Why Athletes Go Broke (And How This Pro Snowboarder Avoided It)

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Man, Dan, good to connect with you.

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Now, if people have not seen you on TV back in the day, the shredding slopes, like kind of give us an idea of who are you, what do do and where did you come from?

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And this is a interesting story.

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Yeah, Josh, well, I'm grateful to be here with you and your listeners.

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You know, I like many of your listeners.

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I had big dreams as a kid.

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When I was young, I wanted to be a professional snowboarder and being young and naive.

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went and told everyone about what I was going to do.

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And, you know, the piece that I would touch on that I think is the most powerful and reflecting back on my life is my parents.

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And I told my dad I wanted to be a professional snowboarder.

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He looked me dead in my eyes and he said, go for it.

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And my mom said, yeah, do what you love.

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Follow your passion.

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We never did.

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I don't do anything I and I want you to make sure that you follow something you're passionate about.

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from a pretty young age, I had a unique perspective that anything was possible.

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you know, for, you know, I hear a lot of kids talk these days to me and talk about how, you know, when they go to their parents, a lot of pressure to go into college or go a certain career path.

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And the piece that I think is important to hear from my personal experiences, you can never know.

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how much of a desire your kid will create for a goal.

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And I didn't know it at the time of how far I'd be willing to go, how far I'd be willing to push myself to create my snowboarding career, but uh it was the best uh advice and support I ever got from my parents.

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So fast forward, I would snowboard all winter long from ninth grade in my senior year as soon as I was a graduate from high school.

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I moved to Salt Lake City.

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I thought within one year I'd be this big professional snowboarder.

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uh Mind you, my parents supported me.

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uh with my desires, but not financially.

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There was no extra financial help.

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So I was working at Red Lobster, Blockbuster, Payway, biking to work and back, getting rides with my friends to the mountain.

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What was that?

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Living paycheck to paycheck, literally.

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But year one goes by eating peanut butter and jelly for breakfast, lunch and dinner.

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um No major, you know.

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Accolades contracts.

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I go back home to work save money next year.

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I go back thinking this is my year Again eating peanut butter and jelly working odd jobs have a lot of failure actually a lot of setbacks a lot of injury um Just didn't didn't take off like expected year three I come back and I have a major knee injury within three days of getting assault Lake City and uh Doctor basically says you got to have surgery We got to remove your meniscus or sew it.

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And if we sew it, you're out for the whole year.

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I chose to sew it and sat out for the year.

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And that was the point for sure for me, Josh, where if I wasn't committed to my snowboarding career being 21 at that time or 20 years old right around my 20s, I would have quit.

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But I was fully committed to this goal.

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He's either going to make it or die trying.

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I know that sounds extreme, but at that point I was all the way in.

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And next year I came back.

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My great friend said, hey, you should go to Aspen, Colorado.

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There's an Aspen Open, anybody can enter.

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You pay 200 bucks and all the kids from around the country come together.

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They get two runs on the X Games course, which is held in Aspen, Colorado.

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And go out there, there's like 230, 240 kids.

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And I'm just thinking, are the chances?

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And the way it works, it's really simple.

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You get two runs.

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If you finish top 10, you go to finals.

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If you don't finish top 10, you're done.

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I finished sixth during qualifiers, came back the next day during finals and ended up winning this contest.

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And from that point on, I had some major support from my brand stepping in saying, we think you're the real deal.

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And they started to travel me all over the world and my snowboarding career took off and I had a dream come true as a child of a.

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15 year run as a professional snowboarder.

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ended up competing in X Games six times.

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Got a couple gold medals, couple silver medals and was on the cover of every magazine and it was phenomenal.

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And you know, the piece I would share too that really changed for me is I could see an end coming at the top.

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It was interesting for me.

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Like I finally get to this place of making good money far beyond what I ever made of it before my snowboarding career.

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And I'm at the peak looking at my heroes who became my friends, who are five or 10 years in front of me.

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And I see their careers winding down and it's just brutal.

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Like I see them losing their homes.

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I see them going back to working at the grocery store.

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I see drug addiction, suicide.

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And at that point I'm terrified.

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I'm like, my gosh, if I get the chance to have a career as long as those guys did, who are my heroes and idols, and I see how their careers are winding down, I gotta do something different.

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at that time I start reading every book I can get my hands on.

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Like, what do I do with the money I'm making to start to create?

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passive income, learned about this powerful word passive income, which is basically get your money to work for you.

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And my goal was to exceed my living expenses so I could still live in that state of freedom.

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So I started investing and reading books and I'm creating passive income.

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I'm learning how to hedge inflation.

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I'm learning about depreciation.

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And those are the three things that changed my life.

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So that's a little background story of my snowboarding career and what inspired us to start Granite Towers Equity Group.

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Yeah, man.

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uh Your parents, dad says, go for it.

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Mom says, follow your passion.

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Both parents kind of had this view of we didn't get this green light from our parents.

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We're going to change the way we do it with our son.

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Mom, I want to be a professional snowboarder.

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Go for it.

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Right.

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Now, talk to me about the.

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uh Talk to me about the psychology there of you going to your parents, teenager saying, want this.

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You asked them what you wanted and they gave you a green light.

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A lot of kids don't get that.

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Talk to me about the validation you got there or the go for it.

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Yeah, I mean you say it still brings tears to my eyes, you know, it's like as a human being when you're young, when your parents believe in you, it just gives you this fire.

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It's like this, I can't even tell you, like it just allowed, it allowed me to just go after it with zero risk.

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So, um man, I usually don't tear up like this.

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So I'm not sure what's hitting me so hard right now, but yeah, it was the separator for me to believe.

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And had to go do it.

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And I'm grateful for every belief they've given me from day one.

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They're still like that too.

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Yeah, shout out to mom and dad for for that the power of the go for it the green light from someone who we look up to the the authority in our life the uh people that have influence over our life and I think that's I think that's a beautiful story man Dan and I'm in my heart my heart's tugging at that that's why I wanted to ask that question because I think sometimes in our um Think sometimes I think in our lives we need a go-ahead we need someone who saves Go for it, right?

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We're waiting.

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I want to do this in my life.

