- Profit Strategy: Buy & hold
- Number of Units: 18
- Personal Money Invested: 20% down
- Amount Earned: $9k-$10k monthly cash flow
- Prior Experience: Joe spent almost 40 years as a general contractor for commercial properties, working on massive projects such as building 177 Walmarts and Sam’s Clubs.
Joe started his career as a construction manager for a developer. He was working Friday to Friday. He describes himself as a blue-collar guy who worked diligently every day.
Joe’s Call to Adventure
Joe has a B.S. in Construction Management and Business and spent almost 40 years as a general contractor for commercial properties. He worked on many massive projects, his most prominent being a $66 million truck manufacturing facility. Joe also built 177 Walmarts and Sam’s Clubs. He was successful, well-networked, and respected. Some would think he’d “arrived.”
Despite the industry paying well, he knew it would never provide him and his family with the lifestyle he strove for. He didn’t want to provide solely for his family — he had big goals for helping others, too. Resources were necessary to accomplish both pursuits.
His Vision Develops
He knew he had to find a way to make his money work for him. He decided to pursue real estate and started with single-family properties. In fact, he did 27 of these deals but quickly got bored and considered other investment options.
He moved into multifamily investments. After completing several smaller projects, he experienced a critical mind shift. He elaborates, “one of my investors shifted my perspective. This guy’s projects were in the $18- to $30-million range. I told him about an opportunity I was underwriting. But he wasn’t into it. I asked him how I could get him excited about it. He told me that it was too small. He explained that it takes the same amount of brainpower to do million-dollar-deals — or even $20 million deals — as it does to do the small ones. He pledged that if I found a $20 million project that works, he’d invest in it.”
Joe Seeks Mentorship
Joe sought help because he “knew enough to be dangerous.” He loves that Lance’s program is straightforward. He treasures the deal sheet because it allows him to easily and quickly identify viable projects. He expresses how Lance has helped him, “I needed an expert to help me get there. I didn’t need him to get me out of bed and go to work. I needed him to keep me from making stupid mistakes, but I was already motivated to go.”
Lance taught him that “with an 18-unit project, you can lose four doors and survive. It’s not pretty, but you can endure. If you have a portfolio of four duplexes and lose those four doors, you are immediately in the red. And that’s not a good place to be. I don’t look good in red.” He’s learned throughout the journey that “Lance’s model is spot on.”
In the beginning, one of Joe’s most significant obstacles was cash flow. He clarifies this, “I was starting with next to nothing. We did have some savings and equity in our home that made things a little easier. But as you grow, the issue is always cash flow and leveraging your debt. Every deal has a life of its own. When you look at projects — regardless of their size — you have to raise the equity or have it on your balance sheet, one of the two. If you don’t have it on your balance sheet, you have to find it. The good news is there are a bazillion people out there who want to work with people that are ‘getting out of bed and going to work.’ It becomes critical to develop relationships. All you need to do is make relationships. Talk to others about your projects. It’s a relationship process.”
Before he tapped into his relationships, he had to rely on credit cards and his home equity line to invest in projects. His credit card debt grew, and he was limited in his expansion.
He shares an example, “there was a time I needed $2.3 million to close. I was informed of this ten days before the closing. I returned to my Rolodex to determine who had that money. It came from a relationship with a guy who had wanted to work with me for 40 years. He loaned me $2.36 million. I’ve learned it’s all about relationships.”
His first deal after Lance’s training was an 18-unit building. The story of how he acquired the funds necessary for this deal exemplifies his gratitude for relationships. “I described the deal to my BNI group. I told them I was looking for a couple of equity investors. I had done successful private money deals with some people in that group, so they were immediately responsive. One of the members suggested I talk to her husband. I shared the numbers with him. I explained that I already had the financing secured and was just looking for the equity. He put up the equity, and I took the bank loan. In exchange, he received 30% of the deal. I retained 70%. I’ve done all the work, but I’ve done it with his money.”
Joe’s vision is to build passive income and legacy wealth and contribute to communities.
While he enjoys many activities — skiing, bicycling and traveling — his true objective is to help others experience the same success. He explains, “when you aren’t worried about getting paid, the possibilities are endless. My goal now is to help others.”
His initial objective was to have 500 doors. He clarifies why his goal has expanded. “Five hundred doors is roughly an annual income of $500,000. It sounds like a lot of money, but it isn’t.” He is not being arrogant. He simply knows what it takes to accomplish his goals. He explains, “my big ‘why’ was to go to work, so I didn’t have to go to work.”
