How I Turned $116K Into $3 Billion

June 9, 2024

How I Turned $116K Into $3 Billion

MrBigMoney Big Money Mindset, How To Think Like A Big Money Millionaire billionaire insights, business growth, capital raising, competitive advantage, ego, financial freedom, influencers, investment, long-term strategy, market analysis, operations management, pandemic, passive income, property management, real estate, Robert kiyosaki, scalability, tax advantages, value creation, YouTube channel 22 Comments

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how did you do it how’ you go from 116,000 to three billion in transaction to owning two today I always tell them the same thing I started with operations with property manag I think a lot of times people want to start businesses and they put money into those businesses but they don’t know how to run them they don’t know that sales solves everything and they don’t know how to manage expenses they don’t know how to manage people so one of my competitive advantages was actually jumping into Property Management because now I was able to learn all of those things on somebody else’s nickel and so by the time I actually got to the ownership side and I put the ownership hat on I knew how to run them now I had a lot to learn don’t get me wrong but I saw the problems before I bought the properties I saw things that the sellers and the Brokers never saw so I was able to solve them so everything I bought I knew how I was going to fix it before I bought them and that that was my competitive Advantage I realized it was realizing to be able to see what others didn’t see and to be able to fix the problems that others didn’t see and that’s how I created value for myself and for my investors I always tell people they should start a business but I I look at a lot of these 20 and 30 year old influencers and you know all they can really do is generate a lot of followers and influencers there there’s nothing wrong with that but they get a lot of money and they think that it’s easy it’s not easy and then they try to build a business later so in other words they’re they’re Famous online and then they try to get some kind of assets to support that because they realize that they too are a declining asset I I was lucky where I actually had to block and tackle from the beginning I was hitting singles the whole time I was just trying to buy real estate that cash flowed and then over 20 years I was able to do that successfully just by focusing on passive income then Along Came the pandemic some of you might have heard of it well I got sent home I started doing the YouTube channel and those kinds of things so I’m talking about real things experience and wisdom of things that I actually did and I look at these guys online no offense to any of them some of them I watch and some of them are really entertaining but they still don’t know how to grow a business they still don’t know how to manage a business and they still don’t know how to scale a business well what they’re good at is Tik Tok so after five or six years of being in Property Management I realized that I’m never going to get wealthy I’m going to have what I call a busyness it’s not a business it’s a busyness I was just busy all the time property Management’s hard so I realized I was going to have to start buying property just like some of the other people that I knew so the first one I used my own money that I had saved over that period of time and like all of you you know I believed that we should save our money so that we would have money to be able to invest in things and that’s what I did but after one deal I was broke again just like I started so I had one deal which was good the cash flowed a little bit I managed it which was awesome but I was broke again so then I did it again I saved a bunch of money and bought another one but then I quickly realized if I really wanted to move the needle I actually had to learn how to raise money I I had to learn how to get money from other people to be able to grow faster quicker and more successfully so that was the piece that I never knew how to do I of course didn’t even know how to buy a building the first time which I ended up doing but then each step is a journey so I think what happens is you start off by one step and then two and your circle gets bigger the people start coming out of the woodwork you know they start bringing you deals and you start meeting lenders and you start meeting all these things and it’s confusing and there’s a lot of people giving you lots of ideas and I do believe that you should go very slowly you should always go very slowly and very methodically you should never just jump in because you watch something or read something and I always believe that you should know how to run it in other words if you can’t run a business or you can’t operate a property then somebody else is going to have to do that for you and you’re not even going to know if they’re doing it well or not so well except for of course some of the most obvious things like I’m not cash flowing and I have a vacancy like those are obviously easy but I’m talking about all the details the hundreds of details that are included the nuances and all the little things that you can do to move the needle on any deal to make a cash flow and there’s a lot of them by the way and over the years of managing lots of people’s properties as a fee management company I was able to experiment and get lots of experience from folks on deals that they would bring me because at the end of the day if you send them money of course they’re happy and maybe you keep the business but if you don’t you probably will end up getting fired so that’s a lot of pressure as a property manager you have to dig deep for ways to be able to increase the value of a property through better operations and when you look at that from a property manager standpoint as you’re buying an investment you have a