Investing Secrets: Invest like the Top 0.1%

Mark Pattison: How this Real Estate Entrepreneur built an 8 Figure Real Estate Portfolio

• Danny Gould • Season 1 • Episode 7

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Join us as realtor-turned-investor Mark Pattison unveils his transformative journey from an $80k debt to building an impressive 8-figure real estate portfolio. In this riveting episode, Mark shares his expertise, from navigating the challenges of property acquisition to strategizing profitable ventures like an 82-unit apartment complex. Gain insights into the art of real estate: the significance of surrounding oneself with a proficient team, understanding the essentials of the industry, and continuously adapting to modern trends. Learn about maximizing tax benefits, effective portfolio management, and why real estate often trumps other investments. We end the conversation with a deep dive on AI and how Artificial Intelligence will impact Realtors and Real Estate Investors alike. Dive into this treasure trove of real estate insights only on "The Gould Mine."

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  •  What's up gold miners. In today's episode I have the privilege of welcoming my good friend longtime friend and realtor slre estate team leader slre estate investor extraordinaire. This dude owns eight very successful businesses and in today's episode we're going to dive in and talk about his journey from realtor to real estate team leader to real estate investor. We're also going to go into in depth. Some of the things that he's doing on the development side of things in San Diego and a top it all off. We have a discussion around artificial intelligence Ai and how he is using it right now in his real estate business as well as his real estate investing business so without further Ado everyone Mark. Patteron Mark yes welcome to the gold mine thanks for having me man man. I'm so excited to have you on cuz. We've uh. We've known each other for quite some time. Now I feel like it's been seven years eight years. I don't know been a while yeah. It's been a while probably from my start of my career. Yeah yeah we started around the same time I still know nothing yeah yeah. Same here dude you know a little bit more than feel like I'm like what yeah. I'm like what what the heck is going on. No that's awesome man well. I I so you built a real estate team very successful real estate team. You have a lot of different businesses now and you also are a very successful real estate investor. So at what point did you decide to take the realtor H because you know a lot of Realtors. We they don't they don't get high on their own. Supply. You know there's a lot of Realtors who like rent and like don't really own any real estate. So like at what point did you decide hey. I'm I'm not just going to be a salesperson. I'm going to be an investor yeah. I think it's I mean for me. It's always been in my blood to where I knew I'd never want to be a renter. So something my parents have always ingrained in me is like you don't rent from people you buy so um. I bought my first place at 20 years old when I was a college student at Seattle U because it was cheaper to pay the mortgage than it was to live in the dorms. So we I obviously had to have my dad coign um. We got to the closing table and they're like yeah. Your closing costs are 12,000 something I'm like what are closing costs. No one told me about this I was like Dad karrow some money I had my down payment money so that was like literally. My parents still say about that and I'm like I paid you back Shut up. I didn't know uh so yeah that was my first purchase. So I've always been quote unquote an investor. But I mean that was 249,000. Funny thing is I bought that in 2006 so as we know 2007 2008 so I kept that property though held it for 13 years. I ended up making a $160,000 profit so that's something is like my dad always said which I also didn't know real. Estate went down and when I say my dad told me this or that my dad's not some real estate investor. He's not some like Guru or anything. He actually has zero real estate background. He's just a blue collar works his butt off you know says Hey real estate goes down. It'll come back up. Don't worry right. So I I kept it whereas a lot of people let their place go back and mind. You. I was losing money each month when I had it as a as a rental um. You know I was losing maybe like a hundred bucks. Here 200 bucks there something would break so it wasn't like amazing being this young 20s something year old having this like negative negative cash flow asset when you're already broke um. But I ended up selling it and making a ton of money and I'm like you know what if you can buy real estate in the worst freaking time ever and still make $160,000 off of $20,000 investment pretty freaking good right. So I've been hooked. I've been hooked ever since you know and so let's just do the math on that real quick. So you said 160. How many I made 163 ,000 profit and my down payment and closing cost and everything I think was like maybe 18,000 okay so that was a 8X on your initial money on your initial down right so at 8X return on investment over a 16e period. You said no it was a I would have to say maybe 13 years. Maybe less I sold it in 2020 and I bought it in 2007. It was probably about 12 years total. I mean that's a that's that's a really high return rate that's a really high return rate in in the worst time ever to buy right exactly yeah wow it just is crazy well. It's the thing about. It is that because it's OPM you're making money off other people's money. You can go and look at the stock market and people are like oh well. If you go to S&P. You get 10% return over x amount of years average yeah. But you're only making 10% return on your money correct not making with real estate you're making 10% return on all of the money that you happen to borrow and yes there's cost but you know what my tenant paid all those cost. So it it you know I mean I may have not had a cash flowing asset. But the equity was building up over time so and and when you do have a cash flowing asset and you're building. Equity dude. It's freaking mind-blowing how much money you could make your story wasn't always sunshines and rainbows. Though you I saw on your Instagram. At some point you were like $70,000 in debt and still managed to go from that to but you on a Ferrari now bro no. But I I have a I have I have a poor Ferrari I have a Porsche okay. There we go but I I did go look at Ferraris like not that long ago. That's what my buddy. That's what our. Buddy Jade told me he's like hey. He's test driving Ferraris. I know I but my thing is I could get one but also I want more properties. I have this like thing where I just constantly want more more more and so I'm I'm not going to go buy an expensive car. Uh I mean I have I have a few cars right now and they all add up to probably more than a Ferrari. But it's also not just one car can't have a Ferrari be my daily driver. I mean some people do do it right. Some people do do it.
