Transcription

• Speaker #0

  You know, I really believe every dollar that I have in my life, it represents it's a receipt of some form of my time and attention that I traded. I think it takes a little bit more effort. If we're trying to help people really become owners, very few people in fact, I've never had a lease option owner on their own become an owner. But I have seen people do it inside of a program that's tailored to help them increase their credit payoff debt, you know, improve their DTI, whatever it might be, you have to reclaim. claim your money. Your money represents time that you've traded and it's the tool to buy your time back.

• Speaker #1

  We're in negotiations. We're investing in real estate. They're winning. They're making money.

• Speaker #2

  What's up, everyone? Welcome to the Real Estate Educators Podcast, where we provide the education you can build on. I am your host, Kevin Amos. We are back with another awesome episode. I'm so excited to be doing this podcast and this episode. I know you're going to get some value. Five-star review, share it with a friend. If you're out there building a portfolio, you're out there fixing and flipping, you're out there teaching investors, this is the podcast for you. Super special guest, someone with a lot of experience here, Ryan Lee. So you've been doing this a little while and you really have three parts of your business all involve real estate investing. You are an active investor. You have some rental properties. Dying to hear more about that. You're a passive investor like myself. And you're out there teaching people how to be successful as a passive real estate investor. Welcome to the show, man.

• Speaker #0

  Kevin, I got to tell you, man, it's always fun when you get to meet some of your mentors. So to be here on the podcast with you, my friends, having you interview me, man, what an honor. I'm excited to be here today.

• Speaker #2

  Oh, man, you're making me blush here. Let's go. Listening in your car and you're not actually watching this on YouTube. Cool. Well, let's get started. I actually don't know how long you've even been doing this. I forgot to ask that question before I hit record. So here we are. we're live guys. So what, how did you get going? How long have you been doing this?

• Speaker #0

  Yeah, man, I am the world's best timer on real estate investing. I started in 2009. So after, you know, all the craziness, but I started in 2009 because I was stuck. I was stuck with money and I didn't know any better, right? I didn't know that the real estate market, you know, took a hiccup and lost a little bit in 08. But for me, you know, I graduated college, got my first corporate job, started climbing the corporate ladder, making little trade-offs with my life, making more money. max funding my 401k thinking, man, this is work and it's work and it's work. And one day, I'll buy my life back. And in 2008, everything dropped like a rock for me. My 401k, my brokerage account, everything kind of sank to the ground. And I'm really grateful for that experience for two reasons. Number one, I was five years out of college when 2008 happened in my world. And I was modeling my life and my financial plan off of people that I was watching their entire you know, dreams, all their dreams melting down in front of their face. And I'm thinking to myself, that's me 30 years from now, if I don't do something different. And I realized they had no control. And if they have no control, how could I ever have control? I was just along for a ride. And I didn't like that. That was number one. And the number two, you know, I always had a goal to use money as a tool to live a better life. But the further I got into the corporate rat race, and the more money I put in the market, the more stuck I felt. I felt like I was getting further and further. And then 2008, when that happened, I realized. If I don't take more control over my money, I'm never going to be able to take control over my life. And so that opened me up to considering a different pathway. And like so many of us, my gateway drug was Kiyosaki and that little purple book. I read that book and it slapped me across the face and helped me realize everything that I thought I knew about money might actually be wrong.

• Speaker #2

  So you said something interesting there. You felt stuck. You were maxing out your 401k. You had a brokerage account. It seems like you had a lot of stuff going for brand that was successful. And that is how we're taught to get out of the rat race. You earn money, you invest it. But you said you felt stuck. Can you tell me a little bit more about that?

• Speaker #0

  Yeah, so I'll give you my perspective. When I landed in the corporate world, I was always entrepreneurial to begin with. I paid my way through college with some entrepreneurial side hustles. And I remember when I got my first college job, post-college job, I had to move from Utah where I grew up to Arizona. And here I am, I land in Arizona, everything's hot, I didn't want to be in Arizona, I'm reporting to a boss named Rob. And I remember when I got that first paycheck, you know, that was back in the day when they gave you a paycheck, and I put it in my in my back pocket, you know, to kind of open it symbolically that I'd done something, I'm the first college grad in my family, I thought I'd arrived, right? And I remember when I opened that paycheck, and I took it out. And I looked at it, I kind of had to flip it over a couple times, because after taxes and moving expense and deductions and insurance. Like I was wondering where the heck all my money went. And that was my first wake up call. Your first check,

• Speaker #2

  first wake up call. That's crazy.

• Speaker #0

  Oh my gosh. This might not work. And so I resolved right then and there to climb the corporate ladder as fast as I could, make as much money as I could. And my goal was to retire early. Now, I didn't know what that meant, but that was my goal. And then fast forward five years, when everything I had worked the previous five years for was disappearing in front of my face, I realized I might not ever be able to retire because I'm seeing all these people that I'm modeling my life after now, their retirement falling apart. And I just traded five years of my life. And that really frustrated me, to be honest with you, because every promotion came with more expectations, more responsibility. I was trading little pieces of my life to make more money with the intention of one day I'll have enough money to buy my life back. And that was my first wake-up call. That might not ever happen.

• Speaker #2

  Trading pieces of your life. So that's the stuck piece. That's what you were feeling. Like, how do I advance? Because it sounds like, Ryan, when you trade time for money, it's finite.

