0:00

You know, you're going to chart out a nice straight path.

0:02

I'm going to start here and I'm going to end up here

0:05

and I'm going to be happy. Well, the path is really going to look like a stock chart.

0:08

It's going to be up and down and up and down, but hopefully as it

0:10

just keeps rising, hopefully if the trend line is always up, you'll,

0:15

you'll reach whatever your goal is.

0:17

And so my goal, I just wanted, I just wanted money coming

0:20

in that wasn't, You know, it wasn't connected with medicine.

0:24

I didn't have any grand schemes of financial freedom.

0:26

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0:29

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0:31

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.

2:08

out of your life, your time? Maybe hit that financial freedom number that you might have in

2:14

mind, or maybe there's just the lifestyle that you want to change,

2:18

but you feel like there's not a perfectly leveraged way or you

2:22

don't know the best next steps. Well, I brought in Dr.

2:25

Tom burns in here, who we recently got connected, but we

2:28

know so many friends together. He broke everything down and dispelled a lot of the myths

2:34

that I had, but also likely you have when it comes to passive

2:39

investments and ways to actually get that financial freedom.

2:43

So. That's what we chatted about. We're going to get into it right now.

2:47

Tom, I'm, I'm really happy. We got connected.

2:50

Uh, it was, uh, what? Justin Breen, I think, originally, Brought us together

2:55

fellow visionaries, right? Quick starts.

2:57

Absolutely, absolutely. Yeah,

3:00

Birds of a feather. we are. Yeah.

3:02

And I feel like a lot of entrepreneurs, you know, a lot of

3:04

folks listening are like us, you know, um, we got into something,

3:09

you know, I know your background is interesting and I would love

3:12

to kind of preface, you know, what your previous life looked

3:15

like and what led you to What you're doing now with all sorts of

3:19

interesting investments, you know, time and financial freedom being,

3:24

I think the biggest things that you've kind of cracked the code.

3:29

And I feel like a lot of entrepreneurs are in the similar boat.

3:32

You know, we just have our own little flavor of how we got

3:35

to where we're at right now. So, um, yeah, I think of this episode, I'd like to, uh, you

3:40

know, uh, kind of break some of these mental barriers that we

3:44

have as people, as entrepreneurs and see how we can really

3:47

find that financial freedom. Yeah. Right.

3:49

Yeah. And it all starts, it all starts in your head.

3:52

You know, we've all got, we've all got talents and you know,

3:54

if it was, if you could do it with a, if you could do it with

3:57

a menu, everybody would do it. That's for sure.

4:00

Yeah. Perfect roadmap. So. Well, and, and, you know, I was, I was kicking this off, you

4:05

know, just our chat here, you know, you have this book here,

4:08

uh, why doctors don't get rich.

4:10

And it's a, it's an awesome purple book.

4:13

And, uh, you know, you have a, what your friend, uh, Robert Kiyosaki, I

4:17

think a few people know who he is. And, you know, he was the one rich dad, poor dad loves the

4:22

book that I first picked up. And it kind of flipped the switch.

4:26

It was like, okay. Time for dollars that whole game seems like a scam, you know, it

4:31

doesn't it's not the game I want to play at least, you know, and

4:35

there's more to it than that. But yeah, give me some initial thoughts on that

4:38

Yeah. You know, so Robert's book, that's why, it's why I loved

4:42

his book is that it, you know, it didn't necessarily tell

4:45

you really how to do anything. But it gave you the mindset and the reasoning why you might want

4:50

to, you know, and so with it, which basically that assets produce

4:54

passive income and passive income gives you the, gives you the control

4:58

over your time, gives you the choice of what you want to do with your

5:00

time, which is what we all want, you know, I mean, Joe, we all, we've

5:03

got, we've got roofs over our heads and indoor plumbing for a reason.

5:07

We want to control our environment. So take that a step further.

5:10

And we'd all like to be able to control our environment,

5:12

spend more time with our kids, more vacations, see the world.