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I got this passion.

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I got this joy.

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But we have these fears, right?

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You spent three years of getting your ass kicked.

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You're one boom.

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You're two, go home.

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You're three, sit out.

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Knee injury, surgery.

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Is my career done with?

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Talk to us about the go for it when it comes to now you're seeing your friends, a lot of fear, a lot of pain.

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You're seeing them suicides.

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You're seeing These people who are at the top of their game, the best in their craft, losing their homes, having to go back and work for time again.

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Talk to me about that fear that it strikes up in your heart.

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Yeah, you know, the piece that really was apparent is the lack of financial education for athletes and for a lot of folks that come out of school and end up making really good money.

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You know, I wish there was more financial education about what to do with the money you make.

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That's really 50 % of it.

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Making good income is awesome, but it's only half of the pie.

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Because at the end of the day, I've seen it firsthand over and over again.

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These athletes come in and make incredible money and they go by liabilities that they are far beyond what they can afford.

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And when that contract ends and it does so quickly, all of a sudden that 15, 30, $40,000 mortgage payment that's due every month.

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is no longer able to be paid and what does the bank do?

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They're like, yeah, that house is now ours.

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And you sunk a bunch of capital into interest into a home you couldn't afford that is now the bank's or car, you know, or living standards or partying.

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And if you can just delay gratification just for a few years.

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when you're in that position or if you come out of college, you live below your standards for three, four, five, seven years, you can be financially free the rest of your life.

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And that was, that's the message I would love to bring to more athletes, more people who are getting into their careers that if you can just delay gratification a bit and learn how to put your capital to work, to start creating passive income, to hedge the dollar against inflation and to create depreciation for tax loss, you can be financially free and live this life of passion and freedom and not have money controlling every decision you're making like I was.

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Yeah, bro.

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have the same amount of pain in my life because I saw family struggle.

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saw, you know, hey, mom and dad, could I get ice cream money?

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No, we can't afford it.

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I'm wearing the Kmart shoes that shred.

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Then they fall apart, you know, like the day one you roll out with them.

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So like I remember the struggles.

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My dad, badass Vietnam vet to Purple Heart.

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You know, this anyways, that's not about me or the or my father in the story.

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But I remember him breaking down and crying.

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Right?

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So like the pain that I experienced that I go, I never want to do that again.

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You experienced that pain and you go, I do not, don't care what it is.

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Like, you know, yeah, it'd be cool to have another car.

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It'd be cool to have a big air house for sure.

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But that the temporary joy of buying something and then forgetting about it two minutes later, and then seeing what you went through or what your friends are going through.

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That's pain, right?

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Pain's a great motivator.

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Pain and fear is a phenomenal motivator.

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And I, I'm with you on this, right?

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I experienced the same thing.

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So now you decide to go, I'm gonna do something about it.

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Why I have cashflow coming in from my job, my JLB, right?

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Six tours of X Games, you're making money, you're getting brand sponsorships and you're making money.

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But you still had to make a conscious decision.

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I got to do something about it because the fear of that is terrifying.

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I start reading books.

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Yeah, that's it.

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Yeah, exactly.

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You know, when I started reading these books and they're basic books, Rich Dad Poor Dad, Robert Kiyosaki, I'm reading Ken McElroy's book, ABCs of Real Estate Investing.

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And there are some simple concepts in there that I never heard until I'm 27 years old.

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And I'm reading this book just like, how have I not heard about this once in K through 12?

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How have my parents not known about this?

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How have there been nobody who came in and said, hey, Dan, just so you know, this is what's going to likely happen with your snowboarding career and you should do something with it to create a future.

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And so it was really clear to me, get into a position where I'm taking the money I'm making and get it invested to start creating many streams of income.

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And that money is so exciting.

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I still remember realizing it, I'm on the chairlift at Mount Hood.

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was a beautiful sunny day, I was riding park.

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And it was right around the time when I was going through this, I guess, transition phase.

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is an understanding this education and I'm like, what I'm doing is almost a waste of time.

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Like I have to snowboard every day to get paid and I snowboard and work, I work to get paid, work to get paid is very inefficient to putting the capital to work once and get paid forever.

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whether I'm working or not working.

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it was part of what helped me transition out of my snowboarding career into a full-time real estate investor.

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And the other part was just having children and the risk reward didn't add up.

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But it was literally three, four, five books over a six to 12 month period and some audio books where I saw a totally new direction and everything shifted in the direction that we're going.

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And nothing's changed over the last 12, 15 years of building uh passive income and hedging inflation and depreciation.

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Yeah.

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So I, you know, part of the, your private equity is that how your group kind of operates, raise money, acquire the deal, add your value, return it back to the investor, do it over again.

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Right.

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So it's so awesome.

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Out of, out of studying, you know, we've, we've, we've interviewed thousands of people and we study investors and we study why people make investments, right.

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As a part of our, our research.

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And what we kind of learn is people will make investments, their motivation for making investments a lot are fear of future, right?

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I'm grinding away.

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was a firefighter, you know, and I was humping hoes and, I blew up my knee in the firefighter Olympics.

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And I'm like, my career might be over.

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And at that point I was scared.

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Right?

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So like I started studying books and all that other stuff.

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And I went to business because I'm like, blew up my knee.

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Like I'll never be the same.

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It gets cold and I feel it.

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Right.

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You feel, you know, when it's getting cold.

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your knee injury.

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that pain and that fear caused me to want to make a change for the future.

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The future Josh is begging me to do something about it.

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But let's be honest though, out of 100 people we're sitting with at a table, there might be one or two people with that view of, need to plan today.

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I need to do something today.

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How do we get more people to maybe view a little bit of the future Josh, the future Dan's?

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the future kids, how do we encourage and inspire more people to do that?

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Yeah, it's such a great question.

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And I remember my wife, Melissa, when I was going through the transition and keeping us living below our means, you know, it looked like we were making about 60 to 70,000 a year, really, I'm making 500 to 600 as an athlete.

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And she's over here like, hey, let's loosen this up and have a little more fun and live a little more lavishly.

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And I'm pulling back saying, no, let's let's invest this first.