  •  I'm in Southern California but how did you do it. Mark how how did you go. How did you go from $70,000 in debt to now being a very very successful business person across a variety different variety of different businesses. Uh funny thing is is I was just looking at what's on my credit card right now cuz. I was like oh $70,000 when I was you know younger seemed like so much freaking money um. Now. I have just month month to date you know in 13 days. I have $79,000 in charges on my credit cards. That's one credit card yeah. That's not my personal but still it's funny like how things have changed and how much more expenses so what it was was. I was always like a yes person. I always said you know if someone's like oh you want to go to Kenya and go climb you know and then go into uh Tanzania and climb kill Manjaro. I'm like let's do it charge that like let's go so I did that a lot and I had been to now I'm at 85 countries. So I think a lot of that debt was not because of like poor choices. It was travel and fun uh and I was in my 20s and I I don't suggest anyone to get into debt because it just sits and lingers and you're paying way more than what you're actually borrowing so gotta be cautious. But I in my opinion I I would do it again and then pivot closer to 30. I'm. Like oh I got to get a career that I love and where I can find the returns that I think I deserve I was working in corporate world. You just never you know climbing the corporate ladder. You just don't get what you can get in real estate or being your own boss. And so I changed that up uh got into real estate. Now about I want to say I should check when I got my license. I think it was 2015. So it's been about eight a little over eight years and uh just like put my head down and sold houses. In that time you have gone from solo agent at what point did you decide. I don't want to just sell houses I want to build a a team I was at a Tom fairy conference. It was sales Edge in La Hoya. It was my first tom faery conference and this girl was sitting in front of me. She heard me talking about a client I had and she's like wait well who's your client. My client was a famous person and she's like oh my gosh mind. You I never sold that person house sucks oh well uh. But I was like talking about it and she turns around. Then we ended up forming a team. It was like the dumbest combination ever but oh my God we like each other. We should form a team tomorrow. Uh We've sold 12 houses total. Uh let's do this that's kind of how it was. I think I mean I had not had much experience and I was like all right. So I ended up forming this team um I think i' had sold like 24 houses in a year which is a pretty solid agent for my first year. Especially year one um in Southern California and then I uh built my team right after that and it was more of ATT traction like people just started coming to my team asking me for advice and as you know there's always new people in the industry and from that OG team. There's still two people that are still on my team um seven years later which is pretty cool that is awesome yeah especially because the attrition rate is pretty high in the industry so that's awesome man. So since then you've built up quite a portfolio of real estate. Mostly short-term rentals so yep what made you decide to get into that space. What was it about short-term rentals that that Drew you or attracted you to it. I mean look at the hotel game. It's just they are you're killing it. I mean you look at like I think Hilton's numbers. It was something like they can have 93% vacancy and still be profitable. It's like it's something ridiculous on like their numbers are cross because obviously they've got a ton of properties that they've you know own slash manage um and you know. Over the years. Obviously you can have much higher returns for those properties but you just look and see what you can get when it's a rental versus it being a short-term rental and long-term rental. In California. You have tenants and issues and and not saying that's not what you have in Southern California with with short-term. But you control the narrative a lot more when they're not your tenant and I don't ever want to have uh one. The cash flows higher but two I don't want to ever have to like be at the mercy of someone paying rent and just deciding oh. I don't want to pay rent anymore um. It even happens in short-term rental game. We've got to be cautious with that I own a short-term rental company called 31 beaches and that um you know if a tenant decides to stay which is happening in LA with uh a lady I don't know if you've seen that in Brentwood I heard about this yes I researched like 500 500 days has not paid and she's demanding $100,000 to be moved out. Uh that kind of stuff like one that should be completely illegal. Oh. I know I I told them I was going to um play Taylor Swift vigilante go. There break out the windows of that house and just like throw smoke bombs in there and people are like do you know the owner and I was like no. I don't know the owner I'm just doing vigilante for him helping him out. I was like so if you guys hear this on the news. My alibi was. We were all here at my house right. But I was like who takes advantage of people like that. It's not like that dude isn't paying his mortgage and even if he doesn't have a mortgage people are like oh bad for the rich guy like you don't know where he came from right even if he came from money like I'm sorry like you still don't have this right to not pay and that's what in the world of like long-term shortterm kind of makes me a little nervous in California yeah. I thankfully knock on wood have never encountered that um but my short-term rental numbers are about 2.7 times what I could make even after all the expenses of running the operation and having a manager run it. Uh it's 2.7x what I could rent it for longterm interesting so your your your returns are 2.7x higher with the short-term rentals than they are with like a a regular rental so question for you when you're analyzing a deal though are you analyzing it based on the short-term rental numbers or are you analyzing it based on the medium to long-term rental numbers and then like the short term is just gravy like how do you like how do you like underwrite or Analyze. This all three okay because you always in my opinion according to my previous Coach Co coach. Mike thank you for this always have plan B in place if short-term rentals all of a sudden like in Southern California San Diego. The city they took out I think 10,000 units right um. Now. You have to have a permit so always have that plan B if you had 10 short-term rentals. You would have had to get rid of nine if you had them all in the city. Obviously there's some ways to kind of figure it out but you're not you're not doing it legally like you're you're you know breaking the rules but um so if someone kept all those short-term rentals which I got rid of mine. I I kept some of them in Southern California but I only have one in my name in San Diego. I have them outside of the city and I have them in other places. But you can technically only have one so when I run my numbers I look at shortterm. Rental. I look at medium-term rental which would be you know nursing homes. Insurance claims Etc. Not nursing homes uh travel nurses uh and then the last one would be um long-term. So I'll go through it. I'll do all my own data. I never trust the the owner numbers or the listing agents. Numbers of what their cap rate is or what their cap rate potential could be because they're they want