COVID 19 is affecting all aspects of life as we know it. Vinney Chopra shares with us how he sees the situation and what his company is doing to to go forward.
Darrin: (00:09)
What is the BIGGEST RISK?
Toija: (00:13)
So the saddest, I'll give you the saddest phone call we get in this office. My sale closed yesterday. I want to do a 10 31 exchange. So the BIGGEST RISK is not talking to an exchange company and they get fixated on the 45 day deadline, which as I said is the worst deadline. But the biggest risk and the worst case scenario is they don't talk to a 10 31 exchange. They'd been on the internet, they've read all about it, they have it all figured out and they got the 45 ways and they call us after the sale has closed.
(00:52)
We cannot fix that, we cannot fix that. And so the biggest risk is not being willing to talk to an exchange company, um, as part of their due diligence. And I will say again, like there's three attorneys in here and they don't want to talk to us cause they're afraid there's billable hours, which there isn't, but they're afraid there are.
Speaker 1: (01:12)
And so they will not call us and engage us and don't want to bother us and they don't want to take up too much of our time and they won't talk. And then by the time that we end up talking to them, the sale has either closed, or there so far down the wrong path, we can't fix it.
(01:28)
So I go back to my original statement that when they have half a thought in their head, they don't even know the words to put together in a sentence what questions even to ask us. We have the questions, we'll ask the questions. So the sooner they talk to us, the better they'll understand the path. Now when they talk to us, that conversation can go 15, 30 45 minutes, a few weeks, days and years sometimes. But the sooner they're in line communication with us, the sooner we can keep them on the path and we'll keep talking and talking and talking until they have found the path that gets them to whatever their rainbow is. And so not talking to the exchange company and sometimes they're in a situation I can't fix. So the sooner, the soon as they're talking and certainly well before closing. Well before closing.
COVID 19 Impact on Commercial Real Estate is developing. Learn how Michael Zuber sees the challenges and opportunities facing Real Estate Investors.
Now, thanks to technology you can manage your perfect portfolio from anywhere on your mobile phone.
Minesh Bhindi with Perfectportfolio.com shares his strategy for doing just that.
Today. My guest is Minesh Bhindi. He is with Perfect Portfolio.com and, they strategize to buy below market, cashflow and compound. And in just a minute, we're going to talk with Minesh about how to create and manage a fully diversified portfolio in prime real estate from anywhere in the world. But first a quick reminder, if you like the show CRE PN Radio, be sure to like share and subscribe. Also, you can leave a comment as we love to hear from our listeners. And don't forget if you'd like to see how handsome, our guests are, be sure to check out our YouTube channel and that's Commercial Real Estate Pro Network. With that, I want to welcome my guest, Minesh, Welcome to C R E P N radio.
Minesh
00:50
Thank you so much for having me. It's a pleasure.
Darrin
00:52
All right, well I'm looking forward to talk with you. I, read up a little bit on your, uh, your background and, I'm excited to, to hear, uh, you know, what, what would you have to say about, uh, uh, managing real estate? But before we get started, if you could take just a second and share with the listeners a little bit about your background.
Minesh
01:15
Sure. So I started off in real estate when I was 16 years old, uh, at 15 and a half. My, my dad has always been involved in real estate. I was watching him negotiate a deal and, uh, with a very arrogant 15 year old mind when he got off the phone, I was just sort of smirking at him and he said, what are you looking at? What are you smiling at? And I said, ah, that sounds easy. I could do that. That sounds, uh, you know, that doesn't sound too difficult at all. And luckily instead of telling me to screw off, uh, which you would have been perfectly right to do, he said, show me. Uh, and so by 16, I had started negotiating real estate deals and because I was at a very advantageous point that I can see now, I couldn't see then, which is I could walk away because whether we did a deal or not, I still had to get my homework done.
Darrin
02:04
I still had to go to school. I still had to do the things that a 16 year old is going to do. So I had the advantage of being able to walk away. Um, and so very quickly I started getting really, really good deals. And very quickly I started getting deals that were just unbelievable deals that people couldn't believe that we could get. I'm talking like 30% discounts on properties where you, you just, you, you could not get these deals before. And so that's what was going on. And then when I started working with these deals and when I started working on working with investors with these deals and believe it, cause we were structuring deals where you were getting a cash back on completion, you were putting nothing down on the property, you were getting a cash back on completion and you, you were getting basically an interest, almost an interest free loan on the day of completion.
Darrin
03:02
So it was phenomenal. And I did my first deal at the age of 18. It was a, a block of 16 or 18 units that I was negotiating and I decided to buy three of those, did it with the same deal. I bought 500 pounds down to reserve these properties. I got a 68,000 pound cash back on the day of completion and a quarter of a million pounds in equity. Well that was my first, my, my own first real estate purchase after a couple of years of, uh, negotiating deals. So that's really my background, um, on real estate. And then a friend of mine said, Hey, you should, you should teach this stuff. Uh, and that's when the education side started.
Darrin
03:46
No, it sounds like you started on third base. I mean that's, that's, that's awesome. To start so early and have a, you know, A), you had the exposure and it sounds like, again, like you, you uh, your father was encouraging as opposed to, uh, you know, uh, resistant to helping or, or even entertaining your interest I think is his kind of thing. Cause it is funny, the, uh, uh, parental child relationship as the kids go through teenage and, and, uh, you know, kind of the smart ass kind of a thing. And, and um, so kudos to your father for, uh, not, not resisting you then.
Minesh
04:22
Yeah. I think if I had failed the first couple of times he would have resisted because obviously then it was the reputation of the company and everything else at stake. But luckily I got the swing of it very quickly because I guess the arrogance and the confidence at 16 and sort of helped, uh, actually negotiate the deals, which was very strange. You know, a lot of people say you shouldn't be arrogant about it, but if I was to say, what was the one thing that really helped me actually get and secure these deals, it was the arrogance. Uh, and it was that confidence of just being able to say, Hey, look, you either want to do the deal or you don't want to do the deal. I don't care. You know, it was, it was really that approach that allowed me to get the deals that people that have been in the industry for 14, 15, 16 years at that time, couldn't get.
Darrin
05:05
Sure. Well, and I think, you know, you said something right there, the, the ability to walk away is always your most powerful leverage. You know, if you're emotionally into it and you can't see the, the faults and you don't have that, you've lost the ability to walk away the other sides though they've wo n. Right?
Minesh
05:26
Absolutely, in everything.
Darrin
05:26
Yeah. And, uh, so, yeah, but, but what a powerful message is, you know, somebody just starting out to have that and to see that work and to, to know that that is, uh, you know, it is a power. It's a tool for you as opposed to, you know, kind of, I hope it works. I hope it works out. It works. And you get all emotionally involved and then you can't walk away from them and you get crushed by it, or you do win or, um, but, uh, no, that's, that's awesome.
Minesh
05:53
Yeah. Right now, you know. Right. And one of the things that interests me is that right now, obviously the market's everywhere in the world, especially my home market of London, uh, and the U S have gone up a lot. And so people are thinking, Hey, you know, maybe people don't want to, maybe the seller is in, is, is in power right now. But for me, I think the buyers in power right now. And so I think now is a great time to be arrogant. I think there's less buyers now than there are sellers. I think a lot of people want to cash in on their profits right now at the top of quote unquote top of the market. Uh, you never know where the actual top is going to be, but a lot of people want to cash out. So now as a buyer's market, you should be going out, putting out offers. You never know what's going to land. That's, I really started off at the time where property was peaking, uh, in London. You know, it was like 2005 ish, uh, that I started. And that's, you know, it was only two years up until the credit crunch, uh, and three years up until, you know, the crisis happened. So that was my peak period. And it was a buyer's market at that point. I, I don't think it was a seller's money, you know, it was a sellers market.
Darrin
07:00
No, it's funny to hear you say that. I, I say funny, uh, from a lookback perspective because I think that so often what we, what we've been focused on is post-crash and how low things were for getting him a high things they were. And what you're saying is how much success you were having in the run up manner prior to the crash. Were you, uh, uh, holding any assets in the crash or where were you at? Uh,
Minesh
07:28
we, we S absolutely holding assets in the crash. It was during, it was during the crash that I sort of, um, realized that maybe I should take a different, different turn. And it took a few years for me to figure out what direction to go in with the difference between my portfolio in the crash and other people's portfolios. In the crash was that the cash backs that we were getting that I was getting, I would actually leave them in the bank and not spend them on a new car or not spend them on a holiday or not spend them on things that weren't appreciating in value. So when the crash happened, I still had cashflow and cash reserves to actually see through the cap, see through the crash.
Darrin
08:09
Right. No, I think that's most people I see that a or that I know that, uh, made it through the storm. Uh, like you say, either they were well reserved before or they certainly weren't foolish with what cash they had in the storm, conservative. But that was what gave them the match. You know, that much more ability to capitalize when things corrected.
Minesh
08:33
Yes,
Darrin
08:33
They were in a position to, to run fast when others, others couldn't. And capital was capital was at a premium. I mean, you know, lenders weren't lending. Everybody was afraid that there was more to, you know, crashing. And you've mentioned this, nobody really knows. Are we at the top? Uh, are we, you know, at the bottom you knew, you don't know in the moment that you're there. It's only after time has passed so you can reflect and say wow that was the top or that was the bottom.