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And so I remember her specifically saying, and it was interesting to me because it seemed so obvious.

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that you got to delay the gratification first and why people aren't able to see that.

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It surprises me.

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guess the best way we can help and from my perspective is to keep sharing stories of people transition.

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Maybe they think it's difficult.

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You know what?

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I can give a real life case study real quick for listeners so they can understand how simple it really is.

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Yes, it takes more time to go do, but you may not have to go do it all.

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You could partner with people like yourself, Josh, or like other syndicators, people who have success in a track record.

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and have a rinse and repeat model for capital, if we do come along.

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So example I'll just share real quick is, you we bought a deal in Cleveland, Texas, 88 unit apartment called Northridge Court.

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Still there, still uh operating.

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And when we bought the deal, we acquired it in September 2019 and we paid like 6.7 or 7 million bucks for the asset.

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And we ended up raising 2.1 million dollars from our investor group.

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you know, let's say I put in 200, my partner puts in 200, and then we raised the rest from, you know, group of probably 15 or 20 investors who are also looking to put their capital to work.

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And we ended up selling this deal sooner than we had anticipated just because the market multifamily was going crazy in 2021 for like 12 million bucks.

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So was this really, really amazing return.

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And that's not how they all go.

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But the point I would share is, I put $100,000 into that deal and it produced an average 12 % cash on cash, or let's just keep it round numbers, 10 % cash on cash, you're getting about 10,000 a year.

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mailbox money, that's the passive income coming in, whether you work or don't work, that's your money working for you.

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And so once you get the, we'll call it currency, right?

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It's what the dollar is, it's a currency.

00:15:22.511 --> 00:15:29.655
You put your currency, which most people use money, into the deal and boom, it's producing this cash flow or passive income.

00:15:29.655 --> 00:15:33.738
And so that's one of the reasons we like multifamily value add.

00:15:33.902 --> 00:15:37.192
apartments or triple net lease is the consistent cash flow.

00:15:37.192 --> 00:15:41.865
It's one of the main reasons, like I said, I changed my life was learning about passive income.

00:15:41.865 --> 00:15:50.667
And so that deal for the cold produced about 12 % cash on cash, which is 12,000 a year, which is paid in monthly or quarterly.

00:15:50.706 --> 00:15:53.817
And that's just one part of the investment.

00:15:53.817 --> 00:15:59.403
And that's the part that I'm looking for of how hard can I get my money working for me?

00:15:59.403 --> 00:16:03.067
and how much can it bring back every month, whether I work or don't work.

00:16:03.067 --> 00:16:08.381
And then what I look to do, which is simple, anyone can do this, is live off that passive income.

00:16:08.525 --> 00:16:14.105
So if there's new money coming in from other sources, let's say my snowboarding income, I'm stacking, I'm stacking, I'm stacking.

00:16:14.105 --> 00:16:18.025
Boom, I invest a hundred grand and now I got a thousand coming in as trickle money.

00:16:18.025 --> 00:16:21.125
I might live off that money versus my other income.

00:16:21.125 --> 00:16:29.745
And the whole goal for me, which is I think a pretty easy to understand goal, it'll take a little more time to go do, is let's say it costs me 10,000 a month to live.

00:16:29.745 --> 00:16:35.981
I'm looking for my passive income to be at least 10, ideally 15 or 20,000 so that I...

00:16:35.981 --> 00:16:41.162
can live in my life with no stress about how am I gonna make my monthly payment.

00:16:41.162 --> 00:16:42.721
If I get fired, it doesn't matter.

00:16:42.721 --> 00:16:55.261
When I get fired, when I get cut from the brands, which I got cut, and it was still hard, even though I did as much preparation as I did, Josh, when I got the call from Volcom, and there sounded like someone on the other end of the line was dead.

00:16:55.261 --> 00:16:56.601
I'm like, breezy.

00:16:56.601 --> 00:16:57.922
And I'm like, are you okay?

00:16:57.922 --> 00:16:59.481
He's like, yeah, man.

00:16:59.553 --> 00:17:05.646
She's got to let you know, we've got some budget cuts and we got to let you go and we're going to pay out your contract, but you're done.

00:17:05.646 --> 00:17:08.635
And I'm just, you know, I put all this time in preparing already.

00:17:08.635 --> 00:17:13.299
I already had 70 units or so and it was still a heart gut wrench.

00:17:13.299 --> 00:17:14.400
It was like, are you kidding me?

00:17:14.400 --> 00:17:15.401
It's already happening.

00:17:15.401 --> 00:17:20.262
So um yeah, that's how we create passive income.

00:17:20.383 --> 00:17:22.144
you know, that's one asset.

00:17:22.144 --> 00:17:25.055
And then you go do it on several, five, six, 10 of these deals.

00:17:25.055 --> 00:17:31.391
And you start to see a different world of You know, there's plenty of capital in the world and it's not a constraint.

00:17:31.468 --> 00:17:33.138
Yeah, for sure.

00:17:33.278 --> 00:17:45.467
think uh the guy named Mike McCallewitz, think his name was he wrote a book about money, but he talks about there's this law, I think they call it the Parkinson's law, where you will fill the gap of what you have.

00:17:45.467 --> 00:17:52.011
So if you have $1,000 coming in, you will fill you will use every bit of that thousand bucks or more.

00:17:52.011 --> 00:17:57.631
If you have 10,000 coming in, you will use every bit of that 10 you You fill the space of these things, right?

00:17:57.631 --> 00:17:59.873
It's just, if I have it, it gets spent.

00:17:59.873 --> 00:18:08.537
like living below your means, like bucks up against all human psychology of, know, I made it, I earn it, I've got it, we'll make more.

00:18:08.537 --> 00:18:10.759
can make, you know, like it keeps going up.

00:18:10.759 --> 00:18:13.700
How do you have the discipline?

00:18:13.700 --> 00:18:15.872
I know fear is a definitely a motivator, right?

00:18:15.872 --> 00:18:17.893
You know, those calls were coming because you saw it happen to your friends.

00:18:17.893 --> 00:18:18.712
You saw the cycles.

00:18:18.712 --> 00:18:21.744
You saw what was pending in the future, right?