• Speaker #0

  Yeah.

• Speaker #2

  So you figured it out.

• Speaker #0

  I'll tell you, that's how I measure time for me today. I really believe every dollar that I have in my life, it represents, it's a receipt of some form of my time and attention that I traded. And if time is our number one resource, and I think we all want more time and more control over it, money's greatest intrinsic value then, it's not my net worth, it's not my cash flow, it's not the assets that I own, it's the control over the time that I have and the options within that control that I get to exercise. That, for me, is financial freedom. And I started to wake up to that reality because I was measuring my success on rates of return, on my net worth. And when that all started to fade away in 2008, I realized I had to have a different perspective. And the coolest thing about it, and this is what Kiyosaki, I'm so grateful for him. He gave me a different perspective. And once I had that, it allowed me to start seeing the world of money differently. And that allowed me to start taking different actions that lead me, you know, obviously now 15, 16, 17 years later on the path that I'm on today.

• Speaker #2

  Okay. So control of your time is how you define. uh, financial freedom. So many people will define it like this. I have more passive income than I have expenses, right? But what that, and that's probably true, but what that does is creates that freedom, uh, control of time. So it's just as maybe a different way to look at it, but really, can you control, can you make the decision on what you're doing from an hour?

• Speaker #0

  And I'll tell you what the first the first place I learned that lesson. was in real estate, right? I remember I read Rich Dad, Poor Dad. I'm like, oh my gosh, okay, I'm measuring all my success off net worth, right? My 401k net worth balance went from six figures down to $28,000. So that sucks, right? And as I started looking at that, I realized I couldn't, even if I wanted to retire early, I couldn't touch my money until I'm 59 and a half based on the vehicles I'd chosen to put my money into. So now I'm looking at real estate. And I Remember, okay, if real estate's the pathway, I went out and I bought my first property. And it's so funny, Kevin. I'll never forget this. I remember I bought my first property and I walked around the office the next day like little mini Grant Cardone. I had my chest puffed out. I'm a real estate investor. I have no idea what I'm doing. I bought my second property shortly thereafter. And on my third property, I legit almost had a panic attack. I came home because something was kind of boiling up inside of me that I was refusing to look at. I thought I could just work my way and push my way through it. But after three properties, what I now realize, I had a part. time job. It took me a lot of time to find those properties, to rehab those properties, to renovate those properties, to manage those properties. Kevin, I am, I will just state it on here so no one can try to beat me. I'm the world's worst property manager ever, right? If my tenant would call me crying, I'd cry right back with them. And then, you know, before I know it, I'm paying the mortgage and they're living in my house, destroying it, you know, for the next couple of months. And I realized in real estate, like it was, it was a, it was a breakdown for me. I remember six months into my third property. I was doing lease options back in the day. And the dude gave me a $10,000 down payment to move into the property. Every single red flag that was available was on his application, but I pushed through him because the guy's gonna give me $10,000 upfront. He made me pay for it and then some over the next six months. And back in my corporate career days, I used to sell medical equipments. And I remember I was up in a hospital in Rapid City, South Dakota, trying to sell a boardroom full of medical doctors and hospital administrators, all of this medical equipment. And my phone, my phone just started, boom, going off. And I, at this point, I had a little healthy anxiety to my phone because I knew it was probably a problem with one of my properties that I was ill-equipped to deal with. But it just started ringing in rapid succession. So I step out of the boardroom and I start listening to my voicemails. I had a voicemail from the tenants that, well, it was the tenant's wife first. And she's crying saying, please don't evict us. She'll make sure it never happens again. A voicemail from the tenant himself, yelling, screaming, belligerent. He'd do it again. And voicemails from several of the neighbors of this house that I own saying they're going to sue me and a voicemail from a police officer saying, son, you better call me. And so I called the police officer and I found out that this tenant who I had put in the property, not managed well, let him do what he was going to do. He was raining terror on the neighborhood and so much so he shot a neighbor's cat because he perceived it to be on his lawn. And so at this moment, I'm like, check me into the hospital. I'm done. Like financial freedom doesn't. actually exist. I can't get it in a 401k. And now Kiyosaki lied to me and he didn't, but I was, I didn't understand what I was doing. Real estate isn't freedom. It's the system that is a freedom. It's how you operate it, how you control it, how you own it that creates freedom.

• Speaker #2

  Have you ever seen that show on Netflix, like worst blank ever? So there's a worst neighbor ever, worst ex ever, all of these, it's a whole series, right? Dude, you had the worst. I guess tenant, worst neighbor ever. You could have been on that show.

• Speaker #0

  But dude, anyone who's on real estate now, I mean, you interview any real estate investor, a legit real estate investor, they have a story just like mine or 10 times worse than mine. So it's not, it's how do we own real estate and how do we make better decisions with what we buy, how we manage? And then going back to the definition of financial freedom, this was my first, this was my second wake-up call now. My second wake-up call is real estate isn't freedom. Cash flow that I have to trade my time for isn't freedom. Financial freedom is measured with cash flow greater than expenses, but it's experienced with time. And I'm grateful that I learned that lesson because had I not, I would have crashed out on real estate. And once I learned that lesson, I took a step back and I started thinking systematically rather than brute force. How do I buy within a system that allows me to own and control more of my time and still own an asset?