Minesh
09:00
Exactly. You know, one of the things that was interesting was that one of the strategies that I employed to stay in the game, so to say was that all the cash reserves that I had, you know, in 2008 when the market started crashing by about March, 2009 the stock market had bottomed. So this is why we talk about the perfect portfolio. It's not just about having assets in one and understanding one vehicle. You've got to understand multiple vehicles cause while property was still recovering, was still going through the period of recovery, the stock market had bottomed by March, 2009 so I just took the cash reserves at the ridiculously low interest rate that I was paying on them, put that money straight into the stock markets. As the stock market started climbing after March, 2009 I had more than enough cashflow to, to survive quote unquote, the the crash and what was going on there.
Minesh
09:51
So you've really got to understand multiple different asset classes and how they work so you can stay in the game longer. That's what my mentors taught me and that's what I try and practice.
Darrin
10:00
So let's talk about that. What, what, what type of asset classes are you in?
Minesh
10:05
Yeah, so we, Perfect Portfolio is focused on real estate, the stock market as a whole, via index funds, uh, and golden and silver. So that's what we're really, that's what we typically focus on. And the idea of a perfect portfolio throughout history and my research shows, if you are sort of between 40% in real estate, 40% in the stock market, 20% in golden silver, you are at a very, very good stable portfolio level.
Darrin
10:32
And is that a, that's how you manage your own portfolio then? It's between that, those kind of ratios.
Minesh
10:38
Yes. It's, it's almost almost exactly that.
Darrin
10:41
And how much of those are our cash flow as opposed to appreciation is that.
Minesh
10:49
They're all cashflow. They're all cashflow assets. We, the way we do gold and silver, it's cash. It allows us to bring in a cash flow the way we do real estate allows us to bring in our cashflow in more ways than you can do with traditional physical real estate and the way we do the invest in the stock market by the index funds. It allows us to bring in a cashflow. Cashflow is the King of anything that you're going to do with investing. The only way capital gains really works in the, you know for you is if you make capital gains really fast because then it's almost like cashflow. If you think about it, right? If you're trading in and out of an asset and you're making cash and you're making capital gains, it's sort of like cashflow in the short term if you can do it in an in the near term, but if you're holding on to assets longterm and you want to grow your wealth, there's three key things. You've got to buy those assets. At the best price possible. You've got to have a cashflow and then you, you've got to reinvest that cash flow into those assets that are going up anyway. Um, and so I like to call that my wealth triangle philosophy. So it's, it's very, very simple.
Darrin
11:52
That definitely, uh, sounds like a recipe for success. Um, and the ability to withstand, uh, any kind of shortcomings or market cycles, um, and not just with, but then also, uh, you know, capitalize and grow your portfolio when, when times are are down. I mean, that's the always the thing is that, uh, you know, I, I think from this, the beginning of this have we talked about when you started, when you were able to be a non non invested emotionally in, in the situation, uh, is something that, that would propel any investor to help any investor and just to be in that position, uh, you know, and be able to, to be the counter action to what the market's doing and really seize the day kind of thing.
Minesh
12:41
Yeah. And you know, I was very lucky to be in that situation. Um, I don't overlook that. I was very young, I didn't have any other commitments. I didn't have a job. I didn't have a wife, I didn't have kids. I didn't have these things. Um, you know, sort of holding me back or making me second guess myself or making me want it to work so much where I would screw up the deal, you know? Um, so I was very lucky when it came to that. That's one thing I have to say, but saying that, you know, now we've coached people in 46 different countries to do what we do and it just works. You just need the right coaching. You just need the right mindset. And really it's the mindset. It's nothing to do with the actual strategy. There's not too many strategies that work in anything. There's only a, you know, less than less than five strategies work in anything that you want to do. You just got to have the mindset to see it through. And that's what we specialize in. Our strategies are very, very simple, but we specialize in actually making people execute on them. And that's why we're successful doing what we do.
Darrin
13:44
I like a mindset and a execution. Um, let me ask you in the, the, the assets you mentioned a gold, silver, um, uh, the, um, what was it, the, the index funds and uh, uh, the real estate. Um, can you describe a real estates, such a broad topic? I mean, are you investing in, in specific, uh, pieces of real estate? Are you investing in funds? How are you, how are you doing your, your real estate?
Minesh
14:15
Yeah, so we use rates, which are real estate investment trusts. Um, and we actually use reach ETFs, which is an exchange traded fund. And how it works is very simple. Rates are set up like companies like funds and you put your money into them, uh, and they go out and buy real estate and manage that property in, in, in the best way possible to generate you the highest return. Now their objective is to get you the highest return so that you put more money into the rate. It's very, very simple, right? Capitalism works. Um, now the rate ETF is sort of one level above that where their job is to allocate the funds in the ETF to multiple different rates to give you exposure across a broad market of real estate. So in essence, with the way that I do it with one stock purchase, I'm investing in eight different sectors of real estate, 154 different real estate projects and I can manage the entire thing from my phone.
Darrin
15:10
And I can also use, you know, the option strategies that we use to generate a cashflow, uh, on my holdings. On top of that, you know, there is in the uh, re TTF that I use, which is VNQ anyone can go and, uh, look at it. It's got $64.2 billion of assets stored inside of this ETF. So when you are going and knocking on the door trying to do a deal as an individual versus someone with $64.2 billion behind you, who do you think is going to get the better deal? So these guys are able to get much better deals and most importantly, they have the best accountants, the best lawyers managing your portfolio so that you make the most amount of money. Why? Because if you make the most amount of money and their fund outperforms, they're going to get more money.
Minesh
15:59
It's very simple. Capitalism works. So that's why a, I like to use the read ETFs. The results on these have been absolutely fantastic. BNQ provides a 4.52% dividend. It also has compounded at 8.48% since inception. Uh, and the fee for getting involved in this thing is 0.12% yearly. So it's nothing, you know, compared to what your fees and expenses and everything are. When you are looking at, uh, buying physical property, this is, this is so much better. And on top of those rooms, on top of those returns, we use options to then generate us an extra 1% a month. So you're adding 12% a year on top of, on top of what I've just said. And again, you're diversified into eight different sectors and 154 different real estate projects with one click of a button.
Darrin
16:53
No, that's pretty impressive. Um, the dividend, uh, you mentioned the 4.5% or 4.5 to a percent. Is that, is that paid a quarterly or how was that a quarterly?
Minesh
17:08
Yeah.
Darrin
17:08
And then, uh, the 8.4%, uh, compounding, um, are you, I assume that's a value you would recognize if you were to sell essentially?
Minesh
17:18
Yes, absolutely. Yeah. You're getting after gain, you're getting a capital gain, plus you're getting the cashflow via the dividend and you're using the options to generate an extra 12% a year.
Darrin
17:27
Got it. So the, the, the asset, uh, the value is going to historically is, uh, is that an average or is that,
Minesh
17:36
yeah, that's an average average compound since, since inception.
Darrin
17:40
Gotcha. And then tell me about the, the options you mentioned, uh, how is it that you're able to, uh, utilize options in the REIT there?
Minesh
17:52
Very simple, you know, options allow you to speculate on an, on an asset price. Uh, it allows you to guess or bet what you think is going to happen to a particular asset by a particular time. Um, and all we do is we sit on the other side of the speculators and we collect that money. It's like when you go gambling, you become the house rather than, uh, becoming the player. And so all we're doing is sitting there going, okay, this person thinks this real estate fund is going to go up by 10% by the end of the month. And so we own that stock. So we're going to take a, a premium, uh, to hold that stock and guarantee that stock for this, for whoever that person, whoever the speculator is. Uh, and as per the Chicago board of options, uh, statistics, 90% of speculators in options lose money.
Minesh
18:46
So we're winning 90% of the time and the other 10% of the time based on the rules of, of, uh, of how we place these options, you're never going to be in a scenario where you are selling that asset for less than you buy it for. The other key thing that we do is we do not leverage, we do not use margin. We do not use, uh, uh, any form of leverage when it comes to our strategies. So you're basically as safe as you can get and generating a cashflow via those options while that asset is going up. The fundamental thing to understand is that I am a longterm investor. We are all longterm investors. We believe in the longterm value of the stock market, the longterm value of real estate and the longterm value of gold and silver. The cashflow is designed just to give you that cashflow on a short term basis. So we're never getting into a position that's going to force us out because we're trying to, you know, get very greedy on the short term. It's never going to happen. That's why we aim for 1% returns. You can easily try and aim for 7% a month, returns with options, but then you're taking huge risks. Uh, and that's not what we're, that's not what we're about.
Darrin
19:54
Got it. How does that, uh, uh, income stream the, the return, uh, compare with like gold, gold and silver and what you're seeing in the index funds?
Minesh
20:07
On the real estate side? You mean?
Darrin
20:09
The, the percentages we just went through like the dividends and the compounding of the real estate value and uh, uh, the options. How do those percentages compare to, to what you're seeing in the index funds and, and uh, golden silver?
