends, and it continues. Legacy. And then I think the development business that was also a way to collect properties, because several times he would do a small development and keep a building and that was a way to pick up profit, if you will, in real estate. But the whole act of turning dirt into dollars is very, very different than just passively accumulating income. So we continued to build that up and then when you’re in the development business that all really is more of a business than it is an investment.

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

Robert:                      So today a lot of what we do is investing in bigger projects with partners. Sometimes we’re the syndicator if you will, we’re the master partner, and sometimes we’re not. My favorite thing to do today is to invest alongside other people that are doing great stuff. It’s a form of leverage. (inaudible 00:45:36)will say, “Well, if you invest in a syndication there’s no leverage.” Well I think it’s exactly the opposite. It’s the ultimate leverage.

Robert:                      You’re leveraging somebody else’s experience, and time, and relationships, and market knowledge, and you get to glean from that if you choose to and make the financial return. So you know, I think it is smart to have a niche of some type, something. For me it was small residential properties. Typically four, six, eight units. You know, there’s that financial difference between one to four units and five and above, but sometimes that niche is difficult because it doesn’t have as many economies of scales in the bigger stuff. So it’s been an evolution for us. Today we’re kind of all over the world. In fact we talked about that earlier. This live where you want to live, invest where the numbers make sense. We’ll ask an audience of people, “Who thinks it’s risky to invest outside of the U.S.?” And there’s hands that go up, and you say, “Well, who thinks it’s risky to have all your investment capital tied to one nation’s economy and currency?” And then a whole nother set of hands comes up.

Robert:                      So it’s not right or wrong. You can become wealthy and successful and never leave your country. But to us it’s a big world out there, and there are so many places to invest, and the harder you search the better there will be opportunity if you choose to. So a lot of what we do today is outside the United States. It’s not just outside United States. It’s not that we don’t like U.S. property. It’s that there’s just different opportunity and there is some diversity and there also is … Part of the thinking is what happens when, not if, but when there’s a downturn or if U.S. dollar continues its climb downward like it has for 100 years. You know, trying to be on both offense and defense at the same time.

Russell:                      I think there’s one interesting thing in there that … We talk about the lessons learned in 2008. We couldn’t tell the difference between a bubble market and a resilient market, and what we realized was that the markets that really shot up and then crashed hard were the ones were there was a lot of leverage. And Texas was a market that did not crash hard, and it was not because it had some economic bones that were rooted in energy, and that was part of it. But part of it was because they had some restrictions on how much cash out you could take, and so their lending restrictions created less leverage in those markets and so kind of extrapolating on that we went in and said, “Well, gee what about if you could invest in markets where there’s no leverage at all yet?” And of course that’s hard to find in the United States, and one of the things that drove us off shore was finding markets that don’t have leverage yet with the idea that at some point in time they probably will. And I’d rather be in before that happens then afterwards.

Russell:                      And of course then once you study any market the big question is what’s the appropriate product type or demographic that you want to serve in that particular marketplace? And for us because we want to just spend time in exotic locations, and we found a place that had the right supply and demand dynamic. The question was what’s the right product and it ended up being resort property. So to come full circle, that’s how we ended up kind of in that resort property niche, and then the indication was the secret to getting it done and then there’s a little, yes, probably secret sauce factor that’s in it that we won’t talk about that makes it a real interesting investment for us in terms of passive income. So anyway, so that’s where we primarily focused our attention for these last eight or nine years, I think it’s been.

Brandon:                   So where. Say you’re outside the U.S. Can you guys give us some examples of locations that you’ve invested or that you are currently invested? And do you have lots of resorts or there’s like a massive huge thing that you’re working towards?

Robert:                      Yeah, great question. So we started out, first other country that I invested in was in Mexico. And in Mexico, anywhere … As soon as you cross a state line, laws are different, practices are different.So there’s a level of education you need. I don’t need to go pay $50,000 to learn it, but you do need to understand there’s mortgage dates, and deed and trust dates, for example. As soon as you go to another country, well now the very basis of law can change as it does in Mexico. Mexico’s based on Napoleonic Civil Law. That’s different than what we’re used to in the U.S. and then Canada and places like that. And so in the zones we were in, coastal property areas in Mexico, you don’t actually own the land. You own a bank trust. Something called a (inaudible 00:50:14), so that takes a while to get your mind around. Like I don’t have the simple title. Well, isn’t that scary? Well, it can be, so the learning curve there.

Robert:                      But Mexico’s the first place we went and we bought some property passively there and then we developed two projects in Mexico, which was great experience. Today I don’t know that I have interest in doing any more in Mexico. It is the opposite of a tax haven. Very political, very difficult to get things done, in my opinion, but it was a great learning experience. And how do you operate in a completely different country with a different language? So that was tough. We invest a little bit in the Dominican Republic. It’s in the news a lot today, the Dominican Republic, but today just passively interested in that market.