00:18:21.744 --> 00:18:24.064
But how can, how do you...

00:18:24.064 --> 00:18:39.770
Instead of money sitting in a mattress, sitting in a uh bank, buying another watch or whatever, how do you get it to go instead of spending it, sending the kids to private school or whatever the case may be, I'm going to put this towards an asset.

00:18:39.932 --> 00:18:42.203
How do you get your brain to do that?

00:18:42.286 --> 00:18:51.266
Well, another piece that that's such a great question and I love the Parkinson's law where I Elon Musk hammers this where work expands to fill the time available for its completion.

00:18:51.266 --> 00:18:55.526
I think is really how it's how he puts it in the sense of like you give yourself three hours to clean the house.

00:18:55.526 --> 00:18:56.405
That's what's going to take you.

00:18:56.405 --> 00:18:58.205
Give yourself 25 minutes.

00:18:58.205 --> 00:19:01.846
Yeah, might be a little different quality, but you're still going to get it done based off do or die.

00:19:01.965 --> 00:19:07.566
But what changed for me was the realization that the dollar is losing value quickly.

00:19:07.566 --> 00:19:09.885
A quick story you guys and I could see this firsthand.

00:19:09.885 --> 00:19:16.480
I know you'll be able to relate to this story, grandma, who lived through the Great Depression, such an unbelievable woman.

00:19:16.480 --> 00:19:21.623
She has five children who are 12 and under, and her husband unfortunately commits suicide.

00:19:21.623 --> 00:19:26.365
And so here's my grandma with five children, 12 and under, coming out of the Great Depression.

00:19:26.365 --> 00:19:28.405
And she works her ass off.

00:19:28.405 --> 00:19:30.556
Like, she does everything you can.

00:19:30.556 --> 00:19:32.406
She penny pinches all along the way.

00:19:32.406 --> 00:19:34.218
My mom says that she was a worker.

00:19:34.218 --> 00:19:34.988
She got it done.

00:19:34.988 --> 00:19:36.587
She had to survive.

00:19:36.729 --> 00:19:40.970
And she saved her money more diligently than anybody I've ever met in my life.

00:19:40.970 --> 00:19:44.551
She was the most frugal human being and she worked till she was in her mid 80s.

00:19:44.551 --> 00:19:46.251
She was a very healthy woman.

00:19:46.612 --> 00:19:57.136
And the sad reality is she saved $93,000 and here she is in her now 90s, needing to go into a assisted living facility.

00:19:57.356 --> 00:20:00.597
And we saw my mom and dad were managing her money at the time.

00:20:00.597 --> 00:20:02.199
So I heard about it firsthand.

00:20:02.199 --> 00:20:06.641
Her bank account of 93 grand got drained in about a year and it was down to zero.

00:20:06.641 --> 00:20:13.880
And that was the moment for me during my snowboarding career that If you just work and save money in the bank, you're going to lose.

00:20:13.880 --> 00:20:15.701
It's guaranteed going to lose.

00:20:15.701 --> 00:20:17.471
And I know how hard she worked.

00:20:17.471 --> 00:20:18.741
know how well she saved it.

00:20:18.741 --> 00:20:28.987
So inflation, which is the silent wealth killer and stealer, that's what I think is a really big point of happening in America right now between the haves and the have nots.

00:20:28.987 --> 00:20:31.567
And whether you're Republican or Democrat, doesn't matter.

00:20:31.567 --> 00:20:34.409
Inflation happens no matter what party is in office.

00:20:34.409 --> 00:20:36.049
They continue to print capital.

00:20:36.049 --> 00:20:40.112
A book I want to leave for your listeners to go and read and digest.

00:20:40.112 --> 00:20:52.051
and read again and again is Ray Dalio's book, Changing World Order, where he will share with you history about previous dynasties, previous empires, about how they rose and how they fell.

00:20:52.051 --> 00:20:57.211
And he shares exactly where we are in the US currently based off history.

00:20:57.486 --> 00:20:59.046
Dalio's purely data.

00:20:59.046 --> 00:21:00.306
He is not a biased human being.

00:21:00.306 --> 00:21:07.486
He's just looking at the data from the last 1500 years and saying based on what's happened in the last 1500 years, based on what we can see today, here's what's likely coming.

00:21:07.486 --> 00:21:16.226
And when you can see what's likely coming and where we likely are, you have got to get on the side of inflation because the government's Fed will continue to print it.

00:21:16.226 --> 00:21:21.582
And as they print it, the power of the currency goes down.

00:21:21.582 --> 00:21:31.726
And you know, example of how we're hedging inflation, again, real life case study, I'm only going to share what we're doing here is you buy an apartment, again, let's just call it 885 unit apartment.

00:21:31.726 --> 00:21:33.705
We buy it for four and a half million.

00:21:33.705 --> 00:21:39.625
We sell it, you know, a years later for seven million because of being able to drive the net operating income.

00:21:39.625 --> 00:21:43.586
And really simple stuff is we're raising income by making the property nicer.

00:21:43.586 --> 00:21:44.766
We're going to invest money into it.

00:21:44.766 --> 00:21:46.365
We're going to upgrade interior units.

00:21:46.365 --> 00:21:47.405
We're going to put in a playground.

00:21:47.405 --> 00:22:00.430
We're going to put in water conservation programs to, you know, make the expenses tighter just because we're putting in new toilets that don't use as much water or aerators, things that are good for both the tenant and the, um, nature.

00:22:00.430 --> 00:22:05.692
And so you end up doing this beautiful value add strategy and move rents up.

00:22:05.731 --> 00:22:14.594
And when you sell the deal, again, go back to $100,000 investment, you put in your 100 grand and you're receiving cash flow along the way.

00:22:14.594 --> 00:22:18.154
And then when you exit, there's usually a thing called an equity multiple.

00:22:18.154 --> 00:22:28.461
And if you can drive that operating income, which again, increasing income, reducing expenses, and you sell it, you have drastically changed the ability for your capital to earn money.

00:22:28.461 --> 00:22:32.122
So you can have 15 to 20 % annual return on your money.

00:22:32.122 --> 00:22:34.342
Now that's higher than inflation.