• Speaker #2

  So I might be asking the obvious here, but just enlighten me a little bit. The $10,000 lease option guy, what was the mistake there?

• Speaker #0

  Mistake number one was I was doing all of the work. Legit, I was doing all of the work. It took me hours and hours and hours to find, rehab, renovate, and manage property. So I might have made really good money in real estate, but it wasn't freedom. Once I understood that, then I stepped in and said, okay, the real problem was my decision-making process. Do I want to be a property manager? Yes or no. And if I don't want to be a property manager, how do I set a criteria, hire a property manager that's going to enforce that criteria, and that person gets paid and there's still enough meat on the bone to ensure that I'm getting paid for owning the asset and taking the risk. That completely changed my perspective of what it means to be a real estate investor, not just a home buyer.

• Speaker #2

  So I got started with lease options too. super young. I was buying one or two houses every single month. And the way I was doing that while I was broke college kid was the lease option. So I think you doing that is, is remarkable. And I think our audience can get a lot of value from this because it's a fantastic strategy. I hope you still agree with that.

• Speaker #0

  I still do. Yeah.

• Speaker #2

  Okay. So tell me, tell me what is the lease option and why is it so effective?

• Speaker #0

  You know what? It's a phenomenal program in the sense that you're looking for someone that, that you're looking for someone that has an you ownership mentality, but they can't own for various reasons today. And so inside of a lease option, what you're really doing is you're giving someone the option through a down payment and maybe a portion of their monthly rent that you'll credit to buying the property at some future point disclosed in the lease option contract that you set up with them. And so you're really trying to attract a better, higher quality tenant that has a little bit more skin in the game based on the money that they're putting into it, maybe a little bit higher rent. maybe a little bit higher than just a security deposit. My first lease option guy gave me $10,000. And the objective was I'll credit that $10,000 to the purchase price of the home when you get ready to buy it within the time of your lease. And so at its core, you're giving someone an option to become an owner. And then during their rental period, you're hoping that they kind of fix what needs to be fixed in terms of why they can't buy the home today so they can then buy. Now, in my experience I think it takes a little bit more effort if we're trying to help people really become owners. Very few people, in fact, I've never had a lease option owner on their own become an owner, but I have seen people do it inside of a program that's tailored to help them increase their credit, pay off debt, improve their DTI, whatever it might be.

• Speaker #2

  Yeah. So you're talking about a lease option as an exit strategy or a… Almost like a property management sort of strategy. I was using it to buy it and do that. So you could use this strategy to acquire property also. And so your guys were giving you $10,000 down payment. It's quite easy to negotiate those where you don't put any down payment down.

• Speaker #0

  Totally.

• Speaker #2

  Have you ever done a lease option on the acquisition side?

• Speaker #0

  I have never done it on the acquisition side simply because after that third property, I shifted my whole paradigm of what I was trying to accomplish.

• Speaker #2

  Okay. So you got into the business just buying like probably 30-year mortgage, down payment, 30-year mortgage, and then you lease optioned as your exit strategy. And then you learned a lot of lessons and three deals. And then what happened?

• Speaker #0

  You know, for me, I just got more committed to the thing I wanted. I wanted more control over my time and more options within my time. And so I'm so grateful I learned so much from books and from mentors. And, you know, I want to say it was immediately after, but it was probably a couple months, I honestly questioned whether or not I was going to stay in real estate, it was, it was hard, it was really hard. But I went back to I wanted my dream more than I than I was willing to settle for excuses. And I was reading a book that I thought was going to give me the secret in a different way than it gave me the secret, but it was Think and Grow Rich, right? It's Napoleon Hill. And he's talking about in in the book, in the first couple of pages that mentions the secret over and over and over again. And right, as you read through the book, you don't really find the secrets. But I remember I read a story about Henry Ford and Henry Ford in his time was accused of being, you know, ill-equipped to run the Ford Motor Company, the most ignorant businessman of his time. And so much so that Ford finally took the newspaper, I forget which newspaper it was, to court and was suing them for libel or slander or whatever it is. And, um, They proceeded to bring in all these experts to ask him all these asinine questions around, you know, gravity and math equations and whatever it might be. Things that were completely irrelevant to running Ford Motor Company, but just try to prove that he's ignorant, right? He's not smart. And finally, Ford holds up his hand and he says, stop. I have a row of electronic push buttons on my desk and I can push a button at any time and bring someone to my aid, the exact person that could answer this stupid question, right? And then let me get back to running a business. And I remember I read that book and I'm like, oh my gosh, I need a row of electronic push buttons. And I went from thinking, how do I work harder? Because I'm still working a corporate career and trying to do real estate on the side now. Now, how do I develop a row of electronic push buttons? How do I work smarter? And that allowed me to go from being stuck at three properties to scaling to 17 properties in the next couple of years. And I use that scale to then be my exit from the corporate world. And so That was really my game changer in that is I started thinking in systems and processes, people versus how do I brute force do more real estate.

• Speaker #2

  System and processes. So I remember that. I remember reading that story as well. He's like, I don't know how to answer your question. I just know what button to push.

• Speaker #0

  Yeah.