Joe loves real estate investing. His ultimate dream is to build a thriving business that his sons can join should they want to. He enjoys the work enough not to seek retirement. Still, he strives for financial freedom because of the opportunities it opens.
He describes that financial freedom provides “the ability to live your life how you want to. You can choose how you want to spend time with your wife and kids. It allows you to travel, fish, play golf, or ride your bicycle without worrying about money or a job. It gives you options.” He continues, “financial freedom also means no debt. Life can quickly get pretty good when you don’t have debts.”
His goal is to own 2500 multifamily units. He’s also pursuing residential care projects and expects to have 180 assisted living beds within the next five years.
His story has already highlighted that he has philanthropic goals. He’s passionate about dogs and works with the Duo Dogs Foundation. This organization’s mission is to “train and connect dogs to people with specific physical, emotional, and social needs, creating a dynamic, life-enhancing duo.” He enjoys hunting and imagines having properties “with pheasants, grouse, and quail.” He works with an organization that trains hunting dogs.
“This business has been a complete lifestyle change. It has allowed me to go to my kids’ events, travel, and be outside. This business enables you to work wherever you have a good internet connection. I’ve closed a deal on a ski trip. It’s not all about making money. It’s about lifestyle and living the way you want to live.”
He explains, “we’re trying to fund a lifestyle. You’ve got to have a ‘why’ outside yourself, your family, and your charities. Your ‘why’ should be so enormous that when you tell others about it, they tell you that you’ve lost your ever-loving mind. When someone tells me there’s no way, I tell them to hide, get out of the way, and watch and see.”
The Importance of Relationships
As previously mentioned, relationships are paramount to Joe. The importance of connections is multifaceted. Joe’s relationships have helped finance projects, grow his business, and expand his mindset.
First, he explains, “the benefits and longevity of multifamily investing are that as you help others by improving apartments, they help you pay down your debt. Paying down debt increases your equity, which gives you more liquidity, allowing you to go to the bank again to get another loan to do another deal. It gives you credibility. It also gives your business equity and structure.”
Joe’s always been passionate about helping others. Being financially free will just increase his ability to do so.
He relays a story about how he was able to help one of his son’s friends. “The kid was smart but had made some bad decisions. His parents weren’t great, and he was living with someone else. The guy he was living with passed away. When my son went to help his friend move, he discovered him living out of his car. My son asked if his friend could move in with us.” Joe agreed.
The rest of the story unfolds with Joe teaching him some valuable life lessons. Joe guided him to get a job and advised him to get a used bicycle instead of a new car. When Joe saw him smoking, he urged the kid not to waste money on cigarettes and girls. Finally, it was time for his son’s friend to move out. Joe helped him find an apartment. Then the young man fell behind on his rent and had to learn how to catch up.
Joe describes what happened next, “here’s the magic. The kid calls me and says, ‘you trusted me when no one else would. You took a chance on me. You put your reputation out there for me. I want to tell you that I’ve decided to join the Marine Corps.’ I love that he is now on a path to success.”
Joe describes the approach to use when roadblocks appear. “If you’re going to be in this business, you have to be able to be punched in the nose and get back up. It’s inevitable. There’s no perfect deal. We’ve had several very successful ones, but we’ve also had some that weren’t. But at the end of the day, you just can’t quit. If you stop, you have to go to a job. Whatever motivates you, put that on your mirror or your computer. I post quotes that inspire me: ‘get comfortable with being uncomfortable,’ ‘the impossible is possible,’ and ‘be daring.'”
He offers this advice, “throw a project away if you have to work to make it a deal. Don’t screw with the numbers so that you feel good about a bad deal. I made that mistake more than once, but you make it about three times and learn that if the numbers tell you not to do it, don’t do it.”
He also shares advice that is imperative for any endeavor. “Don’t quit. Just don’t. Don’t quit. You’re going to get punched in the nose. You’re going to make bad decisions. You’ll have people you trusted lie to you and steal from you. You’ll go through some highs and lows, good and bad. You may want to quit because you think you can’t do it anymore. Then other times, you will say, ‘Holy Crow! I’m delighted I stuck with this because I got $2,000 in ‘mailbox money’ this month.’ It’s all about attitude, and it’s all about your ‘why.’ You need to make your ‘why’ so big, preposterous, and onerous that when you talk about it to your mother, spouse, best friend, or whomever they tell you, there is no way. And then you just respond, ‘stand back and watch.'”