00:22:34.922 --> 00:22:37.662
That's keeping up with inflation and then extending.

00:22:37.662 --> 00:22:48.561
Those are the things that I think more people need to be tuning into if you wanna have a chance to not be living in a smaller and smaller world.

00:22:48.561 --> 00:22:53.486
And I see it firsthand for people like my parents who don't have.

00:22:53.486 --> 00:23:19.877
inflation on their side and they are know social security is is what it is their pension is what it is and as they print that standard of living continues to get smaller and smaller it breaks my heart to see but that's just how it is and if that's how the rules are i want to learn the rules and i want to play by the rules to win Yeah, it's powerful sharing stories and testimonials of people that have experienced these things and made a change for their life, a change for the future changed.

00:23:19.877 --> 00:23:23.201
you know, speaking of tuning in, you've been on media a lot.

00:23:23.201 --> 00:23:25.035
You actually have your own media stuff.

00:23:25.035 --> 00:23:29.789
Why don't you give a little shout out to some of the media programs that you guys participate in and run?

00:23:29.996 --> 00:23:32.826
Yeah, we have a podcast called Keeping It Real Estate.

00:23:32.826 --> 00:23:38.450
We're just educating folks on what we do in the multifamily value ad space.

00:23:38.450 --> 00:23:40.431
We'll bring on vendors at times.

00:23:40.431 --> 00:23:42.191
We'll talk about deals.

00:23:42.191 --> 00:23:47.973
We'll talk about our team at Granite Towers Equity Group, but it's all on Apple iTunes, Keeping It Real Estate.

00:23:47.973 --> 00:23:54.176
Our episodes come out once a week or once every other week, depending on guests.

00:23:54.176 --> 00:23:57.185
it's a great way to learn with podcasts.

00:23:57.185 --> 00:24:01.189
obviously if people are listening here, you're getting information from real life people.

00:24:01.189 --> 00:24:03.705
I at least verify that you are that are doing it.

00:24:03.705 --> 00:24:06.314
I always like to listen to people who have results who've already done it.

00:24:06.314 --> 00:24:08.836
I don't want to hear about theory of like, this is what you could go do.

00:24:08.836 --> 00:24:12.679
I want to hear from people who are doing it and have done it and were successfully doing it.

00:24:12.679 --> 00:24:14.480
So I can go recreate it for myself.

00:24:14.480 --> 00:24:16.092
that's, mean, anyone can do what we're doing.

00:24:16.092 --> 00:24:24.939
You know, there's, there's nothing separating the other athletes or other people who are doing well from creating a business just like we've, we've been creating and continue to create.

00:24:24.939 --> 00:24:28.719
And the cool part with this is We can go do this and create no limits.

00:24:28.719 --> 00:24:30.970
And a lot of our investors are coming along for the ride.

00:24:30.970 --> 00:24:42.546
have 750 individual investors right now that we have responsibility to help grow their capital through real deals that they can go touch see and get an income statement and verify exactly where the money's going.

00:24:42.667 --> 00:24:43.378
Yeah.

00:24:43.378 --> 00:24:55.067
One of the questions I love talking with investor groups funds is, know, why should someone and we're not going to give, you know, I know that we're recording and we're not allowed to, you know, share specific guarantees or anything.

00:24:55.067 --> 00:24:55.906
It's an investment.

00:24:55.906 --> 00:24:57.008
There's risk involved.

00:24:57.008 --> 00:24:59.559
And I think everybody like listening in understands that.

00:24:59.559 --> 00:25:05.493
And if you don't understand, it's risky to invest, I think it's more risky not to invest.

00:25:05.493 --> 00:25:06.855
Let's just be clear on that.

00:25:06.855 --> 00:25:11.347
But why should someone invest with you rather than anyone else or not at all?

00:25:11.509 --> 00:25:18.375
Yeah, you know, I think that that's something that so first of all, the not at all is the inflation, the continuing of printing of money.

00:25:18.375 --> 00:25:27.404
Like you're guaranteed, you're guaranteed based off of history with currencies that the value is going down over the long term.

00:25:27.404 --> 00:25:32.769
100%, 100 % of currencies, which is the dollar, have either failed or gone to zero or been replaced.

00:25:32.769 --> 00:25:37.326
So you're you're you can see the future isn't bright for the dollar.

00:25:37.326 --> 00:25:41.425
So that's what I'm certain of here based off of history.

00:25:42.165 --> 00:25:50.506
And so what I would say is go and get with people who are doing this because it is a lot of work to go and be and do what we're doing.

00:25:50.506 --> 00:25:51.266
We're running a company.

00:25:51.266 --> 00:25:58.185
It is a full on obsessive behavior nature that never sleeps when you're running a company.

00:25:58.185 --> 00:26:05.875
But what A lot of professionals can do, people who have capital, they're in a career, they're making good money and they want to invest it, go meet some syndicators.

00:26:05.875 --> 00:26:09.178
I mean, we're happy to hop on calls with any of your listeners at any time.

00:26:09.178 --> 00:26:13.150
See if you jive with them, see if you like their track record, dig in, ask them questions.

00:26:13.150 --> 00:26:14.960
You don't need to move quickly on this stuff.

00:26:14.960 --> 00:26:16.601
You there will always be another deal.

00:26:16.601 --> 00:26:21.303
If you got people who are telling you, this is the last deal, you got to get in or the bus is going to leave, run.

00:26:21.303 --> 00:26:24.443
Because what we do, there will always be another deal.

00:26:24.443 --> 00:26:29.165
If you know what you're doing and you're sophisticated in this market, there will always be another opportunity.

00:26:29.165 --> 00:26:31.385
but I would go and see who resonates with you.

00:26:31.385 --> 00:26:32.665
I'd learn about their core values.

00:26:32.665 --> 00:26:34.365
I'd learn about their track record.

00:26:34.365 --> 00:26:35.506
You said it exactly right.

00:26:35.506 --> 00:26:36.566
There is no guarantee.

00:26:36.566 --> 00:26:40.365
Like you can invest with some of the best of the best and market cycles can shift.

00:26:40.365 --> 00:26:43.546
We just went through a huge correction in 21 and 22.