Robert:                      My next market was Australia. Australia was interesting for a lot of reasons. They almost speak English. It’s a long way away, but we had an opportunity to invest with a huge company with a giant track record owned by a big conglomerative that is publicly traded and so there was some security and stability in that. It was new construction in a great area. That turned out to be great. Again, lessons about team and who’s behind any project and most of these were just onesies and twosies and then after we made the strategic decision that Mexico probably wasn’t our long term development home we went on a two year search, and we wanted to find another country. And I think a preface to this is what really set me off in this direction was when Las Vegas, Nevada went up 52.6% median home price in one year we knew something as wrong. We didn’t know what it was, and we made a ton of money doing it, but it’s like wow, this can’t sustain.

Robert:                      Today we’re probably better educated about those things, but at the time there was just something tugging at me. And I had been attracted to Cabo San Lucas, and that was the first part of Mexico that we went into and that turned out to be pretty good for us because again, leverage down there. So unleveraged properties don’t get into trouble when the mortgage market explodes. And then we sat down and said, okay let’s find another market. Mexico had a lot of great things to offer but also a lot of negatives, and we were on this two year quest. We went to every country in Central America, most of the Caribbean. We wanted to stay closer to home. My investing in Australia taught me that I want to be within a few time zones of where I live. Just easier to conduct business. You’re active. You’re passive, not as important, but if you’re active. And if we’re going to go there we want it to be a place we enjoy going, so we ended up in the country of Belize. And Belize had a ton going for it.

Robert:                      It’s the only English speaking country in Latin America, so everyone speaks English. The law is in English. The contracts are in English. It’s postcard beautiful. Where we are is like a Corona commercial. The water’s 82 degrees, palm trees and white sand. I’m about to make my 137th trip to Belize, and never once I look at my calendar and say, “Oh man, I’ve got to go to Belize next week.” It’s always great. I take my family there. We vacation there every year. It’s extraordinary. Now, that wouldn’t be enough. There would also be a real estate opportunity there. And so to answer your question specifically, Brandon, the largest project is in Ambergis Caye, Belize and it’s the single largest hotel by room count in the country. Now it didn’t start that way, that sounds all impressive, but we really just started to try to come next to the great operators in the country and provide what was needed. There was real demand for quality hotel rooms that wasn’t being met.

Robert:                      And again, financial construction is difficult there. You can’t really get a construction loan very easily, and that’s actually a good thing. Means that you don’t see too many broken projects, but it is hard to get off the ground. And so it’s been such an amazing learning opportunity. Seems like it’s always two steps forward, one step back. But it’s extraordinary and we got a bunch of great folks behind us and it’s humbling to go there now and walk around and so wow, we built this thing.

Brandon:                   Yeah that’s super cool. You say you don’t have a construction loan. Does that mean you’re financing the entire syndication basically via … I mean just all raising money for 100% of it? You’re not using bank financing at all?

Robert:                      Yeah, pretty much that’s what it means, and that’s a heavy life, right. So first of all, first money in is our money. So we’re at risk and we’re all in, and then rather than go to … We, you know, have some good connections. We thought about, “Hey, we’ll just go grab a bunch of money for this thing,” and instead we wanted to empower people to go out and raise money themselves. So we created kind of an environment where people can syndicate three of four rooms inside of a Hilton Hotel. Well, that’s a hard thing to do. How do you rent four rooms at Hilton? Well, you don’t. That’s not something that’s typically available, but we figured out a way that both could do that and raise the money to do it, and so we only did one syndication ourselves just to build the model homes and from then on we found folks that want to come in and syndicate.

Robert:                      You know when you syndicate every day you wake up with two problems. You’ve got to find a deal and you’ve got to find money. And our premise was imagine this scenario where you didn’t have to worry about where the next deal was going to come from because you just bought another lot and have another four, five, or three hotel rooms and folks can just continue to raise capital in a market they understood and in a market they were talking to their investors about. So that’s how we did it, through an army of syndicators and it’s been quite a journey.

Brandon:                   That’s cool.

David:                        So there’s something I want to make sure that I understand right. One of the things you guys mentioned was you’re investing in countries that don’t have financial leverage, which meaning like it’s hard to get loans to buy real estate. And if I’m understanding you correctly what you’re saying is that if you go buy real estate when it’s not easy to get a loan, when that funding does come, when their government does like what ours does where they support Fannie Mae, Freddie Mac type loans now people can afford to spend a lot more to buy that same leverage because they can borrow money at a cheap rate which makes the value of it go up a lot. Is that the basic premise?

