Agents Building Cashflow

EP 187: Wealth Through Real Estate Ownership with Rich Hamilton

Rich Hamilton

Rich Hamilton, Founder of Catalyst, a commercial real estate investment company specializing in value-add multifamily properties in the San Diego market, shares his journey from starting in commercial mortgage lending to building a robust investment portfolio, offering invaluable insights into scaling wealth through real estate ownership, navigating market challenges, and fostering a value-driven mindset. 

The conversation covers practical tips on building relationships, the power of tax strategies, and the importance of choosing niches in business. Don’t miss this episode for actionable advice and unique perspectives on succeeding in real estate investing.

Key takeaways to listen to:

  • Learning the art of cold calling and building trust to win in commercial real estate.
  • Embracing the mindset shift from transaction-based income to asset ownership for wealth creation.
  • Leveraging tax strategies like cost segregation and 1031 exchanges to minimize tax burdens.
  • Identifying and investing in undervalued properties in prime locations for long-term appreciation.
  • Exploring niche markets for lucrative opportunities beyond traditional real estate.

About Rich Hamilton

Upon graduating from College in 2013, Rich Hamilton joined PSRS, a San Diego boutique mortgage banking firm. After two years working as an analyst in support of senior producers, Rich decided to go “full commission” and exclusively focus on his own clientele. In 2018, at the age of 27, Rich was offered a Partnership opportunity at PSRS and became the youngest Principal in the history of the company.

New opportunities presented themselves and beginning in mid-2017, Rich started acquiring his own commercial assets. In 2022, he formed Catalyst as a holding company for approximately 190 apartment units, 13,000 SF of retail, and 18,000 SF of medical office.

Today - He splits time between San Diego, California, and Florianopolis, Brazil.

Connect with Rich Hamilton:

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Rich Hamilton: [00:00:00] Whether you're in mortgage or your real estate agent or any industry, if you have that mentality of "What can you do for me?",

Your potential success will be capped and what I found, one of the reasons I was really able to kind of catapult my mortgage career is because I changed my mindset on that 

Intro: If you're a real estate agent earning 200, 000 a year and you want to grow your passive income, this show is for you. Learn secrets other agents use and hear from experts in our field who will guide you on your journey to investing in assets like apartment communities so you can take your commissions and turn them into cashflow.

Here's your host, Randall. Let's dive in.

Randal McLeaird: All right. Hey man, I'm looking forward to the conversation. I really am interested. Like you graduated in 2013 [00:01:00] and you got straight into commercial real estate after that. And on the left side of the business. Yeah. Again, how did that influence your early acquisitions when you were going through and just kind of walk me through that process of knowing the debt side really well

to be able to get into your first acquisitions and how comfortable that must have made you feel. I'm curious about that. Like I started as a loan officer back in 2004. That's when I got out of college and I started doing loans and then I got really comfortable flipping houses because. I knew the loan products, I knew how I was going to work on the back end. Like, so I imagine you had some sort of in on that front as well on the commercial side. So yeah just walk me through like, you got started 2013. And then you started doing loans so what lessons did you learn from the backend seeing the debt markets that allowed you to go out and buy some of your first assets?

Like, let's just start there.

Rich Hamilton: So yeah. First of all, thank you for having me, Randall. Yeah, for sure. I'm really excited to to chat with you and get to know you a little bit better. Really enjoyed looking [00:02:00] into your background. So graduated college in two, 2013. And I got to tell you, I was a little bit of a late bloomer.

I was in a lot of ways physically I didn't really become a man until maybe my sophomore, junior year of high school. So I feel like my entire life I've been a little bit of a late bloomer. And that also includes when I was graduating college. There's a a little bit of late bloomer in the sense that I had no clue what I wanted to do.

And my grades weren't that great. My internships weren't all that impressive on the resume. And I mean, 2013 was, I think, an interesting year. I mean, maybe 2013 can be characterized as the year where 2012 things had really bottomed and then 2013 was the 1st big rebound year.