• Speaker #2

  That's quite that's awesome. So you said systems. Give me I'm trying to figure out how exactly you did that. So for the listener's benefit, you were like. done. You don't want to do all the work. You wanted to create your buttons. What did you do?

• Speaker #0

  Well, come back and maybe we will get to this part in a little bit further part of our discussion here. But I built something today that I call a passive income machine. Now, it's more than just real estate. And I learned that I had to put a few things together to get me the outcomes that I wanted, but quite specifically what I did. is I realized the hardest part about owning real estate is owning real estate, right? It's really that. And so I built a decision-making process of the, you know, the geographies I was willing to buy in, the metrics I was willing to look at. Because before, you know, this is back before software was really a thing. And I remember realtors, they would send me stuff all the time and I'd crunch numbers and I'd try to figure it out. So I just built a decision-making process. Now I use some mentors to help me understand what, you know, What is the rent appropriate to the purchase price of the property? What's a realistic version of vacancy and repairs over a 30-year timeline? What's the life expectancy of roofs and things like that? And I started building this decision-making process in to where I could run some numbers. Someone can send me some details. And if it matched my geography that I wanted to be in. And if the numbers spit out and I would just make it turn red, yellow, or green. If it turned green, then the numbers lined up. The geography lined up. That gave me a clear... buying framework. And once I had the clear decision-making process on what to buy, I could move so much quicker into deals. But then the second and biggest thing, and I still do this today, is owning real estate comes down to owning real estate. And it's all about property management. And so for me, I own real estate today in six different states. I have several different property managers, but I built a protocol of who I hire, what my expectations of them are, what I hold them accountable to and how they get paid, not just on a percent of rent collected, but on, you know, effectively managing a property, filling vacancies, keeping repairs low, things like that. And that's, that's really been my success, I think, to long term ownership. Anyone who's owned real estate for 10 years, they look like a genius 10 years later, right? But you got to get through the 10 years to be the genius 10 years later, and it all comes down to property ownership.

• Speaker #2

  You said the word accountability. I think that's one of the lessons that I've struggled to learn. I'm still working on that. But holding your property manager accountable, that's not so easy.

• Speaker #0

  No.

• Speaker #2

  They will try to get away with some stuff, right?

• Speaker #0

  They will try to get away from stuff, and people will only get away with the expectations that you give them. And if you give them very loose expectations, they can get away with anything. But if you set very clear expectations and a communication protocol. For sure, I've cycled through some property managers. And part of cycling through property managers, they're how you find the winners. And I want my winners to win. I want my winners to get paid. And so, you know, I think a lot of people, they think about property management, how do I grind them down? You know, how do I go from a 10% of rent collected to eight to six to, you know, as little as possible. But you get what you pay for at the end of the day. And, you know, the way I teach it inside of, have you ever watched The Office? Remember that with Michael? Yeah. Remember when he's forcing Kevin to eat broccoli, like he's forcing it down his throat and like Kevin's choking on it. That's kind of what I think about a property manager. A property manager is just eating broccoli all day long, right? They're just dealing with crap and garbage and it's so hard. And so for me, yes, I paid them a good percent of rent, but I actually put bonuses in. Man, if they make more money, I make more money. It's so crazy. Do you offer that to them? You offer that? Man, I first started off, I would just send little gift cards to them. And you'll be surprised what a $50 gift card to Golden Corral does. When I first started doing that, like the property managers, they might manage properties for 100 people, but you're the only person that ever says thank you and sends them some type of form of gratitude. All that one thing, like it spiked me to the top of the list. Whenever there was a problem, I had preemptive calls from my property manager. They would put in extra side hustle work to make things work for me because I was the one that didn't, you know, force the broccoli down their throat. Of course, I wanted a standard held, but I said, thank you. And I acknowledged them for the work that they were doing. And so now we have a whole game board. I actually have all of my property managers. They communicate together with each other. And we have a little game board of who's going to get the biggest bonus this quarter.

• Speaker #2

  This is like, dude, this is like, you're dropping nuggets here. This is fantastic. Like, this is pure gold. you I would do that a lot of times with my contractors when I was rehabbing a house. Like I'd bring them pizza on it, like just randomly. Right. And, and they love that stuff, but I never thought about doing it with property managers. I think I'm at my, one of my takeaways here, right. So I'm going to go do that like today with one of my property managers that has been going above and beyond just recently. That's great.

• Speaker #0

  You will be floored. You will be floored. They will, they will almost cry in your, like on your text message thread or the phone call or whatever it is. You will be the only person that has said thank you to them in like in 2026, like ever. It's fun. It's so fascinating when I first started doing that. And like I said, it was a $50 golden corral card. And I realized that one $50 thing, it made me hundreds of extra dollars over the course of a year and thousands, if not, you know, hundreds of thousands over, you know, a lifetime because my vacancy is lower, my repairs are lower. my call, like my, my, my tenants, higher quality, everything improves when your property manager is treating your portfolio, like their, your portfolio, like theirs. And I make a portion of the wealth that I make theirs. If they hit not just a minimum standard, but they go above and beyond.

• Speaker #2

  Oh, this is fantastic. Okay. Well, I want to hear more about what you're doing now. So I know you have different aspects of your business. I definitely want to get into your decision-making process, the passive income machine. But let's talk about like your portfolio, if you don't mind. I know you're on the active and passive side. So what does that look like?

