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Commercial Real Estate Pro Network

Commercial Real Estate Professionals who work with Investors, Buyers and Sellers of Commercial Real Estate. We discuss todays opportunities, problems & solutions in Commercial Real Estate.
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Now displaying: July, 2019
Jul 30, 2019

Absolutely, I think. There's a couple there's a couple of factors to that. I mean in any building there's the physical risk right. There's what you can't see. So there's the plumbing there's the electrical there's the things going on behind the wall. So there's a certain amount of risk that you can assess and mitigate. What we used to call it, "Known unknowns". You know it exists but you know that you don't know the status of it. So you just have to plan accordingly. And I think on top of that as owners and as investors you have to be able to adapt. I know a lot of people that in a lot of forms whether it's military or law enforcement or wherever they are they create a plan and they get so tied to that plan that they lose 

 

their flexibility and they and they lose their ability to adapt quickly. And I think adaptability is the key and there's a term that we do use. In my other line of work which is risk at risk you know you're going to mitigate you're going to assess but you're also going to adapt to risk. You're going to adapt and you're going to overcome it. And so if you know if you know you're accepting a certain percentage of it and then you accept it and you move forward I think that that allows you to then react when you go from five units to 13 vacant. You know that is a that's a that's a risk that you knew could always happen. You hoped it wouldn't. And it did. So how are you now going to handle it. And your ability to adapt quickly come up with 

 

a new plan or just the plan and move forward on point and on target will allow you to succeed. So I think that that's bigger than a physical risk of a pipe or whatever that is it all falls into the category of of pivoting and moving forward. And then I think you have to be able to assess the situation and then and then not to mix too many metaphors to pull the trigger on starting. OK. where do we go from here? Because we still have to get because the project doesn't stop. We still got to get to the goal, the finish line. And so I think as investors your ability to remain flexible. You know don't get don't get off target. Don't don't go off on tangents and change the plan throughout stick to the plan but also understand that on it at any given time 

 

the plan will change whether you want it to or not.

Jul 25, 2019

Think BIGGER Real Estate Show is Facebook Live event where Justin Stoddart shares ideas and methods for real estate professionals to help them build, grow and scale their brand and business.

Justin is real estate and marketing entrepreneur.  He started in real estate as a custom home builder.  Since then he realized his passion was building people rather than buildings.  Today he works with real estate agents as a representative at Old Republic Title in Lake Oswego, OR. 

So many real estate professionals are caught up in the daily grind that must be performed to get the work done, that they have no time to think about, let alone execute, creating a brand and growing beyond the transaction mode. 

There are multiple opportunities to spend money on different tech platforms to advertise and get leads.  But at the end of the day, is a client you work with from Zillow your client or Zillow’s client?

Zillow is working to become the Amazon for residential real estate.  They draw the attention of the prospective buyers, agents pay to be seen on Zillow, and it works.  But will the client remember you, the agent when they are ready to buy again? Unless the agent has distinguished themself as something special, the customer will likely go back to Zillow, not the agent.

In order for an agent to avoid being displaced by tech platforms like Zillow, they need to create value and position themselves as a brand.  If the consumer sees no value in the service provided by an agent, why would the customer look past a tech platform?

Think BIGGER Real Estate

Justin recognized that real estate agents need help to grow their business and their brand.  To help his clients, real estate agents, he created theThink BIGGER Real Estate Show. It is both a resource and an example for his agent clients on how they can bring value, and stay relevant in the eyes of their clients and prospects.

The Future of Real Estate

The future of real estate is certain to change.  Real estate investors and home owners will continue to buy properties.  Presumably, as technology advances and AI is more fully adopted, the division between Fiduciary & Functionary tasks will become more defined. 

Fiduciary tasks: Decisions made by the real estate agent on behalf of the client that put the clients interest ahead of the agent. 

Functionary task: The many task which are necessary to complete a real estate transaction such as filling out a form. Over time, these lower level task will be transferred to tech platforms.  

Ideally, by transferring the lower level Functionary Tasks to a tech platform the real estate agent will be able to work more on the Fiduciary Tasks, to better serve their clients.  

Time previously spent doing the functionary task, will give the agent time to spend educating oneself on where the market is going, engaging the client.  

This higher level will not be for all of your clients, but you will be able to provide this for a small group of your clients & prospects.  When you ask better questions you get better answers. The more you listen and learn your clients wants and needs, the better you are able to serve them.  Ultimately, this better experience will provide a happier client who is likely to refer more clients to the professional agent.  

