How You Can Buy Real Estate Without A Bank: Creative Finance | Pace Morby

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Most people believe you need cash, good credit, or a bank to buy real estate. The reality is that hundreds of thousands of homeowners every year will hand you the keys, and sometimes even pay your closing costs, just to get out from under a mortgage they can no longer carry. This conversation breaks down how that actually works and why most investors never touch it.

On this episode of Wealth Made Simple, Karlton Dennis sits down with creative finance investor Pace Morby to break down how he buys real estate and businesses without using his own money, credit, or a bank. Pace walks through subject-to deals where the seller pays him to take over their mortgage, why he ranks single family homes as the most flexible asset you can own, and how a 7 million dollar RV park turned into a 2 million dollar jump in net worth in a matter of days. He also gets into the tax side, from cost segregation and the short term rental rules to financing 4 million dollars of equipment for a major write off.

Whether you are trying to close your first cash flowing property, acquire a boring business right in your own town, or simply keep more of what you earn, this episode lays out both the mindset and the mechanics behind it. Pace also explains why most people who watch a breakdown like this will still never take action, and what separates the few who do. If you want to build real wealth using assets instead of waiting on the market, this one is worth your time.

CHAPTERS

00:00 Intro
00:26 The System That Lets Pace Step Away
02:27 Undercover Billionaire: $2M in 3 Days
03:06 How Zero-Dollar Deals Actually Work
03:55 Why 650,000 Owners Will Hand You the Keys
06:37 Closing a Deal Live On Air
11:02 Why People Won't Take Action
13:14 Why You Pay to Be in the Room
15:15 Creative Finance Explained
16:36 RV Parks and the Accidental Landlord
22:23 The Morby Method and Wedding Venues
23:22 Real Estate Pro Status and Texas Oil Parks
24:34 Pace's Full Portfolio Breakdown
28:39 Building Car Washes With Vic Keller
33:12 Why He Won't Go All In on One Thing
34:02 Where Beginners Should Actually Start
35:18 Co-Living, PadSplit, and the Right Modality
39:15 Why Graham Stephan Is Wrong About Real Estate
40:24 Sober Living, Section 8, and Super Section 8
46:18 Rapid Fire: Ranking Every Asset Type
48:18 Taxes, GPUs, and Bonus Depreciation
50:14 GPU Allocations and Becoming the Middleman
52:54 Ken McElroy's Director of Philanthropy
54:01 How Pace Structures 45+ LLCs
55:07 The $12 Million Demand Letter
57:46 Why Hiring Pros Saves You Money
59:16 How Pace Uses AI to Find Deals
01:02:36 Hiring a Full-Time CTO
01:04:41 The Student Who Retired After One Deal
01:14:47 The Best Boring Businesses Right Now
01:18:19 Why Pace Hasn't Bought a Jet
01:21:51 Where to Follow Pace

#realestateinvesting #creativefinance #wealthmadesimple

Transcript

SPEAKER_01 0:00

I lost like a million and a half dollars. I had no cash. I had no lines of credit left. I had an employee that sent me a demand letter of 12 million bucks. Damn. I was zapped. I got a two million dollar uptick of net worth in like three days. So I don't need 90 days. Put me on a park bench butt naked in a thong and I'll go do one of these deals. Like maybe not a thong.

SPEAKER_03 0:26

Welcome to Wealth Made Simple. I'm sitting down here with a friend, a mentor, and somebody that has probably helped more people get into real estate than anybody else I know. Mr. Pace Morby. Carlton Dennis, thank you for having me on the show. Happy to have you here, brother. We're gonna jump right into it. You're on YouTube every single day, it seems like you're posting an episode. I think we said four times a week you're posting episodes, and you just were touring the country for a hundred days in an in a motorhome. So you're too busy to edit your content, to create VSLs, to go look at funnels. I mean, maybe you're coming up with offers, but even really seeing offers all the time.

SPEAKER_01 0:59

I come up with everything. So I like I'm the visionary behind it. So even you walked in and there was um me and the team for the YouTube team. Yeah. I came up with the Zero to Hero series with Maddie. I came up with the Zero to Hero series with Jennifer, the lady with multiple sclerosis. So I come up with these things. I find the character, I create the story arc, and then I fly and I create the content and they document it, and then it comes back and they organize the content. They go, How do you want us to tell this story? And so I'll come back, but then I don't have to touch a computer, right? So they do they'll now after that meeting, they'll go and handle all those things. They'll come back to me right before it gets posted. But what am I doing in the meantime? Um, I'll fly to Montana. I'm with my kids. I, you know, I'm working out in the garage naked with my wife this morning, you know. And I gotta be, I get to find four or five hours a day where I get to just live my life and have really true balance. And without knee reach and the organizational structure here, I wouldn't be able to do that. I'd be stuck behind the computer and um I wouldn't be able to do the stuff I want to do, which is create. I want to create and I want to do weird shit. Yep. Like I want to, the next thing I want to do is send me to like one of the most dangerous countries on the planet with no money and like an Android phone and like no shoes, no money, no nothing. And I have to escape from that country by doing real estate deals virtually through like their a VPN or something like that. I want to be able to do stuff like that and show people like there's there's lit literally no limitation in the world of your other than your ability to just follow a system. And I want to go show it. I don't want to teach it on a whiteboard all day long. I want to go show myself being put in those really impossible situations.

SPEAKER_03 2:27

When Grant Cardone did that one TV show, uh Undercover Billionaire, and he had, I think, 90 days to figure out how to make was it a million dollars?

SPEAKER_01 2:34

A million, yeah.

SPEAKER_03 2:34

What would you have done if you were in a situation where in 90 days you needed to make a million dollars from zero and you couldn't use your influence?

SPEAKER_01 2:41

Okay, so what Grant did is he went and bought a mattress company and he took ownership. That's how he got a net worth of a million bucks. I'd do that with an RV park, I'd do it with a mobile home park. I just bought a $7 million RV park with no money out of my pocket and it has like $2 million of equity in the deal. I got a $2 million uptick of net worth in like three days. So I don't need 90 days. Yes.

SPEAKER_03 3:01

And that's when people hear that you're buying deals without any money, they have no idea what that even means. How can you go and do a transaction with zero dollars? How does that work?

SPEAKER_01 3:10

Okay, so I have an I have a seller right now. I just closed the deal yesterday. Um, seller calls up, says, Hey, I've got a 3% interest rate, sell your website, I have no equity, I'm trying to sell my house, my agent can't sell the house. I go, Great, I can take over your payments. And they go, Okay, well, what are you gonna pay me? I go, nothing. In fact, I'm gonna have you pay the closing costs. And so I've got a deal where the seller's handing the keys to their house on a 3% rate. I'll turn around and I could wholesale that deal to a family for 20, 30 grand, or I could turn around and rent it out for like sober living or do whatever else I want with it. Um, and the seller is paying the closing cost of like 4,700 bucks to give me their house.

SPEAKER_03 3:46

This deal that you're constructing, most people don't even understand why someone would even want to do this. Explain the dynamics around why someone would even be able to say yes to something like this.

SPEAKER_01 3:56

There's about 650,000 people in the country right now that have no equity but are actively trying to sell their house right now. So these people, let's say they owe $375 on their mortgage and they're trying to sell their house for $390. Some people think, oh, well, they have $15,000 in equity. No, they don't. They're upside down. Because after you pay your agent, you pay your other agent, you pay closing costs, your buyer's gonna come along with all their inspection items. You're underwater, you're writing a check to get rid of the house. And so people are like, oh, people are holding on to their mortgages right now. It's like, okay, obviously you're not in real estate. You don't understand what's going on because when you look at the actual math, hundreds of thousands of people get job change, they get deployed, they get divorced, they get, you know, they lose a job and they're like, I have to get out of this house, I can't afford it. Hundreds of thousands of people a year cannot hold on to the house. So it doesn't matter how good their rate is, they have to get rid of the house. They can't afford it anymore. This is happening no matter what the economy's doing. Since 2013, I've been doing this. I've never seen a cycle that did not have hundreds of thousands of people saying, Here's the keys to my house, and willing to pay the closing costs. So the family that um I just bought the house from in Santan Valley, Kenneth and Melissa, Kenneth lost his job. He's an electrician, has a good job, but for 90 days he hasn't been able to work because he got injured. So for 90 days, he has no income coming in. She goes and gets a job. She's a stay-at-home mom, she has no understanding of how to make enough money to pay a $3,000 monthly payment. So they go, you know what? We just need to sell the house. They try and sell the house. Agent's like, you owe too much on the house. For me, when you're looking at deals like this, I go, the value of a house is not the purchase price. The value of the house is what I can do with it. So think about that for a second. If I can find another family that doesn't want to go through a bank and I can literally just take the contract I got with Melissa and Kenneth, and I could just sell it to another family for 20 grand and this family gave it to me for free, I could just make 20 grand out of thin air.

SPEAKER_03 5:41

And that's wholesale.

SPEAKER_01 5:42

It's wholesale. Or I can, like what I did on that particular house, I'm having a company called Oxford House just sublease it from me. So I don't have to find the tenants, I don't have to manage the repairs, I don't have to deal with the utilities. Oxford House deals with sober living and people that are aging out of foster care. And so you just go to Oxford House and go, hey, I've got a lease on this for I've got a payment on this for 3,000. If you can pay me 40,500 bucks, the house is yours. Yes. And they'll come in, they'll give you two months up front security deposit, and then they'll give you a five-year lease. Like, bro, there's I put me on a park bench butt naked in a thong and I'll go do one of these deals. Like, maybe not a thong.

SPEAKER_03 6:14

What prevents people from doing a wholesale deal like this?