00:26:44.006 --> 00:26:57.006
know, so I would put effort in finding a group that resonates with you and just continue to get to know them and continue to get on their webinars.

00:26:57.006 --> 00:26:58.546
You know, and we have a new deal.

00:26:58.642 --> 00:27:08.826
Josh, we'll have a webinar talking about the deal for one hour about everything we're doing and why we're buying the deal, location, debt, value add strategy, exit strategy, returns, et cetera.

00:27:08.826 --> 00:27:10.076
And then at the end, there's a link.

00:27:10.076 --> 00:27:14.287
You can either choose and invest with us if you're in our database or wait, and there'll be another deal.

00:27:14.287 --> 00:27:15.998
And you'll get on and watch these webinars.

00:27:15.998 --> 00:27:18.749
And we'll do, let's just say, four to six deals a year.

00:27:18.848 --> 00:27:21.965
After seeing five or six deals, you'll see they're all very similar.

00:27:21.965 --> 00:27:23.726
You know, it's a rinse and repeat model.

00:27:23.726 --> 00:27:25.086
We're not changing our structure.

00:27:25.086 --> 00:27:28.365
We know exactly what we're looking for and we're buying the same thing over and over again.

00:27:28.365 --> 00:27:35.425
So as you build that confidence and trust, you'll start to know like, okay, I'm willing to take a 75 or $100,000 risk.

00:27:35.425 --> 00:27:37.185
And until that comes, don't do it.

00:27:37.185 --> 00:27:43.705
Just wait because money invested into a deal with the wrong partnership is not worth the pain of rushing into a deal.

00:27:44.130 --> 00:27:45.611
Wow, for sure.

00:27:46.070 --> 00:27:51.174
What advice do you have or tips you have for investor relations out there, right?

00:27:51.174 --> 00:27:54.467
The model, raise money, you have to find the deal, right?

00:27:54.467 --> 00:28:02.450
You have to keep in communications with the investors because if you do a good job with an investor, they may come back for follow-ons.

00:28:02.450 --> 00:28:06.424
A lot of times what we've seen is we just talking to the LP and they do this.

00:28:06.424 --> 00:28:07.846
Here's 400K.

00:28:09.048 --> 00:28:09.778
put it to work, right?

00:28:09.778 --> 00:28:16.944
Like that he just had a big exit and then he sees and then he's made seven investments after that and they go, the investments go up, up, up, up, up.

00:28:17.986 --> 00:28:27.085
What advice do you have for investor relations people and teams out there for ah maybe tips on communications, tips on those conversations?

00:28:27.085 --> 00:28:31.028
What, you know, like what advice do you have for the investor relations community?

00:28:31.135 --> 00:28:37.311
Yeah, so the biggest thing with investor relations is be really clear exactly what's going on, you know.

00:28:38.253 --> 00:28:44.134
for me, when I'm in limited partner, some of these deals, which I am, I don't need to hear suns, suns, roses all the time.

00:28:44.134 --> 00:28:46.013
I understand that changes happen.

00:28:46.013 --> 00:28:47.594
Audibles need to be called.

00:28:47.594 --> 00:28:48.574
Bumps come in the road.

00:28:48.574 --> 00:28:49.314
This is business.

00:28:49.314 --> 00:28:52.213
This isn't like a direct line up to the left.

00:28:52.213 --> 00:28:53.253
That's not how it is.

00:28:53.253 --> 00:28:58.473
So when you start to be like that, I'm looking to say, hey, well, are we really getting real information here?

00:28:58.473 --> 00:29:00.653
So I would say, shoot them straight.

00:29:00.653 --> 00:29:01.314
Do the right thing.

00:29:01.314 --> 00:29:03.854
One of our core values at our company is do the right thing.

00:29:03.854 --> 00:29:12.229
And if you're over here thinking, well, if my mom had to tell my mom or grandma this, and I embarrassed to say it, then you're running a fine line there it's a wake up call.

00:29:12.229 --> 00:29:14.659
So, you know, being really clear, we do monthly updates.

00:29:14.659 --> 00:29:16.930
That's how we've been running them for the last 10 years.

00:29:16.930 --> 00:29:22.111
So every month on the first of the month at 7 a.m., you're going to get an update from us with all the financials.

00:29:22.111 --> 00:29:24.471
There's the good, the bad, the ugly.

00:29:24.852 --> 00:29:29.123
And you're going to see the direction the property is trending.

00:29:29.123 --> 00:29:30.942
You're going to see which way the market's trending.

00:29:30.942 --> 00:29:32.594
And some of our investors read them.

00:29:32.594 --> 00:29:34.854
Some of them don't, but we still provide it.

00:29:34.917 --> 00:29:40.682
And then if investors have more information or want more information, you get on a call with them and answer direct to them.

00:29:40.682 --> 00:29:47.987
I think just being really clear, really direct, don't hide the problems, don't hide the pain, it's okay.

00:29:49.108 --> 00:29:55.032
in order to be in this business and to run a successful company, you have got to be in personal alignment.

00:29:55.032 --> 00:30:00.156
And from my perspective, you have to share the truth because eventually it's gonna come out.

00:30:00.156 --> 00:30:07.430
And if it comes out too late, there's gonna be much bigger reprimanded problems than if you share it early.

00:30:07.430 --> 00:30:12.596
You can always share it earlier and do your dang best to resolve the problem at hand.

00:30:12.865 --> 00:30:13.665
Yeah.

00:30:14.708 --> 00:30:19.815
It takes a special person to be able to ask for money, right?

00:30:19.815 --> 00:30:22.196
To get the conversion, right?

00:30:22.277 --> 00:30:24.480
To make the offer, to receive the offer.

00:30:24.480 --> 00:30:28.105
Talk to us about the first time you asked for money, like raising money.

00:30:28.105 --> 00:30:29.771
Give us an idea of what that looked like.

00:30:29.771 --> 00:30:32.986
Yeah, the way I see it is I'm never asking people for money.

00:30:32.986 --> 00:30:38.652
I'm showing them an opportunity that we believe in that can take care of their failing currency and here's how we're going to do it.