• Speaker #0

  Yeah, you know, so for me, it comes down to two different things, right? You have to own real estate. I don't believe unless you're going to own a business of some kind, I don't actually believe it's possible to be and maintain financial freedom unless you own assets that give you what I call the four pillars. Like within any investment, you can make money in four different ways. How you participate in that investment determines how many of the four pillars you have, but you can make money, number one, in appreciation. And if you think about how 90% of the people quote unquote invest today, they put their money in something that they have no control over and they hope they can sell it at a higher resale price down the road. That's a mutual fund. That's stocks, right? That's appreciation. That's also real estate. Now, will real estate go up in value? Probably, but I don't control it. So that's only one of the four pillars. The second pillar is cash flow. It's possible with the right investment strategy, you can have an asset that rises in value, goes up in price. And second to that, it delivers a stream of income. Third, real legitimate tax benefits. Deferring tax like I was doing in a 401k, that's not a tax benefit. That's a tax deferral. And so with real estate, I can permanently eliminate taxes if I know how to do it right. And then number four, this is the most beautiful thing of all, it's amortization. And amortization is a function of leverage, meaning I can use someone else's money to buy an asset. And if I attract a tenant, they'll amortize or they'll pay off that mortgage for me. It's only done through leverage. And so as I look at that, the only way to win in an inflationary world, if the government's going to keep printing money, which they seem pretty hellbent on doing, I have to own assets that rise in price or demand. And because they rise in demand over time. the value of those homes go up. I want to use leverage. I want to put as little of my own money in as possible. And I want time to work for me. And so for me, I have to own a base of assets. And over the course of the last 15 years, I've scaled my real estate portfolio of assets that I own to 50, 53 single family homes. Now I could go further than that. And sometimes I pick up homes. You know, the last couple of years, I've been using a lot of 1031 exchanges to kind of optimize my portfolio, rearrange some of the pieces on the board a little bit. But outside of that, I'm willing to take a lower return on investment because I lose some of those pillars to get a little bit higher return on attention or a little bit more passive. And that's where I go into syndications. And syndications are you have to be very, very disciplined in understanding what a true successful syndication is because, man, so many people right now you can see are just, you know. underwater because they use leverage to do syndications and they can't maintain the leverage over time. So you have to understand how to do syndications effectively. But if you do, you're actually investing in bigger projects that have not, I wouldn't say bigger payouts, but less, less opera operational drag on your time and effort.

• Speaker #2

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• Speaker #0

  In syndications?

• Speaker #1

  In syndications, yeah.

• Speaker #0

  It's so crazy. So I don't do any multifamily in syndications. All the syndications I do are either manufactured housing or they're super high-end golf resorts. Those are like two completely different opposites.

• Speaker #1

  I don't know anyone doing golf resorts. So tell me about that.

• Speaker #0

  Well, so here's the number one thing I look for. Like on the ownership side, I want to use as much leverage as possible. And I want to barbell. I want to I got this concept from Nassim Taleb. Nassim Taleb in the book, Anti-Fragile, he talks about this idea that if you put every, like if you're gonna lift weights, if you're gonna do a bench press and you put all the weights, you stack the barbell on one side, it's gonna tip and you're gonna get injured. But if you counterbalance, you know, a 45 plate on one side and a 45 plate on the other, you can lift a lot of weight, right? It's the exact same thing with owning real estate. So if I'm gonna go into the game of owning real estate, single family homes or any form that I'm gonna take a 30-year fixed mortgage on, I want to counterbalance the leverage that I'm using with liquidity. Liquidity is how you let time work for you and be one of those investors that looks really smart 10 years later. So for me, that's how I play the game. I want to go all in and use as much leverage as I can on the assets that I own. And then I'll just counterbalance my leverage with liquidity to allow me to ride out economic issues in the short run. But on the other side, on syndications, I want zero leverage or very. very little leverage. And if it is leverage, I want to fix rate leverage over a long, long period of time. I think that's where a lot of operators got in trouble, is they shortened their timeframes. They didn't have fixed leverage. And whoever could have predicted interest rates doing what they're doing. But the only way to win in a syndication is you have a profitable project that's profitable without leverage, and leverage only juices it.

• Speaker #1

  Yeah, and be careful of negative leverage. which is basically the cap rate lower than what your borrowing costs are. That could be very, very dangerous. Okay, so syndications, you don't like multifamily. I didn't know that. I misread that. I mean,

• Speaker #0

  it's not like I don't like multifamily. I just, over the years, I've just refined the expertise that I have into a few different areas. And I just, rather than going wider, I go deeper.

• Speaker #1

  Okay. You're a golfer, huh?

• Speaker #0

  I am a golfer.

• Speaker #1

  Okay, so no leverage at all on syndications, which that's pretty rare to find if you can find that. I don't know about the golf course industry. I've never seen that. But fixed rate debt, long-term fixed rate debt, how do you find that in some of these commercial projects?