SPEAKER_01 6:18

Mindset. Just like anything else. They're afraid to ask. I think that they are it's so simple. Same thing with me that you feel like you're gonna you're missing something. Or it's kind of like when people take tax advice from you, they're like, it can't be that simple. You're like, yeah, it's in the internal revenue code. Yeah. It's written. Yes. And people still think you're full of shit. Yes, they do. So it's the same thing with me, is that when they see me do it, like, check this out, this is wild. So this today's Friday, Monday, I get a call from an agent. And I was doing a four-day challenge. So I get a call from an agent. I go, I'll just take the call on the live in front of 1800 people. So agent calls me. I go, Yeah, how's it going, David? I haven't done a deal with you in a year. How's it going? Goes, hey, I've got a seller, they're in a bad situation. I go, great, get the seller on the phone right now. He goes, Oh, they're not available. I go, just check. Get them on the phone. Five minutes later, sellers on the phone. We're all talking. I got, you know, thousands of people watching this live. This is Monday of this week. It's streamed on my YouTube channel. And I go, Well, dude, can I just come down to the house? And he goes, Yeah, you can come down to the house. And I tell um Melissa and Kenneth, the sellers, I go, hey, I'm going to record this so that when you want to review what I said to you in your house, you can watch the video yourself. Are you cool if I just record the whole appointment? And so I gave my phone to the real estate agent, David. I go, hold my phone while I just go through the appointment. So I go through the whole entire thing. And this is what's crazy. Like you they watch the first call, they watch me extract the pain. And why are these people selling in the first place? Why are they willing to let me take over their house? People will watch it live. Yeah. They watch it live. Like, no bullshit. Here's the address. Here's the sellers. Obvious, this is not staged. And then I go to the house, and here I am, an hour, an hour and three minutes. Okay. Check this out. Let's go through this real quick. See how I'm with the seller and I'm explaining it to him. And then I even even in the video, I break down even the contract step by step by step. I break down why am I doing this? You're going to give me your house. The mortgage is going to stay in your name. I'm taking, I record the entire thing. The next day on the second day of the webinar, Tuesday, I give the video away. I go, you guys saw the call. You then saw the appointment. Here's the hour. People are like, oh, there, but they haven't signed in the side chat. People are like, oh, but they still haven't signed. All right, you sons of bitches. Here's what we're going to do. Hey, Kenneth and Melissa, can you guys come on this uh Zoom tomorrow? I got a couple of friends wanna, they have a couple of questions. I want to show my friends us finalizing the this contract. And I'm saying like a couple friends, it's thousands of people. Yeah. So Melissa goes, yeah, that's probably fine. So Melissa and Kenneth, this is Wednesday, two days ago. They come on a Zoom with thousands of people. And she's like, I thought it was a couple of people. I go, Yeah, but I got to show people I'm not full of shit. So I go through and I go, What questions do you have? And I go, too, I go to her and go, how much money you get she are you getting in this in your pocket? She goes, Nothing. I go, tell people, tell the thousands of people why you're willing to do this. She goes, We lost our job. We're in a bad situation. We don't want to hurt our credit. We're just going to let pace take over the mortgage. Do you know the do on sale clause? Do you know this? Yes, pace, you explained all of this to me. Great. Everyone in the side chat's like, oh my gosh. Oh my gosh. But we didn't sign the contract. I said, Melissa, I want you to go and drum up 15 excuses why you shouldn't sign this deal with me. And she goes, okay. So she goes to ChatGPT and she goes, You've already answered everything that ChatGBT said. You already preemptively knew. And it even said, if you're working with Pace Morby, just sign the deal with him. He's the foremost expert on creative finance. Like ChatGPT is like coaching her along. I'm like, gosh, damn. So the agent, David, originally found me on the ice coffee hour a couple of years ago. And he called me and we've done a couple of deals together. So Graham Stefan and Jack Selby sent me a text on Thursday and they go, Hey, do you want to come on the show this weekend? I go, Yeah, but can I bring an agent with me? And so I bring, I'm, dude, this is Monday. I've got the agent calling me. Tuesday, I've got the seller appointment. I record the whole thing. Wednesday, the seller comes on the Zoom. Thursday, um, we walk through the contract of the seller, but I tell the seller not I'm not gonna sign. She goes, Well, when are you gonna sign? I go, I'm gonna sign on the ice coffee hour next to the agent while I'm with Graham and um Jack. And she's like, that's so weird. I go, I know, but even after I show everybody, literally every step of the thing, 90% of people will be like, but how do I do it? Uh-huh. You son of a like, what do you want me to do? I just want to choke some people. So I'm sure it's the same thing with you. Like on tax advice, like you you tell people like, go do a casa, go do this, buy an Airbnb, go do this. And they don't. No. Instead, they write a freaking check to the IRS.

SPEAKER_03 10:41

Like, I don't get why people are so stupid.

SPEAKER_01 10:43

Yeah.

SPEAKER_03 10:43

It's hard, man. It's hard to get people to take action. They get in their, they're they're trapped behind themselves.

SPEAKER_01 10:49

I think it's a it's an identity thing. I think it's I don't see myself as a wealthy person, therefore I'm not gonna take wealthy action. And it's a subconscious thing. I see myself living this life because I feel like I'm worthy of that. I think it's a worthiness issue. Wow. Personally, right? Like otherwise, people would be attacking their goals with like insane fervor. Instead, they're being viciously mediocre.

SPEAKER_02 11:13

Yeah.

SPEAKER_03 11:13

What you're trying to paint is why can't this be you? But there's still certain people that are like, this is not for me. Well, as as they're watching.

SPEAKER_01 11:20

Bro, the this is the funniest thing. So the Maddie content, right? So we did the homeless lady last year. She's um did now done 30 deals, which is really cool. Eric actually went on my first appointment with her. I was texting Eric and I go, hey, Eric, I need to pick you up. We're going to LA for the day. I'm gonna go buy. I'm look, I was looking at buying a modular home company. I go, but on the way to the airport, we're gonna pick up a homeless lady. He's like, excuse me? Like, what are you talking about? I go, yeah, yeah. If you don't feel comfortable, then like stay home. But I don't I've never met this person in my life. Yeah. And we're gonna go to a shelter and pick her up. So we document the whole thing. We release this on YouTube. It's a whole series. It, man, it it's inspired hundreds of thousands of people. I get DMs every day, 50 to 100 DMs every day. I I want to be the next Maddie. I'm like, just follow the Maddie content. She did it. I gave it to you for free. I gave them so I recorded 70 hours with Maddie. Every word I said to her, whiteboard videos, all the steps she took, everything, every single appointment we her and I went on, recorded. Where did the leads come from? How did I negotiate them? How did and I give it away for free, and people still don't take action. Yeah.

SPEAKER_02 12:24

Yeah.

SPEAKER_01 12:24

I I read a couple of weeks ago that the average YouTube viewer that does, it's not inside of a community, just YouTube viewers. The success rate is 0.01%. So, like whoever's watching this, tens of thousands of people will end up watching this, and like one of those people ever do anything about it. Why do you think that is? Human connection. I think it's the same thing like when you were learning tax law and you were learning all the stuff that you learned, like you were around your mom, you're around other incredible people, just having good mentors. Yes. And understanding same thing with football and you know, working out. Like you didn't figure out how to build this all this muscle by yourself. I mean, there's a lot of quiet time you put into like having this incredible regimen and being consistent, but somebody had to teach you. Yeah. Somebody had to trade me. And more importantly, you had to do it with somebody that showed you what was possible. Yes. You know what I'm saying? And so people are unwilling to be around that person because it cuts money. It's like the Costco versus Walmart mentality. It's like, bro, I can't hang out with Walmart people. I want to hang out with the Costco people. Why? Because the $97 keeps the Walmart people out. Yeah. You know what I'm saying? Yes, it does. Yeah, you're absolutely right. It's like you and I are in a really high-level mastermind that's like a quarter million dollars a year. And that quarter million dollars is not for us to buy ourselves in the room. It's basically to put a barrier up to keep other people out. Yes. And so I just think that the people that take action that understand high-level collaboration are the ones that are willing to spend a little bit of money to be part of the boys' club or the country club or whatever it may be. Even the gym, like a high-end gym. Do you go to a shitty gym or a nice gym?

SPEAKER_03 13:50

I go to Equinox and yeah, nicest gym that's. Well, why?

SPEAKER_01 13:54

Is it because the equipment's the best, best, or is it because the quality of the people are the best in the in there? Best quality of people, man. There you go. Community guy. Me too. So you look at these people that watch the content and they're like, but how do I do it? It's like, you got to have somebody else to help you out. Yeah. Because there's going to be a moment when you're talking to a seller and the seller has an objection and you're not. I'm I'm obviously tens of thousands of calls and tens of thousands of appointments that I've been on, and I love people. So for me, you could put me in the worst possible situation and I'm going to overcome the same thing with you. You put a client in front of you that has the worst tech tax problem, and in 15 minutes, you're solving a problem that their CPA has never been able to solve. Yep. Because you've seen repetition and at a very high level. Yeah. But that doesn't mean that you can just put it on YouTube and people are going to go do it on their own. No, absolutely not.

SPEAKER_03 14:35

And I've done you. I've done me. They don't do it. I walk through three of my actual cost segregation studies.

SPEAKER_01 14:42

They ain't doing it, bro.

SPEAKER_03 14:42

No. People are like, oh, the smart people do this. Don't even seem right. I'm like, dude, I did the cost seg through my cost. And I, there's the address, and here's the thing, and blah blah blah blah. Square footage, everything.

SPEAKER_01 14:52

And so really the smart people just go, oh, that's the expert. Let me just buy my way in to pay for the sh the cheat code. The knucklehead just keeps watching content. Yes.

SPEAKER_03 15:01

You know what I'm saying? Pace, you have been at the forefront of creative financing. Most people don't even know what the hell creative financing is, but they see you and Cody Sanchez talking about how you can do creative financing to buy businesses in real estate. Explain in the most layman terms what is creative finance.

SPEAKER_01 15:15

Creative finance is the ability to buy anything you want without the use of your own money, credit, or a bank. That's as simple as I can put it. What does that mean? It basically means like if I want to buy this phone, I go, let's say this is your phone and you I go, hey Carlton, I know that you're gonna upgrade this iPhone 16 to an iPhone 17 next year.

SPEAKER_05 15:31

Yep.

SPEAKER_01 15:32

And if you go put this on Craigslist or on the market, right? If you put a business on the market, a house on the market, an RV park on the market, you're gonna get a lowball cash offer. I already know you are. And so you can take it in the shorts, or we can work out a deal where you get the number you want, but I get terms. Seller says, Well, what are terms? You go, well, purchase price, down payment, interest rate, and length of time. That's terms, right? So I tell the seller, you know, if you could put this on, if you put this iPhone on Craigslist, you could probably get 700 bucks. And you're gonna have to list it for a thousand to get that 700. And even then you might not get 700 and people are gonna dick around with you and whatever. How about I just pay you the thousand dollars you're shooting for, but you let me make a hundred dollar monthly payment for the next 10 months? Seller says, Yeah, all right, that makes sense. Thousand dollars, hundred bucks a month for 10 months, it's a thousand bucks. Now, what did I just work out? I worked out all four terms in that little statement. The four terms are purchase price, thousand bucks, down payment, zero. Monthly payment, hundred, hundred. Interest rate, zero. So most of the deals I work out are also zero percent interest because I don't even bring up interest. I just say, how about I just make you a monthly payment that makes sense for you? Like so RV parks, for example. Um, I've got a $5 million RV park. Eric's been there a bunch of times, um, Glacier Peaks. I bought this park, $5 million. Seller says, I he tells me the first word I've ever heard this, uh, first time I've ever heard this word, he says, I'm an accidental landlord. I go, what do you mean by that? He goes, My CPA told me that I should go buy a bunch of real estate to do cost segregations, but I don't know how to manage real estate. And I'm like, oh, well, you could go to seminars, you could, you know, get educated. He's like, I don't have time for that. So I bought these RV parks. Now I don't know what to do with them.

unknown 17:06

Uh-oh.