Minesh
20:24
Yeah, the, the index funds out perform, uh, everything in the short term. Um, I believe gold and silver will revalue at some point and outperform all of them. However, gold and silver is more, that's why the cashflow side of gold and silver is very important because you could be sitting on a, on some gold or silver for 20 years before it does anything. Uh, and I know there's a lot of people out there and my peers, the industry that are harping on about owning gold and silver and, and that's the only thing that you should own. You know, it's, it's, it's funny how they're the ones selling the physical gold and silver for you to buy in that scenario. But for, from my perspective, you, if you're invested in gold and silver and you've got more of your, more than 20% of your assets in golden silver, and out of that 20%, if you've got more than $5,000 in physical gold and silver, that doesn't generate you a cashflow. You're being inefficient with your funds. There's better ways to do it. And that's how hedge funds do it. And that's how billionaires do it. And that's, that's the way we like to do it.
Darrin
21:26
So when you say cash flow again, I guess from the gold and silver, I'm still not clear on how, how is it you generate cash flow from the gold and silver? I mean, if you physically hold it, it's, it's in your possession. How does he generate the cashflow?
Minesh
21:39
So we use the ETFs as well. Uh, we, we, we like to utilize ETFs because they're there. They're fantastic innovations in the investment space. And it's interesting to me how, you know, especially in the gold and silver space, there's a lot of fear around using ETFs and actually in the real estate space too, it doesn't, it doesn't make any sense to me. People are very comfortable buying Apple stock, but they won't go and buy a real estate stock. It's just sort of, it's very, very interesting, uh, why there is that fear. Um, but yeah, we use the ETFs, uh, and we then use options on those ETFs to generate that cashflow.
Darrin
22:13
Got it. Got it. Um, you mentioned your, your longterm, uh, players. Um, how do you, I guess, what do you see? Do you see everything continuing? Do you see, uh, I mean, are there, are there strategies you employ? I mean, it sounds like from the real estate thing, you're, you're hedging your bet from getting a spread of risk, uh, amongst different asset classes and working with the biggest, uh, players. Index funds. I think they are similar from the standpoint of you're, you're, you're, you're basically tracking that the, the Dow or the index. I mean that's the,
Minesh
22:50
the S and P.
Darrin
22:51
S and P. all right. Yeah. And uh, the gold, gold and silver, like you said, uh, is it been pretty flat here? I'm not really that familiar with the gold and silver prices right now. Where are they?
Minesh
23:03
Yeah, I've been doing pretty well [inaudible] doing pretty words holding on 1550 right now. Um, and it's done very well last year and it's going to do very, very well this year as well. And that's the one thing that people get confused with gold and silver. If anyone's watched any information on YouTube about gold and silver, what you normally get told is that gold and silver are going to skyrocket when the world melts down. And that's not true when you look throughout history, the only time gold and silver actually skyrocket is when there is a us dollar crisis. And I don't foresee a U S dollar crisis for a long time. What I do foresee is the stock market continuing to go up. And as a result of that hedge funds having to reallocate more of dollars as a percentage of their new net asset values in their hedge funds to gold and silver as a hedge. So if they want to put 5% in gold, for example, and they've got, you know, let's say $100 million to play with, and now that hundred million dollars has gone on to $200 million, now they need to put in a bit more dollars into gold to keep that 5% balance. And that's what pushes the price of gold and silver up while the stock market's going up.
Darrin
24:12
Gotcha. So it's basically the, the, the demand based on their growth is essentially a leverage, uh, for you to, to increase your position in gold based on the value of gold or silver going up based on a supply and demand, uh, kind of thing.
Minesh
24:30
That's absolutely right. You know, you don't, not with gold and silver, you're know, we are not waiting for the world to melt, uh, before we make money with gold and silver. I know that's a, a big thing in the world that, you know, people try and propagate, but that's not when typically gold and silver, they'll skyrocket when there's a U S dollar crisis. Typically that's when it happens. It's nothing to do with the stock market. It's nothing to do with anything else. In 2008, the stock market went down, gold and silver went down and have a guess why, because the hedge funds were reevaluating their portfolios. The net asset values went down. They had to reallocate out of gold. So it's very simple from that perspective. You know, anyone who's waiting for a crisis to make money on gold and silver, you're gonna we'll be lucky to see that in our, in our generations.
Darrin
25:20
Well, I appreciate you saying that, cause I think that, uh, given the, um, near-miss to the last crash, I think there's a mindset of there's another crash coming and there's like,
Minesh
25:32
Which is ridiculous.
Darrin
25:32
Right, right. Right. Now I, I've, I've, I, you know, I, I've talked with and read and heard and everybody wants to, to identify the, just the, the average length of a cycle, uh, the averages. And there's constantly ups and downs and stuff. But I think that, uh, in that conversation, one thing that I find missing is the gravity of the crash and the correction that occurred. Um, if it was a minor, a dip, you know, like a, a w w what's a recession? Is it a one quarter of negative growth? Is that, is that how we define? Three quarters?
Minesh
26:08
Well, one quarter, three months is typically a recession. Yeah.
Darrin
26:12
Okay. So three, three months. So three months is what a recession is defined by and over, you know, over history. They happen periodically, every, you know, cycle of seven, eight years kind of thing. There's usually, there's some sort of a minor correction, but the, the correction was so major and then plus the fixes that were put in place that have, uh, essentially prevented, you know, the opportunity for it to get out of hand doesn't mean that it won't get out of hand again. Cause I think that it just, the nature of things as we get comfortable, we kind of loosen the standards, policies change and you know, expectations. But, but there will be another crash. But I think that the, the those that are waiting for the next crash uh, crash, we're predicting the next crash, uh, as big or bigger than the last crash. Uh, maybe waiting for a long time, just based on what I'm seeing. I think that the economy is relatively strong unless there's some sort of a worldwide, um, you know, event. I'd love to hear your input on that.
Minesh
27:11
Well, let me say something that's going to blow people's minds. We're not going to see a 2008 style crash in our lifetimes that has done, that happens about every 70 years. Uh, and that style of crash is done. Anyone who's waiting for an economic slowdown or a, uh, a period of recession, we've already had it since the beginning of 2018 and we've just come out of it. If you look at the channel for the world, uh, well, even the U S stock market, it's gone nowhere since February of 2018 and just at the tail end of 2019, it started coming out of that. So that crashed that everyone's waiting for has already happened on the ride noses. And now we're in another cycle up in the stock market, in real estate and obviously in gold and silver. So anyone who's sitting out of the market right now, you've already cost yourself 25% last year and you're probably going to cost yourself somewhere between 10 and 20% this year, just on a capital appreciation, not anything, not even including the cashflow. So if your money sitting in the bank, that is, in my opinion, the absolute worst place to have it right now.
Darrin
28:14
Right, right. So let me ask you, so when you're, um, making your investments, um, are there any characteristics or you know, I mean, you basically, it sounds pretty simple as far as the three things that you're investing. You know, when I, when I typically think of real estate, it's, it tends to be a specific property and there's characteristics and we can run the numbers and all that stuff. Um, but it seems like you've taken all of that out of the conversation. Uh, is it, is it, you're, you're investing in a, in a REIT that's so large, that's constantly, they're out there shopping for these deals. And the opportunities that basically as simple as it gets.
Minesh
28:54
Absolutely. And not only are the, are they out there shopping for these deals? They're out there with their head on the chopping block because the moment they have a bad year, they get all their, all the, all of their funds pulled. So they don't get the luxury that you and I get when we go looking for real estate, which is our one bad deal out. It's not a problem. They're on it 24, seven for you. So you don't have to worry about that. If they buy, if they perform badly, they'll get, you know, $70 million pulled from their fund in the next year. Um, and so they're, they're, they're not looking to do that. And these are the best nerds and the best geeks in the world doing all the analysis to keep your portfolio growing.
Darrin
29:34
Got it. So basically the way that you manage your portfolio from remote is that you're investing with the experts in these different funds. Uh, and from there, from your phone, you're able to manage, uh, and keep track of what's going on. And
Darrin
29:54
is that there's basically, I mean, it's.
Minesh
29:57
My job. My job is very simple. I need to know when to get in. I need to know what percent to allocate into each asset class and I need to know how to generate that cashflow using the options. Everything else I've already said to you, you got to be in, in stock, in the stock market. You've gotta be in real estate, you've got to be in gold and silver. However you do those things, that's really the key where the skill comes in and depends on how much money you're going to make. That is the dependent factor. It's not about what assets to get into. You need to be in the stock market. You need to be in real estate, you need to be in gold and silver. What you do after that realization is the key on how much money you're gonna make. I mean, you know, and right now I'm talking to you from Bogota in Columbia. So it's like, you know, you can manage this portfolio from anywhere, but a multimillion dollar portfolio that I can carry around with me on my phone and track from anywhere. Um, I've made, I've been traveling since the first week of January. I think I've made eight, 8.8%, maybe 8.9% of my money so far while I've been traveling. And that's really the key. It's what do you do once you decide that this is the asset class and that's what we specialize in.