BIGGEST RISK 

Each week I ask my guest, “What is the Biggest Risk Real Estate Investors face?”  

BIGGEST RISK:

I think actually interviewed a gal yesterday and she said. I asked her the question which is kind of my signature question get on my shows which is, "what do you do to intentionally think bigger? And I 'think it's a great response actually for your question. She said I work too. I work really hard to avoid complacency. And I think the biggest risk that all of us face in a world that's rapidly innovating and rapidly moving forward is to get complacent with our own personal growth in our own personal network. And I'm going to put up a plug for you. You didn't ask for this but to have somebody who's whose business is insurance. But goes about adding value to their clients really modeling media. Modeling marketing at its highest form. I think it's it's brilliant on your part because you're becoming a much more, even if nobody listens to this. I know that's not ture, we had this conversation before. You've got a great audience. That just affect the person that you're becoming by having these conversations. Just makes you when you show up with a customer you're so much more valuable to them than had you just been going about as a typical insurance agent. And so I would encourage anybody who's listening that the biggest risk that you have is to not surround yourself with partners like Darrin and knowledge that's helping you grow and your business grow. Because we can't really complain and say, "Oh I've had such and such for so many years and you know they're you know they've done fine". Which I'm all about loyalty, don't get me wrong. Like I'm not. But what I am saying is all of us need to be aggressively seeking out how to grow ourselves and grow the value to our customers. And sometimes that entails actually taking a look at our partnerships instead of these people becoming somebody that can lead me? Are these people the growing network that can be a value to me and my customers as the competition stiffens. So not growing and being complacent I think is the biggest risk. 

For more go to:

www.ThinkBigger.Realestate

Jul 23, 2019

BIGGEST RISK:

I think actually interviewed a gal yesterday and she said. I asked her the question which is kind of my signature question get on my shows which is, "what do you do to intentionally think bigger? And I 'think it's a great response actually for your question. She said I work too. I work really hard to avoid complacency. And I think the biggest risk that all of us face in a world that's rapidly innovating and rapidly moving forward is to get complacent with our own personal growth in our own personal network. And I'm going to put up a plug for you. You didn't ask for this but to have somebody who's whose business is insurance. But goes about adding value to their clients really modeling media. Modeling marketing at its highest form. I think it's it's brilliant on your part because you're becoming a much more, even if nobody listens to this. I know that's not ture, we had this conversation before. You've got a great audience. That just affect the person that you're becoming by having these conversations. Just makes you when you show up with a customer you're so much more valuable to them than had you just been going about as a typical insurance agent. And so I would encourage anybody who's listening that the biggest risk that you have is to not surround yourself with partners like Darrin and knowledge that's helping you grow and your business grow. Because we can't really complain and say, "Oh I've had such and such for so many years and you know they're you know they've done fine". Which I'm all about loyalty, don't get me wrong. Like I'm not. But what I am saying is all of us need to be aggressively seeking out how to grow ourselves and grow the value to our customers. And sometimes that entails actually taking a look at our partnerships instead of these people becoming somebody that can lead me? Are these people the growing network that can be a value to me and my customers as the competition stiffens. So not growing and being complacent I think is the biggest risk.

Jul 18, 2019

Qualified Opportunity Zones were created in the 2017 tax plan passed by congress.  

Following is from my second conversation with Real Estate Accountant, Jonathan McGuire, from Aldrich Advisors.  In this we dive into the clarifications provided Treasury Department draft proposal of proposed regulations.  Eventually, final regulations will follow. In the second round, a path from inception to exit strategy has been made clear.  

On CREPN Radio episode #158 Round I, Jonathan explained what Qualified Opportunity Zones were and their purpose.  For investors with a capital gain, from any investment, they could invest with a temporary deferral on the owed tax if they stayed in for 5 or 7 years.  If they stayed in 10 plus years, the subsequent gain on the investment in the Qualified Opportunity Zone is TAX FREE. 

Click the link to download your Qualified Opportunity Zone Explanation

Temporary Gain Deferral

Temporary Gain Deferral is the initial benefit to investors with capital gains who reinvest their gain into a Qualified Opportunity Fund that invest in a Qualified Opportunity Zone.  The QOZ deferral program last until December 31, 2026 at which time, the deferred tax becomes due. 

Discount on the Original Capital Gain   

If the investor holds the investment for:

  • 5 years by 12/31/2026, the investor receives a 10% discount on the basis for which tax is owed.  
  • 7 years by 12/31/2026, the investor receives a 15% discount on the basis for which tax is owed

TAX FREE BONUS 

If the investor holds the investment for more than 10 years, ALL SUBSEQUENT GAINS ARE TAX FREE!