SPEAKER_01 17:06

He goes, Can you just take them off my hands? I go, Yeah, but I need seller finance, right? So he does five million dollars. I pay him $18,000 every single month. I have a 20-year loan with him. So it literally went from he him being the owner to me being the owner and him being the bank, and I make an $18,000 payment to him just like I would to the bank. Yes. And he avoids a lot of capital gains tax. He charges me 4% interest, so he's making money on his money. He relieves himself himself of all the headache and the burden. And my team's like, this is the easiest thing on the planet to manage. In fact, the employee, her name's Jen. Eric, have you met Jen? You don't remember. So Jen at the time was managing one RB park for Eric. Now she manages three for me. Yeah. She was managing one horribly for Eric. Why? Because Eric was micromanaging her. So these these landlords or these business owners, same thing with Cody Sanchez, these owners don't know what they're doing. They accidentally fell into some asset type or they accidentally became a contractor or even an upholstery company or whatever it is. Yes. They don't know how to grow and scale a company. All they know how to do is maybe the job, the upholstery or whatever it is. And so you come into a company like that, you can blow it up if you actually know what you're doing with delegation, systems, processes. It really is that simple. Um, and the upholstery company example is funny because I we live in Arizona. Yeah. You don't, but I do. And it's hell, it's like hell here. 125 degrees. Your outside furniture gets torched every couple of years. So you got to go get it reupholstered. So I go to this guy and I drop off all my cushions. This is three days ago. And I'm sitting there and I go, Man, you seem like you should be retiring soon. He goes, Yeah, I I am retiring. I just sold my building. I just sold my he goes, I sold my company to uh an air conditioning guy. I go, you sold your whole company? He goes, No, I just sold the building. Nobody wants my business. I go, why don't they want your business? How much do you make? He goes, I make about $400,000 a year. I work about four hours a day. I'm like, nobody wants to come along and buy your business. And he goes, why would somebody want to buy my business? So I'm sitting here like choosing my upholstery and like here's him. He's manually filling out the order form. Look at this. Yeah. He's literally filling out an order form with a pencil and a pad in 2026. Bro, this is every single business, every single RV park, every single mobile home park. It's archaic shit. So I take a photo of this thing. Literally nothing. He's like, everything's walk-ins from like Google. I just have Google ads and, or not Google ads, Google reviews, and people just walk in. This is how all businesses were run before. And you do the taxes for these guys. So you know they're all solopreneurs. So you look at these guys, and this guy goes, I'm literally just shutting up shop. I'm, you know, I think I've made enough money I could retire. And I go, Why don't why do we do this? Why don't I find a young kid, 25 years old, install him in your business? He works for a year with you for free. So he doesn't make any money. He's going to college simultaneously and he's got like a full ride. I'll put this kid in here. He'll work the job. And then at the end of the year, he starts doing the work and you retire and he pays you a check for like $7,000 a month for the rest of your life for letting him take over all the Google reviews and the website and the this and the other. No money down deal. He goes, And I could make $7,000 a month. I go, bro, you're making $40,000 a month right now. You'd be happy with seven. He goes, I was gonna shut down the company.

SPEAKER_02 20:13

Yes.

SPEAKER_01 20:13

So like there's so many different ways to structure. This is my upholstery guy down the road. Like this is I didn't have to pull up leads and cold call people. This is like the companies you're actively doing business with right now. Yeah.

SPEAKER_03 20:23

Well, when people think about doing these business, these business purchases, they're thinking, okay, well, I need to come to the table with a certain amount of capital as a down payment. I know you can do the whole SBA route. So I need to have at least 20%, 40% down. Explain to them why they don't need that.

SPEAKER_01 20:39

Okay. So when I started, I got I think I got really lucky. In 2018, so I had I had done a bunch of creative finance deals from 2013 to 2018, but I was primarily a cash traditional guy. I don't know, most people don't know the story. Thousands of wholesale deals, fix and flips, traditional burr strategy, all the things, and probably like 50 to 60 sub two deals. In 2018, I had a client, I was also running a big construction company. My biggest client filed bankruptcy on me and like 50 other clients. And I lost like a million and a half dollars. I had no cash. I had no lines of credit left. I was zapped. And I go, all right, well, this is a question I love asking. What has to be true for this to be the best thing that happened to me? And so I wrote down, I started writing down a list of like what has to be true for this guy filing bankruptcy on me and me losing a million dollars for this to be the best thing. So in 12 months, what's the goal? And I wrote down, I said, I'm gonna rebuild everything using no banks, no cash, no credit. And I, and from that moment, I was like, I'm the creative finance guy. Yes. And I didn't have to pretend because I legitimately had no money. Yeah. I just acted as if I didn't have money. And so I still do the same thing. So when people go, Oh, the SBA just went from five million dollars to ten million dollars cap on the bill, I'm like, good for you, dumbass. You're still not even going that route. Congratulations. Go and ask Daddy Bank for a loan. Yeah.

SPEAKER_00 22:02

Hey Daddy, can I get a loan? Here's my credit and here's my job.

SPEAKER_01 22:07

Like my tax returns. Here's everything up my ass for the last 10 years. There's a seven, seven-month process to get an SBA loan, and then the SBA loan wants wants like reporting in a certain way. They want to give me a blood.

SPEAKER_03 22:18

They want your social security number.

SPEAKER_01 22:19

But there's like there's transactions I've done SBA loans on, but I those are called what we call Morbi method. What's a Morby method? What's that? Morbi method is when you get a traditional loan and that's in first lane position. The seller carries the remaining balance. You're in the deal, no money out of pocket. So the seller covers the down payment for the SBA loan. So yeah, crazy, right? So I do this with RV parks, I do it with businesses. I've got a really cool wedding venue that we just bought in uh Pigeon Forge, uh Tennessee, right out by Jerry Norton's house. Why would you buy a wedding venue? It's a cast.

SPEAKER_03 22:48

Immediately comes to my mind. A wedding venue is a short-term rental.

SPEAKER_01 22:51

It is a short-term rental.

SPEAKER_03 22:52

People are only staying for a day.

SPEAKER_01 22:54

Yes. So you got little cabins on there. People are staying for like two or three days. So it's a short-term rental. So you get really massive depreciation. And if you're if you're a W-2 employee, right, and you're like, I need the short-term rental loophole, you can use a wedding venue and those law lodging, as you know better than I do, as a short-term rental loophole.

SPEAKER_03 23:11

Is what you're doing with the RV parks a part of the short-term rental loophole? Yeah. Are your tenants staying on average seven days or less, or are you not really quantifying that since you're already a real estate professional?

SPEAKER_01 23:19

70%. Well, I get a lot of students that ask me, like, Pace, I'm not a real estate professional. If I bought an RV park, would I get the same tax benefits as you? And I said, not if you buy a Texas RV park. Why? Texas RV parks, like 80% of them are what? Their workforce housing. Oh. So like all so Big Spring, Texas, Lubbock, Texas, um, Kermit, Texas. Midland. Midland, Odessa. I've got an Odessa RV park under contract right now. It's a $7 million, 200 unit RV park. These are people that stay there nine years, bro. Whoa. Like these are oil-filled workers with three teeth in their face. Like they have like the craziest lives ever. They're the guys on oil rigs. They're the guys that are doing weldings. Their wife is the welder. They're the grinder in the shop down the road. And so these guys are not leaving. And you cannot do if you're a W-2 employee, you can't get that, right? No, you can't do it. So I get the cost egg regardless because I'm a ta I'm a real estate professional. But if you're an employee, I would stay away from anything oil related, go for the resorts, go for like the seasonal stuff. And so I'd say 70% of my portfolio is seasonal, you know, average days rented or four days. And then 30% of them are Texas oil-filled stuff, which I prefer. Yeah. Because you don't have tenant turnover.

SPEAKER_03 24:33

Pace, if you can, break down your real estate portfolio to us.

SPEAKER_01 24:36

Um, okay, so I've got about 2100 units, and out of those 2,100 units, 1,400, 1,500 are multifamily. Some of those are with Josiah, my partner I referenced earlier. Him and I own about $75 million together. So most doors are multifamily for obvious reasons, right? I've got one asset in Houston that's 480 units, one asset. All right. So it's pretty easy to gobble up a lot of units that way, right? Um, I don't really love multifamily. I think that multifamily goes through these crazy cycles where hedge funds are just pumping money into it and it's just too cyclical in nature. Whereas like RV parks, which I really love, no, it's like an untapped treasure. Less than 2% of the RV parks that are owned in the country are owned by private equity. And so it's not being tapped into. Um, so I've got some storage facilities I own, own two storage facilities. I've got some boutique hotels, I've got some like little side projects. I've got 15 mobile home parks, I've got 30 RV parks. I've I had it at one point 300 single family houses. I now have 180. I'm 1031 a lot of those into bigger stuff. Yeah. Um, I've got businesses like landscape companies and um um funbox franchises, Everbowl franchises. I've got a wedding venue that we're we're buying, a marina that we're buying. So I'll buy just about anything as long as it cash flows and I can buy it with Creative Finance.

SPEAKER_03 25:52

In your investment portfolio, which assets are performing the best for you right now?

SPEAKER_01 25:55

Um, okay, so hours in money out is the way I look at it. It's like how many hours does my team have to put into it? RV parks by like a 10x margin. Not even remotely close. Because like I let's say one asset. We have an asset. Joe Zi and I own an asset in Tucson, Arizona. It's a $20 million asset. We bought it on seller finance. We had a 4% note, 20, 4% seller finance, 20 year amortization. And um seller, dude, it's crazy. That seller had owned that property for 35 years and his kids didn't want it. They're all healthy, they're all happy, they're all whatever, but they're just like, yeah, give us a monthly payment type of thing. Anyway, that deal, I have a seven-person team that runs that. It's 161 units. Yeah, dude, you got rental, you got freaking people banging into walls, land, landscape issues. You've got um appliances going bad all the time. You got washers and dryers going bad all the time. People are complaining about the pool, the pool's having problems. Multi-family is multi-bullshit. Like in terms of headaches that you're dealing with. It also, that asset produces the largest check every single month. That one asset nets us about $97,000 a month. Net, net, net, net, net, $97,000 a month. We bought that deal with no money, no credit, no bank, bought it through a broker. Shout out to that broker. And I would rather have five RV parks than one multifamily deal in terms of size, because the amount of time, effort, and energy that an RV park has and like CapEx repairs and up like maintenance, it is virtually nothing. So I just bought a deal in Goldsmith, Texas, about two weeks ago. We just closed on it. No employees have been to that park in like four months. It's just a dirt lot with people that have RVs and electrical poles and sewer. That's it.

SPEAKER_03 27:30

Who's managing it?

SPEAKER_01 27:31

Somebody virtually with a camera on the thing. So it's like there's nobody there. Yeah. The work for the work the oil-filled workers just need a place to plug in and dump their shit. And we that thing nets like $13,000 a month with nobody at the property.

SPEAKER_03 27:44

Would you say that your storage units are easier to manage than your um mobile home parks?

SPEAKER_01 27:49

The storage units we had to build. So I'd I not a good those took years.

SPEAKER_03 27:54

What did you learn about building properties versus just acquiring assets?

SPEAKER_01 27:57

I mean, here's the thing. If you go to like Crexey.com or libnet.com right now, you can find assets that people are willing to sell their finance. Like go to Crexey.com right now, type in owner finance in the search bar. There's 16,000 assets right now on Crexy.com. People are willing to give you owner finance to the point where they put it in the freaking listing. Why do I need to go build anything when somebody's wanting to retire and desperately marketing to you to retire through owner finance because it actually gives them tax benefits and they get a higher price? So I get a lot of students that want to develop parks with me or they want to develop stuff in my guys. I could buy 10 assets that are cash flowing on day one while the time you just pull a permit. Now, that being said, I do have another play that Josiah and I are doing right now, which is we are on our fourth car wash we're building. And our goal with the car washes is um, do you know who Vic Keller is? No, I don't. You should know Vic Keller. He's uh had a $6.1 billion exit to Warren Buffett in 2019, become a good friend of mine and a mentor of mine. And he's teaching me how to build car washes. And car washes create insane enterprise value because if you go and duplicate them, you know, there's the monthly revenue. Yes. It's the same equipment on every single property, it's the same marketing, it's the same, this, that, and the other. So you can one customer uses this unit, but they can go over to that unit. You have like full city wide marketing and you just kind of dominate a city. Um, you and I have a uh mutual friend, Chad Willardson. Yes. I won't say his come his customer's name because he'll get in trouble. But he has a customer that has about 500 car washes and they just got an offer to buy their company for $8 billion. Their net on this, after their construction costs, everything they've built, their net on that would be like $4.7 billion in enterprise value that would be in their pocket net. So car washes are longer-term play. They require permits. And my team is out there. Like you can meet Phil and Ryan right now. We we're on our fourth car wash. I mean, hell, we could do a whole freaking YouTube video just about that exact thing. Like break down a car wash. What does it cost? How long does it take? What does it net?

unknown 29:52

Yeah.