Which we rode that wave for a solid 10 years, right? Until 2022. And ever since 2022, we've been [00:03:00] in kind of this difficult environment. So I feel very fortunate that I. was graduating in 2013. It was a great time to enter the labor force, but I didn't have a whole lot of opportunities because again not a great resume, average grades, not particularly skilled in many things.

The one thing I was skilled at though was sales. And so I got connected to a commercial mortgage company and very quickly realized that I actually enjoyed cold calling. I don't think there's a lot of people who would say that they enjoy cold calling. There's probably people out there who excel at it, but I actually enjoyed it.

I enjoyed this trying to Convert a stranger essentially into a client on that. I enjoyed the game of that. And so fortunately I had some success within the first couple of years and was offered a partnership opportunity. Now I was [00:04:00] offered this partnership opportunity probably before I deserved it.

And this is actually a good piece of advice probably for your younger audience is. When you're joining a company at 22, 23 years old, one thing to look for is join a company that is still being run by the baby boomer class, right? The 60 to 75 year old, cadre of people, but maybe they're missing that generation in the middle.

And that was the case for this company. I joined. It was all 60 to 75 year olds and then me at 22. and so I showed some early signs of potential, but they also recognize that. They kind of needed to hand me the keys, so to speak, to ensure the success of the company. So I became a partner quickly you know, was doing probably 25 commercial loans a year anywhere from 800, 000 to a [00:05:00] million in fees.

And so I was living well though I was in California, which means I was paying, upwards of 40 to 45 percent of my income and taxes but probably about 7 years ago, there was 2 epiphany moments where, yes, I'm making this really good income.

I have plenty of money to do the things that I enjoy, but I had two epiphany moments, one of which was I went into the office one day and I noticed that there was another guy in the office right next to me doing the exact same things that I was doing that day. He was cold calling. He was dealing with a difficult client.

He was pitching a deal to a lender. So he was doing really the same activities that I was doing. And at that point at 25 ish years old, I was enjoying it. But he was 65. And so I kind of remember thinking in that moment, like, okay, I enjoy doing this today, but am I going to enjoy doing this 40 years from now?

 And [00:06:00] the answer was no. So ever since that moment, I kind of, my eyes opened a little bit about, okay, how can I pivot to create a little bit more passive income so that I'm not going to be effectively locked chained to my desk for the next 40 years. The other thing that happened, and this was in the same year the cool thing about being in the commercial mortgage industry is that I had access to my client's financial statements.

So I was constantly looking at personal financial statements of very wealthy people worth 25 to 50 million plus, looking at their personal financial statements, looking at their tax returns. Now, I remember one day specifically, I was looking at one of my client's financial statements. He was probably worth about 30 million.

And I also looked at his tax return from the prior year, and I noticed that he paid less in taxes than I did. And keep in mind at that time, I was worth nothing. I said, okay, clearly I'm on the wrong [00:07:00] side of the table here. While it's true that, in the transaction business, which I know, well, whether you're doing loans or you're selling property.

You can make a good living, but in that moment, I recognize while the true wealth can only be had owning the assets themselves and participating in the appreciation of those assets and taking advantage of the tax breaks that.

Randal McLeaird: Yeah, , the insight one, I mean, I'll take it back all the way from getting the advice you gave if you're looking for a company to go into the baby boomers and then , that Delta between their age and yours Not only are you getting their experience and learning from somebody who's been through a lot of market cycles, like that's an invaluable experience as well.

But then you give yourself the leg up. So I just wanted to comment on that before we went down the other road. And then having the wherewithal and the self awareness to look around and look at your life. In [00:08:00] 40 years that's kind of a benefit as well to be able to sit back and say, okay, I don't want that.

So, a couple of bits of advice I think anybody can take heed to. So you were doing the loans and you're obviously having a lot of success. How did you decide? Or what did you do, I guess, to start buying property?

Were you still doing loans and you're still staying active on the active income side? 

Rich Hamilton: So the first large commercial deal that I acquired, this was in 2017 again. So I was probably 25, 26 years old. The way that deal really presented itself was I was actually working on the loan for the client for the guy who was supposed to buy this retail center and I remember underwriting this retail center and, you know, the rents were really low the location was.