to fluff that up so that it looks like hey look look how good of a deal. This is because obviously the higher the cap rate the better and if you have that I mean like you got you can't trust someone's numbers you can't trust. Someone's p&l you can ask for like their bank statements and see and I highly suggest that if you're buying something y because whatever they're presenting to you they can make that up right right yeah. So I do a lot of due diligence on that aspect and I never thought I was an analytic and then I look at it. I'm like actually. I'm really good at this like and also I have that in Nate like I can walk into a place so I have this company got fixers is my Fix and Flip team. I can walk into a place and be like okay that wall can go that way. This can go that way and they're like what if that structural I'm like no the roof line goes that way. I'm like no and I can like figure that out in like probably 10 minutes for a whole layout and find out how to maximize the rental income from there and now. I'm also using an app called Neighbor. So we're renting parking spots at these places and gaining like $100 $150 per month. Okay well multiply that by like 2030 so I'm getting like like $3,000 more a month off of just like storage and parking from Neighbors in the area on these properties and I'm pocketing. It's like almost $40,000 profit a year that's really fascinating what's the name of that app again or what's the name of that neighbor. Neighbor Neighbors um Nei G yeah. It's just called Neighbor so what they're like parking their car in your in your uh garage or like on the driveway or what yeah. So I have uh in like hip hip neighborhoods. If you have an extra parking spot or if you have an airb B where they don't need the parking spots um. You just lease it out and you can post it on neighbor interesting interesting. So mine is not in a garage yeah mine's you. If you have a garage you can do it. You can do like boat storage. You can do RV storage. You can do all these little things and yeah 150 bucks. But it's all controlled through the app. All the instructions are in there it it takes me zero time so for an extra $36,000 a year hell yeah like once. It's in there I just K these like Auto deposits coming in that's super sweet that's super sweet you wonder. I just thought of something what if you like Arbitrage and do this and you go and you rent. People spots for like 50 bucks and then you go and post them up for a 100 bucks. It's actually not bad it's little. It's little numbers. So it's small thinking but that multiplied it could work good work yeah especially in our Market because there's no parking in in San Diego yeah. It's super hard for parking like. It's. It's not easy to find parking and they're building all these buildings so like talking about development and where I'm going now I'm building uh 82 unit apartment complex a block away from here and then this here is approved for 74 units really that's and and it's like 74 units and 13 parking spots or 18 parking spots. It's it's really little. It's kind of sad cuz. It's. They want it to be more of a walking Community. But San Diego is so spread out so there's the opportunity there but like something like that will cost us around 10 million to build but it'll be like a $50 million exit. Like once. It's all you know 10 years out. You have to hold it for 10 years. SP sp800 turn it into rentals. Then you sell it off and this is all new for me. Like I I mean I was selling one-bedroom condos four years ago. So this is like you know.
  •  I'm learning Next Step yeah yeah. Not the expert but yeah just surround yourself with the right people and um really vet. Your. Business partners is my advice. Like you can't just take people's word for it. You you need to bring in attorneys you need to bring in like when you start getting into business. Partnerships you know make sure you have a term sheet make sure you have an operating agreement you know if you're buying property by tenants in common make sure you have that labeled out um you know talk to a title rep on how you should take teny and and figuring out like or how you take ownership a title and and they'll help you guide you. The right way CU. If you screw up or something is Shady. Like you need to have like I said all the plan B options exit strategies and things go arai that's that's definitely something. I'm learning through this this Venture. So this is a ground up you're doing two ground UPS right now yeah three. Three three of they're not all like in construction but yeah I have three pieces of land that I own and all three of them are going to be ground up construction. How do you so for someone. That's like thinking okay I I would like to be a developer. Someday you just said it yourself yeah exactly yeah. Yeah exactly right so you're just starting to get your feet wet with all of this like what's the first step and and what are some what are some things that what are some lessons that you've already learned along the way that someone who is just thinking about it uh would would benefit from um become friends with the city figure out what new community City Planning where they're going to be actually zoning certain things. So Unity Zone was a huge thing that happened across America where they went in you could reinvest money double down the cash 10 years you can basically exit out without paying uh any any capital gains on it. So there's like all these different opportunities throughout the country. So find out what's going on in your community for example in our city. It's uh called complete communities. It's only in the city of San Diego and what it was was to address the housing issue. But what you can do is basically build a ton of units with no height limit. Obviously there's you know within parameters um and and you're allowed to take for example. We have two single family houses that we bought we're combining the Lots okay. We're getting rid of those homes yep and we're gonna. We're going to build up 82 units on two single family house. So it's a three bedroom two bath and like a three-bedroom one bath house wow and now it's going to be 82 units straight up in the air with 18 parking spots that must have been a very nominal acquisition for the amount of um for the amount of cash flow that that's going to receive how what's so so if do you mind sharing numbers like I or like I'll pull them up yeah let me um. I mean I won't like I'm not going to share the screen on it. But at least I can have it off top of my head um because my numbers are probably kind of sloppy. Let me look and see so yeah the first he's doing it live. Everyone like this is let me look. This is RW all right so the purchase price for the Lots um. For both of them. One was 2.2 million and I say lots. It was actually a house yeah correct yeah single family um yeah. But it's going to be torn down. I want to save it and actually relocate it to a a different property um. But it was total was 3.85 million okay. So what we did was we did $400,000 down on both houses and then we just uh you know got debt for the rest of them yep. So just doing like a typical loan. Uh it's not a 30-year fix. It's just a regular regular deal Y and then pulling all of that together getting all the entitlement um so that means getting mechanical engineer. Plumbing electrical like or I'm sorry mechanical electrical. Plumbing all of it done getting it stamped by the city with the back and forth notes so then once you have everything done from the city and you have the package it's fully entitled or. It's called RTI like