SPEAKER_01 29:53

They net $43,000 and none of our car washes have employees on them. Not one. They're all ran by AI. So it will read your license plate. That's pretty easy, but it will also scan your entire car for dings, scrapes, little um, you know, your uh windshield has a crack or a ding. Yeah. And so we send them an email and go, hey, would you like us to fix your windshield? Would you value address value add? Value add. So you're it's and you're 29 bucks a month. So you make all your revenue on the first day of the month. You bring in like $90,000 on day number one. Yeah. You're net positive on day one. Whereas like other assets in my RV parks, which are great, I'm like trying to book people out and I'm trying to fill the spaces and somebody has to stay in the space of like a car wash. They're pit people are in and out.

SPEAKER_02 30:34

Yes.

SPEAKER_01 30:35

And 80% of car wash people don't even use their subscription once a month. Not even once a month.

SPEAKER_03 30:40

So they find they sign up for a subscription to go to the car wash. Maybe it's $24 a month. Yeah, they go out like every 40 days, they'll go wash a car. Okay. And then they just go, it's a drive-thru, right? Do you have anyone there drying off the car, working the guns? It's straight drive-thru.

SPEAKER_01 30:56

Yep. So we have somebody that goes by the car wash.

SPEAKER_03 30:57

So this is like passive almost, but it's more of an active business because people are coming in on a transient basis.

SPEAKER_01 31:02

Yep. And so we buy in, you know, heavily populated areas. We just bought a deal in uh DFW. We just closed on it yesterday. It's already pre-permitted, and um, we're it's shovel ready. The cost to build them. So here's the here's the cool thing. So Vic Keller, you got to have him on your show. He's one of the smartest people you'll ever meet in your life. Get around good mentors, guys, and spend money to get around him. Get around him as fast as you possibly can. Vic Keller, shout out to you. Um, and I'll text you guys together. He's incredible. Um, so Vic is like, I'll make he's the manufacturer. This is this is how gangster he is. Yeah, this is the value of get around cool people. So he has this big car wash exit to Warren Buffett, right? And so Warren Buffett goes and gives him a non-compete. He goes, You can't go and compete with me until 2025.

SPEAKER_03 31:45

Yeah, don't go start this all over again.

SPEAKER_01 31:46

Don't do this because you already figured figured the whole thing out. So, what does he do? Well, he goes and buys like the number one gun manufacturer in the world, and he goes and does all these other things with his money, and he goes and builds like 10 other cool companies. But Vic's like, man, the car wash company is like really like my favorite thing ever did. It's so passive. It's like re cash on cash is so stupid. And he goes, I know what I'll do. I'll go buy a car wash manufacturing company, the company that like manufactures all the equipment. I'll go buy a chemical company, I'll go buy a payment processing company, and I'll just go put the full vertical integration together. And then I'll start buying land preemptively. And then the second my non-compete goes over, I'm gonna start building again. And so I caught him in that loop in that like build-up phase. That buildup phase. And he goes, You want to open up 500 of these with me? And I go, Yeah, how much do I pay you per per uh unit? He goes, Nothing. I'll just help you. I'm I'm your mentor, I'll help you out. But you got to buy your equipment from me, your chemicals from me, and payment processing has to go through me. So he's got like a whole nother enterprise play that he'll make a bunch of money off that. Of course. But if I get to a hundred units of car washes, we're already at four. I know it sounds like a not a lot. We just started in October, so this is six months. Um, when I get to a hundred, because it'll compound, which will take me about seven years, that exit will be like a billion dollar exit on car washes.

SPEAKER_03 33:01

So, question to you is with all these things that you already own, RV parks, storage units, car washes, why wouldn't you just go all in on then car washes? Why are you still doing sub two deals and all these other deals?

SPEAKER_01 33:12

Because I am a deal junkie. You know, I don't know. I just love it. And plus, here's the other thing too. I I call I think about this on the Dairy Queen side. So Dairy Queen originally started out as a food or ice cream? Ice cream. They were originally originally ice cream. So they made all their money in ice cream. Then somebody was like, well, let's add food. And then they realized they're making way more money on the food.

unknown 33:35

Really?

SPEAKER_03 33:35

They're hamburgers and way more money on the food.

SPEAKER_01 33:37

So the thought is, well, if they have the equipment, they have the machines, they have the systems and the processes on the ice cream, and they also have the brand. Why not? You're telling me they should turn off their ice cream machines because they're making more money here? So it's the same thing for me. Just because I'm making more money here doesn't mean I don't have systems, processes, and teams that are already doing the thing. So why would I turn the ice cream machine off?

SPEAKER_03 33:56

Somebody's looking at you and they're like, dude, I want to be pace morby. Okay, I need to go set up an RV park, I need a little learn sub two, and then I need to do a wholesale deal. Where do they actually need to start?

SPEAKER_01 34:04

It's not even that's not even it. It's just learn deal making, right? Lead generation, pain point of sellers, and how you how you can help the sellers. If you do those three things, where can I find leads? Yeah, deal structure, and how do I help sellers? You figure those out. Any asset type you want, it is is applicable. It conveys across. So, like when I jump from RV parks to buying a laundromat, there's no difference in my mind of structuring a deal.

SPEAKER_04 34:26

Yeah.

SPEAKER_01 34:26

I'm buying a thing that makes money. That's it. I'm buying a thing that makes money. Put the thing, whatever the thing is in the box, I'm buying the thing that makes money.

SPEAKER_03 34:33

Yes. I believe in real estate, obviously, from the tax benefits, but we recently had Graham Stefan go on a podcast and say, over the last five years, he's made more money in the stock market than he has in real estate and he's selling all of his real estate.

SPEAKER_01 34:43

Graham, you're great, but like, bro, you stopped buying real estate a long time ago. He had nine houses in California. Like, what does he know about real estate investing?

unknown 34:49

Yeah.

SPEAKER_01 34:50

He was a real estate agent, bro. I'm sorry. I love Graham Stefan. Yeah, but real estate agents don't know anything about real estate other than passively buying a deal and just waiting for it to appreciate. That's not how you buy stuff.

unknown 34:59

Yeah.

SPEAKER_01 34:59

The appreciation is a cherry on top. You're buying things that have an active modality that make money. So, for example, having a regular renter in California is a horrible modality. Like, what are you doing?

unknown 35:09

Yeah.

SPEAKER_01 35:09

Meanwhile, people are doing sober living, assisted living, they're doing behavioral health, they're doing all sorts of other exit strategies that have so much money and so much more cash flow. Even like Jack Selby, check this out. So, Jack Selby, his co-host on the show. By the way, you did it, you killed it on that episode recently. Um, Jack is like, I don't believe you. This seems like bullshit. And I go, how about this? I will give you equity in a deal. I will give it to you. And you can see my monthly reports every single month. And he's like, Oh, this sounds risky. I'm like, what do you mean? It sounds you guys are so allergic to risk. What are you talking about? And so what do they do? They can be a little skeptical sometimes. So I fly him down. I take him to a property and I walk him through and he goes, So you're gonna make like $2,000 a month on this? He goes, Why didn't the lady keep it? And I go, her name's Cheryl Lynn. She was in foreclosure. Eric, you and I went to this appointment. Do you remember Cheryl Lynn? The black lady went to okay. This lady's so cool. She bought it as an Airbnb. So wrong modality for this house. She didn't know highest and best use for this house. So she buys it as an Airbnb and it's failing. So she calls me, she sees my website and she goes, Hey, I'm having a hard time. I go, Yeah, I'll take the house over for free. Not gonna give you any money, but I'll bail you out of the mortgage. And she's like, Well, what are you gonna do with it? I'm like, definitely not Airbnb. That's not an Airbnb area. It's freaking Glendale. Sorry, shout out to Glendale. Like, um, like so she goes, What are you gonna do? I go, I'm gonna do co-living, rent out by the room. I'm gonna put it on a website called Pat Split and it'll make like $3,000 a month.

SPEAKER_03 36:35

What's co-living?

SPEAKER_01 36:36

Co-living is uh essentially just renting out the room. So you're taking uh, I just bought a couple last week where the house is four bed, three bath, 2,500 square feet. Regular rental won't make money. Right. So Graham's not wrong in this that if you're doing regular rentals, you're getting your teeth kicked in. Of course. Yeah. Like anybody doing regular rentals is getting their ass handed to them. And so you shift and you pivot. That's it. You pivot to a different modality. It's a midterm rental, renting out to nurses, renting out whatever. But co-living is taking over because it's affordable housing for um working adults. So think about like a student, uh a nurse that just graduated. She just got her first nursing job. She's like, I need to pay off my student loan debt. I don't want to go get a rental for the average rental right now in America, it's like $1,800. So I don't want to go pay $1,800 plus utilities, plus maintenance, plus blah, blah, blah, blah, blah, blah, plus whatever, internet, whatever. I just need to find a place that I can pay $800 a month. Utilities are all included, landscape is included, cleaning is included. Wow. So what we do is we provide affordable housing to the marketplace by taking a four-bed, three-bath house, adding six bedrooms, by getting rid of the living room, the garage, and we turn this into a 10-bed, three-bath house, and people are paying $800 a month, including the utilities, the internet, the landscape clean, and then weekly we send a cleaner through the house. Wow. And now you've got a house that the house I just bought is in San Antonio. The mortgage I took over is a 2.8% mortgage, $2,000 a month, really great mortgage, but I'm renting it out. I'm I'll collect $9,100 a month between these 10 bedrooms. What could I rent it out for?

SPEAKER_03 38:07

It's like a four or five X.

SPEAKER_01 38:08

It's a crazy X, but you know, you got management, you got things in there, you got utilities and whatever. The net on that property is three grand a month. Okay. Meanwhile, if I just went and did a regular rental, my regular rental would have been like $2,700. And people are like, oh, $2,100, you're taking over a mortgage. $27 is what you're bringing in on a rent rental. You got $800 in cash flow. No, you freaking don't. You ain't got no cash flow because you got management, you got bull crap, broken window, whatever. And so co-living makes your cash flow so significant. Plus, you're bringing an affordable solution to the marketplace, and you re you're rewarded by making a lot more money. So where Graham Stefan and even my friend Cody Sanchez, they talk shit about single family houses. I'm like, you are barely scratching the surface of what real estate possibilities are. You're not even, you're it's kind of like going to a food court with 50 restaurants, trying the trying the first restaurant, going, Yeah, this whole food court sucks. Bro, what are you talking about? You haven't experienced the best restaurants. They're usually in the back where all the cool people hang out. Yeah. So to my friend Cody, I love you. You're amazing. One of my one of my dear friends, she's been right here in my podcast studio multiple times. And Graham Stefan, I'll see him on Sunday. They are wrong. Period. End of story. They're wrong. Yeah. He bought real estate thinking I'm gonna rent it out to a regular rental. Now, the challenge with Graham, what's the difference between Graham and me and and you? I'm sorry, Graham, you and me and Graham. What's the difference? Your experience. Our ability to build teams.

unknown 39:33

Yeah.

SPEAKER_01 39:33

Graham doesn't have a team. Oh, that's true.

SPEAKER_03 39:35

Yeah, he has a very small operation.

SPEAKER_01 39:37

He's a villain, and there's nothing wrong with that, right? But you know who what we call them? We call them tired landlords. Those are the people I buy on seller finance with no money down that are like, I don't want to handle this anymore. I'm like, okay, meanwhile, I have a team. Like, I mean, you got Eric here, your video guy. Eric was on my team for years. Eric could name 10 people on my team that handle everything other than me. Yep. And so the difference is building a real real estate business, not a hobby. And what what Graham Staffin did, shout out to him. He made a lot of money doing it, and he built an incredible brand, one that I look up to every single day. I look at that guy and what he's accomplished, and I'm so freaking impressed by him. One of the smartest people on the planet, but he didn't build a real estate business. He had a hobby. Yes. And he used he was buying those as a real estate agent, not a real estate investor, if that makes sense.