Gentrifying rapidly like this is a coat in Oceanside, California. If you're familiar with that kind of one of the last [00:09:00] coastal areas of Southern California, that's still affordable. So he was buying this retail center couple blocks from the beach area is rapidly improving. It's still improving to this day, fully leased, but very low rents.

Good finance, good financing potential, 70 percent leverage at plus or minus 4%. And I remember like, man this deal really good diversified rent role with all service based tenants, right? Amazon proof tenants, a barber shop, a coffee shop. And I remember I'm underwriting this. I'm like, I really liked this deal.

But my job is to arrange the financing. For my client. But then he ends up canceling and once I get word of that, I think to myself, I should buy this. So that first deal I acquired I put, 350, 000 of my own money. And then I went to my brother who also happens to be in the real estate industry, and I went to my dad who [00:10:00] also has real estate investments.

And they both also put up a third of the equity need and we bought that and we still own that asset today. So that was the 1st deal and then I want to fast forward to 2020. So, 2020 was really the turning point for me in terms of. Going from the transaction side to the principal side and what happened in that year was, if you can recall, there was a big event.

I think. COVID. Yeah. It's called COVID. Yeah. 

Randal McLeaird: That thing 

Rich Hamilton: changed. Yeah. It changed the world a little bit. And one of my best borrowers at that time was a hotel operator. So he owned a ton of hotels and I had financed a bunch of his hotels and COVID hits and I noticed he starts panicking, right?

He is unable to operate his hotels. And he very quickly. Came to this decision. [00:11:00] I don't want to be a hotelier anymore. I want to sell all my hotels. Oh, and on top of that, I have this other business. So he was also a big time franchisee. He was a McDonald's will still is a McDonald's franchisee.

He's got about 26 locations. So he's wants to sell all these hotels. But he doesn't want to pay the capital gain tax. Right. And he's also got all of this cash flow from the operations of his business that he wants to invest and into something that will also appreciated value.

So it was kind of this perfect storm event where I pitched him. I was like, Hey. Let me help you because I had done some investment sales as well. So not only was I a commercial mortgage banker, I had quite a bit of experience on the investment sales side. So I made the pitch to him. I said, Hey, let me shepherd you through this process of selling all the hotels.

And let's do 1031 exchanges, [00:12:00] all the hotels into multifamily. The most bulletproof asset class on the planet, even though, well, as you know, multifamily is in certain markets is troubled right now because it's overbuilt, but , don't think that's an indictment on the asset class.

I mean, after all, no matter how bad. The economy gets like people always need a place to live. So he really liked the idea of exchanging out of these very difficult to operate, business, which was the hotels and exchange into multifamily. And then on top of that, I got him to put a lot of fresh, not just exchange capital, but a lot of fresh equity from the operations of his business.

So, all told, I probably raised from him and one of his other franchisee friends. You know, 25 to 30 million in equity. And so that's translated today to a portfolio [00:13:00] that's, you know, plus or minus 90 million. Yeah. 

Randal McLeaird: 70 percent levered, 65%, something like that. Yeah. Sounds about right. 

Rich Hamilton: Yeah. 

Randal McLeaird: Yeah. I mean, that's fantastic that you were able to position yourself in that way.

With him to be able to execute that. So in 2020, that's why I would say our leverage 

Rich Hamilton: is actually a little bit less because it's the assets have appreciated, so yeah, that makes sense. Yeah. 

Randal McLeaird: That's fantastic. So you were doing investment sales and you were doing the loans.

Man, what was your, and I agree yet multifamily challenge in certain markets right now. But I looked through your portfolio list of properties here. And. Most of them look like they're in San Diego. So I'm kind of curious, what was the thesis going into San Diego, right? And buying. 

Rich Hamilton: Well, I think sometimes we need to acknowledge and just be honest when we do something and then it ends up not completely going to plan.

And so while [00:14:00] I'm still thrilled about. What we own and the potential of what we own. The original business plan starting in 2020, when we really started ramping up was, okay, let's buy the ugliest building on the street. Right. But in a location. So if you look at, I don't know how well, you know, San Diego, but pretty much all of our properties are in very desirable pockets of San Diego.