massive massive advantage over those that don’t know how to look for that same thing all they can do is raise capital and hope that they’re in the right Market you know I never came from money my parents didn’t have money and so I didn’t know anybody that had money so that was a problem but secondly you know when you manage properties for other people you’re also taking a look at the way they put the deals together you’re looking at the way they structured their Partnerships and then I was meeting just regular people like these were just normal people like doctors or lawyers or CPAs and business owners that would come visit the property and they would go yeah I just invested in this I just wanted to check it out and all of a sudden you start to realize that there’s just one person sitting in the middle of all that that knew all these people and kind of put that whole deal together both on the debt and the equity and then they turn it over to a guy like me and they wanted to perform so once I started to realize that all I needed was just a different circle of influence I needed to be in those circles and and you start to realize that you can be in those circles because those folks are working hard maybe they’re dentists maybe they’re doctors you know maybe they’re CPAs maybe they’re lawyers maybe they’re business owners I can assure you they’re all working very hard and they don’t have time to invest in real estate because they’re doing their thing so but however what I realize is they don’t want all their money sitting in a stock market let’s say so what they’re always doing is looking for people just like me or just like you smart people that understand what they’re doing to invest alongside of to be able to buy real estate that cash flows to create passive income for them because at some point they are also going to retire and they want to have that passive income coming in as well for me there was no aha moment I never measured my success on money ever I always measured it on passive income like I always trying to replace my monthly burn rate which way back was like 5,000 a month which seems like a lot of money the time now it’s not so much thanks to our inflation rate but that’s another story but the truth is I just was trying to buy real estate I was afraid of the stock market I didn’t understand it I was putting money in the stock market as well as probably a lot of you but I would get those quarterly statements and I was like I don’t even know why it went up or went down I have no idea and then you get the you know the standard line from the wealth manager financial planner or whoever that didn’t know either so I was like oh there has to be a better way to be able to put my money to work somehow create passive income and then I realized Not only was I getting that but I was getting all this massive tax advantages I did not realize the tax advantages could offset some of the things I was doing in other areas and so I started to pay less and less tax so really what was happening is I was working and doing other things but I was paying less tax so I was able to keep more in other words if I wouldn’t done anything with real estate at all I would have paid more tax so I ended up actually not really making a lot more but paying less tax so therefore I had higher savings as a result of paying less tax legally because the government rewards people to invest in real estate in the form of depreciation and other things but they basically are not very good at providing housing like the government sucks at housing I just take a look at all the projects you know the the the government is not a very good landlord so they rely on the private sector to do all that and so for that they give you big tax advantages that’s fun because once I started to realize that was not my strategy in the beginning I also realized that there are thousands of people that have that exact same scenario so that’s what happened when I met Robert Kim Kim kosaki is they had a tax problem problem so I thought oh I’m being so smart and raising all this money you know not from them but from all these other people to be able to buy deals and you know progress forward on with my own business plan for my company but what I didn’t realize is what they really wanted to was to be able to offset some of their taxable income because that’s what real estate really does for people that are in these bigger tax brackets there were so many things that I realized you know like what happens is I believe every corner you know especially when you’re your late 20s you start to be cocky you have a bit a little bit of an eag and then 30s it just gets worse well so when I met robbert and Kim I started to go speak with them I had of course they had never been on stage before so they asked me to come to one of their events and I went in the room there’s like 400 people sitting there all trying to learn about real estate investing and stuff and I was realized I I I actually realized because you could see it in one room like there’s a lot of need here there’s a lot of people that really could use this knowledge and the back back then this is pre- internet that you know he would pack a room and they would all show up and he was trying to teach people you know um all based on You Know Rich Dad Poor Dad and of course before that so I went on stage with him and um he’s like you know tell him everything you’re working on and he walked off stage so I stand in front of 400 people um it’s first time I ever spoke in public and I realized I was scared to death first of all but I realized I completely messed it up I’m sure but I walked off stage maybe 10 minutes later Kim Kim ran up and saved me because you Robert has a great way of of uh letting people sink or swim you know um and I’m grateful actually for that opportunity and she came over saved me I went to lunch right after that and uh I there was like 50 people that came up to me