SPEAKER_03 40:22

Yeah, it does. Question to you is sober living. I have a lot of clients that are starting to build sober living uh homes and run this as a business model. Yeah. Talk to us about this play and why it's working so well.

SPEAKER_01 40:34

Sober living is a big deal for a couple of reasons because the gut the government is pumping in federal grants to cover a lot of these expenses. They're trying to get people off of the streets. They're trying to get people more places to live. So you've got companies like padmission.com. Go look up padmission.com. It maps out all the sober living houses and all the like nonprofits in the area. I choose not to do not um sober living myself, and I tell my students not to do sober living either. I tell them to do subleases to sober living facilities. You don't want to deal with the sober living headaches of the individual personnel. So I'd rather go to like an Oxford house or a padmission.com and go, you guys can rent my property at double the rent rate. Just don't call me.

SPEAKER_02 41:13

Yeah.

SPEAKER_01 41:13

And so sober living is awesome because the government's paying for people to basically get off the streets and have a place to go after they um basically go through treatment. Sober living versus Section Eight. Sober living, Section Eight is really limited on houses. So when you look at like a map of the Section 8 asset class, it's very focused in like Ohio and like basically the flyover states, like places you don't want to buy real estate. And people are like, oh, they're cash flows really well. Okay, but cash flow is one of five reasons we we buy real estate. It's not the only reason we buy real estate. So a lot of people will buy these little rinky dinky houses and go, I bought a house for $70,000. I turned into a cat, a cash cow in freaking Omaha, Nebraska. I'm like, great, it'll be worth $62,000 in 10 years. It's a piece of shit. I'm not gonna buy it. I'm not gonna buy there. We buy real estate for cash flow, appreciation, depreciation. We buy it also for uh the mortgage pay down. So when it pays down the tenant pays down the mortgage, yes, it they do. Dave Ramsey, you are wrong. The tenant pays down the mortgage, not me. And then the fifth one is my future leverage. So think about this. I own a house long enough, the property goes up in value because it appreciated, and the tenant pays it down, it creates a delta. Guess what I can do tax-free? You know, you know this better than anybody. I can borrow against that money tax-free. Can I do that in these little rinky deaky states where I buy a house at 80,000 and in 25 years it's worth 82,000?

SPEAKER_02 42:29

No, sorry.

SPEAKER_01 42:30

No, you can't do that. So Section 8 is great. The problem is very limited on the type of house. Section eight has to be approved. So you're not getting HOA houses, you're not getting nice houses. And so these houses are usually in B areas, if you're lucky, mostly C and D areas. Yeah. And so you deal people go, oh no, my Section Eight, they use their value, they will lose their voucher. Guys, these people don't care about losing anything. I'm telling you, I have had, so I have, I think, 40 Section 8 tenants. Most of mine are super section eight. What's super section eight? I'm not interested in doing little baby section eight stuff of single family houses. What I do is I'll go buy a 12plex, do the whole unit, Section 8. Oh, wow. And then I have that brings in enough money I can have a manager in that town that manages that asset. When you have Section 8 tenants, bro, you're a therapist, you're in everything. These people got problems. Yeah. And so Section 8 works, it's great. The government's going to continue. But the government also, depending on who's in office, uh Trump was thinking about like shutting off Section 8 at some point or like dwindling it. And so I look at that asset class and I'm like, stop thinking about yourself as a Section 8 investor, a sober living investor. The politicians in office, the things that are happening in the world, inflation is going to make you pivot. Like right now, everybody's doing pad split. Pad split is co living. Everybody's switching over to co living. All these Airbnbs are getting, you know, their teeth kicked in. What's cool about co living, too? This might be something you want to look into if you're clients, is the rent agreement is a weekly agreement. Really? Yep. So you don't pay monthly. It's a weekly agreement. You pay a weekly uh payment.

SPEAKER_03 44:05

Interesting.

SPEAKER_01 44:05

Yeah, it's interesting. And so I looked at that, I'm like, I wonder if W two people can use co living as a replacement of W two or of like uh their tax benefits.

SPEAKER_03 44:13

You need to have an average, and in order to have an average, you need multiple guests to stay in the property.

SPEAKER_01 44:18

So if you have multiple guests, but it is a ten it's a ten unit house with ten different guests. And they're cycling through all the time.

SPEAKER_03 44:24

Is it listed as ten different units or is one unit? Ten different units. It's listed as ten different units. So for each one of those units, I would need uh an average because in order to get an average, you need two. So yeah.

SPEAKER_01 44:38

If anybody's gonna figure it out, it's Carlton Dennis. I'll tell you that. I'm here for you, bro. Yeah, if you look at like pad, you look at Pad Split, you look at Furnish Finder, you look at these websites, people are staying in these houses and paying double the rent rate for just a room for like a couple of weeks. Yeah. Or a week or what have you. And so if you limit your rent rate or your rental agreement to a week, maybe there's a way that people could play that make that play. I'm gonna have to look into that one for sure. But but back to section eight for just a second. I like section eight. I just think that a lot of people will talk about it in a way that you could just do this on any house. You can't.

SPEAKER_02 45:08

Yeah.

SPEAKER_01 45:08

You don't determine the exit strategy of a house, the house determines the exit strategy. Here's what I mean. If I get a 2,400 square foot house, four-bed, three-bath house in an HOA, I'm not doing anything other than midterm rental. I have one, I have two strategies. I can do a midterm rental, so I can rent it out on like Furnish Finder at like three or four months.

SPEAKER_02 45:25

Yeah.

SPEAKER_01 45:26

Because an HOA is going to limit my my rental exposure to 30 days. They're going to say you can't have anybody in that house less than 30 days. Okay, well, short-term rental's out. Yep. Oh, but I'm an Airbnb investor. Can't do it. Well, that you're not the one that determines the strategy, are you? The house determines the strategy. So I don't, I've never looked at myself as a Section Eight or a sober living investor. I look at my guy, myself as a guy who can generate leads, structure solutions, and help sellers. And whatever ends up happening with that house. So the first thing I could do with that house is midterm rental. The second thing I do could do with that house is I could assign that to somebody else that wants to live in that house and just make a fee and make 20,000 bucks. But if I think of myself as I'm section eight, well, dude, you're relegated to like 10% of the entire nation of houses, maybe less. And then you're also relegated to vouchers, and then you're like it gets dwindled and dwindled and dwindled. And so I see people that are like, I'm a section eight investor, have a really hard time getting deals done.

SPEAKER_03 46:17

Yeah. All right. I want you to rank these type of investments. One is spectacular, 10 is garbage, you wouldn't even do it. Right? Okay. Airbnb. This is rapid fire too. So one to ten, rank these investments, Airbnb.

SPEAKER_01 46:31

One being the worst.

SPEAKER_03 46:32

One being the best, ten being the absolute worst. Airbnb.

SPEAKER_01 46:35

I feel bad saying this because you're on the thing. You gotta do it. I say Airbnb. I'm gonna give it an eight. Make some room for somebody else, for some other shittier ones. Um we're living. If I'm subleasing to somebody else, I'll give it a three. Mobile home parks? RV parks? Two. Oh, RV parks wrapped in that? Number one.

SPEAKER_03 46:50

Uh let's do RV parks? One. Mobile home parks? Four. Um industrial? Two. Storage units? Five. Multifamily? Five. Single family.

SPEAKER_01 47:00

It's the king. Okay. It's a one. Because I can do anything with it.

SPEAKER_03 47:04

Really?

SPEAKER_01 47:04

Yeah, I can't do everything with RV parks. I can't do everything with multifamily. I can do anything with a single family house. I can flip it, I can wholesale it. I can do sober living, assisted. I can do midterm rental. I can do Section 8. I can do anything you can imagine. You can do. It's the most moldable moldable clay on the planet is a single family house. And on top of it, it's the most frequent transaction on the planet. Like think about this. An RV park has there's in the country, there's 27,000 RV parks in the country. Yeah. 27,000. 27,000.

SPEAKER_03 47:32

It's not that many.

SPEAKER_01 47:33

Not a lot. When you think about it, there's zip codes in the country. There's zip codes in the country that have 27,000 single family houses. So think about that. The frequency of transactions. So like you look at one Maricopa County. How many RV parks traded in Maricopa County last month? Two. How many single family houses traded in Maricopa County last month? 9,000. It is literally 4,500% more transactions. So if I'm starting out and I want to go make money today, it ain't going to be RV parks.

SPEAKER_02 48:04

Yeah.

SPEAKER_01 48:04

Because an RV park transaction also, the average transaction takes three to nine months to close. A single family house, I could make a call on Monday, have a deal closed on Friday.

SPEAKER_02 48:12

Yeah.

SPEAKER_01 48:12

You ain't doing that with RV parks.

SPEAKER_02 48:14

Yeah.

SPEAKER_01 48:14

Even though I love the asset and I want to hold it, single family just is the king. When it comes to taxes, do you worry about paying taxes? No. I know people like Carlton Dennis.

SPEAKER_03 48:22

What do you do for your taxes?

SPEAKER_01 48:24

Coseg, primarily. Um okay, a couple of things. So last year I did a GPU. I bought some GPUs.

SPEAKER_03 48:31

Computers?

SPEAKER_01 48:32

Yep. So like big GPUs, so equipment. I got so I basically financing. Yeah, equipment financing. So I did I bought four million dollars of GPUs. I'm renting them out to a data center. Yep. And I put only 5% down. So I put $200,000 down on $4 million.

SPEAKER_03 48:47

So I got a $4 million rent off through code section $179 and code section 168K. There you go. You are you are financing equipment, which is a business expense. And because that business, or because that equipment is being leased out, you're earning cash flow on the lease on the lease payments, but then you're paying off the debt associated with that, with the lease payments, and you're able to write off the entire value of the equipment under code section 179 and 168K.

SPEAKER_01 49:10

Which is cool because like based on the rental income, that rental income in the next seven years will have paid all four million dollars of the top the GPUs all the way off. I'll get and then I'll continue to make money. So my tax write-off of the GPUs will get paid off 100%. I'll get my original $200,000 back in year seven, and then every single year after that, I'll get about three, four hundred thousand dollars.

SPEAKER_03 49:31

Nice. Crazy. Yes, yes. We we like equipment financing over in our world as well.

SPEAKER_01 49:36

It was my first time doing it.

SPEAKER_03 49:37

Really? Yeah. Well, you like it because of the leverage behind it.

SPEAKER_01 49:40

I like the leverage. I also had a I had an RV park called Bear Grass RV Resort. I had it under con I was about to get it under contract in November. It was gonna wipe out the rest of my um taxes. Yeah. And the broker calls me up. She goes, the seller saw saw you on um YouTube and said that you are blah, blah, blah, you're getting too big of a deal and da-da-da-da. And we want to change the terms. We're like, all right, well, this is not gonna work out. So we canceled it. We don't, we they never signed the contract. They refused to. And then I was like, Well, that there goes my tax write-off for the rest of the year. I gotta go do something. And so I met a guy named Jack in a mastermind that I'm in. And Jack is like, yeah, I sell GPU allocations. And so, like, last year he helped the Kardashians buy $100 million in GPUs and a bunch of other people. And so um, I was like, I gotta get you, I gotta get some of those. So he allocates about a hundred million dollars a year of GPUs, and then he does weird stuff. Like, he goes, I also have the contract to buy all the LEDs for LAX and I'll finance media boards? Yeah, all the media boards. Yeah, so again, like same similar type of thing, right? So he's got media boards and he goes, I'll finance all of them, but I just need the down payments from and everybody. So if you guys all investor capital come in, so cool.