Darrin
31:12
Let me ask you, you mentioned the, the dividends, um, which essentially to me that's the cash flow. Correct? I mean that's the,
Minesh
31:19
no, so there's difference because you know, with, with, with gold and silver, there's no dividends. So the dividends is a part of the cashflow, but the majority of the cashflow comes from utilizing the options.
Darrin
31:33
Okay. Gotcha. It's the options. Gotcha. Gotcha. Ah, interesting. That's, that's a definitely a, a, a unique, uh, perspective. And, and uh, sounds like you've had a lot of success with that. How many people, you said 46 countries. You, you've worked with, uh, students. Um, how many people have you got a,
Minesh
31:54
We only, we only every single year we cap it off at 155 people. And the reason for that, I don't know, don't ask me why it's not 150 or 160, but it's 155 people. And the reason for that is very simple. When I started my first education business, the mistake that I made, and bearing in mind I was involved with physical real estate. The mistake that I made was that as I worked with more people in the education business became successful. I had less time to put it into my own investing. And so after the, after the 2008 crash and after my transition into doing it this way, I've just realized I didn't want to make that mistake again because from my personal wealth and my family as well, the majority priority of that is going to come from, uh, my own investments and not actual business.
Minesh
32:40
So we work with 155 people a year. As soon as we hit that 155, if we get 155 people by February, we'll shut doors up until uh, the next year. It doesn't really bother me. I like working with good quality people, people that are focused and people that are at least coachable. Uh, we're not a churn, you know, a churn and burn and dump company were doing seminars every single weekend selling it and not providing support. Once you become a client, you get to access a weekly coaching call for life at no extra cost, you know, so these are the types of things that we're trying to, we're trying to do, um, to help people over the long term. That's what it is for me. It's about building a relationship and that's why we have an application process. I review every single application, uh, that we accept. So it's more of a longterm, um, approach and a more of a relationship building approach than anything else.
Darrin
33:35
Oh, I got it. Love the a, you still got the, the mindset of a, you know, one foot five, we can walk away. There's not, you know, not a, not too hard or not two 50 if we're going to make more, you know, more students this year kind of thing. That's, that's great. It's an,
Minesh
33:48
At the end of the day, I know that if I can compound my money at 20% a year consistently, you know, no matter what I do, it's not worth getting overly stressed on an education business or any business really. You know? It's just not worth getting overly stressed because if I can compound my money at that level, you know, which I have been doing, I'm set. I'm sitting very, very nicely for my, for my future, you know, and that's what this is about. The strategies that we teach are really strategies that I wanted for myself.
Minesh
34:19
And this is what I do for myself. It's, it's, there's nothing, there's nothing that I don't do for myself that we, that you know, that we, that we teach everything that we do is exactly what I'm doing myself. And that's what it's about. That's how I would like people to live as well. I think there's a lot of people chasing success and chasing a business and chasing things in such a way which sacrifices their quality of life. And I think, you know, when it comes to real estate, I don't think there are actually that many people on earth that are super passionate about a building. There are a few nutcases, but I think most people are very passionate about what real estate can give them, which is the lifestyle, which is the security, which is the wealth, which is, you know, the quality of life for their children, their family, their wife, their husband, their, their parents, et cetera, et cetera. Those are the people that I like to work with because those people are not egotistically attached to having 10,000 properties. You know, those people just want the end goal and they're aware of the end goal. Um, and that's what I like to work with. Cause the end goal is easy. The egotistical shit in the middle, that's where it gets complicated. That's where you can take too much risks. That's where you can blow the whole thing up.
Darrin
35:32
Right. Right. No. Well, said. Well, said. Hey Minesh. If we, could, I want to shift gears here for a second. Uh, I mentioned to you before we started that by day. I'm an insurance broker and, uh, I work with clients, uh, on a regular basis to assess risk and determine what to do about the risk. And, uh, there's three strategies we typically, uh, can, you know, rely on, uh, the first strategy is we look, uh, and ask, can we avoid the risk? I, if that's not possible, we, we look is there a way to minimize the risk? And if we can't avoid it nor minimize it, then we look to transfer the risk. And that's what an insurance policy is. And, um, as, uh, for the last year or so, I've been asking my guests, uh, if they would, uh, take a second and consider what they see is the BIGGEST RISK. And, uh, just to, to be clear, I'm not necessarily looking for an insurance related, uh, answer. Uh, but, uh, I'd like to ask you if your game, uh, Minesh Bhindi, what is the BIGGEST RISK?
Minesh
36:40
The biggest risk is an external, uh, situation happening in your life that forces you out of an investment earlier than you wanted to be in it. You know, and that's really the, for most people when they're investing in the stock market, a margin call comes along and that wipes out, you know, 50% of their portfolio. We don't get involved with margin, we don't get involved with leverage. So for us, the biggest, the single biggest risk is a life situation happens. You don't have enough reserves and now you need to get out. And while you need to do that, the market is down 10% because it's, it's, it's going through a standard correction, uh, that it does every, every 18 months anyway. So that's really the biggest risk. The, if anyone wants to get involved with investing, there's two parts to it. The first part is actually making money.
Minesh
37:26
And the second part is investing money. What a lot of people get these two things completely mixed up. The other way around. When you're investing money, which is what we do, you want to invest with money that you're not going to miss for 10 years. If it just, if the market shuts down for 10 years, then you know, as Warren Buffett says, you're not going to miss that money. You've got to have enough cash reserves or a lot of people I find are doing is approaching, I don't have any money. I want to make money. Let me go use an investment strategy to do that. And that's not, that's not the right way of doing it. Go make the money first, have the reserves and then start investing. Otherwise, if a life event comes along, you're going to be forced out of a market and people like me are going to buy all your stock at 50% of the value.
Darrin
38:11
Right? No, that's, that's well said. Uh, right out of the, uh, Warren buffet school of, uh, you know, uh, what's that, uh, say? And he says, when the, when the, all the water is out of the tub, you find out who's wearing shorts or whatever that is and kind of thing. So, yeah, that's good. Good. Hey Minesh, where can listeners go if they'd like to learn more, connect with you?
Minesh
38:34
Well, perfectportfolio.com but I'm sure you'll have a link in the description anyway, so they can go check out the training, um, and, and go watch the training. You know, like I said, we, we specialize really in helping people execute and get the result. That's why people, you know, people pay over 50% of our fee after we help them make $50,000 in profit. So it's really a collaborative arrangement that we have. That's why also we got to review every application. Like when I say we, I have to review every application because I've got to trust someone who's going to actually implement it, uh, and not just get excited and buy things. Um, that's not who we're looking for. We're looking for people who are actually focused on growth and actually focused on implementing the strategies that we teach because we know they work now. We know they work from, you know, people that have never had, I've got single moms that are never ever thought about investing in delay, you know, got an inheritance and they, and they have to do it to ex wall street traders that are using the strategy and not everyone's making it work. Um, so, you know,
Minesh
39:39
that's, that's, that's really what we're looking for. If it sounds interesting to you, come and have a look at our strategies, you can come and learn a lot on our trainings. We give away a lot of the things that a lot of other people try and hold back. Like, which funds during the, the funds in the, you know, what you invest in. That's not the secret. The real secret to your longterm success and you actually achieving the security, the freedom that you're looking for is actually the implementation part. That's where we help. That's where we come in. Everything else I can give you, you know, everything else is very simple. Uh, and I can give you that and you can walk away with it and do something with it or not do something with it. But what we specialize in is actually making you do it.
Darrin
40:18
Got it. Minesh, I can't say thanks enough for taking the time. I've enjoyed talking with you. Learned a lot and I hope we can do it again soon.
Minesh
40:28
Absolutely. My pleasure. Thank you for having me on.
Darrin
40:31
All right. For our listeners, if you like this episode, don't forget to like share and subscribe. Remember, the more you know, the more you grow. That's all we've got this week. Until next time, thanks for listening to commercial real estate pro networks, C R E P N radio.
Darrin: (36:34)
Minesh Bhindi, what is the BIGGEST RISK?
Minesh: (36:40)
The biggest risk is an external, uh, situation happening in your life that forces you out of an investment earlier than you wanted to be in it. You know, and that's really the, for most people when they're investing in the stock market, a margin call comes along and that wipes out, you know, 50% of their portfolio. We don't get involved with margin, we don't get involved with leverage. So for us, the biggest, the single biggest risk is a life situation happens. You don't have enough reserves and now you need to get out. And while you need to do that, the market is down 10% because it's, it's, it's going through a standard correction, uh, that it does every, every 18 months anyway. So that's really the biggest risk. The, if anyone wants to get involved with investing, there's two parts to it. The first part is actually making money.
Minesh: (37:26)
And the second part is investing money. What a lot of people get these two things completely mixed up. The other way around. When you're investing money, which is what we do, you want to invest with money that you're not going to miss for 10 years. If it just, if the market shuts down for 10 years, then you know, as Warren Buffett says, you're not going to miss that money. You've got to have enough cash reserves or a lot of people I find are doing is approaching, I don't have any money. I want to make money. Let me go use an investment strategy to do that. And that's not, that's not the right way of doing it. Go make the money first, have the reserves and then start investing. Otherwise, if a life event comes along, you're going to be forced out of a market and people like me are going to buy all your stock at 50% of the value.