Russell:                      That’s exactly what happens. I mean look at what happened to housing when Fannie and Freddie were created. They basically introduced subsidized debt into the system, and the purpose was to make housing more affordable, but it made it more expensive. Look at what happened to college education. They instituted student loans. The idea was to make college more affordable. It actually made it more expensive. Same thing happens anywhere debt gets introduced, because you hold purchasing power from the future into the present and then people can take, for example, a six percent 30 year fully amortized loan, $300 a month means I can pay $50,000 more today for that property. Well, if you’re the owner, the seller of that property, that person’s $300 a month is $50,000 cash to you right now based on their ability to bid up based on cash flow.

Russell:                      And so until that shows up there’s no debt service in the marketplace, so the cash flows are very solid, and once it does show up typically it begins to push the rents a little bit too. In this case it’s overnight rentals, because you have to build in the cost to debt service so you end up pushing the higher end of the market. But the point is is that it pushes up the pricing, and so you’re always looking for those kind of opportunities to get in early. But that’s exactly how it works. When you bring purchasing power from the future into the present and it doesn’t just have to be that country.

Russell:                      I’m not holding my breath for how long it’s going to take for Belize to figure out to bring financing, but what we experienced in Mexico was that at the height of 2006, 2007, U.S. lenders had made every loan they possibly could make in the United States. Part of the reason we had the crash is because now I understand this. I didn’t understand it back then, is we have an economic system that requires perpetual exponential growth of debt. And when you have lent to all the good borrowers you have no choice but to lower your standards and lend to the marginal borrowers.

Russell:                      When you’ve done that, then you’ve got to go look for new markets. It’s like any company for anybody who’s trying to grow, you’ve got to get out on the margin. The problem is is when you’re doing that in debt markets that markets can collapse. Anyway, so they were moving into Mexico. Now of course the crash came, and then all of the lending went away. But we’re back at that phase. So at some point down the road, as long as this expansion of global debt continues, global lenders are going to be looking for premium properties to loan.

Russell:                      And so for us they’re not going to be living on single family homes in the country of Belize. It’s a third world country. It’s very poor but primo resort properties on a tiny little island with no capacity to expand where you’ve got a big brand name development, big developer, great product. We think, now we don’t know, we’ll find out, but we think that at some point that’s going to make great collateral and either private or institutional lending is going to come along and want a piece of it. When that happens the folks that get in before all that happens are probably going to ride an equity wave, because that’s typically what happens. I can’t say that’s going to happen, but it wouldn’t surprise me.

David:                        Well for anyone who doubts that, all you have to do is look at what happened in 2001 through 2007/8. That’s what drove prices to go so high was the lending standards were lowered and opened up and money flooded in there. And people would pay whatever they had to for a house if someone would give them the money. The money’s there, they’re going to take it. They’re going to pay more. It was great if you owned a property like what you were saying. Your values went up. People kept buying it and then it’s not sustainable. You also mentioned that, and then crashing, but that principle is absolutely proven through that time period when you say why was housing so expensive? It was literally because banks would give you the money. That’s why houses became so expensive.

Russell:                      Well I call that the air in the jump pass. You know, when they’ve got the pump on, and they’re pumping a lot of money into the economy, they’ve got a lot of air in the jump pass and everybody’s jumping around and having a good time. When somebody trips over the cord and the air stops, the thing deflates, all of the sudden it’s not a (crosstalk 01:00:47).

David:                        You’re going to, yeah, head to the concrete underneath it it doesn’t feel so good anymore.

Russell:                      Exactly.

Brandon:                   So I want to ask you guys a question about, I’m sure you’re asked this all of time, but you talk to a lot of investors. You guys are looking at the world market, but also you’re still in America so you’re looking at the U.S. Market. Where are we? Like what inning are we in before a crash comes again? Is it going to be a big one do you think? I mean obviously none of us have crystal balls, but what are you seeing in the U.S. economy right now and what are you doing to prepare for it?

Russell:                      Such a great question. And you’re right, everybody asks that question. I was on a panel two days ago and that was the question they wanted to know. We had Dr. Doug Duncan, you know, Senior Vice President of Fannie Mae and their Chief Economist on our summit boat for two years in a row, and one of the things he said last year was, “You know, these cycles don’t die from old age. There’s something that happened that creates the change,” and so yeah, we’re long in the tooth, but at the same time our federal reserve has done an amazing job of kicking the can down the road. That’s not necessarily a compliment, but I think we’re late. I think we’re near the top of the cycle.