• Speaker #0

  Well, it's challenging. That's the hardest part. And so usually the syndications that I'm operating in, they're more of a family fund than an outside public raise, right? And so it's internal money. That's the financing. And only when internal money is given back upon the increase of a value of a property would external financing be brought in. I always want to be in first position. I want the collateral of the asset to ensure that I never lose money. And again, time is your best friend in real estate. If you don't have time, if time is working against you, you know, based on interest rates and amortization and first or second position, then you're playing a very dangerous game. And this is why most syndicators are failing right now is Time is working against them. They couldn't ride out the increase in operational expenses on variable debts that amortized over a short period of time. And so for me, I want time to work for me. And so that's every single investment that I'm in. It's private money. It's a pool of investors that take down the project. We're investing really in the operator of the project. We're holding them accountable to timelines. And only when the increase of the value is there and it justifies a cash-out refi. Do we then bring in outside financing? But we have principal back at that point.

• Speaker #1

  So it sounds like you're like almost a co-general partner.

• Speaker #0

  Very close to a general partner, but at the same time, we're not an operational partner.

• Speaker #1

  Okay. So it's still passive for you though, mostly. So if I'm interested in syndications because I want to turn my actively managed portfolio into more of a passive, because I think the balance is fantastic. I think the way you're doing it is very smart. How do I do that? for the listener, like, how do I sell some of these and get into syndications? Where do I go? How do I learn about this?

• Speaker #0

  Man, I'll tell you what, and we've built this. So I didn't start everything I'm doing for me. I mean, I started like everything that I'm doing, or I didn't start doing this for other people as what I should say. I started it for me, right? I was stuck financially. I was stuck in the corporate rat race. I had to figure it out. And as I figured out a few things, people started coming and asking me, Hey, how did you do that? Can you show me too? And before I knew it. When I walked away from the corporate world, you know, I had a little pool of people that I taught loosely how to do it based on what I'd done, but I realized I know nothing, right? Yeah, a lot of it was luck. I just persevered through it. I learned a lot of stupid lessons. Don't do this. Don't do this. It was more of the things that not to do than what to do. But over time, as more and more people came, we turned it into a company. And we've now been rolling in this company for over 10 years. We're 12 years old now. And I've had so many people in so many different walks of life that we've just had to solve different problems for them. And it's been so fun. So in our world, I tell you that financial freedom is a function of two things. Number one, it's financial security. And number two, it's financial independence. That's really, that's really the game. And financial security, I want you to think about that, like your fixed minimum monthly expenses to maintain a bare minimum lifestyle. What's your mortgage? What's food? What's insurance? Fixed basic expenses. I want that to be covered. in income by what I call a private pension. And the private pension is really how we do these syndications for people now. If I'm ready to retire tomorrow, right tomorrow, I just need a paycheck coming in every single month based on variables that do not change. And so the way we do these syndications today is we go find a deal, right? The deal requires, you know, $30 million of capital. We pool our investors, we go take down the deal. And if someone's ready or not ready to retire, we can put them in that syndication, they could ride the upside, higher returns. But if someone is ready to invest, we can put them in a private credit fund. And the private credit fund, we'll just pay them a fixed interest rate every single month, backed by collateral. That fixed interest rate is anywhere from 8% to 9%. So it's much, much, much higher than if you're trying to manage your own stock portfolio. And that's just a private pension income form. And it's backed by real tangible real estate, pays monthly, just like that. And then we get to use their capital as upside. They don't need... potentially or want the upside. They value income more than they value upside because they're trying to buy their time today. So that's how we play the syndication game. You're either growing or you're taking income. And we put those two things together in a private fund to be able to do that.

• Speaker #1

  Okay. So that solves the financial security piece. You said two things, financial security. What was the second one?

• Speaker #0

  Okay. The second one is financial independence. And this is where, this is why you have to own real estate period. There's just no way around it. Right? We have all understood that the cost of living is going up. And I think we've all been trained, taught and educated that inflation is healthy. There's nothing more unhealthy about our economic system than the rated inflation that is happening, especially over the last five years. But as the government prints more money and GDP or economic output doesn't rise to the increased, you know, money sloshing around our world, the world's going to get more expensive, and it's going to get more expensive every single year. So if I want to retire in my 30s or 40s, And let's just say I need $100,000 to cover my full lifestyle today. Well, 10 years from now, I'm probably going to need 180 or 200. And another 10 years, I'm going to need 300,000. So on the other side of things, I call this financial independence. And this is where I want to own real estate that rises in value. So inflation is benefiting it. I own the asset, so I can do cash out refis. I can raise my rent. I can do a lot of different income plays on that side to keep my ongoing and future income steady and on pace with inflation. So ownership of assets for financial independence, syndications or private pension for financial security, put the two of them together, and that's financial freedom for us.

• Speaker #1

  That's genius. So you teach this? What is that? What did you mean by you're also teaching people?