Darrin: (00:00)
Today, my guest is Scott Bossman. He is a physical therapist, husband and a father of four. And after realizing his physical therapist career was not going to provide him the financial freedom he sought, he, uh, found land flipping, uh, with Mark Podolsky and the land geeks, uh, program. And, uh, in just three years he was able to create enough passive income to replace his physical therapy salary and, uh, quit his full time position. And, uh, today Scott is a member of the land geek team and he's passionate about sharing his journey into the world of Raul and flipping in hopes of inspiring others to, uh, step into their side hustle and achieve their financial freedom. And in just a minute, we're going to talk with Scott about how he achieved his financial freedom through land flipping. But first I want to remind everybody if you like the show CREPN Radio, uh, please let us know. We would love to hear from you. Uh, you can comment, you can like, you can share. And as always, we hope that you'll subscribe. Also, if you'd like to, uh, check out how handsome our guests are, be sure to check out our YouTube channel and you can find us on YouTube at Commercial Real Estate Pro Network. With that, I want to welcome my guest, Scott, welcome to CREPN Radio.
Scott: (01:22)
Thanks very much Darrin. Thank you for having me.
Darrin: (01:25)
Scott, I'm looking forward to talking with you today. Before we get started, if you could take just a minute and share with the listeners a little bit about your background.
Scott: (01:37)
Yeah, I'd be glad to. So, I was born in South Dakota. I spent most of my life here in the Northern Plains States. I went to a small liberal arts college in Iowa called Luther college and, and eventually went to physical therapy school. I knew healthcare was something I always wanted to do. I grew up in a family. My stepdad was a doctor, my mom was a nurse, I had other people in the healthcare field. And it just kind of encompassed a lot of our discussions at dinner time. And that type of thing. And I always had an interest in science and helping people and, and thought it was the best path. And for a long time it was the best pass, path for me. I was a physical therapist for almost 20 years before I discovered this niche in real estate investing.
(02:22)
But you know, really, I just come from a family of really hard workers. People who trade their time for dollars in all of these different careers. Doctors, lawyers, nurses, farmers, construction workers. My dad was a construction worker on my, all my grandparents were farmers. So it's very customary in my family to work hard and that's what I thought I needed to do. So that's what I did for a long time. I did that for 16, 17 years. And I, I don't know if it was a midlife crisis or what, but about the time I turned 40, I turned over in bed and just thought, man, I'm just, I'm just spinning my wheels. I feel like I'm not getting anywhere. I'm married. I have four boys. And with a physical therapist salary, you wouldn't think it would be hard to put food on the table, but that's about where we were.
Scott: (03:13)
So it was very stressful and, and my career, although I love patient care, as you can imagine, the healthcare environment can be quite toxic at times, especially in the last few years. So that just culminated in a lot of stress, for me. And you know, working 50 hour weeks, feeling like I wasn't getting anywhere. And, really looking at a stagnant salary, you know, freeze, pay freezes and that type of thing, uh, over years getting a 1% raise. And, uh, I'm just realizing I needed something else in my life. So, uh, I went on kind of a discovery, a journey of self discovery and tried to figure out what we wanted to do. After reading every Rich Dad Poor Dad book there was, and, uh, listening to a lot of other books about real estate and that type of thing. I found Mark Podolsky by accident on a podcast and I thought, this sounds amazing. I came home and told my wife, I think this is what we need to do.
Scott: (04:15)
And, uh, when, you know, kind of burned out, well, I didn't burn my bridges because a land investing, the great thing about it is the barrier for entry is quite low. You don't need a ton of money. You don't need a ton of time. So the risk of getting started was actually quite low. Uh, but we went into land investing and, uh, as you mentioned earlier, um, you know, just by taking massive action and doing what I needed to do, I replaced my income in two years. I was able to quit my job in three years, and it truly was a side hustle for me, you know, maybe 10 hours a week on top of what I was doing. I carved that time out and, and, and, uh, we made it happen.
Darrin: (04:55)
Awesome. No, I'm a fan of Mark's. He's been, or I've talked to him a couple of times, here on the podcast. And, uh, he's just a real energetic guy and, and, a Great story. Um, so let me ask you, so you mentioned that, uh, you kind of had this aha, what are you going to call it? A midlife crisis or not, but just, you know, the W2 there were limitations. You were basically limited by based on what others were willing to pay you, uh, essentially for your, for your time. When you, when you had this aha, was it a, I'm not going to be able to get where I want to go or what, what was, was there an underlying the mother and just the, you know, the struggle, like you mentioned, even just to put food on the table. I mean, just the, you know, the constraints.
Scott: (05:47)
There were a number of things for me. There, there was the immediate feeling of, uh, just I mean, not necessarily into debt that's struggling to make all ends meet and paying bills and getting food on the table. There was the, the retirement horizon, right? Turning 40, knowing that in 15 to 20 years, I need to have a good cushion for retirement. So, so there were definitely the financial aspects of things were a big stressor at the time. The other thing though was the, just the, the lack of time freedom and the, and the fact that I really was trading my time for dollars. My boys were growing quickly. My wife didn't see me much and you know, uh, it was, I had no sense of time freedom. So that was another motivator for getting into something like this, so that I would be able to have a little bit more control over my time, a little bit more control over my financial destiny and be able to, to spend time, uh, you know, with my loved ones, maybe teach them what I'm doing, which is what I've done as well with my kids, which has been very valuable, and, experience, experience, freedom on both those fronts.
Darrin: (07:05)
Awesome. So as you got into your search for something, something different, what was it that you saw with the land flipping that appealed?
Scott: (07:18)
Yeah, we were, we were actually on the verge of going into multifamily housing. We were on the verge of purchasing a duplex when I, when I heard Mark's, podcast. And I thought, uh, you know, number one, I in patient care, I read people really well. I could just tell that Mark was really genuine. And, it was, it was just a great podcast to listen to and I thought, wow, this sounds so much easier than what we are about to do. You can, you know, a land flipping business can start cash flowing very quickly. You don't need $30,000 to start. You know, you can literally start this with a couple thousand dollars.
Scott: (07:56)
You can start this with no money. It sounded like something I could do. Uh, I, I, you know, I'm a good learner, a good researcher, a good planner, and it just sounded like something, that was, that was more up my alley than having, than, than going into multifamily housing where there can be a lot of emergencies. Right. I have friends in multifamily housing. They're getting up at three in the morning and they're going to court to evict people. Um, you know, there are no land emergencies. Uh, and, and that was not really apparent when I got into it, but it's been apparent now for the last couple of years, you know, out of all the hundreds of deals I've done, I've had like two minor issues that cost me a couple hundred bucks. And compare that to, to my other real estate investor friends. Uh, it's, it's very low stress in that regard.
Scott: (08:46)
Uh, so, uh, that's what I loved about it. Um, and I, and I loved Mark's mindset. Uh, you know, I get this question all the time because I talked a lot of people about this business. Why would Mark want to teach everybody to do this and introduce competition into the environment? Well, Mark's very much about the abundance mindset. And the, the, the raw land market in, these United States is so absolutely massive. It's really hard to wrap your head around. Um, and, uh, therefore, you know, Mark has no limitation in teaching people to do this. Because not many people are doing it, number one. And number two, even if we teach a lot of people to do this there is going to be a lot of lotta land leftover for sure. There's gonna be a lot of land for everybody.
Scott: (09:30)
So I love that mindset of his and, and entering his community and being a part of his community now for the last four years. I mean, Mark and his training, you know, Mark has retired so many people. And people and now to be able to, in my role with Land Geek, I kind of facilitate that happening. So if you were to come to me and say, I want to do this, I tell you how to do it. And I helped facilitate that and that's really rewarding as well. I get them on the path, that I've already experienced.
Darrin: (10:05)
Yeah. The, I'm just thinking with Mark, I remember, uh, his system to me was a Uber impressive just based on how he had truly systematized it. Are you, did you create your own niche that you're going after then? And basically are you able to leverage is kind of a system approach or do you have, can you kind of walk us through kind of a month of what you're doing?
Scott: (10:32)
Sure, the, the great thing about land investing is it's, uh, it's, it's very, very repeatable, very redundant. Once you, once you learn how to do a deal, you can just rinse and repeat and do it all over again. So, but the most important aspect of our businesses and mailing. We target all of our, or we get all of our properties by mailings. We mail property owners who are, they may or may not be distressed. They may have back taxes. They may just live away from the property. They may have owned the property for 30 years, and they don't know how to get rid of it. So we show up in their mailbox as a solution for how to get rid of the property. Uh, and, uh, essentially there's just a negotiation process on the front end. We do our due diligence.