ready to issue so that's ready to issue permits. Once you have all that that value of those two properties skyrockets because it shows like the cities approved this. So then you can either go and Shop it to a developer um someone who knows what they're doing or keep it inhouse and keep going and. Try to do it on your own which in my opinion like I don't know where I'm going to do like if I'm gonna do this whole thing or if we're gonna sell it off because it's it's you know it's out of my realm um right. But if you did keep it there's a law in um. I think it's I want to say. It's uh maybe. It's just California but for 10 years essentially if you were to sell those off as condos um. The person could then come after you for 10 years. You know they come after the developer. The architect the Builder um for different reasons if there was anything that was wrong that they had litigation on. But if you own the property you know and you have Plumbing issues or whatever you just go. After the person you go after their bond. You get it fixed and then the tenants just have to deal with it Etc. After 10 years. The statute of limitations runs out so you can then sell those properties off so that's when you kind of condom minimize it give each one an APN and then you then sell them off or you sell off the whole project together um I see but for for us that all-in investment. I think let me let me get these numbers. Uh. It's 22 million total um between land cost hard cost soft cost. Uh the financing and contingencies all in is going to be 22 million the loan that we're going to have on all that is around 14.5 million m um. So. It's about 7.7 million in in cash and in investors that come in so whether we put it in the cash. I don't have 7.7 million if if I sold everything and started in only fans. No. I' get probably zero do no so. I'd have investors come in pay the rest of that cash or like. I said you have that full package that you can just sell off um and then sell it to an investor probably for like you know probably six million and we bought it for 3.2 held it for a year yeah so 3.2 plus your well plus all of the back and forth with the city because that cost money too right so yeah all the and with the and with the architect and the engineers and everything because you have to pay all those Consultants um so that's probably about seven uh. Let me look. It's probably about. I think it's around like 700,000 for all the consultants and everything that but as you as you go the other thing too that's amazing is like you get to be part owners of it. So it's a lot of like they're just giving you the work for free and then they get a percentage. So that's a much bigger. So it's a cheaper way to do it and it's less and then also if you have the Builder or the architect um being part of the build. The city actually gives you credits or I'm sorry lenders do so it shows like they have more equity in so you're basically like creating fake money. I see because you get you get Builder credits. So they're like oh well you're not charged. This so you don't have to actually pay that but we can take this off of that. So actually you have this much equity in there so then you don't have to do it. That's how a lot of the people do it interesting interesting so that 7.7 million if you get those Partners in on it. You don't actually have to come up with 7.7 million and then they're incentivized too to do the best job possible because they're now Partners in it yeah. There's an entire Restaurant Group here in San Diego called uh Consortium and they just bought a freaking 120 or 140 unit hotel. That was from the 40s. They redid the whole thing I think they spent 60 million on it yeah. They have I think around 20 restaurants around uh San Diego and all the restaurants are like the most beautiful stunning places you've ever been in and you're. Like this restaurant owner is an idiot like they overbuilt for sure and they're like no no. No the contractors actually part owners so all of the work is amazing but they're part owners on it. That's why so they're getting it at like dirt cheap and they're getting it as credits versus it being like. They're actually paying out of their pocket that's super fascinating. I know that's what I want to start doing for like a bunch of other as well um like with flips like you know sometimes people are too greedy and they don't want to give away a part of the pie but you can get so much more just like I said vet your vet your partners vet who you're working with have attorneys come in in every scenario possible if something happens yeah the only that scares me a little bit with all. This is like the partnership scare me yeah. I mean actually I'm kind of I'm going through this right now with um got a two. I don't know if he knows. I have two hotels that a contract right now in Memphis and um and so I I'm looking for well. I found a k I found a partner but it took me a while to vet everyone and still like I mean I like the guy. I think he's cool but like I don't like I don't know I don't know what I don't know right so I've vetted him to the best of my abilities. What are the steps that you've taken in the Partnerships that you've had in the past that have a and this is for like my own personal knowledge too like what steps have you taken to to vet your partners to make sure that you're getting in you know in bed with the right people yeah. So I've only had two Partnerships um well three if you include my started my real estate team when the girl was like wait who's your client that only lasted like a month um so when I'm going in and vetting someone. Some some rules that I've learned is like and I don't even know if this is how you would do it because honestly I'm so new at this. But it would be like character references and and like really doing your research on these people going on um. If you don't have the app for war. You can look up like anyone in everyone uh it can pull up all of their records so if they've ever had money laundering or if they've had any issues or uh three divorces or you know. It's like not saying any of that is like necessarily like a bad thing on one or the other maybe the money laundering. But it just shows you who you're getting in bed with like you're like what's what's actually happening yeah um so like on that I I would definitely have that aspect and then also like give me your proof of of like um like proof of concept like have you done this before. Because some people that are in sales we're really good at making people believe in our ideas and like an idea and an I like if you haven't done it yet. It's especially at the realm of 27 million or $24 million. Like you can really screw up some yep yep. Like five delays. You know could really throw all your money down the drain and then you're just stuck there with the half done building right and there are projects like I mean you see them all the time right where like halfway through they just run out of money. And it's like a like a Half Baked building and you're like uh what happened. That's all that's all over Mexico yeah. You see like a you see like a highrise and you're like that's been a highrise. There's one right off like South of the Border here right on the ocean and it's been like that for at least 10 years. Since I've been here and it was like luxury condos. They were like pre-selling. These condos off so people were buying into a pre-build and then never finished what happened to their money. I I don't know yeah that's that's rough. That's anyways all right cool so that so that's that's good.