Round II Clarifications:

Use inside the Qualified Opportunity Zones -  Originally, the understanding was specific to the real estate; new construction, or substantially improved.  The round II clarified that tenants in a QOZ can also take advantage of the tax laws.

TAX FREE GAIN End Date

Round II clarified the end date for the free bonus on the subsequent gain.  The 100% tax free subsequent gain ends in 2047. Previously, there was no recognized end date attached to this.  This will likely create another anniversary date for additional market activity.   

Fund Rules

Fund Rules require that 90% of assets held by opportunity zone fund must be invested in qualified opportunity zone stock, partnership or property.    And, at least 70% of the property inside of the business, etc must be qualified, ie: acquired after 12/17, substantial improvement, original use inside the QOZ, etc. 

 

More Clarifications:

  • Land will always have original use.  This clarification reduces the amount of substantial improvement required, due to the subtraction of the land value from the purchase price.  The reference point for determining the value of the land is the county assessor tax record.  

 

  • QOZ allows you to separately recognize the true economic value of the structure and land.  By lowering the value of the structure, this lowers the amount of substantial improvement needed to qualify for the QOZ.

 

  • Depreciation, if you keep the investment for 10 plus years and sell before 2047, for qualified investments, there will be no capital gain and capital gain tax.  Therefore, the benefit of a cost segregation study is worth even more when considering the basis step up. Because you have no gain, you can have no depreciation recapture.  

 

  • Paying the deferred tax from your original gain that your deferred into the Qualified Opportunity Zone has been made easier.  Round II explanation provides the option to refinance the property, take cash out so that you can pay the tax due in 2026

 

  • Property in lieu of cash can be contributed to the Qualified Opportunity Zone.  If you currently own property in a zone, but do not have a gain from a sale, you can contribute the property you hold into the fund, and participate in the investment.

BIGGEST RISK 

Each week I ask my guest, “What is the Biggest Risk Real Estate Investors face?”  

BIGGEST RISK: I would say the BIGGEST RISK is not taking a serious look at Opportunity Zones. If you don't do it and put a little bit of sweat equity into this to see if you can you can make a deal fit inside of a zone. If you have a project underway or a potential project that you're looking at I mean, you would be doing yourself a disservice if you have a property or a business that it's going to be located in the zone and not take advantage of this. Now maybe you don't have capital gains so you can't do anything. But you know maybe you need some investors, and you need capital. Why take a debt interest? Let's get somebody with equity that wants to have a vested interest in seeing the business succeed and create an investment that works for them and for you. And then it's a win win on both sides. 

For more go to:

www.aldrichadvisors.com

jmcguire@aldrichadvisors.com

Jul 16, 2019

Darrin: [00:00:08] Jonathan McGuire what is the BIGGEST RISK you see that investors face? [00:00:13][5.5]

Jonathan: [00:00:17] I would say the BIGGEST RISK is not taking a serious look at Opportunity Zones. If if you don't do it and put put a little bit of sweat equity into this to see if you can you can make a deal fit inside of a zone. If you have a project underway or a potential project that you're looking at I mean you would be doing yourself a disservice if you have property or a business that it's going to be located in the zone and not take advantage of this. Now maybe you don't have capital gains so you can't do anything. But you know maybe you need some investors, and you need capital. Why take a debt interest? Let's get somebody with equity that wants to have a vested interest in seeing the business succeed and create an investment that works for them and for you. And then it's a win win on both sides. [00:00:17][0.0]

[5.5]

Jul 12, 2019

Darrin: [00:00:08] What is your BIGGEST RISK? [00:00:09][1.6]

 