Russell:                      There’s all kinds of reasons to think we’re there. I don’t think that we all ought to be pulling out every dollar and sticking it in the mattress quite yet, but I think you need to be proactive. You need to be thinking about when the next downturn comes. How could you be best prepared? Because I know that in 2008 we were ill prepared, and in 2019 we are much better prepared.

Brandon:                   (crosstalk 01:02:20).

Russell:                      Yeah, I.

Brandon:                   Go ahead.

Russell:                      Well, I was just going to say this is, you know, I spent a lot of time studying this, because it’s fascinating to me. Coming from the money side and understanding that this is all financial market and economic driven. It is hard to say, because I think anybody who’s an observer recognizes that the central banks around the world have been passing the baton around the globe, taking turns devaluing the currency, and pumping up debt and pumping liquidity into the global financial system. How long can that go on? Je ne sais pas. But you know, the point is you have to be prepared to weather the storm and I think real estate is arguably the best investment to do that. I could do a whole dissertation on that, but I won’t. But I do agree with Robert and I think it’s the general consensus that we’re closer to a top than we are to a bottom and so now’s the time to be thinking about hedging equity.

Russell:                      It’s a good time to be getting liquid. It’s a good time to be locking in long term debt on properties that you expect to be keeping long term, and just being prepared. You might miss a little bit more of the upside, but you’ll more than make up for that by being liquid when the time comes, when there’s blood in the streets. And I used to really resist the idea of like a vulture fund or the idea of capitalizing on other people’s misfortune, but the reality is having been the blood that was in the street. You know, somebody could have come along and bailed me out by buying a property out and mitigating some of my loss. They’re actually helping me and I would be okay with that. I didn’t realize that back then.

Russell:                      The other thing is is we talked about this a lot on the show, because the show’s been going on since forever. And so we went through that whole 2008 thing and we talked about healing America one house at a time. And so when somebody comes in and buys a house, investors are like the white corpuscles in the economic system, and they run around and they clean up all the garbage and they get rid of the bad debt, they get rid of the bad properties, and they put things back in service.

Russell:                      So there’s going to be lot of those kind of opportunities. So again, it’s just a matter of being prepared so that it doesn’t really matter which way things break. You’ve got a plan. If you’re only geared for one, for sunshine, and even though the forecast is sunshine it doesn’t cost you that much to pack an umbrella. And I really think that from a financial perspective, everybody should be taking a look at their portfolio, looking at their exposure to rising interest rates. Not saying their gonna rise. Right now they’re currently going down, but they could.

Russell:                      And then how liquid are they really and what are they exposed to? And then really tightening up the properties that they have, making sure that they’re really operating optimally. That you’ve got competitive rents that you’re not at the top of the market. I think right now would be a dangerous time to be top of the market in a product niche in a market that’s at the high end of the market.

Russell:                      In other words, when things can track, you’ve got to have somebody above you to bring some pressure to where you are. So the good news is real estate’s not an asset class. Because it’s not an asset class, whatever goes on in the macro really doesn’t matter. It only matters what goes on in the micro, but if you’re in a market where people who are living in a more expensive area when downtimes comes will move to you then you actually will get some upward pressure when everybody else is feeling downward pressure. So I think market section is real important. Product niche and the demographic you’re servicing is very important. Price point is very important. How your portfolio, your balance sheet is structured in term of liquidity. That’s very important. Making sure that you don’t have exposure to the potential for rising interest rates, even though you might pay a little bit more for that right now. I think it’s good insurance, so there’s things that you can be doing in a market like this without completely disengaging.

David:                        Have you guys seen those companies that are literally giving you the down payment for your house in exchange for a share of the equity in the property?

Russell:                      No, I haven’t seen that.

David:                        It’s like a Silicon Valley tech, start up type thing, but they say, “Hey, we’ll give you 10% or 20%, or whatever of the down payment of your house, but we own 30% of it, and when you go to sell it you have to pay us back then.” That’s how much money is floating around that people are putting into real estate that are not thinking what you’re thinking.

Robert:                      Based on that, I think we’re higher to the top than I (inaudible 01:06:42).

David:                        Changes your opinion a little bit. I know. I think … Brandon and I met a guy who worked for one of those companies a couple of years ago in Hawaii and then … Because I live in the bay area in California, and one of my clients works for that company. And he like, that’s actually part of his job is to help them find houses they’re going to give money to and then like well five or 10 years later when they go to sell it we’re going to get all this cash. But that is, that’s like gambling, literally. That’s a gamble that you have zero control over, but it’s a legit business doing it.

David:                        And Russ, I think you made a really good point that we often criticize the vultures, but a vulture serves a purpose. If you didn’t have vultures you’d have dead carcasses stinking up the place. They’re everywhere, right?