  •  So you use forn that's actually you know what I know um. Someone else was telling me about for worn. I've used like been verified um but yeah I've been verified. I think it's like U like it's like a amateur. I think for1 is like FBI kind of level like you can look up like Justin Bieber and get his cell phone number and call Justin Bieber. There's like legal issu if you do if you do it. Though like you basically can't use like you sign all these documents in 41 like you can't use it for your benefit. It's it's all these weird things so if you go out there and try to find someone's phone number and do call like you can get in big trouble. I see I see gocha so they have like basically like ndas or whatever confidentiality agreements or some interesting cool man and so let's let's go. Let's take a a step back real quick and talk about just like the shifting landscape right now in the real estate World in general. So there's quite a bit of uncertainty as to what's going to happen with the real estate market and since you've been in it both as a buyer and as a salesperson right and and as a seller right. So you you you experienced many different aspects or facets of the market. What what is your prognosis for the situation that we're currently in and and what would your advice be to anyone who's investing or or or salese right like both the Realtors and and investors like yeah as a uh Chief Global Economist no actually have no freaking clue what's going on but you know what put your head down sell some more houses. Uh I think always no matter if the Market's good bad shifting whatever y you need to have your reserves in place and you need to make sure that your finances are in order. Everything always needs to have a backup plan. For example all of my properties can self like run self-sufficient. I mean when Co hit that was a no moment that was definitely an unknown when I just kept seeing cancellation cancellation cancellation come across uh from all my short-term rentals and I'm like oh like yeah. This is this is real but I had reserves to pay each mortgage so like place I have uh different accounts for so like all my rentals have six months reserves all my stuff and whether it's like being invested because I just don't want it to sit there. I typically keep about a month or two of just liquid and then the rest is typically in uh exp stocks or like I'll have it. But it's liquid enough to where I can pull it if I need it. But I don't ever have it where it's like just where I'm like oh I I need to sell a house to to make my payments like don't ever get yourself in that situ situation. So if you're buying now is it more risky because we don't know what could happen if you're just trying to flip it or do something yes if you're buying and holding my personal opinion is you're going to be fine. What's the worst thing that happens like if you have to have a house or if you have rental and it's and it's covering it and the prices go down remember my property. I bought in 2008 well 2007 properties went down. You just hold it longer yeah. It may not be the ideal but you're not going to lose money. You only lose money if you sell less than what you bought it at and you don't have to do that. If you planned correctly um as for stuff. We're still buying houses like right. Now. I probably have three flips going on maybe four um. So my team got fixers. We have 17 callers. There's definitely people out. There you can do sell financing. There's a lot of interesting ways that you can get into the market right now and I mean if you follow Barbara corkin at all. I think she's great I I look up to her a lot. She you know what's you just frecking refy so worst case scenario prices drop. Okay hold the property cuz you had Plan B cuz when you bought the property. You did long-term short-term uh and middle term maybe even if you lived in it and then you had reserves. So you you can't go wrong with real estate like you could obviously Buy in a dying. Market make sure that population's increasing make sure that there's maybe you know military or something that's consistent in your area um. But then you go from there and you just you just keep doing it and doing it and doing it. And it's like how did I get from where you know eight years ago having $70,000 in debt to this to now having $70,000 in 13 days in debt yeah. Like yeah I don't know you just you just keep moving along and I think people look at me or someone. I look at others. I feel like I'm a minion but people may say like oh. How are you doing this 82 unit apartment complex and I'm like I mean I surrounded myself the right. Builder the right architect you know the right consultants and uh we're just doing it step by step. You just learn little by little um and then whatever you don't know you can look it up on AI create. Me create me this and and do this yeah. So if you're not on chat gbt and you're not paying the $20 extra a month you're crazy um. You can figure out majority of your life on AI. All of your life's problems can be solved so I EX for except for what I don't know mental and emotional. I don't know not yet not yet. But it it could get there. I really do think it could yeah. I really do I need I do want like an AI heart. I need something to like care for like others not like physical heart but like the emotional heart I don't have that aspect no. I think you're selling yourself short there man. But um you know actually speaking of AI. So you know it's really cool. So I I got. I've got a cool story for you and I'm sure that you've got some cool AI stories too but have you ever like gone through a Leal document before and like just you're staring at it. And you're you're like you're trying to put your your your. Like you know best reading glasses on trying to like dissect it all but like you're just kind of staring there. You're like what am I reading right. Now you know kind of thing where you're like like every you can get through most of it but then some of it. You're just like I have no idea what this is saying so that happened to me on this last contract that I was uh reading through. So I'd cut and paste a few paragraphs into it. That I was like I have no idea what this is saying and then I'd say break it down for me in layman's terms and it would spit out like in layman's terms. This is what this means and so it like reinterpret so it was really cool man like I it was just like a really practical use case for uh for me so that that was that was pretty interesting any any fun or cool AI stories that you've got um. I was actually just going to throw an RPA in here and see if I can get which is a purchase agreement in California and I was like let's see if this will summarize us for us well yeah. So I mean right now. I have two employees that work on AI um. Their job is to basically discover how can we make the real estate process smoother whether it's lending um. I mean so I've got two pretty fre freaking cool things. Uh I have an AI company for real estate agents that you're going to be able to pay a monthly subscription fee to I'm thinking. It's going to be around 99 bucks for like our our platform and then you can have all the cart options as you have a team but things like um creating new listing forms creating new marketing. It's going to be integrated with canva. So you're able to generate everything and anything that you need plus it's going to have every single real estate. Prompt updated regularly a lot of the things that you see when you're buying like a prompt book those things are so like it's going to be outdated in a day because it's always updating. So we're gonna have ours live on a website that you log into you'll have a membership um and then from there you'll be able to get anything and everything for Real Estate related and it it's prompts as in like creating a list listing description creating this. But it'll all have plugins to your MLS. So you can actually like pull data um so. That's that's where I like it and it also can give you summaries of your market so you don't have to go out you're just going to have one spot that's kind of tell you like your daily dashboard. Uh you know how many new listings how many this like it can pull from everywhere so you're fine. You don't have to go out there and search for it. That's super cool yeah. That's super cool man registered all we're doing is just now.