Tim: [00:00:10] Sure. Great question and I pay a lot of attention to this because I've seen people make a lot of money and lose a lot of money in real estate. I want to make sure that I'm not making the same mistakes. The BIGGEST RISK, in me and my model and my business is probably tightening up of lending, tightening up of the banking. And so when I know how do you mitigate that right. Because my model is based on refinancing in 12 or 18 months. So one thing I could do is if I see the market shifting I can refinance sooner and I just don't get to take out like the refi cash out refight proceeds. Right. I can. I can refinance back out at my basis into long term debt at any time. The reason I wait until 12 months is typically because we could pull some money off the table distribute it. It pads the investors returns a little bit and makes them happy makes me more liquid to go qualify for more loans and things like that. But if I didn't if I didn't feel confident where the market would be twelve months from now I could definitely refinance sooner and at least get all my investors their money back out. And then just have long term debt in place and write out any sort of storm. The other thing that I do is I underwrite my projects as if it's going to be the loan to value is going to drop by 5 to 10 percent over the course the next 12 18 months. And then I also underwrite my jokes as if the interest rates are going to bump. Like right now my interest rates. I'm going to refinance right now my interest rates four point six percent and I'm underwriting my deals at 5.5 percent right now for anything that I'm acquiring today. So do I think to jump that much. I don't think so. But I want to be prepared for in case they do. So I'm underwriting it in a pretty conservative fashion making sure I'm making the offers at the price point that we need. And I mean it's such a low cost basis I'm buying at such wholesale prices that things would really have to shift hard for me to not be able to at least cash out my investors at the end of the day. So again I'm 30 to 40 percent below market values today and you know for traditional syndicators when they're looking out trying to forecast five years from now that's really hard. We could have three different presidents over the course next five years. Right. [00:02:25][134.3]

 

Darrin: [00:02:25] Right. [00:02:25][0.0]

 

Tim: [00:02:26] Versus forecasting out 12 months. It's a little bit more predictable of where the market's going to be in 12 months from now. You know interest rates aren't going to be at 18 percent or anything like that. Could they bump up maybe a half a point or a point? Yeah that might happen. Could lending tighten up a little bit? Yeah that could happen. But you know I'm at the point today where I have a big enough balance sheet and enough performing assets and enough cash flow coming in where even if the market shifts I'll still be a bankable. You know I'll still be able to put long term debt in place just maybe a little bit lower of a loan to value. And so. So that's that's really my greatest risk in my business. And you know if worst case scenario I got I got to ride out the storm and we can't refinance back out, my investors know that they're still gonna earn their 10 percent preferred rate of return on their money and they're OK with that. And if they have to ride it out you know 24 or thirty six or 48 months they're OK doing that. We have the asset. We're at a low enough basis we could sell it if we needed to or we could hang onto it. The cash flows enough the debt service coverage is high enough where we're able to cover all those expenses. [00:02:26][0.0]

[136.0]

Jul 11, 2019

Multifamily Mindset is key to growing true wealth in multifamily real estate.  

Tim Bratz brokered his first commercial lease for a 400 square foot retail space which rented for $10,000 per month in New York, NY.  When he realized the landlord was going to make almost $2,000,000 over the 12 year lease for this one space, he knew he was on the wrong side of the coin.  He needed to be a landlord instead of a real estate broker if he wanted to create real wealth in real estate.  

Since that time, Tim has flipped single family homes, wholesaled, owned single family rentals, turnkey rentals, and invested actively and passively in multifamily properties.    

The first apartment building he purchased was an 8 unit property for $30,000 which he invested another $50,000 into.  All in he is in for $10,000 per door, and it cash flows like crazy. Since this one property, he stopped investing in all other types of real estate except for multifamily.

Real Wealth in Real Estate

Real wealth is not created on one commission from an individual transaction.  It is created from residual income; getting paid repeatedly, month after month and year after year.  Wealth in real estate is created over time, not by flipping property after property, but by holding the asset and letting it appreciate over the years.    

Multifamily Mindset

Multifamily Mindset for Tim started with the realization that residual income was key.  More wealth has been created in real estate. It’s a proven formula if you stick with it and have a vision.  

The more he learned about real estate, the more he saw an opportunity for him.  He also recognized the power and potential danger of leverage. When the 2008 crash happened, those with too much leverage, lost everything.  While those with cash flowing assets, were able to ride out the storm.   

When the banks were not lending, real estate investors with positive balance sheets and cash flowing properties were able to get loans, because they had cash flow.  This allowed them to buy more and grow their portfolio.   

Getting Started

You will pay for your education one way or another.  If you decide to go it solo, and learn the hard way, on your own, you will pay for your education in costly mistakes and missed opportunities.  If you elect to pay a mentor, you will be able to shorten your learning curve, and gain from your mentors experience, and mistakes so you won’t have to repeat them.  The choice is yours.

There are tons of books and podcasts available for free.  But these do not hold you accountable. How many times have you been to a seminar or read a book that inspired you to do great things.  But as soon as you return home, you get into your regular routine and forget all the excitement and momentum you gained from the event.  Having regular meetings with your mentor or mastermind group, will keep you on track and hold you accountable to yourself so that you reach your goals.  