They're either coastal locations or they're like. You know, the hipster place to live or where all the tech people are, you know, high earning young people are where all the cool bars and restaurants are. So that was the business plan. Let's buy the ugly building in the great location. Let's add value over time.

Let's slap a new coat of paint on, let's do new windows. Let's, You do new landscaping and then let's also renovate the units as they turn. So let's force appreciation into these assets. [00:15:00] Let's drive the rents higher and then two to three years down the road, let's do a cash out refinance.

And recover our equity. And that last part of the business plan has not panned out for obvious reasons. We did deliver on the forced appreciation part. Our rents are 30 to 40 percent higher than when we bought them. The buildings are a lot. They do have much better curb appeal, but unfortunately, given what's happened to the debt markets, it's not just that interest rates have gone higher it's that the participants in commercial lending are fewer.

It's both. We used to have five incredible local credit unions, and now pretty much all of them are not lending. And I think this is tied to what we saw with, [00:16:00] Silicon Valley bank and first Republic bank was huge in our market. They did every multifamily and they're gone.

Signature bank Silicon Valley first Republic. A lot of the small and regional banks and credit unions are suffering right now because they've lost a lot of their deposits. And so what's unfortunate is that in 2024, if you want a commercial loan, a lot of times you have no choice but to go to Chase Bank and go to the other players who have actually benefited from .

This turmoil. So I know this isn't a question you asked, but I think It's an important thing to bring up. One of my big concerns with commercial real estate over the short to medium to long term is the fact that there's been this great consolidation in commercial lending and there's just fewer and fewer [00:17:00] capital sources and I'm worried The big banks will become aware of that and will be less competitive with their terms going forward.

Randal McLeaird: And fortunately 

Rich Hamilton: we acquired everything we got five and seven year fixed money. So all of our loans are still in the low threes, but hopefully the Fed pivots really soon here because. You know, it's going to be a challenging environment for us across the board. Our blended interest rate in our portfolio goes from three and a quarter to six and a quarter.

Randal McLeaird: Yeah, for sure. And that's what a lot of people are seeing that didn't have, like, maybe they had a bridge loan or something. So, I mean, there's a lot in there that I want to ask you about. One, it is a very interesting dynamic that you have with your equity partner and your equity, right?

Because having one or two investors. With 25 million to 30 million in a deal is a much different conversation than having a syndication with, [00:18:00] you know, 50 different investors on any given single asset. Right? And so. I'm kind of curious, either advice or just like how the conversations go with your partners who may not be IRR driven or like, Hey, we've got to hit this multiple otherwise you fail.

It's like, you're kind of in it together and it's. Tighter knit is what it sounds like, but I'm kind of curious to get your take on that. 

Rich Hamilton: Yeah, I think that's a long conversation that can be had. Joint ventures versus syndications. There's pros and cons of both.

Neither is objectively better or worse in my opinion. The cool thing about my relationship is there's just so much trust there and rapport that's been developed. Over years and years, because again, I was financing their hotels before I started working with them as investors. A big reason we were able to grow so quickly was obviously there was a lot of operating [00:19:00] cash flow to invest, right?

And there was a lot of capital from the 1031s, but the other really key selling point for me. Was cost segregation. 

Randal McLeaird: Yeah. 

Rich Hamilton: So if you can recall in 2020, 2021, 2022, all of those years had 100 percent bonus depreciation. Not only have I gotten them into assets that have appreciated, but also I've saved them seven figures in taxes because they were able to, as joint venture investors, rather than LPs in a syndication, they were able to classify as real estate professionals and take these big losses.

From the properties we bought and offset their income from other sources. 

Randal McLeaird: Yeah. I want to touch on that just a little bit because we talked about it on other episodes, but what you just said is a key distinction. When you are looking to invest in a syndication as a limited partner or a fund is a limited partner in you, earn active income in some [00:20:00] form or fashion, and that's all your income.