  •  We already have it all done. It's just making sure like now we have to like package it to make it look better right but guy that actually works one room over uh Christian. He's he's gonna head the whole thing. It's his. It's his project. But we're going to come together and kind of come up with this like entire. Enterprise for for um all based off AI. That's super I mean. This is the future if you are like by the way it was less than a year ago that all this like really started popping off and here we are nine months lat. It feels like the advancement in just these like we were just talking about it before we hopped on here. This imagine art tool like it it is insane what like it. It's creating images and graphics and all these things that like it looked like a professional picture like a real life photo. But it's not and it's just it's absolutely insane well. I mean also so some things that we'll have is um like our currently so our AI will go into Fallout boss and it listens to call recordings and it it labels it green yellow or red and then it ranks it um out of 10 so it'll basically be whether the call was a good call. It'll also summarize everything into an email and it'll autogenerate that and so all you have to do is hit send but it'll be like you know like hey. Danny great chatting with you about two3 Main Street. The next steps to get your house on the market are blah blah blah blah blah whatever you guys talked about it's going to summarize it for you. It already does it for our team that's so cool and then all you have to do is press enter and then also the sales. Manager gets the summary calls. So then you can go and see like okay. These top agents are the ones having the best calls. These bottom agents are the ones having the worst calls the crazy thing about all of this and all of the data that's all going into it. It's training our AI to where it's just going to be doing the dials for us like it's going to have the conversations right so it already does it. It's just a little delayed so it can have a fullblown conversation and make your dials for you and your follow-ups and your nurturers um. So it will not replace agents. It will replace shitty agents so if if you're not stepping your game up like get ready like it's there's G be a lot of Agents out of the market because we just won't need them to do what we need to do yeah like call centers will be a thing of the past year pretty soon like probably in about a couple months yeah. So I had a friend that was talking about doing. He's creating an Isa company right now and I'm like I would not be doing that dude. I'd take all that money that you're thinking about putting into a Isa company and put it into an AI company and do that one you won't I mean it's gonna be the wave and no matter what the shitty thing is like what are all these people going to do for work. Like we. It's get. The entire Workforce industry is going to shift yeah um yeah. So it'll be interesting to see. It's crazy man. Uh is that through air. Or is that is that another service that you that you guys are creating on your own or like the the call. The call function of it yeah you know I would have to actually ask uh Christian. I don't know sorry about that I I know that our call like the way it ranks. Our calls is through chat gbt yeah um. It's through a plugin. So I don't know how um if through a idol gotcha okay no worries yeah. I just um there's a they keep coming up on. My Facebook feed but it it's really like it really is the future you know um. There's no there's there's no other way to like say it. It's just like how you're having like a computer is having a like a full-blown like personalized conversation um I had the I had that Airi call me so you can do like a trial with it and I was having a full-blown conversation with it. And it freaked me out a little bit. Not going to lie it was. It was kind of freaky. It was kind of freaky. I mean it is it is a little yeah. This is the one actually that we were talking about. This is the one um but no we don't use this. But this is the one that we were listening to. It's. It's a little bit delayed right yeah. It's like yeah. We listened to this a couple days ago. But it's slightly but it's gonna be yeah. It was it was it the Tesla one uh I don't what do you mean the Tesla. One. Tesla uses air air AI for their reps like it'll be like hey. Danny I saw you on our website. Uh this is Mark from Tesla and he's like oh yeah yeah hey man. It's like um so are you interested in checking a car out at one of our places soon and it's an AI talking for Tesla and the person. The consumer does not know it's delayed a little bit but it's not like a rude delay. It's not not enough to where the guy that was on the other line didn't have any quals about it at all yeah. I know it's there was for me. It was like maybe like a maybe a split second delay and it was noticeable but only because I knew it yeah. I know and and that what I was thinking is like wow this is nine months in I can only imagine what like nine months from now is going to be like it's going to. It's there won't be a delay. You know there won't be a delay. It's it's going to be. There won't be a delay in like a couple weeks like they how fast. It's just. It's insane what is happening um. It's gonna be kind. I mean it's the.com boom. It's it's that idea there's going to be a ton of them that are going to come out and they're all trying to fight for all of our things.
  •  And it's like which one should I use or what does what um you. Know you can use a bunch of different base models of things but I think chat gbt for me. It's just been the easiest for obviously. Airi is like something completely different but yeah. The idea behind it is like you know just get your bases down you know if you need to summarize a PDF if you want to create an image for an open house. Whatever you need to do like it can all be done so you're building an a company uh for real estate. Agents do you see any use cases or things that investors might be able to use AI for right now yeah. I mean you could summarize a proforma um so if you get something from someone and you get maybe two different properties and you throw it into AI. You could be like which one's a better investment. What's my cap rate. What's my gross R multiplier. What's my cash on cash return well what if I put in uh 20% down payment okay. What if I do 15% down F now November 8th no. 8 5% down on multi-units yeah um so that's going to be huge for a lot of buyers. If you're a young investor and you don't have much money to put down um and if you want to summarize what would be the better investment. Actually. I do this on my on my uh Instagram Channel. We started looking at properties where would I buy it. Uh would I invest or would I pass and I explain within 30 seconds is why I'd buy this place or why. I'd pass on it yeah so that's going to be my my thing on like basically just like rapid fire um to show you like what you how you need to think. But if your mind doesn't think not saying like but like I said I do it enough to where like I can look at something and be like nope not not an option um. But I can run the numbers so quickly in my head that uh. I'm doing that but that's what AI could do for you right. But I think even though AI is doing it for you. I think you should still understand it 100% 100% that that's kind of the part where I'm like at what point so. For example you've got a bunch of kids in school right now who are using chat GPT to write their things for them their their essays or whatever so my question is and I this just like a theoretical question like more like a philosophical one at what point. It's like the calculator. You know so like now. We're so used to using the calculator that like almost like basic arithmetic is almost not even necessary right but like what what do you need to know like what is the the necessary based knowledge before you start leaning into Ai. And I think that's something that we still have to figure out like across all Industries. Half half of America already is the dumbest people in the world so hey you said no offense. I'm sorry America um go travel a little bit and you'll realize how bad America education is so if people are scared about kids writing their essays on AI. Like uh I think they should be. I think writing an essay is a waste of time but they should at least know how to figure out the research and where to get things. But but why would you have like a Dewey deal system in a library when I can go to Google I I I agree libraries like I love that that the aesthetic I love the community aspect um but like majority of the stuff that's in the library. By the time it's in a book the way that Ai and everything is happening. Now. It's moving too quickly to even print something about it like it's it going to be outdated immediately so imagine. If you had like books on it. It would just be irrelevant and that's how like advertising is going to be. It's going to be so fast and that's