• Speaker #0

  Yeah, you know, and this has been the funnest part, man. I just came out with a book, right? I just came out with a book, and I went back to all of my mentors. I went back to Kiyosaki, Robert Allen, who taught me how to do single-family homes. And, you know, a couple years ago, we were doing a big event, and I brought him to, I'd never met him. I've never met him. And I brought him to the stage and said, hey, I just want to, I want to give you a Lifetime Achievement Award because you inspired me. That allowed me to get free. And then I didn't really know it until I did it. I really, really enjoy helping other people get free. And look at all of these people. And I'll never forget Robert Allen. You know, he's the author of Nothing Down. Robert Kiyosaki credits Allen for teaching his former wife, Kim. how to invest in real estate. And Robert Allen said, and it's exactly what you just told me, Kevin, before we started the show. He's like, you know, sometimes you sit down, you write a book, you're in your office by yourself, and you have no idea who's going to pick it up, who's going to read it, and if it makes any difference whatsoever. And the fact that you brought me on this stage gave me this recognition, and I get to see all of these thousands of people. I'm so grateful for you. And man, I'll tell you what, it was such a validating experience for me. And then since that, when they saw what we were doing inside of our community, both of them said, I want to put my name on this. I want to help you grow this community. And so we documented our strategy, which at its core, Kevin, isn't really a real estate strategy. Real estate is a major asset in it. It's a tax strategy. The fastest way to be financially free is to understand the tax code. And once you understand the tax code, you can create tax-free income. And if you really think about it, if you're used to living, if you're used to making $100,000 today. And I know that's a low number, but if you're used to making $100,000 today, you're really probably only living off of $75,000 after taxes. So if we can create a system that creates $75,000 of tax-free spendable income, it's the exact same thing as making $100,000 and paying the taxes. And so our entire strategy, we call it the passive income machine, is how to use the tax code and then back our way into the right assets in the right system to get us tax-free income for life.

• Speaker #1

  Okay. So that's that retire in 10 years or less. That's a new book. You get it on Amazon.

• Speaker #0

  You can get on Amazon, or if you want all the bonuses, like we have interviews with Kiyosaki interviews with Alan, we have calculators. Just go to retire in 10 years.com the number 10, and we'll give you it's exact same prices you can buy on Amazon. We just give you all the bonuses.

• Speaker #1

  Oh, dang. I'm definitely going to go check that out. That's a really cool offer.

• Speaker #0

  I'm sending you a copy, my man.

• Speaker #1

  Are you going to sign it?

• Speaker #0

  I'm going to sign it just for you.

• Speaker #1

  Yes. Right. All right. And you have students, you said your group, what is that?

• Speaker #0

  So we have thousands of people now that have been doing this over the years. And, you know, I think the hardest part for me when I first walked away and started trying to follow the alternative investment advice, as I looked at it, everyone was trying to sell me a product, right? And could I make it owning single family homes? Maybe. Could I make it doing syndications? Maybe. Could I make it doing insurance? I don't know. Maybe. But everyone in the world was trying to sell a product. No one gave you a system. And when you start off with a defined outcome, retiring in 10 years or less, that now puts urgency and it puts clarity on what has to happen. And then we could reverse engineer and back our way into the right mix of products in the right order to get that outcome. And so that's really what we do. We've helped people invest hundreds of millions of dollars in syndications. We've done over 5,000 single family homes instead of our community. But that's not Even though we bring that to the table, we bring the system and the execution of a system to the table. That's really what our company does.

• Speaker #1

  So it's like a financial planner, but like on steroids almost because you're not stuck in Wall Street.

• Speaker #0

  Man, you should have been my branding guy. That's the best way to freaking explain it. That's exactly our company is called Wealth Outside Wall Street. But that's exactly what we bring you, a financial plan to build your wealth outside of Wall Street. And it really comes down to taking control of your money. I believe, Kevin, at its core, the reason so many people are stuck today is there's two economies. And these two economies run in parallel. And you have to choose which economy you want to be in. There's what I call the dependency economy. And this is the economy that we've all been trained in. It's you go to school. You get a job. You're now dependent on some source of income that is super volatile, even more volatile today with AI. You then take whatever money you have for the future, you give it to someone else, and you cross your fingers, and you're dependent on everything. Markets, taxes, inflation, employment, so many things. And you're just along for the ride, and you're trading your most valuable resource, hoping that at age 65, you have, quote unquote, enough. No one knows what enough money is to retire, but that's the dependency economy. The other side of that isn't doing the dependency economy better. It's taking ownership. And it starts... Not by taking ownership of assets, it's taking ownership over your money. You have to reclaim your money. Your money represents time that you've traded, and it's the tool to buy your time back. Wow.

• Speaker #1

  This has got to be one of the best episodes, Ryan. You're freaking awesome. All this information, all these nuggets that you're dropping on us is quite remarkable. I'm going to go through my notes now, but I got to say for the listener, this was really, really a good episode. And you might want to go back and re-listen to it because there's a lot in here. All right, Ryan, here I go. So you say, we would start talking about your getting into real estate and how you went to the corporate world. And then you got into real estate and you said, you just want to stop trading time for money. That's what you felt like you were doing. And that's what made you feel trapped. And we didn't even talk about how the 401k could actually slow down retirement because you can't access it until you're a certain age, right? So that's a whole another concept we didn't even touch on. Control over your time. That's a definition of financial independence to you or financial freedom. Real estate is not freedom. The hardest thing about owning real estate is owning real estate. You said, I thought that was quite funny. Doing all of the work was one of the biggest mistakes you said that you've made. So learning how to use other people. We talked a lot about leveraging money, borrowing money from banks or whatever to go out and do these deals, but you could leverage other people as well in a positive way, right? They bring in some time.

• Speaker #0

  Greatest form of leverage.