and just were peppering me wanted my card wanted me information because I realized that they were all investors or potential investors so I was like wow this is a great way to raise Capital you know go to these events and speak and also teach and if I’m lucky enough maybe maybe I’ll get a couple of them to take a look at some of my projects so that’s why I started writing the books and started teaching and started touring around with with Rich Dad well the what happens is um you know there’s there’s rent appreciation there’s Market appreciation and then there’s ego appreciation like ego goes like this right because just because the Market’s going up people believe that it’s them and so in my 30s I was no different so I call it the big flip so one of the big deals that I did was I was doing condo conversion so I would take apartment buildings all over talking about Tucson in Scottdale Arizona in Portland waran and in other places we’d buy these apartment buildings and then we’d sell them off like we did on think almost a thousand units in Las Vegas as an example so we buy existing apartment buildings even brand new ones convert them to condos and sell them off one by one so that took about four years and we had wild success we started a condo reality management company a condo sales company and you know of course we were a developer put this whole complex Financial structure around it and we made a lot of money I mean a lot at the end of all of that I had no real estate like a lot of money I had upgraded my whole lifestyle I had bigger houses nicer cars I had done more fun stuff but I didn’t have any assets that produced income I had basically just worked my butt off and done one big flip of about 3,000 units that’s all I did so I didn’t own anything and that was my big lesson so as I went into my 40s I said I’m never going to do this again and that’s when I I ran into one of my many mentors his name was Leonard Litwin and he was called New York Lenny he was building a project in Arizona and he asked me if I would help his grandson put it together which I did I ended up helping on that project and then he called me one day and he said would you like to buy it and so I bought it and I still own it today it’s a property in Sun City Arizona and that’s when I realized the power of cash flow so he owned about 10,000 units in Manhattan and he’d been in the business for a long time so I was grateful and I was listening I didn’t say a word I just asked as many questions as I could because when you get some around somebody like that that was a billionaire at the time you listen you don’t talk and so that’s what I ended up doing I just followed that same philosophy he just said listen if you hold through the good times and the bad times and then just use the bank to harvest your money through cash out refi tax-free trust me you’ll look back and you’ll be glad you did and so that’s when I changed my strategy to long-term hold manage well take advantage of the tax and do a 1031 if I wanted to roll into something else which is just a 1031 tax deferred exchange you can take anything that you bought and move it into a taxfree vehicle and roll it into another asset without actually paying tax on it my ego got really beat up over time you know what happens during these different Cycles you guys there’s booms and bus that goes on and for a lot of you all you’ve ever experienced is a boom so you don’t learn anything when you make money you don’t in other words like I said rent growth Market appreciation ego appreciation like that’s the way it goes like people’s egos make them believe that they’re really really smart and of course they make really bad decisions they start saying like the Superman complex you know I can do anything you know I can buy here I can do that I can raise all this money and they just go and blow well it’s not a great strategy if you think that the past is always going to be what the future is you always have to check yourself to make sure that whatever it is that you’re going to do that you really really understand it you have to take off all the blinders that we all have because that’s what we have and so you have to step back and I always call it you know a coin always has three sides you know there’s there’s the right the wrong let’s say and the edge if you can stay on the edge and look down at each side and really be objective you’re going to make better decisions not only with your money but with other people’s money so I bought and sold a bunch of stuff of course through my 30s and when I’m 40 years old now I’m like wow I need to build a long-term strategy and I need to scale a company and that’s when Ross and I decided to merge and also plan a flag and say we’re only going to grow and we’re going to keep the projects over the Long Haul and that’s what we did the thing is is we both didn’t know how to do it we both had small companies we both had mild success now looking back but now we wanted to grow a business that was 10,000 units we didn’t know quite how we didn’t know that we were going to be at 300 employees one day we didn’t know how to do that in fact at the time I think I had one person that was answering the phone doing the accounting and actually looking at deals for me as well so literally went from one person to 300 I didn’t know how to hire a COO a CEO a CFO a CIO I didn’t even know any of those words I just knew that I needed real quality smart people in those positions and that’s what I strive to do to build my business so that I didn’t have to work so hard because I what I really wanted was the Financial Freedom that real estate provides and I wanted to be able to do what I wanted to do when I wanted to do it actually and I wanted other people to do it so I believe that a company exists to provide cash flow for you without you even working in it that’s what I believe I believe that that is what gives you the open freedom and then what