5:15

And so that's the whole. That's the whole premise of what many of us are after and

5:20

that's kind of what Robert's book did for a lot of people.

5:22

It was a, it was a mind changer.

5:24

And if you can flip the switch in somebody's mind, they will

5:27

find a way to go create that income because there's infinite

5:31

ways to create the income. Uh, and so that, that's why I think it was such a special book

5:36

and why it appealed to so many millions and millions of people.

5:41

yeah, and that was the light switch, you know a lot of other fellow

5:43

friends of mine entrepreneurs That's what got them out of the day job.

5:47

Maybe the rat race, you know initially and and Into this game

5:51

of, of yeah, building business, building, um, I would say

5:54

cashflow in different ways, not necessarily the most leveraged,

5:59

maybe out the gate for a lot of us.

6:01

And we're, could still be trading time for dollars, but,

6:04

uh, you know, I want to go back and talk about your story just,

6:08

just briefly as well, because you did have this previous

6:10

life, um, as a doctor yourself.

6:13

And I think that brought you some aha moments.

6:16

And then, um, cause I want to, I want to take your journey and

6:18

maybe, you know, relate it back to what a lot of people experience.

6:22

Sure. And I'll keep it pretty short. So I was, you know, I was a, uh, As a young person, I was an

6:27

athlete and then quickly found out nobody was going to pay me for it.

6:30

So I became, I wanted to become an orthopedic sports surgeon.

6:34

And that's all. So I did. I followed the path. There was a menu for that.

6:37

So I followed the path. I went to college, went to medical school, and then we

6:41

train as doctors under this apprenticeship type program.

6:44

Five years to learn to be an orthopedic surgeon.

6:47

It was actually six for me. I did an extra.

6:49

But, uh, yeah. That's where we, we try, like, like in the past, blacksmiths,

6:53

plumbers, electricians, you train under somebody that's, that's doing

6:56

what you want to learn how to do. What happened, Joe was, I was just following the

7:00

path and knew nothing else. My dad, my mom, they worked for a living.

7:04

They both had jobs. They were setting up for that retirement and pension.

7:08

And, uh, I watched these doctors that were supposed

7:11

to be me in 20 or 30 years.

7:14

I didn't necessarily like what I saw. You know, they were making a lot of money.

7:18

But they weren't happy. They were in the hospital late at night.

7:21

They were on their second or third marriage. They were complaining about their situation, not having control

7:26

over what they wanted to do. So that happened enough times that I was either, you know, the

7:31

blind squirrel that got luckier. It was touched by an angel.

7:33

But I thought, you know, I don't necessarily want their money

7:36

if I have to have their life. So that's when I started looking for something else.

7:40

And this was pre purple book. So I looked at a lot of stuff.

7:45

We won't go into, I landed on real estate just because it's so simple.

7:48

It's just math. And you know, you, you buy something for a certain amount

7:52

and you let somebody else use it for slightly more than that amount

7:55

and you get to keep the extra. So that, you know, that was real estate and it moved at

7:59

a pace that I could handle.

8:01

You know, it's slow. You didn't have to be first in or last out or vice versa.

8:06

You could do it with partners. You could do it part time. So that that's what got my brain going.

8:12

And so I learned now back then, you know, I was an

8:15

indentured servant, didn't have two nickels to rub together.

8:17

So all I had was to get some education.

8:19

It was also pre internet. So I just read books and talk to people that had done what

8:25

I thought I might want to do. And so once I got out of training and got a couple of nickels to

8:31

actually, actually rub together, I, uh, I paid off a few bills and did

8:35

the only thing I knew to do, which was to go buy some real estate.

8:38

There weren't syndications to look at, or I, I wasn't privy to those.

8:42

They weren't available to me. I was a young doctor, but I, you know, syndications

8:46

weren't out there. So I just went and bought something.