You don't have passive investments that you can attribute some depreciation to then you don't get All of that bonus, you're not able to capture. You obviously have to talk to your CPA about it, but if you're able to classify yourself as a real estate professional, like I'm a real estate professional, I can take a hundred percent of the depreciation.

It's just a big, it's, there's a massive difference. So if you are in a position where you need depreciation to offset some income, go the joint venture route, or at least pursue and look into it So that you can participate 100 percent in that depreciation. It's a great point.

Rich Hamilton: Yeah. 

Randal McLeaird: Okay, I want to get to the point of where you are now and like the psychological change in again from the outside looking in, it just seems like you had this Meteoric rise, right? You've got all these properties. You're buying all these things, which is incredible how fast you were able to go out and execute and buy these assets to some of the content that I see now [00:21:00] that you've put on LinkedIn to where it's like money isn't everything.

pursue service over the dollar and the dollars will follow. So have you always had that mentality or is that something that has happened in recent years? Because you're like, well, look, I've seen both sides. I've got the success and I've got the money. It's not everything. Like, what is it? 

Rich Hamilton: So yeah, thank you for so the other thing that I really like to do is produce content myself.

And, but my content is less video based and more writing based and actually. It's currently an ambition of mine to actually have that be a, my profession is writing something that I really. Feel passionate about and with respect to the question you asked going back to my nine year mortgage career, I did have very long stretches of my career where I was very self centered and.

All day, you know, when I was at the office, [00:22:00] it was the question I would ask myself, okay, who out there, what owner out there can I basically exploit today and extract money from him. For many years, I had that mentality. And if you, as a sales, whether you're in mortgage or your real estate agent or any industry, if you have that mentality of what can you do for me?

Your potential success will be capped and what I found, one of the reasons I was really able to kind of catapult my mortgage career is because I changed. My mindset on that, and instead of waking up every morning thinking, how can I make more money for myself? I woke up every morning thinking, how can I add value for other people?

And it wasn't just owners. It was the other guys in my office. It was the other people in the adjacent real [00:23:00] estate industries. It was the investment salespeople. It was the appraiser. It was the attorney and the CPA and the management company. And it was the owners where I would it's kind of like Gary Vaynerchuk, if you're familiar with him, he wrote a book called jab, right hook.

And like the more that you just give without any expectation of reciprocity. The more the, just like the world conspires to bring that energy back to you in multiples. So it's just something that I've found to be a fundamental truth in life that if you spend your time focusing on bettering the lives of those around you, that is the path.

That is the path to the great wealth and freedom that you yourself are looking for. 

Randal McLeaird: I was literally just listening to another podcast, how it made my first million or something like that. I can't remember which one it was, but one of the, one of [00:24:00] the Tony Robbins quotes was was dropped in the episode.

And the guy was like, if you're not giving, you're not living. If you're not given, you're not living something like that. I don't know if you've heard that before, but, and I was going to ask you if it was like, go giver is a book you read because it's like. That's kind of the philosophy as well in that, but you mentioned that jab.

He wanted to call it like jab a thousand times and then punch. Yeah, it was like his his deal on it. So then my question on that front is how do you decide practically speaking for, real estate professional that's out showing houses you know, , what's a example of something that comes to mind that they could be doing?

That they could be giving back or adding value to either their clients or their loan officer or whatever, 

Rich Hamilton: So I think, and I actually have a full, like, I'm not trying to be like a sleazy salesman right now, but I do have like a four hour online bootcamp on my website that teaches all of this stuff about fast [00:25:00] tracking your path to becoming an elite real estate salesperson or mortgage professional.

I would share this piece of advice with you, which is if you're a residential or commercial real estate agent or mortgage broker the 1st, you really need to be an owner yourself of commercial property as soon and a lot that goes against I think a lot of conventional wisdom that says, okay, just put your head down and just focus on.

I disagree with that. I think the moment that you have enough capital to buy something, an investment property yourself you need to do it. Even if you're buying like. I don't know, 400, 000 strip retail center in Kansas City or something like get something where you can get knowledge as an owner, figure out what it's like to communicate with the management company, figure out what it's like to shop for insurance.