Russell:                      Exactly.

David:                        And that’s kind of what Blackstone and some of these hedge funds did after the last crash is they were the vultures and we all criticized them because they swooped in and they took everything, but that’s also what cleared up the mess that all the people that had spent too much money for a house had made. So rather than criticizing the vulture asking “Well, how can I be prepared to be that vulture?” … Maybe you can pick a better animal. I’ll be a hawk or an eagle or something.

Russell:                      Yeah, but I mean that’s the idea. So part of it is in being resilient, and we talk about this a lot with our friends at Peak Prosperity. The concept of resilience is they talk about eight forms of capital, but one of them was social capital. One of the things that Rob and I spend a lot of time working on is our network. We have I think arguably one of the best networks in the business, and because of that when there is opportunity we have a lot of people who take our phone calls. We have a lot of people we can talk to that have resources and the thing is typically the way the fed responds to economic crisis is to help the rich get richer. They believe in this trickle down thing. If we just help the rich get richer then there’ll be plenty of money in the system eventually that’ll find it’s way through the system to the little guys.

Russell:                      That may or may not be true. I’m not here to debate the pros and cons and relative matters for that. It doesn’t matter because nobody’s asking me. But I just observe it, and I can see that that’s the way it works. And so if you have a relationship with lots of people that are on the winning end of quantitative easing, and loosening of money, and printing of money in order to simulate the economy, then you’re going to be able to aggregate that capital and put it to work. Because the people on the other side of that when they end up with all those gains, are like, “Okay, now what am I going to do?” Like right now, there’s something going on. This whole opportunity zone thing is really interesting.

Russell:                      It’s like, to me, step two and it’s really interesting because you say okay, President Obama who is on one side of the political spectrum passed the Jobs Act that, the Obama Administration created the Jobs Act, and buried inside the Jobs Act was the ability for purveyors of private placement syndicators to advertise to accredited investors. Before you had to have preexisting relationship, where you had to be a publicly registered security which is extremely prohibitively expensive for small deals. And so that really opened up the ability for people to find investors and for investors to find deals. And so we talked about that a lot on the show, back in late 2013, 2014 when that first broke. Now this new thing with opportunity zones and the tax law, the tax law that the Trump Administration pushed through has elevated real estate to being arguably the best tax shelter there is.

Russell:                      And on top of that, the opportunity zone thing has now made it possible for people who have unrealized capital gains in anything, including their stock portfolios, but folks like Robert that bought Apple Computer way back in the ’70s (inaudible 01:10:15).

Brandon:                   Nice move, Rob.

Russell:                      And they’ve been sitting on it. They’ve been sitting on it, because if they sell it they’re going to have to pay the tax. They don’t want to pay the tax. So they borrow against it, but they don’t sell. And yet they recognize every day that if the markets do blow up they’re at risk. They can’t diversify. Well today with the new opportunity zones law they can. They can sell those properties, they can roll that money in and it’s done in such a way if you really break it down, and we’ve done a few shows on the opportunity zone thing, that when the money moves into marketplace it has to be invested in rehabbing and done on a mass scale, so whereas none of us is individual investors, even a group of investors, a group of syndicators aren’t powerful enough to turn an entire neighborhood or to turn an entire community, but the opportunity zone thing has the potential to do that.

Russell:                      The hedge funds, just like the Blackstones got involved in cleaning up the single family housing mess, now are very much interested, and they’re aggregating a bunch of capital, billions, and billions, and billions of dollars that are going to come in. You as a small investor may not decide you want to do that, but as a syndicator you can go in and have these little small projects in the same areas and get in on that action, that flood of capital. In the essence of trying to catch a wave is just figuring out where the capital’s going to be moving and then getting in on the action.

Russell:                      So these are two kind of related things that came from two very different administrations, but all are boding extremely well for real estate investors and real estate syndicators, in particular, right now.

David:                        If they want to know how to catch a wave there’s no one better to ask than Brandon Turner.

Russell:                      Now that he’s a Hawaiian.

Brandon:                   Now that I’m Hawaiian, yeah. The (inaudible 01:11:50).

David:                        (crosstalk 01:11:51)Hawaiian.

Brandon:                   I don’t know if I can catch a wave, but I show you where to find one.

Brandon:                   All right, that was awesome. Yeah, and opportunity zone is something that intrigues me and we can do an entire dozen shows just on that. And then the other problem I have with opportunity zones is I feel like … I mean I probably, the thing that’s interesting about them is if I ask a dozen attorneys or opportunity zone experts about exactly what it is you’ll get a dozen more, 13 answers. Like I find that … which doesn’t necessarily mean it’s a bad thing. It just means it’s something that like there’s a lot of opportunity in opportunity zones right now.