Scott: (11:14)
We, we agree on a price. We purchased the land and then, start marketing it right away. A lot of our properties I can, we can sell in 30 days or less. You know, a lot of people think raw land, you know, that or they assume that I'm, that I'm flipping raw land that, that, you know, we're buying very expensive land parcels and flipping them for much more expensive. But the truth of the matter is my bread and butter deal, is like $1,500. I love that purchase point. I'll buy a property for $1,500 and then, I'll sell it for $4,500 cash or maybe $6,000 to $7,000 on terms. They sell very quickly. So the power in this business is velocity. So you can do a number of deals like that and really move the needle quickly. There's a gentleman in our community who is over $60,000 a month passive income. You know, that's his average purchase price on property is $1,700.
Scott: (12:17)
It's absolutely phenomenal. But the biggest thing in this business is, is for me a month, uh, in land investing is just, is just being consistent with my mailing on the front end because that brings in the deal flow and the deal flow solves everything. And then also being consistent with my marketing. So we have systems in place for both our mailing and our marketing. The great thing about this business is so much of, so much of it can be automated. So much of it can be delegated, to get to the point where you really have a passive income machine and that's Land Geeks mantra. We want to teach you something that brings in passive income and we want to show you how to create a machine so you aren't having to work so hard. So you're not working in the business. And that's kind of what we do.
Darrin: (13:05)
Wow, that's awesome. I appreciate you kind of walking us through that. I'm curious on, on the, the mailing, I think, you touched on the two things that I would think are key. You know, the mailings going to be the getting out in front of people and presenting your opportunity,. And the constant marketing that's going to be your, your pipe, right? I mean, if you keep that, keep that machine going, you're going to have opportunities to come in. Do you have any kind of a sense of the numbers of pieces that go out as to opportunities to come in and, the close? I mean, is it that kind of simple math? I mean, it's like if you send up, I don't know what the number is, thousand or whatever.
Scott: (13:48)
Yeah. Yeah, that's a great question. We do have this kind of down to a science. It does depend a little bit on the area that you work in, but what we find is that, in these vast counties out West, the equation is pretty much the same. You know, you're in the right market. If you send out a hundred mailings and you get maybe a 3% response rate. Now those could be angry, angry, sellers as well. But you're able to purchase one property for every 100 mailings. That's, that's what we're shooting for. There are a couple of, uh, there's a gentleman in our community that's very successful. He has a 1.7% response rate, or I'm sorry, 1%, 1.7% buy rate. Uh, I would say my buy rates about 1%. So we're, we're looking at purchasing one property out of every hundred and, uh, you know, it, that's the great thing.
Scott: (14:41)
You can start with, uh, you know, w w what we teach people is to start with a a hundred a week. Start with a hundred a week. You don't need thousands and thousands of dollars to send out thousands and thousands of mailings. And that, that's actually what we recommend you don't do it that way because you want to make sure that you're very careful with your County research. Your County research has to be surgical in this business. You have to figure out where there's a good market for buying and selling land. And, you know, we teach you how to do that. You can find a lot of information online how to do that. So the biggest thing is County research and then the, the next most important thing is just to be consistent with those mailings. Consistently sending out a hundred a week. And if you can be diligent and disciplined enough to do that, and you get your numbers on with your pricing and you're in the right County, man, you can, you can make hay in this business for sure.
Darrin: (15:35)
So when you first started, four years ago, what, how long did it take you to land your first for deal?
Scott: (15:46)
Yeah, that's a great question. Uh, let's see, I got, Mark's, his basic training kit is called the investor toolkit. I got that. I digested that very quickly. I think I snapped my first mailings within a few weeks of getting that. Uh, so bottom line is I purchased my first property about six weeks after I got Mark's, basic training program. And this may sound funny to a lot of real estate investors out there, but for me, this is a big deal. I purchased a two and a half acre property for $700, and two weeks later I sold it for $2,800 cash. So that for me, right there was just huge proof of concept. I just tripled my money on a land deal. And I'm a physical therapist. Like I don't have an ounce of business or, or real estate or you know, anything in my body, sales or marketing, I'm not an economist, nothing. And I took this, I took $700 and I turned it into $2,800. That's what I knew. I was onto something. And, shortly after that, uh, I went into one on one coaching with the Land Geek program, which is a year long intensive process to, to get you to the point where you have a machine up and running. And in that first year we bought and sold 30 properties. In the second year we about doubled that and our business has continued to grow since.
Darrin: (17:12)
Oh, that's awesome. So in, so year three or tell me when were you able to replace your income and then I think, did you kind of continue on the PT path for awhile before you, tell us about that.
Scott: (17:30)
Yeah, at about my two year anniversary in land investing, I had exceeded my income with passive, uh, with passive income. I had exceeded my income as a physical therapist. I knew I needed to work a little bit longer, uh, to before I was comfortable in hanging up the, the cleats in that department. But, but so about another year and three months, I was a PT and then it got, we have a very successful third year, in our business. And, and then it just got to the point where I, again, I kind of woke up one day and I realized, you know, I'm spending 80% of my time in something that is yielding 20% of the results and I need to flip that. So I remember having a discussion with Mark and saying, you know, wow, Mark, I'm really nervous about this.
Scott: (18:18)
And, and he's, he said, Scott, you know, how many times have you burned your ships in this sea? You need to burn them again. So we, so I burned them again and quit my job and it's been absolutely amazing. Now I work my land business from home. My wife helps a little bit. I can put my sweat pants on in the morning and bring my boys to school, come back home, drink my coffee, work in land for a few hours. And then, uh, you know, this last summer it was really apparent to me. It was my first summer off and probably 20 or 25 years, something like that. To be able to go golfing with my son on a Monday morning and fishing with my other son on a Thursday morning. That for me is, is what really hit home, how, how amazing this business is for me and so many others.
Scott: (19:05)
For me it's, it's more about the time than it is the money for sure. Uh, and so that's what I've experienced as a result. And, uh, now I, I still am a PT. I'm going into the clinic today for four hours, but I work, um, I worked four to 10 hours a week as a physical therapist. I enjoy doing that. I still enjoy helping people. I still enjoy it. I'm a clinical educator, so I like to go in and, you know, if there happens to be a student in the building I'll pull them aside and say, let's go over some things. And some, I'm getting the best of all worlds right now. It's been a, it's, it's a great life right now.
Darrin: (19:41)
That's awesome. Let me ask you, so, you know, you, um, you made the, I mean, kind of graduated into it, uh, until you realize that, you know, I, gosh, I really don't need to do this, uh, one full time recognizing your time there. What, what do you think the challenge is for most people? Um, is it that they, they don't realize that there's no silver lining to what they're doing? Or that they're not paying attention or is there just fear of the unknown? Have you any ideas on that as far as, cause I mean, you, you realize that what you were doing wasn't going to get you where you wanted to go.
(20:21)
And I think that, um, you know, so much of the way I think, uh, education and like you mentioned your family hard work. You know, work hard and, and you'll retire. And the path. I wonder if you could speak a little bit more to, what you see. Or even kind of your was there any challenge to that? I guess where I'm trying to like get.
Scott: (20:44)
Sure. Um, I don't like being uncomfortable or I didn't, uh, four years ago. You know, and that I would say I talked to a lot of people who are interested in getting into this business. And I would say that in my conversations with people, uh, there are a number of people who are, who are fearful of, of the unknown, of doing something that they've never done before. Um, and there is some discomfort associated with any new venture. Right. Um, and, and I think what I've come to find out is that that discomfort is essential in order for you to move the needle, uh, and become better in whatever realm of life that you're in. That's right. That you want to be better in. Um, some people, they just, uh, they, they can't tolerate that discomfort. So I think that that's the, that's the biggest thing is, you know, you need to realize that that discomfort is a good thing.
Scott: (21:38)
Um, when you're, when you're moving the needle on your life, if you feel some discomfort that's going to motivate you to do better. So, you know, I've felt that so many times in this business, I felt that when I first, ordered Mark's investor toolkit. I felt that on my first mailing. I felt that one, you know, I bought my first property. I felt that when I went into coaching. So looking back over the last four years there have been all these, peaks and valleys of, feeling comfortable and then feeling discomfort. Uh, but, but to me that what, what really, uh, is apparent is the upward trend. You know, and this is, this is like with patient care and physical therapy too. People get better and they get a little worse and they get better and let it be, get a little bit worse.
Scott: (22:21)
What, what, what matters is, are you better now than you were a month ago? And that's kind of the mantra I use with my land investing business. I try to sit down every month and say, you know, am I better now than I was a month ago? And if the numbers say yes and my my time says yes and that type of thing, we're on the right track. If the numbers don't say yes, then I need to adjust. Um, but I'd say that's the biggest thing I notice is that it's just the fear of unknown. Especially for people who maybe aren't, business oriented or, or, or in marketing or sales or that type of thing. To take to, to step into a completely different realm. Uh, I think is the biggest fear, uh, that people have getting into this. But the, but the valuable thing is, uh, we have this down to a science. It really is a recipe and if you follow the recipe and that's where you get strengths or that, that's where you, uh, kind of calm your fears. It's just by following the recipe, um, you follow this recipe and you will be doing land deals.