To get your tax return filed. So figure [00:26:00] out what it's truly like to be an owner. And then what you do is when you are trying to acquire a new client, you don't go to them saying, Hey, give me your business. You go to them saying, Hey I'm not sure what your insurance situation is, but I met this insurance agent and wow, his level of service is exceptional.

He's incredible at what he does. I'm pretty sure he can help you. Would you like me to connect you to, or, oh, by the way. I've worked with a couple of different property management companies, this company, man, they are exceptional. Maybe you're already happy with your management company, but I think you should so now you're, because you're an owner yourself, you're thinking in a different way, you're thinking like them.

And you're thinking of ways to help them in that are outside of your, or discipline. And I think it's, if you add value in those ways to them, then [00:27:00] eventually they'll bring business to you. If that makes sense. 

Randal McLeaird: Yeah, for sure. Yeah. Yeah. One aspect of that could be like the connector mentality where you are making connections.

Do you have any other like off the top of your head that are not necessarily connection based 

Rich Hamilton: yeah. Here's, here's another one.

Here's another one. That's really good. So when you're a commercial mortgage professional, one of the items that you always ask for in addition to a personal financial statement is a schedule of real estate and I would talk to the prospect.

And actually point to a specific loan that they had. And I would say this loan is incredible. You shouldn't touch this loan. I can't, I cannot replace this interest rate. So by doing that where you're actually actively Not pitching your service. The relationship is strength. That same, if you're an investment sales broker, you go through the real estate portfolio and you say, Hey, this property you have right here, like don't ever sell that.

Like the neighborhood that property is in [00:28:00] is, has still has a big tailwind behind it. And so I think doing those types of things gives you credibility for when down the road, you as the mortgage broker, you do point to one loan and you say, Hey, we need to redo this for X, Y, Z reasons, or the investment sales broker now has the credibility to say, Hey, you need to sell that property.

For reasons X, Y, and Z. Now you have credibility to say that because you previously recommended , they do nothing. 

Randal McLeaird: So. Commented on that. That's good advice. Solid advice. All I'm curious, you've gone through the progression of the lending side, principal side, and now you have a course and you have some things.

So like, what is your, what's your main focus right now? Are you still actively going out and acquiring, or you. Yeah. 

Rich Hamilton: So we'll probably buy another deal this year, maybe a 5 million or so is what we're looking. So maybe a, you know, 15 unit deal somewhere in San [00:29:00] Diego, 

Randal McLeaird: San Diego. Okay. Yeah. 

Rich Hamilton: Yeah.

So this might be premature to announce, but one of the things that I'm really excited that my newest venture that I intend to launch within the next couple of months is. In the funeral home business, 

Randal McLeaird: get out of here. And I think 

Rich Hamilton: this is another really if your audience takes away one thing from this podcast, it would be this, which is riches are in the niches, the dirtier the business, the less attractive, the more the business gives you kind of an ick feeling, the better that business probably is.

Because the sexy businesses like becoming a real estate agent or becoming a mortgage professional or opening a restaurant opening a gym, those are all sexy, fun businesses. The sexier the business, I firmly believe the less [00:30:00] profit margin there is in that business. I mean, 

Randal McLeaird: it's a highly competitive.

Yeah. It's it becomes. Yeah. 

Rich Hamilton: Yeah. And I mean, you know, real estate, the reality is real estate is a sexy business. And so therefore real estate attracts. Are the best and brightest in our country and competition goes up and, you know, commissions and profit margins go down. And so why the funeral business?

Well, my, my great uncle was in it. My father was in it. I worked in it for a couple of years. And it's really interesting to think about the baby boomer generation. I think there's 60 or 77 million of them, you know, unfortunately they're going to start passing away in the next couple of decades. On top of that, you look at the funeral home business as it is today, it's very fragmented, private equity, you know, people say private equity.

Private equity will is like, we'll own everything someday, you know, private equities, rolling up dentistry's [00:31:00] and electricians and plumber everything they haven't. Made that deep of inroads in the funeral home business. Furthermore funeral homes are largely owned by baby boomers who are wanting to retire.