Tim has learned from books, podcasts and mentors, both bad and good.  He has found his mastermind group has been the most beneficial for him.  His mastermind group is where he learned from other investors who had passed through his current challenge.  

Meeting regularly with his mentor or his mastermind has helped Tim create a portfolio valued at more than $250,000,000 in just over 4 years.

Regular Reflecting

Tim had over 200 doors made up of a mix of single family and multifamily properties.  When he took some time to reflect, the numbers did not lie. NInety percent of his wealth was from multifamily yet it accounted for only ten percent of his time.  This aha, lead Tim to focus only on multifamily from that point forward. 

If you don’t know where you want to go, it doesn’t matter which path you take.  Know your why, and then back into the numbers to get you on the right path for where you want to end up.  When you know what you want, you can ask better questions, on how you can accomplish your goal.    

Take a day, schedule it, and periodically take stock of where you are and compare it to where you want to be.  Then ask questions, and course correct.  

Consistency is Key

Consistency is key to building a successful business.  An apple a day keeps the doctor away, not seven apples on Sunday.  

If you want to build a big business, there is no shortcut.  Consistency is the key to growing a big business. If you want to build a big business, recognize that it will take time, and act consistently.  When you do this over time, your efforts will accumulate and you will have success.  

Marketing

Tim recognizes that having a consistent marketing message in front of his key prospects is how he will reach his goals.  This applies to both raising money, and buying apartments. In the communities where Tim is actively acquiring properties, everyone knows Tim buys apartments.  Why? Because, for the past three years, he has marketed to owners, and residential brokers that “Tim buys Apartments”.  

For investors looking to participate passively, Tim stays in front of them, and is constantly building his list.  His consistent actions allows him to raise millions of dollars in a single webinar for any deal he has.  

From his residential wholesale days, where he built his list of buyers and wholesalers, he recognized that wholesalers come across multifamily deals all the time, and usually throw them away.  What if the wholesaler could make a referral fee by sending it to Tim?  

Tim emails his list of wholesalers weekly, reminding them that he buys apartment buildings.  Because these buyers come across multifamily opportunities regularly, and have nowhere to go, Tim has been able to make a win-win-win situation for the seller, wholesaler and Tim.

Syndication Strategy

Tim has a unique syndication strategy for how he structures for his deals compared to traditional syndication models.  Unlike others where investors may not see any return until the building sells, Tim offers a preferred return to investors from day one.  As soon as the property is stabilized and can be refinanced, he pays back the investors their principal, replaces his bridge financing, and keeps his investors in the deal for 10 to 30 percent equity into perpetuity.  

Investor benefits include: tax advantages because the preferred returns are long term capital gains.  The investor gets their capital back for the next deal, and they get the long term equity build from their 10 - 30 percent investment with no capital in the deal.   

For Tim, this has created a constant source of money looking for a return that is ready for the next deal.

BIGGEST RISK 

Each week I ask my guest, “What is the Biggest Risk Real Estate Investors face?”  

BIGGEST RISK: The BIGGEST Risk we face is the potential tightening up of the banks.

 

How do you manage the risk? The model is based on refinancing within 12 to 18 months.  If we see the market shifting, we can refinance sooner, and not take out any proceeds.  Usually we like to wait for 12 months so we can take out some proceeds. This allows us to pay a little more to our investors, and make them happy, and me a little more liquid so I can qualify for more loans.  But if we had to refi before 12 months, we could just refi at our basis, lock into long term debt, and ride out the storm.  

The other thing we do is underwrite our projects as if the loan to value is going to drop by 5 - 10% in 12 - 18 months and we assume that the interest rates will bump up 1 percent.  Do I think these will happen? No. But, I want to be prepared for if they do.    

For more go to:

Face Book: Tim Bratz

Website: Legacywealthholdings.com

Podcast: Legacy Wealth Show

Event: Commercial Empire

Jul 10, 2019

Darrin: [00:00:09] What do you see is the BIGGEST RISK? [00:00:11][2.5]

Shoshana: [00:00:13] So I mean I think we've we've touched on it throughout this whole conversation. I think that 2008 for people is a very very large. I think that, we're in this phase where it cannot get all the numbers like this sort of KPI of our economy are looking pretty positive right. [00:00:33][20.4]