• Speaker #1

  Yeah. So there's lots of different ways you could use leverage. Real estate is hard. How bad do you actually want it is what I wrote down. So is your why, what you want more powerful, stronger than putting up with the stuff you have to put up with as a real estate investor. You really start having success when you start digging into systems and processes. We talked a little bit about that. Decision-making process is where you spend a lot of the time in the episode talking about, because that's obviously you're very proud of that and you should be. So that's what really helped you scale to the next level. Bonus your management. I remember we talked a little bit about that and how amazing that is. I'm going to actually implement that one immediately. The four pillars of the real estate income, we talk a lot about that on the show, so I won't need to rehash that. Counterbalance, we talked about the weights, counterbalancing your leverage with liquidity. That is such a huge, great piece of advice because if you don't have the liquidity to handle the leverage, it could take you down like it did so many people. back in 2008, 9, and 10 when you were getting started. We talked about financial freedom.

• Speaker #0

  Doing it again right now.

• Speaker #1

  Doing it again right now. Financial security, financial independence, those are the two things we need to focus on. And it sounds like you do that with your plan that you help people put together. Making money is easier when you know the tax code. See, I just took so many notes down here. And then we talked about the dependency economy and the alternative for that may be the independency economy. And that's what we're trying to get to. That's the economy we want to live in. How did I do? Good.

• Speaker #0

  How'd I do? Kevin, you are, like I told you before, you are, you are so good at this, my friend. You're so dang good at this. I love your, I love the way you interview, you bring the best of people out and you're adding so much value for your listeners. At the end of the day, that's what this world is all about. Money is just a tool. And I think if I could impart one last thing on, on everyone here, we've got one shot at this thing. This is it. I don't get a do-over. I'm 40, 46 today. And the 32-year-old of me that lost a bunch of money in 2008 that was stuck, I'm so grateful for that guy. He was the most courageous guy because he looked at the world that he was facing and he said, I'm going to do something different. You've got to find it inside of yourself. Wherever you're at, if you're at the gym, in your car, whatever it is, you have to have a vision and a drive for your life that's bigger than your past. Because the only separation from what you want and where you're at today is you have to become a new person. And when you're clear on what you want and why you want it, the next question to answer is who you have to become. If money really is a tool, and I believe it is, it's waiting for you to raise your financial intelligence to use it like the tool it's capable of being, but you have to raise your intelligence to be able to harness that power. So that would be the last thing I would share is, I don't think anyone wants real estate for the sake of having real estate. I don't think anyone wants money for the sake of having money. They want the life and the options that it can produce. And the biggest risk that you're taking right now is you're outsourcing, you're deferring, you're not taking ownership, responsibility over your money, and therefore you'll never actually be free. And I want that to sink in. Because I get an opportunity to work with so many people, I've had so many people come to me, and on paper, they should be free. But because they don't control where their money's at, they're worried about who's going to get elected, they're worried about future taxation, they're really worried about inflation, They're worried about all of these things. Because they don't control their money. Take ownership over your money so you can take ownership over your life. That is the gateway. That is the key to freedom.

• Speaker #1

  Yeah, this is really good. And I'm thinking like to do this, what you just said, you got to have to actually take action, right? That's where people get tripped up. Like you've got to actually do something. And I would just say, like, don't underestimate a power of an action. One small thing can change your life forever. So it could be as simple as getting your book and reading it, right? But one small action like that can quite literally change who you are, which you said you have to change who you are to get to where you want to go. I 100% agree. And that little thing can do it.

• Speaker #0

  I agree, my friend. I agree. That's, that's, there's, I think at the core, you know, we, a lot of people come to, to you and to me, and they want to talk about real estate. I want to talk to them about what they want first, because if you're not clear on that, you're going to fail at real estate. If you're very, very clear on what you want and why it matters, then you can face the thing that is hard, but you get to choose your hard. I mean, you could arrive at 65 and be broke, or you can figure out how to own real estate more effectively. Choose your hard. And I promise you, when you choose the right hard, your life actually becomes counterbalanced, a lot more easy, enjoyable.

• Speaker #1

  It's hard, but it's worth it.

• Speaker #0

  Yeah, it totally is.

• Speaker #1

  Totally worth it. All right, man, you got a lot going on. I know you do. You're very busy. You still came and hung out with me. Thank you so much for your time, Ryan.

• Speaker #0

  Thank you, my friend.

• Speaker #1

  All right, for the listener, you have other podcasts you could be listening to. And you know what? I'm going to have to backtrack because we didn't get your contact information. I know we did, retireintenyears.com, but let's just reiterate that because I almost zipped right past that. So retireintenyears.com. Any other way to get ahold of you?

• Speaker #0

  Yeah, you can follow me on all the socials. I think I'm the Ryan D. Lee. there's another Ryan Lee out there. So I'm the Ryan D Lee. Follow me on social, but honestly, the best place you can, if you want any more context on what I shared with you today, just go to retirein10years.com. That's the best place you can go.

• Speaker #1

  And he'll sign your book for you.

• Speaker #0

  Baby, let's go.

• Speaker #1

  All right, cool, right? Well, so for the listener, thank you so much for checking out the Real Estate Educators Podcast. You have a lot of podcasts you could be listening to, and you chose this one. And for that, I am so incredibly grateful. If you got some value, like I did, a ton of value. Please, five-star review, share it with a friend, and I hope you make this day a great one. I really hope you enjoyed this episode as much as I did. If you did, please be sure to follow and leave a five-star review. Oh, yeah, and tell a friend.