Darrin: (23:22)
That's awesome. I'm trying to think here. So the, the uh, you got in, you, you worked it. Now you've got your time back, you're coaching; what would you say, I mean you mentioned kind of the uncomfortable. Is there a a push point? Is there like a nudge other than just the uncomfortable? Is it basically look, I guess what I'm trying to ask is like, um, cause I, I feel like there's just like this, this wake up of just that when you look at, you know, the one thing was kind of the, the uncomfortable on how, you know, you transition and I'm trying to think what do you say to people that when they're looking at their, their future and where they're going to end up. I mean, cause I just look at the limitations of a W2 and how little that really, that there is. You know, and, and recognizing that. Do, do people, when they come to you, are they, are they aware of that? Is that a something that they're, they're concerned about?
Scott: (24:26)
Yeah. I think a majority of people that come to us, they, they realize just like I realized four years ago, know that they're not on the best path. And you know, this path has been ingrained, in all of us, in this country that you, you know, you need to, you need to work hard and train your, to trade your time for money and, and you can retire when you're 65 and, and, you know, maybe 75 now. I mean, uh, people, people work into their eighties and nineties. My grandma, God bless her, uh, she, she just, uh, retired from Walmart full-time a couple of years ago. She was 80, 88. She's working full time. These, these are now, she wasn't stressed for money, but she was just, you know, she comes from a society where people work their entire lives. Um, but I, I'd say a majority of people I talk to, they're there. They're working their entire lives and they're not feeling like they're getting ahead. Uh, so, um, the, the great thing about land geek is we, we provide you a solution to get to the point where you're not trading your time, uh, nearly as much for, for, for money. And that you get to the point where you are more financially secure. So you can enjoy life and, and, and you don't have to, you don't have to work, work that hard.
Darrin: (25:48)
No, I love it. I, and I, I'm, I'm, I'm appreciate you, uh, kinda talking a little bit about that. Because I think that, um, you mentioned, you know, kind of that, uh, the clock, whether it be your 40 or 50 or whatever the age is, is that when you look at, uh, the plan that's been provided for you and you, you run the numbers and, you know, is this going to add up? I mean, I think that's really a, a question. And I, I see it when I talk to people, doesn't matter what income bracket they're in.
Darrin: (26:18)
You know, they could be a, a, you know, six figure plus or, or, or more. Um, but I think a lot of times when people aren't doing and spending, you know, they spend what they get kind of thing and, and uh, aren't fully cognizant of, you know, how are the numbers going to add up kind of thing. So, um, appreciate you talking about that.
Darrin: (26:39)
Scott, if we could, I want to shift gears here for a second. I mentioned to you earlier, by day I'm an insurance broker. And we work with our clients, uh, to assess risk and, and uh, determine what to do with risk and a risk management. And, uh, there's three strategies that we typically consider. The first is can we avoid the risk? A second option is can we minimize the risk? And in the third option is can we transfer the risk? And that's, that's what an insurance policy is. You're basically transferring the risk. And, um, what I've been asking my, uh, a guest here on CREPN Radio, if they can take a look at, uh, what their model is. What their, how they operate and what they see, uh, is, is the, you know, the Biggest Risk. So if you're, you're willing, what I'd like to do is ask you Scott Bossman, what is the BIGGEST Risk?
Scott: (27:42)
I'll give you a multi-part answer if that's okay. It'll be short. Uh, so I, I think of this in a couple of ways. The biggest risk in my land investing business is a, not mailing and not marketing. So if I can be consistent in those two things, I will be successful in this business. And that's something that we, we iterate to our students over and over and over again. Do not stop mailing thats your deal flow. Do not stop marketing. Those are your sales. So the consistency in those things and not being consistent is the BIGGEST Risk. As far as a technical standpoint from land investing, land investing is, is actually very low risk. Uh, which is one of the reasons people love it so much. There are no land emergencies like I said earlier. Uh, so you know, um, uh, that that can be covered with like an umbrella policy in your business in case you do happen to have somebody that you bought a property or and sold the property to and they want to go out to your land to camp on under that type of thing.
Scott: (28:44)
You know, Mark, Mark, recommends having some type of umbrella policy for your land investing business for, for your properties. Otherwise the land investing business is pretty low risk, which is, which is very nice, you know, as far as very, you know, very low entry as well for us with cash and time. Uh, but the biggest, the big risks that I think about is, and this is something I never used to think about, uh, I think in this day and age you really need to diversify. Uh, you need to have multiple streams of income from coming from different places. And that's something I did not realize, uh, up until four years ago or probably five, six years ago, that I needed something like that. That a physical therapist, salary alone was not going to help me get to where I needed to get, uh, as you were mentioning, you know, that that time, 10, 20 years from now, that 10 years is coming, no matter what you do.
Scott: (29:37)
And if I have only my physical therapist salary to rely on, the risk in that is high. Uh, so, so if I can have multiple streams of income, so, you know, now I have physical therapist didn't come, which is small compared to what it was, my land investing income. I'm doing a couple other things now, which is exciting. Uh, and I'm using my retirement money to invest in land. And so I'm really diversifying. I've really come a long ways in the last five years, uh, in doing that. So I think that that's the BIGGEST Risk is not diversifying and not having kind of multiple streams of income.
Darrin: (30:14)
I love it. I, I, uh, uh, I think you're right on. I mean, they, uh, you know, kind of the Kiyosaki, uh, you know, a mentality there of multiple streams of income. Uh, definitely a good, good idea. I appreciate you taking that on for us. Yeah. Scott, uh, before we, wrap up, where can listeners go if they would like to connect or learn more,
Scott: (30:44)
I would recommend you go to TheLandGeek.com and spend some time on the website. Mark Podolski and the the community. We have a number of podcasts as well. The best passive income model podcast. I'm sorry, The Art of Passive Income Model Podcast. And then, uh, if you're curious and want to talk more to me, you can email me@scottatthelandgeek.com or you can even schedule a call with me at TheLandGeek.com/training.
Darrin: (31:18)
Got it. Well, Scott, I want to say thanks for taking the time to talk today. I've enjoyed it and learned a lot and I hope we can do it again soon.
Scott: (31:30)
Thanks Darrin, I appreciate it very much.
Darrin: (31:32)
All right. For our listeners, if you like this episode, don't forget to like, share and subscribe. Remember, the more you know, the more you grow. That's all we've got this week. Until next time, thanks for listening to Commercial Real Estate Pro Network's C.R.E.P.N. Radio.
Darrin: (00:08)
Scott Bossman, what is the BIGGEST RISK?
Scott: (00:14)
I'll give you a multi-part answer if that's okay. It'll be short. Uh, so I, I think of this in a couple of ways. The biggest risk in my land investing business is a, not mailing and not marketing. So if I can be consistent in those two things, I will be successful in this business. And that's something that we, we iterate to our students over and over and over again. Do not stop mailing thats your deal flow. Do not stop marketing. Those are your sales. So the consistency in those things and not being consistent is the biggest risk. As far as a technical standpoint from land investing, land investing is, is actually very low risk. Uh, which is one of the reasons people love it so much. There are no land emergencies like I said earlier. Uh, so you know, um, uh, that that can be covered with like an umbrella policy in your business in case you do happen to have somebody that you bought a property or and sold the property to and they want to go out to your land to camp on under that type of thing.
Scott: (01:16)
You know, Mark, Mark, recommends having some type of umbrella policy for your land investing business for, for your properties. Otherwise the land investing business is pretty low risk, which is, which is very nice, you know, as far as very, you know, very low entry as well for us with cash and time. Uh, but the biggest, the big risks that I think about is, and this is something I never used to think about, uh, I think in this day and age you really need to diversify. Uh, you need to have multiple streams of income from coming from different places. And that's something I did not realize, uh, up until four years ago or probably five, six years ago, that I needed something like that. That a physical therapist, salary alone was not going to help me get to where I needed to get, uh, as you were mentioning, you know, that that time, 10, 20 years from now, that 10 years is coming, no matter what you do.
Scott: (02:09)
And if I have only my physical therapist salary to rely on, the risk in that is high. Uh, so, so if I can have multiple streams of income, so, you know, now I have physical therapist didn't come, which is small compared to what it was, my land investing income. I'm doing a couple other things now, which is exciting. Uh, and I'm using my retirement money to invest in land. And so I'm really diversifying. I've really come a long ways in the last five years, uh, in doing that. So I think that that's the biggest risk is not diversifying and not having kind of multiple streams of income.
What is the Real State of Retail Real Estate?
Chris Ressa cut his teeth in commercial real estate as a real estate representative for Sherwin Williams Paint Company. Historically, Sherwin Williams dominates the contractor market. The growth opportunity with higher margins is in the DIY market.
As a real estate representative, Chris was charged with finding new locations for stores in markets that Sherwin Williams wanted to expand market share. He worked with local brokers, negotiated leases, and gained critical insight how national tenants view retail space.
Here he was exposed to the thinking and strategy that national retailers invest in Identifying markets, time lines, and the value placed on space and lease negotiations.
When he moved to the real estate brokerage side of the business, he found that his experience was helpful, but, real estate is still real estate. You have to execute.
What is the real state of retail real estate? For context, it has to be stated that the consumers demand drives retail real estate. Second, the consumer’s behavior has led to the creation of multiple significant asset classes.