00:30:38.653 --> 00:30:42.657
And so when I see it that way, I'm excited to show people the deal.

00:30:42.657 --> 00:30:44.529
I'm excited to put my money in the deal.

00:30:44.529 --> 00:30:49.246
I'm excited for my partner to put money in the deal and every deal we buy I'm putting...

00:30:49.417 --> 00:30:51.819
large chunks of capital in every deal we're buying.

00:30:51.819 --> 00:30:55.321
And that'd be another question is how much, you know, are the general partners putting in the deal?

00:30:55.321 --> 00:30:56.509
Are they investing in the deal?

00:30:56.509 --> 00:30:58.845
They don't have any skin in the game, probably a red flag.

00:30:58.845 --> 00:31:05.048
But, you know, for me, it's always been and for anybody who's raising capital, it's not me selling anything.

00:31:05.048 --> 00:31:07.871
It's me showing you the deal and the deal should sell itself.

00:31:07.871 --> 00:31:09.231
Here's why we're buying it.

00:31:09.231 --> 00:31:11.012
Here's what the comps are doing.

00:31:11.012 --> 00:31:16.717
Here's what we can do with the property based off this 2 million, 3 million bucks we're going to inject in the property.

00:31:16.717 --> 00:31:20.959
The competitors right now have done X, Y, and Z and their rent is X.

00:31:20.959 --> 00:31:26.031
We can recreate that in a better appeal for this amount of money and it's gonna create a new return for us.

00:31:26.031 --> 00:31:34.457
And if you can follow that business plan and you can say with authenticity and you find the data, it's really just talking about what you're doing and why you're doing it.

00:31:34.457 --> 00:31:48.124
And I think people can feel the level of detail the team has gone into and the track record mixed with the authenticity, it ends up being a pretty easy decision is really how it should be as long as your data is accurate.

00:31:49.410 --> 00:31:51.913
So I guess final two questions.

00:31:51.913 --> 00:31:55.457
ah One question, does the perfect deal look like for you?

00:31:55.457 --> 00:31:59.221
So there's a lot of deal makers out there and they're listening in.

00:31:59.221 --> 00:32:00.781
What's the perfect deal look like?

00:32:00.781 --> 00:32:02.942
Yeah, for us, it's really location.

00:32:02.942 --> 00:32:10.741
And I know you hear that all the time with real estate location, location, location, it really is the thing because when you're buying a deal, you're hiring a tenant profile.

00:32:10.741 --> 00:32:14.241
Your customer is the most important thing to understand.

00:32:14.241 --> 00:32:17.842
And it was a hard lesson for us before we went through some challenging time.

00:32:17.842 --> 00:32:22.182
You buy in a tough market and then the economy starts to slide.

00:32:22.221 --> 00:32:25.061
Every demographic is going to behave differently.

00:32:25.061 --> 00:32:28.309
They're going to do things differently based on their core values.

00:32:28.309 --> 00:32:29.830
And it's very systematic.

00:32:29.830 --> 00:32:32.531
It's not something that's like, this is unbelievable.

00:32:32.531 --> 00:32:33.772
This has never happened before.

00:32:33.772 --> 00:32:36.775
It's very typical and easy to predict.

00:32:36.775 --> 00:32:43.458
So you have got to understand who your renter is, who your tenant is, who is writing the check every month.

00:32:43.458 --> 00:32:48.320
uh For us too, you know, like there's a different variation of bridge debt, fixed debt.

00:32:48.320 --> 00:32:50.902
We like to go with fixed debt and hold longer.

00:32:50.922 --> 00:32:58.157
We like a value add strategy that we can go and document in the sub market and say, yeah, this competitor is legitimately a competitor for us.

00:32:58.157 --> 00:33:09.417
and they've already done this, we're gonna recreate it, or ideally the property we're buying has already proven out 30, 40, 50 units of upgraded and they've already got the higher rent and we can just finish the project.

00:33:10.557 --> 00:33:16.157
We're typically on a five to seven year hold before a refi or a sale depending on the market cycle.

00:33:16.178 --> 00:33:20.857
Ideally we're in that five to 7 % cash on cash right now with where the market is.

00:33:20.857 --> 00:33:24.218
Overall 15 to 20 % annualized return.

00:33:24.557 --> 00:33:26.190
And then the biggest piece that I'm...

00:33:26.190 --> 00:33:29.569
I haven't touched on it all yet, you guys, is depreciation.

00:33:30.130 --> 00:33:34.450
you know, I think if you haven't heard the word depreciation, it absolutely changed my life.

00:33:34.450 --> 00:33:37.210
This is a story I just want to share with you real quick in two minutes.

00:33:37.210 --> 00:33:38.869
You know, I had the snowboarding career.

00:33:38.869 --> 00:33:40.369
I ended up making this really great money.

00:33:40.369 --> 00:33:43.250
I'm self-employed and I'm like, wow, and it just comes in.

00:33:43.250 --> 00:33:44.509
All the brand money comes in.

00:33:44.509 --> 00:33:45.829
I don't see any taxes taken out.

00:33:45.829 --> 00:33:49.329
So I'm getting a full paycheck and I'm just rolling in cash.

00:33:49.329 --> 00:33:50.529
It's unbelievable.

00:33:50.693 --> 00:33:56.979
And the of the year comes and my CPA who does my tax returns says, ban you $240,000 to tax.

00:33:56.979 --> 00:33:58.279
And I'm like, what?

00:33:58.279 --> 00:34:00.352
Wait, wait, wait, what do mean?

00:34:00.352 --> 00:34:03.364
I'm literally stunned.

00:34:03.525 --> 00:34:12.271
And because I'm luckily frugal, I got the cash, but it was a huge detriment to where I plan to invest the cash.

00:34:12.271 --> 00:34:19.217
And so as I'm reading more books, tax-free wealth, all the stuff I can find because now I've got the pain, what do need to do here to...

00:34:20.253 --> 00:34:23.425
legally get around that because I know there's loopholes.

00:34:23.425 --> 00:34:28.280
know there's different ways of behaving to get into different tax brackets.

00:34:28.280 --> 00:34:30.121
again, very basic book.