Shoshana: [00:00:35] And we know from lots of prior experience again, pick on our age again, sorry about that. That everything cyclical. And you know there's a new administration or there's not a new administration or there is a world event or there's changes in the job market. Unemployment, interest rates, etc. All of these factors have, we know from experience, have the ability to create pretty seismic shifts in investment markets across the board. We know this. And so, although there's a book called Irrational Exuberance that we're in this phase, where although we want to feel really excited about how everything looks right now. There is an American reality which is we are where we're always waiting for the other shoe to drop. And that's because for many of us we've seen the other shoe drop and we've paid that price. Myself I would I've been in the Internet space since 1997. I survived three bubbles and bursts in that time you know. Two thousand after 9/11 2008. And you know who. I don't think anybody would ever bet that it's not going to happen again no matter how good things look. So I think that risk is something that is inherent in this business. I think if you come from a variety of different places I think that what we need to do as a we call ourselves a direct to investor platform. So we're not a JP Morgan Chase or a sort of big institutional company that is not going to come across individual investors that we know and shake their hands and have a relationship with we can't afford to be that disconnected. So what we try to do, is and we've done this in the short time we've been around, is really like pull apart where risk sit. You know, what are people most worried about? And so I shared with you the data that we use I share with you the fact that we stay actively involved in the investment. I shared the fact that we have a thesis that says these are short term investments where volatility in the market is minimized. And we recently, about six months ago actually introduced a pretty revolutionary product where we actually provide equity protection on principles for certain ones of our investment. So it's a double layer of invest of a double layer of protection, excuse me. First layer is you as part of your investment a small piece of it goes into a retention fund like a social pool. And then when that's exhausted if an investment does not go well, which has not happened yet. Knock wood. Then the second layer, and you'll you know I'm sure that this will appeal to you as an insurance guy, is we have a reinsurance policy with one of the largest reinsurance companies called Everest RE. That that is there to provide that second layer of protection. Now, this protection does not is not on every one of our investments because as you probably can imagine the projected returns on an insured principal are going to be lower than on one that's not. You know, no pain no gain. High risk, high reward etc. And so but I think that you know that when my CEO Iran Roth walked into every story probably about a year and a half ago to say that he had this idea that we should insure people's investment everyone thought it's crazy. But if you think about it we invest you know we insure almost everything else; our lives, our homes. There's vacation insurance, there's weather insurance. Why not insure your principle on an investment. And so again I think we're looking to really think about what are the things people are most scared about from a risk perspective and find ways to mitigate them. And sometimes that is in the form of a policy. Sometimes it's in the form of a model like the way we do our business. Sometimes it's showing up in Georgia and making sure that an investment continues to stay on track. It depends what it is. [00:00:35][0.0]

[22.9]

Jul 9, 2019

Darrin: I've been asking my guests if they could identify what they see is the biggest risk. Again I'm not necessarily looking for a an insurance related question but if you could take a look at real estate investing and maybe you know how custom irrigation or I don't know how you want to view it but just in the bigger picture of risk if you could identify what you see is the the biggest risk. 

Yonah:  OK so I'll actually take this in a little bit of a different direction then maybe some of your other guests have and maybe you might be expecting but kind of going along with my you're just personal look on this. And it's really a risk for anything not necessarily specific to real estate. But more over the top applies to real estate. I think more than anything in my experience and that risk is actually arrogance.

OK so what I mean by that is when you are thinking that you're going about and you're making a million dollars and making 10 million dollars and it's all you you you you're right. You did it all. You know there is a certain when you start thinking like that you get into a very dangerous situation not just with yourself personally with the people around you. And everyone knows that real estate investing is really a team sport. And there are so many people that are involved.

So when you start to think just about yourself and think about how you did it all by yourself and how great I am. And obviously that's important. I'm not talking about you know low self-esteem here. But real humility means that I'm willing to cooperate and willing to learn from everyone around me. I realize that I can't do this on my own I realize that you know whatever talents I have you know are really God given gifts and I have to be grateful for that and recognize recognize that and use them. But at the same time don't think that you know I'm I'm the best thing in the world because that's the biggest risk.

As soon as you start thinking that history proves itself over and over and over again, you're bound to fail and you're bound to lose whatever you have built you lose whatever friends you made et cetera. And it's just the easy way to lose friends in general. So that's what I think the biggest risk is.

Jul 8, 2019

Darrin: What you see is the BIGGEST RISK?. 

Ben: Well the BIGGEST RISK is always. You don't know what it is. And you know the the stupidest thing you can do in real estate is to buy for cash flow without putting any thought into how you're going to get out. So for me, we've been talking about risk management all this time. I underwrite 10 year hold. What do you think that for. Is that because I want to stay there for 10 years is because this is how I manage risk of what I don't know. 

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