SPEAKER_03 50:48

I'll sell or finance it. Yeah, yeah, and it's just a multiple and then arbitrage.

SPEAKER_01 50:52

He also arbitraged it. So I think on the GPU, he sold the GPUs to me at 4 million. Yeah, but I think they cost him like 3.5.

SPEAKER_03 50:58

So multiple, is it a 10 to one then?

SPEAKER_01 51:00

A 10 to 1, yeah. 10 to 1. Yeah. So I got a 10 to one, but he also made like half a million dollars just selling me the allocation. So he Jack probably made $20 million last year just selling allocations. Yeah, because he's a middleman. Freaking genius. Yes. And that's the thing. Like when you start running into people that are doing crazy stuff, you're like, why did why don't they teach us in school? I I guess it would go over people's heads. I don't know.

SPEAKER_03 51:21

It really would. Just I was on the podcast with Hannah, and she was literally talking about the exact same strategy because Ken Melroy started a business for Media Board. It's called MC Media. He created it, he created his bone own bonus depreciation company. So that way he doesn't have to worry about going through third parties. He's like, dude, if I need my write-off, I will control it myself. I own the own my own media company. And he's like, dude, if I want to offer it to other people, I can offer it to other people. But I can always have my own inventory.

SPEAKER_01 51:46

He's going out and doing all the installs and all that kind of stuff. Yeah, genius. Yeah. Yes.

SPEAKER_03 51:50

Yes, he is. So we spoke about it yesterday. Definitely a conversation meeting you can expect.

SPEAKER_01 51:54

This is where like I don't, I would not want to be Ken. I Ken is a mentor of mine as well, and I look up to him and he's one of the best of the best in the business. And I look at Ken and I go, Yeah, you can do, I'll just rather buy the things from you. I'm not gonna go build that business.

SPEAKER_03 52:08

Yeah, he built it.

SPEAKER_01 52:09

Yeah, that's out like I do a lot of things, but it's like in my little square, which is creative finance, structuring deals, the cash flow. That's like my thing. Yeah. Building a business around like sign, uh, you know what, dude? Here's the check. Just there you go. Yeah, I'll get my 10% my 10%. He might see he has bigger problems than me. His bigger problems are he makes more money than me. Homeboy, like, I don't know if you know Ken in this way, that he has a lady on his team. This is like one of the things I've been inspired by him. Five years ago, I become friends with him. He invites me to his office and he gives me a tour. Is this the philanthropy? Did you Eric said this yesterday? I want to hear the story. Okay, so I go, I'm walking around and he's like, Yeah, and this person does this and this person does that, and this thing happens, and da-da-da. And he goes, and then this is my head of philanthropy or my director of philanthropy. I'm like, Your what? You have a what? And he goes, Oh, yeah. I recruited the lady from ASU that was head of all donations. Yeah. And so I brought her over here because I want to give away a million dollars a month. So Ken Macro is in a different level than you and I. He's giving away a million dollars a month.

SPEAKER_03 53:13

And it takes strategy to give away a million dollars a month. Most people just think, oh, you just give it away. No, you don't. You have to strategically give money away.

SPEAKER_01 53:19

You you probably know this better than anybody else. You see your clients and what they do. And there's ways you can just burn money, like an allocation of a million dollars, let's say you're looking for a tax write-off, like 92% of that never makes it to the cause itself.

SPEAKER_02 53:30

Yeah.

SPEAKER_01 53:31

And so Ken was like, I want to make sure that I have a director of philanthropy that makes sure every single dollar goes to the cause that I'm I that I'm choosing that year. And so I met her and I'm like, You are a director of philanthropy. She goes, Yep, my way, what's your job? She goes, to give away a million dollars every year or every month. I mean, you mean a year? She goes, No, a month. And Ken's like, I want to double that in the next couple of years. And so I every time I see him and I'm on a podcast with him, I just want to remind the audience of like how gangster Ken McElroy is. Ken McElroy is a gangster.

SPEAKER_03 53:58

Shout out Ken McElroy, by the way. Thanks for hopping on the podcast. Pace, people want to know how you structure your LLCs.

SPEAKER_01 54:03

Um, I use professionals that do it for me.

SPEAKER_03 54:06

How many LLCs do you have?

SPEAKER_01 54:07

I probably have 45 or more. Um, I'm learning right now, and I don't know, you and I have never talked about this, but I'm learning right now about idits. I'm learning about eyelets.

SPEAKER_03 54:18

Individual life insurance trusts.

SPEAKER_01 54:20

Yes, because I got I went and got an IUL and I put in my name instead of actually having a trust in a trust. Yeah. Which is stupid. So I just found that out yesterday. Um so I'm learning every single day. Um so I probably have 45. I the way my LLCs are structured, I've got my passive, my active, and then I've got a passive and active holding company. Yes. And that goes up to a trust. And then um I also have a management company where all my employees are housed. Yes. And so none of my employees work for any of the companies that actually produce revenue. Yep. So if there's a lawsuit that goes to the management company.

SPEAKER_03 54:51

Yep. And then you're able to bill from your parent companies over to the management company, which is a deduction at the parent level, it's income to your management company, but then the management company can pay out uh expenses to employees or other management-related expenses.

SPEAKER_01 55:03

So I had um I had an employee a year ago that um sent me a demand letter of 12 million bucks. Damn. Yeah, it was interesting. So um welcome to being an employer.

SPEAKER_03 55:15

Yeah, welcome to being self-employed.

SPEAKER_01 55:16

Yeah, welcome to being self-employed. So, you know, it happens like once every couple of years where your employees just like, oh, well, they make money, I'm gonna try and take a pound of flesh. So I had this guy, really nice guy, he was really talented, underwriter, really liked him. I'm giving him compliments that he he might use against me at some point. Who knows? And um, he ended up getting drunk in front of a bunch of people. I've not said his name, so don't be coming after me for defamation. Your name has not been said. I have not even inferred your name. So he we end up having to let him go, sadly. And so about a month later, he's like, Well, I was told that if I stayed at the company for X amount of time, I would profit share and own equity and blah, blah. It's like, bro, boy, you got fired. And you didn't make it through this. And the the we didn't also didn't have any agreement of of any sort. So he sends me a $12 million um demand letter. So my attorney replies back and goes, Please send this to the management company. Oh, by the way, the management company has no assets whatsoever. This is where you were employed, this is where you were, da-da-da-da-da. I was like, and so he dropped it immediately. His attorney was like, oh shit. He's like, This is gonna cost too much money to go through all of this. While everybody else playing checkers. Well, I hire professionals. Yes, right. And this is where, you know, I I think there's really nobody doing a great job besides you in terms of tax planning, corporate structure, and essentially the the game of chess. Nobody's doing it in a charismatic, storytelling way, and the world needs to understand this stuff. I don't want to know what you know. I like it because it's fun. It's kind of like you are the football player, I like to watch from the sidelines and just pay for the ticket.

SPEAKER_03 56:46

Yeah.

SPEAKER_01 56:46

I prefer to just hire guys like you because you guys see every single thing on the planet. And more importantly, you see clients larger than me and their problems, and then you bring me the solutions that those clients have when I get to those problems. And so I never tried to learn this stuff independently. I just go, oh, that guy sounds like he knows what he's doing. Here, here you go. And I hand it over to guys like you. That's great. I wish everybody did that. I think that it was like the one of the number one hacks on the planet is once I hired a team, it seems expensive. I think that's the trick that people think in their mind of like, if I hire Carlton Dennis, this is gonna cost me money. But the reality is it saves you so much time, energy, effort, and money that you would not you would never go back the other way. What are you talking about? What I you want me to set up my own LLCs? You want me to file my own taxes? I don't know what QuickBooks looks like. Some of y'all out there with peach tree accounting from 1997, still running your own books, like you're a bunch of crazy people. Just hire the professionals and get over it. Like get over it.

SPEAKER_03 57:49

That's the issue that most people have not solved for themselves.

SPEAKER_01 57:52

Do you have people that call like through your company's funnels and through, you know, trying to get onboarded with you and they're just tire kickers?

SPEAKER_00 57:59

Like, what does it cost? And how many you'd have that kind of crap?

SPEAKER_03 58:02

Yeah, absolutely. We try to get off the phone with those people because they don't understand what they're what they're signing up for. The pain is not real for them enough yet. Like we want to be on the or they're glutton for punishment and they like the pain. Yeah. And we asked them, how much did you pay in taxes? Oh, I wrote a check for like 300K. Okay. And what about the year before that? That was about the same. How long have you been? How long have you been with this employer? Oh, about 10 years. So you technically gave the government $3 million over 10 years. Got it. We're talking $50,000 to do a tax plan here today, and you're you're arguing about the price that you're gonna pay us when you're paying the government. It's weird $100,000.

SPEAKER_01 58:38

It's weird because it's like a slow leak at the bottom of their boat, and they don't recognize that that $3 million is real money. Yeah. Because they never received it, if that makes sense. Yes. Whereas like the $50,000 investing in filling up that leak and fixing that leak, that's real money. Yeah. I gotta pay for the patch.

SPEAKER_03 58:58

Yeah.

SPEAKER_01 58:59

But I didn't see the money leaving, and so it doesn't seem real to them. You're absolutely right. It's a freaking, it's a mind game. I'm gonna use that for an ad. Use it. I am, I am. Yeah, like have a leaky boat.

SPEAKER_03 59:08

I'm gonna have a leaky boat on the ad.

SPEAKER_01 59:09

Yeah, AI can help me with everything. It's crazy.

SPEAKER_03 59:12

How are you incorporating AI to help you buy and analyze real estate deals?

SPEAKER_01 59:15

Um, lead generation primarily finding so like right now, we have AI that I can just go, hey, I want all the RV parks in the country that have been owned over 15 years, single, uh, either they own one, two, or three parks. I want you to categorize them by state, size, all of that kind of stuff. And it will do that in three minutes. Wow. And then it'll, and then I can go go out and send them all a text message. So it'll send the original text message. And so it'll spike a bunch of appointments for me to talk to as many of those people as I possibly can. The problem is, not a problem. I think this is the advantage, and this is the moat you want, is that when you're asking a seller to sell or finance something to you, they need to know that you're a real person. Yeah. And so the moat is actually I fly out, I meet them in person, I take them to dinner and I go buy a five million or seven million dollar asset. And I think that's the moat that people are like, well, AI is gonna take that over. I don't think so. I don't think that I think that that portion, same thing with the um the consulting on your guys' side of the business, right? Like AI is gonna be get better at identifying tax strategy or tax codes that they can take advantage of. But from the understanding of understanding their family, their desires, what they really want, that comes down to you. Yep. And so it is the same thing. It removes all the BS that you don't want to deal with and it allows you to get deeper with that client. So AI is allowing us to get deeper with clients. Frees me up time. I don't have, we don't really have anybody in our team doing any lead gen anymore. It's all being done with AI.

SPEAKER_04 1:00:35

Yeah.

SPEAKER_01 1:00:35

I press a button. Hey, we have too many leads, turn it off. Hey, we need more leads, turn it on. And also the way AI is right now is that we don't have to spend any money. Like, you know, besides like usage charges. Yeah, usage. Um, I think if I want to go talk to a hundred RV park owners in a month, it might cost me 200 bucks. Yeah. It's skip tracing their phone numbers, it's using some like AI, you know, tokens and stuff like that, but it's maybe 200 bucks to generate a hundred leads.