Robert:                      It’s early. (crosstalk 01:12:24).

Brandon:                   It is early.

Robert:                      You know, it’s like we were talking about like who do we have that’s an expert on that? Well, just nobody, because up until a few weeks ago and even now it’s not finalized. Like every part of the wording of every law is not finalized. So it will be interesting to watch, and I think big picture it’s going to do a lot of good, and like everything else there’ll be folks that rise up and there’ll be those other folks too.

Brandon:                   Yeah, I get conflicted about it. You know, partly because you have the phrase the pioneers are usually the ones with arrows in their back. In front of, you know, like –

Russell:                      In the front and the back.

Brandon:                   Yeah, exactly, right. So I don’t want to be the first necessarily. But also the firsts sometimes end up being the Steve Jobs and the Bill Gates, and so it’s you know, I’m not saying there’s not opportunity there, but it’s definitely, yeah, I’m not sure where to jump because I haven’t yet.

Robert:                      I think the biggest thing to me is that what the opportunity zone opportunity does is it allows people that previously were not really that interested in real estate; they were investing in companies, or metals, or equities, and now the reason they’re not selling an appreciated asset like Russ talked about is because the tax thing. And here’s a potential chance for them to sell, and defer, and diminish their tax, and then to invest in something that is truly tax free.

Robert:                      So someone that previously wasn’t interested in my apartment deal is like, “Wait a minute, I could be interested in that,” just because of the tax law. Now we always don’t let the tax tail bite the investment dog. Don’t make an investment just because the tax, because tax, as we’ve just learned can and does change. But at the same time, the tax benefits are huge in real estate and we definitely want to take the best advantage we can. So I’m with you. We haven’t jumped into it, but we’re certainly eager to watch.

David:                        Yeah, I think it was a brilliant idea though from the government. Let’s figure out a way to get other people to fix up these areas that we cannot do efficiently by getting people smarter than us with money to put their own stuff into it. And if they can trick people into doing what you just said not to do, doing it just for the tax break and that’s it. Like I would bet when you guys were in the 2008 era, you talked about you’re making all this money in your business and you’re buying deals, a big reason why you bought deals that didn’t cash flow was because the tax savings that you were getting off of the money that you were making. If you were getting accelerated appreciation, and you can use cost segregation at the time. And it seemed brilliant until the bottom dropped out.

David:                        So that’s what scares me about opportunity zones is your motivation isn’t this is sound financial thing based on good fundamentals and principles, it’s oh, we can save all these taxes. So let’s go do that and then the next thing you know your money’s stuck in something you don’t want.

Russell:                      Yeah, I think what I’m saying though is that you don’t necessarily have to do it for the reason that everybody else is doing it. What I’m saying is that this is a giant wealth redistribution plan, and normally when you hear that you hear about taxes spent. Well that’s one way to do it. Another way is to create tax incentives and motivate wealth to move. It’s two different ways of doing the same thing. The Trump Administration is gravitating towards the idea of getting the government out of the way and creating a tax incentive that is going to incentivize people who have money to take a tax break and move it. What I’m saying is that when they choose to do that, we’ve identified where that money’s going to go and we can get in to those markets ahead of that money, or alongside that money, and it’d be easy to see it happening. So (crosstalk 01:15:50).

David:                        Similar to what you guys were talking about with other countries, right? Try to get in before the leverage comes to bring up the value. If you know that money’s going to be flooding into opportunity zones you want to be there first.

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

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

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

Brandon:                   That’s fantastic. All right, well this is a very different type of show, so I’m going to actually skip a couple sections that we normally do, normally we do the deal deep dive and then we do the fire round, which are questions from the four of us, but this was just so good and in depth I don’t want to … I want to move towards kind of the closing here and make sure we don’t tie this up all day.

Brandon:                   So the next segment of the show that I want to get to is called our Famous Four. We got sound effects there. All right, before we get to the Famous Four, let’s hear from Mindy on what’s going on this week over on the BiggerPockets Money Podcast.

Brandon:                   All right, before we get to the Famous Four, let’s hear it from Jay Scott or Carol Scott on what’s going on this week over on the BiggerPockets Business Podcast … I’ll resay that … All right, before we get to the Famous Four, let’s see what’s going on this week over on the BiggerPockets Business Podcast.

Brandon:                   All right, with that let’s get to the Famous Four. So for the last 300 and some episodes, we’ve been asking the same questions, final four questions to every guest and so we’re going to play it with you guys. You guys can answer separately, and I’d assume you have different answers, but maybe you have the same.