00:34:30.121 --> 00:34:33.762
I realized there is an ESBI quadrant that Rich Dad talks about.

00:34:33.762 --> 00:34:35.164
Read the book if you haven't.

00:34:35.164 --> 00:34:42.949
And if you get in on the B and I side, there's a very different tax structure based off of what the government is incentivizing business owners to do.

00:34:42.949 --> 00:34:49.070
And so once I could see that picture, I'm like, my goodness, I have got to get on the business and investor side of things.

00:34:49.070 --> 00:34:52.590
And my CPA that I was working with wasn't the right guy to get me there.

00:34:52.590 --> 00:34:53.550
He didn't educate me.

00:34:53.550 --> 00:34:54.929
He just told me about my tax bill.

00:34:54.929 --> 00:34:56.829
I wanted a CPA to educate me.

00:34:56.829 --> 00:34:58.190
You're my team member.

00:34:58.190 --> 00:35:00.630
You're the straight A student who wants to study the tax law.

00:35:00.630 --> 00:35:03.090
Tell me what I need to do to be more efficient.

00:35:03.090 --> 00:35:10.469
And so I went and hired a new tax guy and he said, hey, your wife, she is working at Red Robin making 10,000, 15,000 a year and she's miserable.

00:35:10.469 --> 00:35:12.849
Would she be interested in being a real estate professional?

00:35:12.849 --> 00:35:13.909
And I'm like, well, what is that?

00:35:13.909 --> 00:35:16.494
And she's like, well, you go manage your 70 units.

00:35:16.494 --> 00:35:28.373
and take care of some of the capbacks, oversee it, do some of the bookkeeping, get 750 hours, and now you qualify as a real estate professional, as an athlete, and we can write this off through massive depreciation.

00:35:28.514 --> 00:35:31.713
So a quick example, like 2015, this is a real story again.

00:35:31.713 --> 00:35:35.213
I'm telling you real data, real context, this is true, real numbers.

00:35:35.213 --> 00:35:39.414
I can remember, it's right there, 325 grand I'm making in 2015.

00:35:39.414 --> 00:35:42.333
I'm embarrassed to say it, it's all I was making in 2015 already.

00:35:42.333 --> 00:35:44.398
Went up high and came down quick.

00:35:44.398 --> 00:35:50.318
I had 72,000 of expenses for running the business and my taxable income was 253,000.

00:35:50.318 --> 00:35:54.538
So my federal tax owed without depreciation that year was 52 grand.

00:35:54.538 --> 00:35:58.057
My highest I ended up paying was 240 grand at my peak of my career.

00:35:58.217 --> 00:36:05.177
Next year, real estate year, I qualify as a real estate professional and my wife qualifies as real estate professional.

00:36:05.177 --> 00:36:06.958
Same income, 325.

00:36:06.958 --> 00:36:10.737
Now I got 140,000 of depreciation losses to write off.

00:36:10.737 --> 00:36:13.965
Plus I got my same 72,000 of expenses to write off.

00:36:13.965 --> 00:36:18.025
And now my taxable income is 113 grand and I owe 17,000 in tax.

00:36:18.025 --> 00:36:27.085
I have 34,000 saved that year to invest, to start building wealth for me, just that one year by just becoming a real estate professional.

00:36:27.346 --> 00:36:37.326
So that's another avenue that I would wanna know about if I'm listening to this of how can I qualify and pay still my fair share?

00:36:37.326 --> 00:36:40.503
We're paying tax elsewhere, no question about that in our company.

00:36:40.503 --> 00:36:44.538
But how do I use the laws, the rules, the way the government set up?

00:36:44.538 --> 00:36:46.840
It's like playing Monopoly, but not knowing the rules.

00:36:46.840 --> 00:36:52.115
That's how it feels when until you get the information, you've got to get the information or you're never going to win.

00:36:52.436 --> 00:36:53.170
Mm-hmm.

00:36:53.170 --> 00:36:58.911
Yeah, if you don't know the rules to play the game you will always lose That's simple.

00:36:58.911 --> 00:37:00.467
That's exactly it.

00:37:00.673 --> 00:37:01.135
Yeah.

00:37:01.135 --> 00:37:09.621
So damn, one more time, if people want to learn the rules and learn the game and learn how to do real estate, become a real estate investor, where could they go?

00:37:09.965 --> 00:37:11.126
Yeah, reach out to us.

00:37:11.126 --> 00:37:12.385
We can have a conversation.

00:37:12.385 --> 00:37:23.306
It's just granite towers, equity group.com forward slash contact us and myself or my partner or someone on our team can get on and have a conversation with you.

00:37:23.306 --> 00:37:30.565
I love to just get on with folks to brainstorm whether you invest with us or not, you know, all good.

00:37:30.565 --> 00:37:31.172
So.

00:37:31.889 --> 00:37:36.461
Uh, fellow investors and deal makers out in the audience has always reached out to our guests.

00:37:36.461 --> 00:37:36.731
thanks.

00:37:36.731 --> 00:37:39.353
Their contact information will be in the show notes below.

00:37:39.353 --> 00:37:46.967
If you have a deal that you'd like to talk about here on the show, if you'd like to talk about the world of investor relations and, and investing, we'd love to have a conversation with you.

00:37:46.967 --> 00:37:52.829
This is we use our podcast network as a living library to learn and to share that knowledge, right?

00:37:52.829 --> 00:37:58.818
People could go and download this and listen and hopefully out of the one out of a hundred people that will actually do something.

00:37:58.818 --> 00:38:05.262
We're hoping to multiply that to get to two people, three people, five people who are gonna make a change for their life to protect their kids and their future.

00:38:05.262 --> 00:38:09.936
So uh if you do have something, you could just go up to the top of one of our websites.

00:38:09.936 --> 00:38:12.257
Everyone has a contact page, contact us.

00:38:12.257 --> 00:38:14.708
And uh as always, like I said, though, reach out to our guests.

00:38:14.708 --> 00:38:16.239
That's the most important thing I'm gonna ask.

00:38:16.239 --> 00:38:18.621
And then until then, we'll talk to you all on the next episode.

00:38:18.621 --> 00:38:19.592
Cheers all.