The different types of Retail Real Estate include:
For this reason, you have to get granular to understand the nuances of each when underwriting a property, because they all operate differently. You have to consider what type of retail will create the best opportunity for a tenant.
Disruption in retail is nothing new. But, not that long ago, the tenant list of an enclosed mall was about 70% leased to fashion and apparel. Then the outlet center created a direct to consumer opportunity for brands.
Next was the category killers, the power centers that provided all of the brands and categories under one roof; think Dick’s Sporting Goods and Office Depot/ Office Max.
Then the multi tenant buildings with the front and center impulse buy, ie Starbucks.
Lifestyle centers include high end fashion, plus mixed use, are walkable and may include dog parks.
Now, online sales are changing how the retail consumer buys. It’s easy to point to Amazon and the volume of sales generated, but there are no known cases where a retailer went out of business because of an online competitor.
Online sales has made most retailers better. Now the consumer can order online, and pickup at the store.
It’s often reported that Toys R Us, a fortune 300 company, went out of business due to online. Their annual revenue was $11 Billion. The truth is they were over leveraged and they could not service their debt.
Retailers are finding that when they open a physical location in a market, that their online sales increase and the reverse holds true when a location closes. Good retailers are figuring out how to add to their bottom line and make the consumer experience frictionless.
A recent study shows that approximately 85% of consumers who order online and pickup in the store will make an additional purchase at pickup.
Right now, in order to get consumers in the habit of ordering online, retailers are providing free shipping and returns. Will free shipping continue to be offered as retailers build more brick and mortar locations for consumers to return the unwanted purchase?
The cost to start an online business is nothing compared to a brick and mortar business. But, to grow beyond $10Million in sales, retailers are finding that a physical presence is needed. At this level, the customer acquisition cost is actually less for brick & mortar versus online.
Multiple online brands are opening multiple physical locations to lower their cost. Product distribution necessitates it. Warehousing, retail and online are all working together.
Other brands are working to limit the number of outlets for consumers to buy in order to keep the value of the brand high, ie Nike.
Brick and mortar has a convenience edge for the consumer who needs something right now. Combine this with evolving experience and physical locations for retail real estate is not going anywhere. For the customer who needs service, a chat bot is no comparison to a live meeting with a person in a physical location.
The store prototype is changing. Brands are trying to determine the ideal square footage, product mix and layout to meet the consumer needs.
Each week I ask my guest, “What is the Biggest Risk Real Estate Investors face?”
BIGGEST RISK:
So I think both from a real estate end and a retail end. The BIGGEST RISK is human capital.
When you have an industry. That's been hammered by Headline News, both the retail and the real estate. When someone is really bright, and smart graduates college, is that the industry they want to get into? And to solve the problems and the challenges that we were just talking about, you need really sharp, talented people. From an industry perspective, I always want those at DLC, but from an industry perspective, retailers, real estate, everybody needs really smart, sharp, talented people.
Getting the bright, sharp people into retail store management training programs. I don't know the last time you talked to a millennial, but when was the last time they said, when I graduate college, and I want to be the store manager of Wal-Mart. I don't hear a lot of people doing that. And I think it's a great job. And there's a great career path.
But the biggest risk is human capital, both on the retail side and the real estate side. In the Great Recession and the real estate side is not limited to my world, but in the Great Recession, you know, in all commercial real estate, very few people were hiring in 2008 to 2012. So you have this labor shortage.
And I think the greatest risk is in commercial real estate and retail. If all the most talented people in the world move over to the tech world and no one comes into real estate, I think that's the greatest risk the industry has.
For more go to:
Website: https://www.dlcmgmt.com/
Podcast: Retail Retold
Darrin: Chris, Ressa, what is the BIGGEST RISK?
Chris: So I think both from a real estate end and a retail end. The BIGGEST RISK is human capital.
And you know, when you have an industry. That's been hammered by Headline News, both the retail and the real estate. When someone really bright and smart graduates college, is that the industry they want to get into? And to solve the problems and the challenges that we were just talking about, you need really sharp, talented people. From an industry perspective, you know, I always want those at DLC, but from an industry perspective, retailers, real estate, everybody needs really smart, sharp, talented people.
Getting retail, you know, getting the bright, sharp people into retail store management training programs, you know, I don't know, one last time talked to a millennial, but the last time they said, when I graduate college, you know, I want to work at you know, I want to be the store manager of Wal-Mart that, you know, I don't hear a lot of people doing that. And I think it's a great job. And there's a great career path.
But the biggest risk is human capital, both on the retail side and the real estate side. You know, in the Great Recession and the real estate side is not limited to my world, but in the Great Recession, you know, in all commercial real estate, very few people were hiring in 2008 to 2012. So you have this labor shortage. And I think the greatest risk is if call it commercial real estate and retail. If all the all the most talented people in the world move over to the tech world and no one comes into real estate, I think that's the greatest risk the industry has.
Hidden investing? What do the top 1% know that you do not?
Holly Williams is a successful advertising professional who worked hard, and climbed the corporate ladder. All during the climb, she did what she was taught to do; get a JOB, work hard, live below her means and save for her retirement.
As her parents aged, she experienced first hand the sad ending waiting for most Americans who follow the investment plan her parents taught her. What she learned while watching her parents age, was that the plan is designed so that you die broke. Nobody ever talked about how the plan includes that you die broke. Why is that?
No one ever talks about how you get your money out of the 401k. Most people know that when you sell, you have to pay taxes. But, nobody talks about what happens when your account goes down and you still need to sell your shares to get the cash you need to live. How it is extremely unlikely you will ever make that money back. And as you get older, the government forces you to take the money out so that they can collect their tax.
Her parents aging combined with her increasing tax bill made her hyper aware of the government’s goal for the masses; die broke. Her plan was broken.
Then she met fellow Texas Tech alumni & NYC advertising executive, Joe Fairless, who shared with her an opportunity to invest in commercial real estate. She liked Joe, and wanted to help him, but did not expect anything to come of it. Wow, was she wrong!
In the months that followed, she received income. At the end of the year, she received a K-1 with depreciation which reduced her taxes. She learned first hand how the tax code favored real estate. Then she found out what an accredited investor was, and that she was one. She also learned about the private investment management advice resources available to the top 1% of Americans and family offices that are not available to the masses.
Eyes wide open! Holly was making good money. She thought she had an idea of how much the wealthy Americans made for an annual income. Maybe a couple of million dollars per year and they probably paid 50% in taxes.
Then she learned the truth about how much the Wall Street fund managers make; $20million and more!. The advisors who were advising her made no more money than she did, and only knew to tell her to stay invested in the market. Investing in real estate is risky!
Since she was an accredited investor, if she had a prior relationship, she was qualified to invest in sophisticated alternative investments like real estate syndications. This is typical of the level of investment the 1% invest in. They get close to the source of the opportunity compared to the diluted returns available to the masses.
Real Estate investing is specifically encouraged by the tax code. For accredited investors, when you invest directly, bypass all the middlemen, you are able to lower your taxable income due to depreciation, and you have the ability to shield your gains from tax. This is unlike investing in a REIT where you are a shareholder in a fund that most likely made a loan and receives interest payments. When you invest as a limited partner in a syndication, you are an owner and entitled to owner benefits.
In addition to the tax benefits, you can benefit from a value add strategy. This can be accomplished through improved management or actually improving the property. The key is to find an experienced investor who can assess the situation and identify the opportunity others cannot see.
Most Americans are focused on creating more income. A bigger paycheck equals more taxes and a bigger lifestyle for most. Earn more so they can spend more.
Real estate provides the opportunity to invest and create wealth. You purchase a cash flowing asset with leverage. It grows in value, and allows you to shield both your income and gains from taxes.
Even though the IRS tax code favors real estate, most Americans are unable to break from the heard. They welcome the opportunity to invest in a stock or start up, but real estate still seems risky. Buying from a name brand mutual fund seems less risky than investing directly with an experienced key principal who knows how to improve the property, create cash flow and reduce their taxable income.
Holly has learned a great deal about Hidden Investing and how the 1% is able to invest in more secure opportunities. To share her new found knowledge with others, she has created a learning and investment platform, KeepMore.com where her motto is: Get more, Earn more and Keep more.
Each week I ask my guest, “What is the Biggest Risk Real Estate Investors face?”
BIGGEST RISK: Oh, I know that's an easy answer. Because I had some real estate, but the majority of my net worth was in the stock market. The stock market is all about hope. It really is. If Trump tweets, it goes up. Tweets again, it goes down. You know, we can have a company with the best earnings ever and their stock goes down.
It makes no sense. Unless you're really good at picking these stocks. I just think that that that hope is not a strategy.
With every investment that I make, I can tell you exactly what we're doing to mitigate that risk. How fast the area is growing. What's around the investment. I can tell you all of that.
So I just feel more comfortable. Because I absolutely don't know in the stock market. And the people we give our money to don’t either. No idea. Not a clue. They just say, “stay in and don't panic”. Right?
For more go to:
Website: www.Keepmore.com
Book: www.hiddeninvesting.com