Brandon:                   But the first one is, do you have, other than maybe you’re own, because I know you guys wrote a book. But other than maybe your own, do you have a favorite real estate specific book? Some book about real estate that has stood out to you?

Robert:                      You know, since you’ve been doing this so long I noticed that a lot of folks have some of the same books. There’s not that many great real estate books. I’m going to throw out one that’s not a best seller and it’s not that well known, but it’s really well written and it’s total contact. It’s called Construction Funding, written by Collier, and it’s just a no nonsense book. If you’ve ever been wondering about how construction or development projects get funded it’s got a really sizzling sexy name, Construction Funding. But a brilliant book and you’ll learn from it for sure.

Brandon:                   That was great. Russ?

Russell:                      I’m not that clever. I really do like our book. The reason we wrote it is because we felt like the world needed it. Of course that was like 15 years ago or longer, but –

Brandon:                   You’ve got to write another one.

Russell:                      It’s … I know, well we need to update the one we wrote. That’s on our to do list, but it hasn’t made it to the top of the list. I’m going to say for me it sounds kind of crazy, but I’m just going to say Rich Dad Poor Dad. And the reason is that’s because that was really what helped me understand what passive income really was all about and the importance of passive income. I kind of understood it before, but it took a long time. I mean a couple of reads and a lot of spending time with Robert himself to really begin to understand what it means. I know it’s technically not a real estate investing book, but it’s such a paradigm shifting book and I think you can’t do anything until you shift the way you think. So Rich Dad Poor Dad.

Brandon:                   I agree. 100%.

David:                        All right. What about your favorite business books?

Robert:                      Yeah, that’s a tough one. We read so many business books and you know you look at your bookshelf in anticipation of being on the shelf. It’s like gosh, I have a hard time with favorite too. Like people say, “What’s your favorite beer?” It’s like which is your favorite child? You know. (inaudible 01:20:15)certain circumstances. But the book I’m going to go with is Steven Pressfield’s Turning Pro. Not a business book, but an entrepreneur book, and it’s a kick in the butt and you’ll feel like he wrote it just to you and it’s a quick read, Turning Pro by Stephen Pressfield.

Brandon:                   I’m actually half way through that one right now. I’m always half way through like a dozen books, but that’s one of our (crosstalk 01:20:33).

Robert:                      Halfway through.

Brandon:                   I’m loving it, yeah. And what was it, the War of Art was his first one? (crosstalk 01:20:38).

Robert:                      Yeah, the War of Art.

Brandon:                   It’s phenomenal.

Robert:                      Great book too. Definitely. Those two books together, read them like one book, good stuff.

Russell:                      Well, I already mentioned Jim Collins, Good to Great. I think that’s a great book, but I’m just going to go with a classic … Sorry, I’m in classic mode today.

Brandon:                   That’s good.

Russell:                      Myth by Michael Gerber. I just think that really what a business is … And people say all of the time, you should run your real estate investing like a business, and you ought to run your business like a business even though a lot of people don’t. They run it like a hobby. But a business is just a system of processes, you know. Even getting ready to come on to do this podcast with you guys, you guys have a process. And we have the five forms you send, and this process that we go through, and these little formulas, and it just makes life so much easier, so much more efficient. I’m just going to say that nobody explains that better than Michael Gerber.

Brandon:                   Yeah, that book was transformational for me. Huge. Cool, all right, number three.

David:                        Number three. What are some of your hobbies?

Robert:                      Music for me. I love music, I love going to shows. I’ve been playing in bands since I was in junior high school.

Brandon:                   Oh, what do you play?

Robert:                      It’s the one thing … I can play guitar and couple of other things, but it’s the one thing I do that really has nothing to do with anything else, although we do certainly push the boundary there. But I just think music is great. It’s so impactful and there’s music to help you through anything. You know, whether it’s working out, or you’re down in the dumps, whatever it is, music is magic.

David:                        Brandon, he’s a musician as well, and he wrote a song while I was in Hawaii called Somewhere Over the Rain BUR. BUR is an acronym that we use and I just wrote the BUR Book and I think it was to commemorate –

Robert:                      BUR (crosstalk 01:22:20).

David:                        I mean, but it’s hilarious. I mean, I just cannot look at that video without laughing at it. It sounds (crosstalk 01:22:25).

Russell:                      Your BUR book is on my bookshelf behind me, because I think (crosstalk 01:22:28).

David:                        Right on. (crosstalk 01:22:29). I sent you guys an advanced reader copy.

Russell:                      Yep.

Robert:                      Well, and we’re happy that you guys will actually sing on your podcast from now on, because we (inaudible 01:22:37)don’t do that.

Brandon:                   I try to limit that.