And the big problem they're faced with is their children have no interest in being the successor. So there was a recent survey that said half of all funeral homeowners. This survey was literally just conducted half of all funeral homeowners want to sell their business within the next 5 years.

And then I looked at the competitive landscape of the brokerages. There's, how many people graduate college and say, I'm going to be a funeral home broker? Not a lot. And so there's only a few brokerages out there and same thing with the funeral homes themselves. They're being run by, baby boomers.

And then there's generally not the next generation. So, this is my big idea [00:32:00] that I'm working on the business plan creating the website. And my goal is to launch a national. Funeral home brokerage and yeah, so that's the big project I'm working on at the moment. In addition to overseeing all the properties and the education.

Randal McLeaird: Yeah, no, that's man, that's fascinating. All the guys that I know, because I've talked to a number of, you know, home owners and operators here in San Antonio. Wealthy, like, they've done very well and 1 of them. He has owned for years and years. Like two half finished, funeral home sites, right?

Not the actual cemetery, but just the site where you go and you have the ceremony and had them for years. And I couldn't figure out why he would just have these things unfinished. And it was like some write off, a loss, a carry forward. I have no idea. But me like and then I have another guy so interesting business There's a few that have traded recently that I've seen and so I'd be very curious to [00:33:00] see like how you price those where's the recurring revenue.

Is it in maintenance? Because again, grandma just passed away just like a couple months ago. And we went through the whole process of getting a plot. Parents bought plots and then learning like every time we open this. Thing we're going to charge you a thousand bucks and, you know, you want to put something it's, so it's just like how are you pricing those things?

And are you more interested in owning them and operating them or in brokering those deals to new buyers? Only 

Rich Hamilton: brokering. Yeah. Because. I do think while the demand for their services is like, is definitely a secular growth story given the baby boomers and then Gen X is a little bit smaller, but then the millennials are even bigger than the baby boomers.

So this is. As morbid as it sounds, you know, the business of debt is a growing business. It's another reason why I like investing in medical office, you know, or we have ambitions to invest in assisted [00:34:00] living. But the business of funeral home specifically doesn't interest me because I do think the margins are coming down because.

More and more people are opting for cremation instead of burial. So, the profit per service. Is declining. And there's some other headwinds in the business. So, but yeah I'm solely interested in broker. And this goes back to talking to your audience about, you know, they might go, oh, start an electrical business or plumbing business, or like, they might scoff at that.

And I understand it like. I do as well to a certain extent, but you can do that and you can still do real estate. Also, you know, do that as your, , big cashflow business and you can still be a real estate person. I feel like people think they're sacrificing their [00:35:00] potential of being involved in real estate by going that route.

But no, it actually only opens the door because it gives you access to all this capital to buy properties. 

Randal McLeaird: Yeah, , I agree. Having a trade I did plumbing a lot when I was a kid growing up. My buddy's dad had a plumbing company and would all go work for him every summer. And his advice was like, learn a trade and it'll pay you forever.

And those businesses and those companies, I mean that there's a reason private equity's going in and gobbling 'em up because. A service based business for home services is like never going away. So they're just cash flowing businesses. Well, that's interesting again didn't know where we take that as far as the funeral home thing , there was a buddy just in the same complex as me.

He's got this thing and he's been going around. The reason I know about is because he's been going around pitching a lot of funeral homes, a product that he's got. And so we were just talking about that then plus the Graham. So interesting. I look forward to hearing more about that or seeing what you're working on that front.

. A rich man is good having you on the show. I really appreciate you coming on, sharing [00:36:00] your information about what you've been working on your business and what you're seeing for the future.

It's been fascinating. So again, thanks for sharing. 

Rich Hamilton: Thank you so much for having me. 

Randal McLeaird: For sure. Hey guys, we'll catch you on the next episode. Did you know that 80 percent of the agents we speak with got into real estate in order to gain passive income so they could obtain financial freedom and become work optional?

If you want to stay up to date, the best way is to make sure you're subscribed. So if you haven't done that, go ahead and do it now. We'll catch you on the next episode. 

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