happens is you want to you actually want to do it but you learn a lot when you build a company that doesn’t actually need you that’s when you really learn so now of course I’ve got things dialed in the best I have at least I’m sure I’ll learn even more in the future but my investment committee met last week and I missed the call I was actually doing something else and I missed it but they put an offer out for $96 million without even talking to me I just saw it come through I was like I go hey Bobby our acquisition guy I go send me the pro fora all the numbers on this deal I haven’t even looked at it I don’t even know what it looks like so uh when you get to that point it’s actually remarkable because what you’ve done is you’ve you’ve given people the ability to make decisions and put deals out that are actually within what I would call my buy box they know exactly what I’m going to ask each week so they were able to put something out like that but when you get to that point it empowers people because the whole company’s moving along again with or without me and that is the entire purpose for a company and that’s where you got to get out of the way of your own ego so then the next thing that happened on that deal was so I missed the first meeting uh so we got into best and final because that’s what my group’s good at is getting us into best and final which means that they break it down to three or five different kind of groups and then you go in with a whole another strategy you know they do and they buyer questionnaires and they want to know where your debt and Equity comes from and you know what your underwriting criterias and all of those things then you get on the phone a lot of times with the seller and the Brokers so we scheduled another meeting because we were going to up our price a little bit because we really like this asset and it had a really good cash flow so we scheduled that meeting and I missed that meeting so so I missed two meetings so we up the price um and now we’re in what it’s called the third round which will be hopefully next week and we’re still in it but the point is is I missed the first two meetings because I have a very capable team to be able to get it to this point now I’ve looked at deal since I’ve seen the pictures and I looked at the numbers I am happy with them but they’re not driven by me so I think what happens with a lot of folks is especially what holds them back is that everything needs to go through them so you see this a lot through really really smart people typically like C let’s look at surgeons or doctors let’s just pick on them at some point there’s only so many patients they can see in a day this happens with Realtors this happens with CPAs this happens with dentists at some point there’s only 24 hours in the day there’s only so many people they can see and there’s only so much revenue they can see and so their variables are of course how much they charge and all those kinds of things so you do have a little flexibility because you own your own own business and you can work as hard as you want but who wants to do that who wants to work that hard and so the key at this point is to figure out are there things that people can do for you that are a better use of their time and not your time in other words what’s the one thing that you should be working on at all times to drive the company forward financially and in the beginning I do understand understand that everything has to go through you and there’s nothing wrong with that as you start but what I find is then people start working more first they work eight hours then 10 then 12 then 16 and then they’re just burned out now they’re working seven days a week and they have no life so the first thing that you have to do in order to scale is of course find people that can do what I would consider to be admin work or administrative stuff like things that don’t make you money at all but things that drive money to the bottom line because they’re better useage of your time for so forth an example last weekend somebody asked me if you were starting on your own and you had one person to hire who would you hire and I thought I’d probably hire like a bookkeeper or an analyst and they’re like well why I go because that person can do Financial modeling for me that person can pay bills that person can go out and understand and look for things that is coming to me in the email in the form of business plans rent rolls fin ANS and those kinds of things and put them into a model and get them ready for me that person can go out and look for new markets and those kinds of things and now all of a sudden I have somebody doing all of those things which I consider to be research and admin and now I’m focused on just the one sheet that actually has the numbers in them now from there I can make good decisions is this a go or no go and now I’m more efficient I can do all of those things I can scour the internet internet at night I can send broker emails I can go look at markets I can go do modeling I can do all of that stuff and you have to know how to do that stuff the point is does that make your money I always say follow the cash ball is that losing your money or making you money so we’re very clear on what our one thing now is it’s to grow the company to 25,000 units and so for that we need a whole new layer of people that can get us to that Point as far as analysts Acquisitions new markets Equity sources Etc all of those things have to be put in place because let’s say my company is running at 1.0 and that’s 10,000 units to go to 2.5 25,000 units that’s another gear you have to have different people in different positions and you have to think differently over the years in this business I’ve met many many many billionaires if you want to learn exactly some of their best practices check out this video that I just did on billionaire trades

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