David:                        Brandon peer pressures me into that. He’s always … I’m like, “Brandon I’m not comfortable. I don’t want to sing.” “You’re going to sing and you’re going to like it or I’ll find another cohost.” That’s (crosstalk 01:22:49). I got bullied.

Brandon:                   (crosstalk 01:22:50). Yeah, I don’t think I’ve done that. (crosstalk 01:22:53).

Russell:                      It’s just the opposite with me. You better not sing or I’m going to find another cohost.

Robert:                      That’s for sure.

Russell:                      I have a reputation.

Brandon:                   There you go. Well, what about your hobbies, Russ? Que faire?

Russell:                      You know, I thought about that and actually I’m kind of in a hobby less mode. I’d say probably my number one hobby right now is still I study economics. I mean, it’s a boring hobby. I’ve still got my saxophone, I kind of broke out my old comic book collection the other day, and I collect coins. So I’ve done different things over my life, but in terms of what I’ve probably actively spent most of my time doing, which is probably related to this show, is I just study economics.

Russell:                      I just think we’re living in the most interesting economic time. I really do think that somewhere along the lines the global system’s going to reset. I think we just happen to be fortunate enough to live at a time when we’re going to get a chance to get a front row seat and watch that happen. And in the chaos is going to be a lot of opportunity. I just want to make sure I’m on the right end of the chaos on the opportunity side. So that’s what I spend most of my time doing.

Brandon:                   I feel like that could be a whole podcast right there on the future of the global economy. But we’ll people will have to listen to your show for more on that I guess.

Robert:                      There you go.

Brandon:                   Number four. What do you believe sets apart successful real estate investors from all those who give up, or they fail, or they just never get started in the first place?

Robert:                      For me, I think it’s you’ve got to focus on the why and not the what. If your what is to put money in your bank and to collect a lot of doors, that’ll only be exciting for so long. But if you have a compelling, passionate why that drives you every day, whatever that is for you. It can be personal, altruistic, some dent you want to make in the world, if you focus on that and let real estate be the tool that the vehicle that drives you there that will keep you in the game and we see so many people get all enthusiastic and will then go off to the next thing, but at your core if what you’re put here to do can be enabled by your investing in real estate then you’ll never quit.

David:                        Beautiful.

Russell:                      I’m going to say relationships. I think that a lot of times that investors spend too much time focusing on the money. They focus on the transaction. They focus, to Robert’s point, on the how to and once you’ve got the why, which I think precedes everything, because you’re not going to do anything until you have a compelling why. The first thing you really want to spend your time doing is relationships and I see so many people play the relationship cards poorly, because they’re trying to extract the little bit extra profit from the real estate agent, or from the deal, or from their service providers, or from their property manager, and it’s just the stupidest thing ever. I mean, you know, create abundance and invest that abundance in relationships and creating abundance for other people, and if you do that plenty of abundance is going to be in your life too. So I would say to me it’s the biggest mistake I see investors make is not putting enough emphasis on relationships and the most successful investors I see put all of their effort into building quality relationships.

Brandon:                   That’s a great answer. All right, well, David Green, you want to take us to the final question?

David:                        The last question of the day. This has been an awesome conversation with you guys. Just tons of wisdom spilling out of it. For people who want to find out more about you, where can they go look?

Russell:                      Well, we decided to make it easy for everybody. We’re old school, they can just send an email to us at BP like BiggerPockets @realestateguysradio.com and we will send you an email with information about all the stuff that we do. We’re easy to find, realestateguysradio.com, but if you send an email to it’ll just land right in your inbox full of links and you can click away and learn all about us.

Brandon:                   Perfect, perfect. All right, very, very cool. We’ll put links in the show notes as well. I think we’re at BiggerPockets.com/show338, I believe. So we’ll put a bunch of links in there as well, the things we’ve talked about today as well as where they can find all your different resources, and different things like the summit at sea and the syndication seminar. All that good stuff that you guys have going on. You guys are (crosstalk 01:27:06).

Russell:                      Yeah, we should get you. We should get you to come one of these days, Brandon. (crosstalk 01:27:09).

Brandon:                   I know, I would love to.

Russell:                      It would be great fun, yeah. (crosstalk 01:27:11).

Robert:                      Come on down.

Russell:                      Yeah, I definitely will.

Robert:                      But we just appreciate what you guys are doing. It’s amazing and just the community you’ve built, and the help that is available, and just the nature of what you do is extraordinary. We couldn’t be more thrilled for your success and it’s been just an honor to be on this show, so thanks for having us.

Brandon:                   Absolutely.

David:                        Thank you, guys.

Russell:                      Congratulations on everything you’re doing. Great job.

Brandon:                   Aw, thank you, you guys.