SPEAKER_03 1:01:01

Have you been able to track how much time it's shortened your ability to get a deal done since you've incorporated AI processes? Like what's your average time to a deal? I mean, you can do a deal a day if you really wanted to.

SPEAKER_01 1:01:11

I could do a deal a day if I really wanted to. I think now I'm at a, I don't think I now know the main thing that we're trying to do is bigger deals that take more time. Um, and so I'm doing less deals, but larger deals, more like dollar transactions, less transactions. Um the amount of time I spend on the deal, I'd say it's been cut down by 60% because AI will also do not only do the front-end um outreach, it will also do the follow-up.

SPEAKER_04 1:01:38

Yeah.

SPEAKER_01 1:01:38

Because what we found is 70% of our deals require 13 follow-ups or more. Yeah. It's a weird number. 70% of our deals had to hit 13 or more in order for them to become a deal. Interesting. So now that but the what's the follow-up? The follow-up is not always a phone call. The follow-up is just a text message or an email. And so AI is doing most of those follow-ups. And so the amount of time we actually spend on the front end is like almost zero. It's not until the seller's real ready. The other thing that uh it's doing is it's transcribing um the conversations that we're having with the seller and it's identified identifying the tone, their seriousness, whether they were trying to get off the phone with you, but you didn't understand that. Yeah. So it's telling you and sending you an email like, here's the transcript, and here's what I what I'm finding is that you stayed on the phone too long. You should have hurried to get off the phone because they weren't ready, and you should follow set up a follow-up with them two weeks later. It's understanding that it can now tell you like what their the likelihood of what their religion is based on the where they live, the tone of their voice. Like it's getting scary. Yeah.

SPEAKER_03 1:02:34

Who works on your guys' AI for you?

SPEAKER_01 1:02:36

Uh Nathan Cahill. We have a full-time CTO and a five-person team.

SPEAKER_03 1:02:40

I love that you said that. So a CTO is a chief technology offer officer. When did you decide to hire a full-time CTO?

SPEAKER_01 1:02:46

About a year ago. So Nathan had built a uh uh an app for me a couple of years ago called prop.ai. So prop.ai is a voice app that just does your cold calling and appointment setting for you. And since then, a hundred other companies have come along and like blown prop.ai out of the water because that was like their only focus. And so in that moment, we built prop.ai, it made a bunch of money. We were selling it as a you know software as a service. So we were making, you know, monthly subscription fees. We still, it still makes money, but it's not the best in the business. So when I notice it wasn't the best in the business, and I'm like, I'm not really a SaaS guy. I'm a real estate guy. Yeah. And also I think, you know, with Claude now, people can just go, I want a software that does X, Y, and Z. And it can make it over and you can just get your own unique app. So I go, Nathan, I want to bring you on full time and run all of our tech, build our community platforms, our automations, how our students communicate with each other, how deal flow comes to us. I want you to build out um and fix our CRM that does all the things. And then I want you to go to the sales team and I want you to find out what are the most common things that they're dealing with. And I want to start identifying like what are the most common sellers we're talking to? Is it the husband, the wife? Where now I'm trying to figure out right now, is it better for a man to be on the phone with a woman or a woman to be on a phone with a woman? So I'm trying to figure those things out. Like, what's the what's the close ratio when you only have women talk to women? Uh-huh. What's the clo- So like we're trying to figure that stuff out. So Nathan, we brought him on full time and we put And you're getting all this data. Yeah, we're getting all this data. Yeah. And I'm not getting the data so I can sell the data. I'm getting the data so I can use it to just buy more deals. But you could sell the data too eventually if you really wanted to. Yeah, we could. And um also like I don't I don't know. You ever I look at like Dean Graziosi, who you and I are both good friends with. Yeah. And I'm like, is there a point where you just stop working? And Dean's like, no, you were put on this planet to create. You're like God made us in his own image. Yep. Or creators. You're you're always gonna create. And so like people that watch this are like, man, like I have a student, his name's Miles. Check this out. This is like the complete pol polar opposite of you, me, and this guy named Miles. Okay. So I'm in Cheyenne, Wyoming, a couple months ago. Random place to be, but I just did a nationwide tour. And I'm sitting there in Cheyenne, and this big, hefty, like giant walks up to me, and his name's Miles. And he doesn't look like a Miles, looks like a freaking Bill. And he goes, I flew all the way from Pennsylvania to talk to you. I needed to be face to face with you. I was like, fudge. What did I do? Yeah. You know? Yeah. And he goes, I just came out here to thank you. I go, what do you what do you mean? Thank me. What what why? And he goes, Well, I couldn't get you when you were on the tour in Pennsylvania, so I came out here to thank you face to face. I mean my wife just retired off this RV park we just bought. I was like, amazing. So you just got your first deal. He goes, Yeah, I followed the systems, I joined the community, I was in the thing, and we bought a deal actually from another student, and it makes enough money that both of us can retire. I'm like, that's amazing. How can I help you get a second one?

SPEAKER_02 1:05:34

Yes.

SPEAKER_01 1:05:35

His answer is like, you don't. I'm retired. I quit my job, my wife quit our job, we're we're done. That's not my mentality. I have a hard time grasping that. So I would like to give him a hug. I was like, congratulations. And he goes, You might never see me again. I'm gonna hang out on my RV park the rest of my life. So the reason I bring this up is because I think people watch this or they see some of my content or your content. It's like, when are these guys gonna slow down? I think there's just certain personality types that love. To create, they love to collaborate, they love to help other people, and they I I get more joy out of that than I do getting the next deal. And I know you're the same way.

SPEAKER_03 1:06:06

I am, I am. I can't imagine myself stopping what I'm doing, brother.

SPEAKER_01 1:06:09

No, it's like, how do I make it more efficient? How do I help more people? How do I shake more hands? How do I become the best in the industry? That you know, I how do you change the industry is really where I think your mind is is thinking like, there's a lot of people that have done a lot of good for your industry specifically that have helped a lot of people like me. But like, how do you change the industry so that people are educated at a high level before it's too late? Because I would say that the average client you have hires you when it's like three years too late. Yeah, that's true. I mean, it's not literally too late, but it's like you should have hired me three years ago. You would have saved $400,000. You should have hired me then. So, like, I think your big stress right now is like, how do I get to these people earlier? How do I market to them earlier before it's too big of an issue? And I'm trying to do the same thing too. I'm trying to be in, I'm trying to get to the person 10 years before they should have started investing in real estate.

SPEAKER_03 1:06:54

What do you think is wrong with the tax industry right now as a whole?

SPEAKER_01 1:06:57

People communicate. Well, here's a couple of things. Um, the number one thing is that I see tax people attack each other, not you, but I see other people like, oh, he doesn't understand the law and that's interpreted wrong. And it's like, bro, why don't you guys get on a podcast with each other and jam it out together and help each other out? I would love to do that. They don't want they ain't gonna do that. They don't want to get with me. No, no, they're not gonna. And I'll tell him right now, I had a I had a um guy that on my YouTube channel, he would go, he spent probably a year making a comment every single day. Do you remember this guy? He was like, he'd go on Jamil. There's a lot of those guys. So it was a tax guy because I would I would take stuff from your content and I would take stuff that I learned from, you know, um my controller or my CFO, and I'd talk about like, oh yeah, we did this cause egg, and I'd said it in a word that wasn't perfect. And this guy would just roast me in the comments, and I'm like, okay, got it. So like you want to just prove to me you know everything. Yeah. And he wasn't the only one. It's literally dozens of the like finance gurus are like, I want to roast everybody that doesn't know what I know.

SPEAKER_03 1:07:58

It's like that culture is so negative right now about social media, dude. All these CPAs, all these tax accountants are just so quick to jump to the comments and be like, uh, not actually. That's not exactly anything. Well, you're gonna get yourself caught up because appreciation recapture in the future, after you do a cost egg, it's like, bro, what are you talking about?

SPEAKER_01 1:08:15

And the thing about like the Costa Egg, they're like, here's the funny thing about it. Your industry is a bunch of pieces of shit. Here's what they do is like you say something about a cost sec, which the point of the video is the cost sec. And then they'll have been a cost sec, but you also have a recapture. You're not telling people the truth. It's like the video can be fucking Costax. And you're watching short form content, you idiot. The only amount of content you can do in a short form is like 30 seconds max. How is Homeboy going to explain cost egg and recapture in 30 seconds? So maybe that's where you can be a little bit better, but Yeah, bro. I don't know how I don't know how.

SPEAKER_03 1:08:52

So you're explain a private family foundation. I go over one principle, Brother Pipe. Actually, you can roll over stocks, and that's what is the preferred method. Bro, I'm talking about cash in the in the foundation.

SPEAKER_01 1:09:03

Like, think about what would be really cool is like if you guys had the finance round table and it was like you and 10 other gangsters that were like all high-level finance guys, and like once a quarter you did a big podcast, it was like six hours long. Yeah, and you guys had one high-level, like high net worth individual. You all from your own individual offices were like, all right, here's our game plan. And then you went around the room and shared each other. That would be sick. Every single thing. And you were like, bro, that's sick. That's sick. And everybody's collaborating and you make it available to the public. The problem is, in order to get clients, these guys think that they have to take bricks out of your castle. You know what I'm saying? Yes, they do.

SPEAKER_03 1:09:42

They don't think we can work together.

SPEAKER_01 1:09:43

No, it's like they don't think that you can work together and collaborate. So you look at like Jamil, Brent, a bunch of the people in the real estate space. I would say one of the best things I've done for this industry is helped more people to collaborate with each other.

SPEAKER_02 1:09:55

Yeah.

SPEAKER_01 1:09:56

I just love everybody. I want to, I want everybody on the podcast. I'll talk about their coaching program, I'll talk about their deals, I'll talk about all of that kind of stuff. Everybody is my friend in the real estate space. In your space, the biggest problem is that they want to cut each other's throats so they can get one more client.

SPEAKER_03 1:10:11

There's only a few people that like I respect. Like Matt Bon Trager, super cool true books. Never attacks anybody on the internet, out there to help people. Amanda Hahn, Keystone CPA. Yeah. Intelligent, brilliant, wants to help people. Mark Kohler. Intelligent. Love Mark Kohler. Wants to help people. Everybody else. And Carter Cofield, throw him in there as well. Everybody else has a vendetta. Do I know Carter? Carter, uh, yeah, same skin color as me. Really cool. I don't know if you've ever ran across him. This is the Jackrabbit. Um, no, no, no. I know who that guy is. Um, Carter Cofield has about a million on Instagram. Um, he, you know, was with all the Atlanta guys. If I show you a picture, you'd probably know who he is. His business partner, his name is George Chambeau. Um, really great guy. You you've seen his videos on Instagram. Really great guy.

SPEAKER_01 1:10:53

The reality is 400 million people are in the in the United States. You couldn't handle even one percent of the clientele in the United States that that is your idea like perfect client. There's enough business for everybody. And so if like five to ten of you guys got together and did some of the stuff that us real estate people did, yeah, like, hey, we're gonna join forces and we're gonna create a podcast that's like only once a quarter.

SPEAKER_02 1:11:13

Yes.

SPEAKER_01 1:11:13

It's not a weekly thing or a monthly thing. It's like once a quarter we take a high net worth individual and we all help each other out. Like that would rise and call it like the rising ships, uh, whatever you guys call it. But that would be sick because I see it happen all the time and I see it in your content, and I look at these idiots and I know they're all tax professionals. I'm like, just I go, here's how the like the way you get clients is you provide value. You don't attack people that are providing value.