what I think about real estate and I think about that's why like regular brokerages are broken because you have this broker who was maybe a badass 40 years ago and real estate's different. Today. The buyer when I first started out in real estate people are like wait where did you like people in my office where'd you find that client. I'm like uh Zillow and they're like you found them from online like they're not going to buy like an online. Buyer found you and they're going to buy a house for you. And I'm like yeah and same with the other three escros that I have right now and they're like wait hold on and I became one of the biggest agents in that office. Like that and all these older agents had not been doing that they weren't even claiming their sales on Zillow I was like I was I was like you guys need to make sure your profiles there your photos and they're like no one shops online for houses well. That's funny that office is closed now which I drive by and I'm like haha so yeah. You got to adapt with the times like students using AI for like. This is they're going to be using AI in the workplace so yeah they should be using AI in in school because at my office if you don't have ai on your phone. I'm like what the hell you doing. I don't want to pay you an hour to write a freaking blog figure it out on AI. In two seconds read it make sure it makes sense and you need to have that but don't take your time to actually write it. I wrote three ebooks yesterday evening see and I was like wrri a book right now actually yeah but like you're actually writing it not AI. I'll never tell yeah no. I'm writing it yeah yeah yeah. That's that's cool you'll be a tell from you'll be able to tell because of all the grammar mistakes. I'm doing it on purpose so you know it's me. No so you know I have a question for you that kind of ties in everything that we've been talking about and it really it really has to do with like mistakes that you've made because obviously you've you've had a lot of success but like those Su that success hasn't come without. Like some some mistakes I'm assuming so like if you had to look back on your investing career. We're not talking real estate sales but if you had to look back on your investing career. What is the singular biggest mistake and don't say that you didn't buy sooner um what's singular biggest mistake that you made along the journey in your investing career. I would say I got too caught up in just like the small mindset or thinking like maybe that that wasn't possible. So we look at like the 82 unit and we're like oh my gosh like how is that possible to get this like $7 million and to do this you're like okay but then look at the like and this is only seven stories look at the like 80 story buildings that are being built. You know look at the hotels that have 4,000 rooms in Vegas. Like they're no different than us. They're just more experience but anyone can do it. You just have to like slowly but surely get there and it's not impossible to ACH. At love it so yeah don't be afraid yourself don't be afraid to drink bake you know that's uh. I think that's really great advice man because I've I've immersed myself into a couple of different investing groups and and whatnot and and it's it's really it's really crazy because there's there's like two just everyone there wants to be an investor right like that's the first like. If you're listening to this podcast chances are you want to be an investor but in that group there's actually a variety of different limiting beliefs that exist and one of the biggest ones has to do with like giving yourself permission to like accept that you're capable or deserving of having X right like like some guy on my call. The other day on this uh coaching call that I was a part of you know he was freaking out over buying a $1.5 million apartment building and nothing against him right. But I was like dude that is like Les less than the median sales price of a single family home in my market and he was like freaking out about buying a fourplex that was like 1.5 million and so it's interesting to hear. You say that because I think that there are there are these like limiting beliefs around money and if you can just like take a step back and realize okay well any building out there. Like someone so if like like the example that you gave in Vegas someone in like someone made it there that had it worse than me and they still got there right so like same thing with what you just said with the all the hotels and stuff in San Diego or like the apartment buildings in San Diego. It's like dude like if they if they can do that why can't I right so. It's like a different mindset. So he's like. This is why I can't because it's a lot of money. But it's like someone else did it. So why can't. I so it's like a different mindset um yeah. It all I mean. It's all and and it's like like.
  •  I said thr yourself with the right people but also it's be don't be afraid to ask questions like no one knows everything and if you're not asking questions doesn't mean you're stupid. How do you think you learn when you're a kid. You're curious. You know how many questions little kids. Ask like they ask like a question every 20 seconds yeah because they want to learn you should be that kid obviously don't be an askhole like someone who just like ask ask ask I had to like tell this to my one of my employees. I'm like nanny you're so curious about things which is great. But it's almost like interrogating like be cautious. How many questions you answer back toback or ask back to back without having a conversation so understand your audience understand like if anything that you want to study now. If you want to like put emphasis on things that you can learn about money people human interaction um not I I would probably go more towards predictive index like understanding each personality type. That's where you're going to be able to make money like AI is. Gonna take over all the automation but there's still going to be the human aspect and you're still going to have to be able to have like some of that um even though more and more is getting eliminated slightly. Switching gears right now I so we know each other on a very personal level and I know that you are very different than most people because you have like five or six and now maybe even more business. I don't even know how many businesses you have anymore and they're all very successful eight okay eight awesome. I'm like in debt and no it's going fine yeah but yeah. No I have eight eight different businesses. So you have eight different businesses which you know most people. It's like overwhelming to just juggle one so. Let's pretend for a second that control freak. I have no controls. I don't care it'll work out. It's like I'm a stoner mindset but I don't smell we it'll work out. It's all good man yeah. What was your question on it sorry. That's kind of like the thing you have to do no but that but that's the punchline right there. It's right. It's it's like yeah cuz. You're control freak. That's um those of you listen listen back home. Uh no so my question to you was. There's a lot of people who have a day job right who make a lot of money. They're they're they're they're wealthy right or or rich or whatever you want to say. But they don't necessarily have the bandwidth that you do to like juggle like a bunch of different things or whatever. So what would your advice be to someone who is is curious or wants to invest in real estate but doesn't really have the try to do. It find yourself someone like me or Danny and have a professional do it. So if you're an attorney or a doctor or you're in Tech and you're. Like yeah. I just I make you know x amount per year. I've got all this extra cash. Yeah find someone that you can partner with that actually knows what they're doing because real estate if you're not in it and you got your pulse on the market. You like I said like you can't buy wrong. But you can you can for sure buy the wrong place just because because you're not in it and like what we think is like just like basic knowledge is not like we sell ourselves short on how much we actually know right uh how in tune we are with what's happening and what places are having development issues and what places are having things passed like that like that takes day in and day out of knowledge and picking picking the right agent like when people just think you're having a buyers agent because you found them at an open house and they're cute and you really get along like that's the worst mistake possibly could have if they don't know their like. They're you're investing $800,000 $900,000 that could go like to 1.2 or it could go to like $ 950. Like do you want to make 300 Grand on this first purchase that you're about to make or do you want to make like nothing for your first home like that's because your agent is just trying to get a sale and because you met them at an open house and you like them so find someone that you can trust that knows their that understands real estate that understands investing that's not going to tell you to buy everything that they see they're going to tell you like. This is a great deal like you should buy. This one don't buy that one don't buy that one and you got to listen to their advice and I mean you don't have to do everything but like if if someone is going to say don't buy something. I had a client. I was like I wouldn't buy that one and they bought it and to be honest. I don't think I don't think they're goingon to be able like get what they want out of it or the rents they're going to want out of it. Um. I just don't see that type of tenant being able to increase to pay the rents that you want. Even though like I said about the listing agent they said oh the rents could be this. I'm like yeah but the market rent look look. What's available like you got to check all that out you got to know the areas and know what's happening people think oh this area is going to gentrify and change. It's like that that takes many years. It's 10 20 30 years before a neighborhood becomes quote unquote nicer or safe to where your rents are going to be enough um so find the right people find someone like me I I actually don't want to help any investors. But I'll get you a great agent on my team but yeah. That's what you you have to like essentially find someone that even has the time because the really good investors we're not going to go and take a client like we're just going to go and find the money ourselves right so and and and actually so that was going to be my next. Question is like so for someone that is super invested in their work and don't have a lot of time you would still say like go out there and buy just like a like a a residential unit here in like in San Diego. You'd say like oh yeah let's go buy like a duplex or a Triplex kind of thing that would be like your your your gut instinct yep cuz your job unless you're inventing some tech or doing something crazy like you're really not going to make a ton of money and real wealth comes from 90% of Americans. It's real wealth comes from Real Estate. I mean that's why we have the disparities between like whites and blacks is like with slavery and land ownership and they weren't given land. How do you build wealth in life where does your. Family's wealth come from where did your parents help you when I went to the closing table and I had to borrow 12. Grand from my parents like that came from generations of generations of generations of land ownership that they built up wealth to where 12 Grand is absolutely nothing to them but to a family that never had property. It's that's that's detrimental to them like it's not possible. So real estate is always the answer and like if you're the first person in your family to buy real estate buy it and buy more of it because it'll change the trajectory of your family and where there know the people that you leave and I mean like think right now if I can build my real estate portfolio up to 50 million bucks like net um. Whether I have it you know debt on it. Whatever and I leave that to my niece and nephew they're stepping up to like a $50 million Baseline and you know you can do with the $50 million like like to not have to start that from scratch and that's what all these like that's what I was like talking about people. I'm like dude you don't even realize how good you have it. We have generations of wealth from Real Estate so just shut your mouth. Like that's all. I think sometimes I'm like and if you're not buying real estate and you have the opportunity you're just as bad there's nothing out there. That's as good as real estate so buy more at all times in my opinion. St like what are you going to buy what are you going to buy 100 Grand in stocks and something that if like the president of that company you bought a stock and stubs their toe. The freaking stock market goes oh. Let's let's lower this price because uh you know the company just doesn't seem as stable like stupid happens the dude on uh. Uh what was it h Sex. In the City. I didn't see the movie but the guy died on a pelaton and I think it was a pelaton and pelaton stock dropped yeah right. It's a movie yeah right yeah to me.
  •  Like no thanks yeah the benefits of real estate buying buildings looking to cost segregation which is accelerated depreciation. You can get your taxes like very low to real estate. You have to be a real estate professional. You have to dedicate a certain number of hours but look that up I definitely suggest if you are in another field start pivoting to where real estate's more your main field um. The tax advantages for Real Estate professionals is much greater than a traditional person yeah and and on that note actually so if you're married it it doesn't even have to be you correct it could be your spouse that's the real estate professional if that's if that's my understanding by the way we're not uh either the disclaimer or whatever like we're not tax professionals talk to your CPA. But I don't even pay taxes. I don't know anything about tax. No I've never paid my taxes ever and I've never served jur jury duty who I'm kidding do you even live here yeah. Am I AI no. I' I've never served jury duty ever. That's crazy and but I have paid my taxes every single year. I've never never been behind I'm about to pay my taxes on Monday their due by the way I think the 16th yeah for anyone who had that extension get on that yeah. I think I think I'm I think I'm good. I think I think Luke took care of it Luke if you're watching this More Money More Problems Biggy Smalls. I'm like how do rich people. I always say this like my assistants we always like joke around. I'm like how do rich people like actually do stuff like I'm not rich and I just feel like. It's just like so much like mail and things and how I'm like how do you do it. It's you got to have a system and be organized if anything take an organization class like on how to organize everything and hire a badass assistant or two that save your life yeah. You got to have you got to have a a full-time like personal assistant that knows how to deal with all that BS. At some point you have two and I have a and a bookkeeper full-time and I have an accountant and I have a CPA and I have a or no U sorry CPA and I have a wealth manager yeah so yeah. You literally have to have like all these people and I tell them be on my ass like because I won't remember that this is this. I'll put it in my calendars and stuff. But I don't want to know like on the 16th. I think that's the day our taxes are due um because of the the 15th is the is a Sunday so then yeah that makes sense yeah yeah so but surround yourself like I said even with your partners your your crew needs to be solid love. It man well we're running up on time and want to be respectful of that before I let you go in traditional fashion. What is one final Golden Nugget that you have for our audience. Go one thing um learn. I I would say be a sponge like I people ask me how many masterminds I'm going to or doing things I have a mastermind coming up in uh Austin Texas in November. On presenting I've got a lot of other great speakers coming be a sponge go to events learn if you don't know ask questions like my dad always said there's no such thing as a stupid question just stupid people which is all so ask questions. Your question's not stupid like people always say like oh this might be a dumb question. I'm like well the question's not dumb. You are you as a joke but no ask questions. It's fine to be stupid. You don't become smart by just faking it like you got to learn you got to be around the right people and just don't you know don't be like oh. I feel stupid for asking this because I'm too scared that I don't know this because I'm an adult and I've already bought 12 houses and I just don't know what this means. Sometimes I'll look at a hud like I'll look at a closing statement. I'm like wait. What's this and they're like don't you go to Real Estate Company. I'm like listen. I also have a whole bunch of other in my life. I don't know what that means yeah like what are you g to do like that. You're cooler than me. I don't care yeah you're smarter. I don't give a we're not in high school. Yep love that so love it ask questions be a sponge awesome man well for those that are looking to connect with you online. How can they how can. They find you what's the best way for them to do that. Uh Instagram is my best way so Mark patteron show so. I'm sure the link will be maybe on YouTube or but yep yeah. Mark Patterson show p a t t I s o n and uh yeah. Hopefully you can learn something from there I always try to do. Some investment talk on there have guest speakers. Do YouTube. You know the normal stuff love it man love it well. This has been awesome I'm really glad that we were able to do this and uh thanks for your time brother for sure man thanks for having me and uh happy Friday. I'm about to go play some kickball slash ball slash ball Friday the 13th oo wow.