SPEAKER_03 1:11:37

Because it's it's it's not gonna make them all of a sudden go to your page and be like, oh, I have to work with this guy now who has literally no followers, no videos about tax, but he attacked Carlton.

SPEAKER_01 1:11:45

Okay, so here's my here's my caveat to that. I think that they take the crappy people away from your algorithm. So, like when people talk crap about me online, I'm like, thank you. Yeah. Because the people that are gonna like what you said in my comments are gonna go away from me. The losers that are just like you, the poindexters, please take them away from me. I don't want to be anything like them. And so I want my I want my energy to detract those people. And so sometimes a negative comment, I'm sure those people pick up clients. Like, do you remember the guy that was talking shit about me on YouTube? He like had a whole YouTube channel about me. And my team was like, we should send him a cease and desist. I go, no, we should send him a check. Send that motherfucker a check.

SPEAKER_03 1:12:24

Yeah, I had a woman that was targeting me for a while. And I like, at first I was like, fuck. And then I was like, shit, we got two YouTube channels running at the same time.

SPEAKER_01 1:12:33

Every time she posts, it's about fucking me. Exactly. And like, think if you could think about it, like a high-level marketing team would be like, all right, so Carlton, here's what we do. We're gonna have an anti-Carlton that we're gonna spin up and create a YouTube channel that makes everybody hate this lady and they're gonna go to you. You will make money by having the haters. You just will. Yep. And I've had a lot of people that will um come over to my side because they saw this guy. I think his name's Tom. I don't know his name. That's the point. Like, I don't know any of you mother effers' names. Like, y'all are wasting your time. I don't look at any of your shit.

SPEAKER_03 1:13:07

Maybe Tom Cruise, section eight.

SPEAKER_01 1:13:09

No, I like Tom Cruise. I think he's I think he's really smart. It wasn't him, it was a it was an older guy. And um, I think Tom Cruise has his own marketing spin that is not my style. Yeah, but like we, dude, not everybody can be a Lamborghini, not everybody can be a Bentley, not everybody can be a whatever. You know, I'm I am a Toyota Prius, bro. Like, I'm gonna be ultra reliable and go for it.

SPEAKER_03 1:13:30

You have a very fast car though.

SPEAKER_01 1:13:31

Yeah, I'm a fast Toyota Prius. Like, put a suit, like put a super duper supercharger in there. And Tom Cruise has his own different style. So I I like Tom Cruise. I have I have no no nothing bad to say about him, only positive things. Shout out, Tom. It was an older dude, I can't remember his name, but he had a whole channel. It was like he would take a video of mine and then dissect what he goes, Well, in the beginning he said 2100, but at the end on the HUD, it said 2120. So he lied to you. He flat out lied to you. I'm like, wow. I I can't believe you have time to do this. Yeah, congratulations, congratulations. Yep. So I think that that's the biggest problem with your industry, and um, it would be really cool. Also, I think the biggest the other problem with your industry is that Mark Kohler and you, I like Matt Bontrager, but I don't I don't I don't remember I don't remember watching Matt Bontrager's content as it in regards to anything similar to yours. Is it the same content?

SPEAKER_03 1:14:22

Not as much.

SPEAKER_01 1:14:23

Not as much. Okay. I really like Matt. Matt's been in this office a hundred times. I love Matt. Um but you and Mark Kohler are funny. You're entertaining. You can take a boring ass subject and make it freaking fun. Yeah. You need more of that, and you're doing a great job, and um people need to be watching more of your shit.

SPEAKER_03 1:14:40

I'm trying to get them on it, man. I appreciate you coming on the show too conversing with me. A couple last questions that I want to ask you is what are some boring businesses that you feel like are working right now? We have a big part of our audience that's looking to buy businesses, and we already talked about car washes, which I think is a winner. But what's another boring business that you can give them that you feel like is working?

SPEAKER_01 1:15:00

Um I mean, I'm gonna be a broken record and I'll give you other ones, but like the the number one by far, RV parks. There's there's nothing more valuable than an RV park. It's a business attached to real estate that gives you cra When I got my first Cos Seg on uh an RV park, I was like, how five million dollar RV park purchase and I got like a $3.6 million uh tax write-off. I was like, how in the F is this possible? And the way the Coseg company did this is they mapped out the roads and they used the roads as a percentage against it, it blew my freaking mind how much I got back from this thing, even though there was no buildings and all that kind of stuff. So um I love it for that. The management um profile is really low. The people that manage the prop parks for you, they live there, they raise their family there. I don't buy a laundromat and have my manager raise their family in the laundromat. It's the same thing with any other business you buy. It's the only business I know of that the the person managing the park raises their family in the park, therefore treats the park like it's their own house. And so when you I don't, nobody on my team, nobody on my team goes to our parks all year long. The only time we go to our parks is when I go film a YouTube video and the employees don't know who I am. Yeah it's the greatest asset I've ever owned. I love it. I wish there was hundreds of thousands of them, but there's only 27,000. Um, other businesses. I think anything besides roofing, electrical, plumbing, everybody's talking about these like they're the greatest thing. But then people go and buy them. They're highly technical, they have tons of licenses, and you're marketing the same to the same people that 500 other private equity companies are marketing to. Go find one that's more obscure. Um, I do like laundromats, but they're very limited to geography, right? People only go to their laundromat that's within a couple of miles of their house. So I don't love that, but I do like laundromats. I do feel like they could be a full-time job for a lot of people if you don't buy a large enough one. But one that I really uh dug deep into the last couple of weeks is upholstery companies. These are usually older people. It's a lost art. And none of these upholstery companies have commercial accounts, which you need. So, like, I I was talking to this guy the other day. I went and got my stuff reupholstered. I'm like, how much are you making? He says, I make $400,000 a year. I work four hours a day, and I just I'm it's just me by myself. And I go, could you take on more work? He goes, Yeah, but why would I? I go, how much more work could you get? 20 times more, 30 times more. He goes, Oh, probably a hundred times more. I could probably have a shop of 10 people. I just I get all these commercial accounts call me, like boat shops and this and that, and Airstream calls me, and RV companies call me and they need a repair done. And I just turn it all down. Like if it does, if it's not a small job, I don't want it. And I'm like, no private equity company is gonna come in and compete with you on that space. And so I would find some, I would find companies that you're already doing business with, drive around town, go on a date with your spouse, drive around within 10 minutes of you and like list out every single business you see. Those are the businesses you want to buy because they they're quarter million, 300,000. Now, for people that want a big pain in the ass, I would say if you are gonna get into the blue-collar work, I would get into like excavation, I would get into heavier duties dutier stuff. Why? Because you can buy equipment, it gets big tax write-offs, you get the building, you get all the things, and excavation companies make a ton of money and they're not going away anytime soon.

SPEAKER_03 1:18:11

Wow. It's just some really great business ideas. All right. One last question. You travel a lot and I am an advocate for depreciation.

SPEAKER_01 1:18:19

Why have you not purchased a jet? Every one of our friends tells me how bad they are. They make they lose so much money. So, like for me, what I don't love. Including Chad and Dean. Yeah. I I mean, Dean, Ken McRoy is actually the the number one person that convinced me not to buy a jet. Really? Okay. So I probably will buy a jet, but I'm gonna buy a jet probably in three or four years. And I also don't plan on being as big of a brand as like a Dean. Like, Dean can't go to the growth. Like, I can go, I go to like my son's high school graduation last night and I had like 10 people stop and go, hey, love your content, right? Dean will get mobbed.

SPEAKER_04 1:18:51

Yeah.

SPEAKER_01 1:18:51

So like dine needs a jet. Other people need a jet to like stay away from the regular people. I get a lot of work done on a regular plane. Um, and I look at people that are like Ken. Ken says, Well, Pace, don't buy a jet unless you're ready to just burn 150 grand a month. So I love the depreciation aspect, but I don't love next month I have a cost of 150 grand between the payment on the the jet because nobody's buying jets with cash. Then you've got the maintenance. Half the time, like Ed Milette, he has two jets. Why does Ed Milette have two jets? Because one of them is always down in the shop. And so then you got the hangar expense, the um, the pilot expense. You have to have three pilots typically when you have a jet, two that are full-time, one that's a rover when one wants to take some time off. Then you have to have a management company that helps manage those people and keep the man the plane going. I'm like, Yep. I'd rather what I I think my next step, so I'll charter from time to time. Yeah. What I think the next step for me is to buy like a King Air or a you know, maybe like a vision jet, like a Cirrus Vision Jet, it's like a seven-seater, and I will do a shared plane with like three other people. And then when I can justify that I'm using it enough, then I'll go and do like full-time jet. But I think that what will happen is that when Josiah and my car wash company get to a certain number, I'll just have the car wash company take the burden. Yeah, I have a hard time looking at a hundred thousand or two hundred thousand dollars a month coming out of the bank account on a jet that we might not use this month. So I and also I can fly first class for a thousand bucks. Yeah. And if I really want a charter, it's like 20 grand and then I don't have to deal with a plane tomorrow.

SPEAKER_03 1:20:25

Nope. And you're up and down.

SPEAKER_01 1:20:27

Same thing with a boat, dude. I'm like, I I want a friend with a boat, and I want a friend with a jet.

SPEAKER_03 1:20:33

So shout out to. That's what I've done. I just find friends with the jets and the boats, and I just say, hey, I'm going here.

SPEAKER_01 1:20:37

When are you going here? And I don't, I I don't have like the other part, here's the bad part about real estate. The bad part about real estate is that a lot of your money gets trapped in assets that's hard to get out. Right. So, like if the market shifts, stocks. This is where like Graham Stefan had a really good point the other day. If I need to pull money out of a piece of real estate, it's I have to go and do a loan, a cash out refinance. I have to maybe get a private money lender to give me cross-collateral, uh, you know, get a lien against or whatever. That takes a little bit. Meanwhile, I could just go to like my Coinbase account if I have Bitcoin and just do a loan against my Bitcoin. And money's in my account today. Or same thing with stocks, right? I can get an S block and that takes two days. And I can just borrow money against my stocks while it stays in the market. So the bad thing about real estate is I'm like, yeah, I'd like to buy a jet, but also money comes in and I want to go deploy it into paying off a private money lender. I want to go buy another wedding venue or buy a new thing. And I don't think I'm at the phase of my life yet where I can just go, yeah, let's burn 150 grand a month.

SPEAKER_03 1:21:34

Yeah.

SPEAKER_01 1:21:35

You might be.

SPEAKER_03 1:21:35

Not yet. No.

SPEAKER_01 1:21:36

But I ain't there yet. I'm trying, I'm aspiring to get to Ken McElroy level.

SPEAKER_03 1:21:40

I am too, brother. And I think the only way we're gonna get there is by staying disciplined and purchasing real assets and holding off on liabilities for a little while longer. Yes, sir. Brother, thank you so much for joining us. You're the freaking man, bro. You're the man, dude. Where can everybody follow you at?

SPEAKER_01 1:21:53

Um, follow me on the Carlton Dennis podcast and just get over to that YouTube channel, go follow this man. We appreciate this guy. Give him a lot of love. And if you guys have a CPA that he should be collaborating with doing content, then see if the some of these CPAs will come and do it. I play fair, guys. I play fair. I love all CPAs. You know my marketing people. I see how you hang out with Mark Kohler and Matt Sorensen. I see how you treat these people with high high level respect. Yeah. More people should be collaborating with this man. That's all we should be saying.

SPEAKER_03 1:22:16

Appreciate you, brother.