8:49

Didn't know my head from a hole in the ground, but I knew how to

8:53

do the math It looked like it was going to work and each step along

8:56

the way the people involved in the process helped me get through it

8:59

And I bought that first property then I I got some passive income

9:03

off of you know I'm a hundred bucks a month or something.

9:05

It wasn't life changing But

9:08

switch, right? It was that moment like, absolutely, it took about a month or two I thought I'd get that little

9:14

check and think, Wow, I didn't have to see a patient or mow a lawn

9:17

or see it do anything for that. It just showed up.

9:20

And so I called the guy said, Hey, I kind of like this.

9:22

You got any more? He goes, well, sure. I got one down the street.

9:25

We went and looked at it. I was a little faster and a little better because I'd

9:29

learned lessons on my first one. I still stumbled and fumbled, but we got through that one.

9:34

I got the addiction, you know, it's a good addiction.

9:37

I got that passive income addiction. And so I bought another and another and I bought like a

9:41

dozen of these things, you know, in rapid succession.

9:43

And I got really good at that market.

9:45

I got to where I could tell you in five minutes if it

9:47

was going to make money. And, uh, bought a bunch of them.

9:51

I bought one side unseen. I bought one for no money down.

9:54

I wasn't planning on doing that. I just knew more than the broker and the seller did.

9:57

So, that started the process.

10:00

And, you know, it kind of grew organically from there.

10:03

It got to where I wanted to get bigger.

10:06

And, uh, you know, I ended up getting a mentor and I ended

10:09

up getting partners and the projects got bigger and I just

10:12

continued to learn along the way. And I'm still learning lessons and still making mistakes and trying

10:17

to take the lessons with me. Well, it's just like anything, right?

10:22

It's like you got to dip your toes somehow and either dipping or

10:25

you're just jumping all full in. And like you said, real estate could be part time, could be full time.

10:31

So it's, it's kind of up to us and it's a math game.

10:35

So it sounds like there is a roadmap, more or less a

10:37

playbook, you know, obviously there's a lot of variables,

10:41

first had to figure out why you want to do this because it's not, it's

10:44

not necessarily, it's very simple. It's just not that easy.

10:46

So me, I was a, you know, full working doctor.

10:49

So that's pretty busy job. But so you got to burn the candle at both ends, but you know, you got

10:54

to figure out why you want to do it. Pretty much anything.

10:58

That's going to take some significant effort. You really have to know why, because it's going to be ups and downs.

11:02

Life is waves and it goes up and down. So you got to be, Ready to pull yourself back up by

11:06

the bootstraps when you're down in the troughs, right?

11:09

Uh, then you got to understand what you're doing, get a

11:11

little education, uh, try to get around people that are

11:15

doing what you want to do. That's where you'll get a lot of your education, a lot

11:19

of your opportunities, maybe some partners, maybe investors

11:21

or people to invest with. And at some point, you know, after you understand the language,

11:26

you understand what you really like, you know, you've got to

11:29

eventually get in the game. Uh, which is one of the chapters in the book.

11:32

You got, as you said, dip your toe in or jump in headfirst,

11:35

whichever way you choose. You got to get in there because that's where you're

11:37

going to get the real lessons. And you know, what is it?

11:40

Tony Robbins says, knowledge is not power.

11:42

Knowledge with action is power. And I would totally agree.

11:45

So you just got to get in there and You know, you're going to

11:49

chart out a nice straight path. I'm going to start here and I'm going to end up here

11:53

and I'm going to be happy. Well, the path is really going to look like a stock chart.

11:57

It's going to be up and down and up and down, but hopefully as it

11:59

just keeps rising, hopefully if the trend line is always up, you'll,

12:03

you'll reach whatever your goal is.

12:05

And so my goal, I just wanted, I just wanted money coming

12:08

in that wasn't, You know, it wasn't connected with medicine.

12:12

I didn't have any grand schemes of financial freedom.

12:15

I loved my job. And then all of a, just all of a sudden, one day I

12:18

looked and realized, well, my real estate's making more

12:20

money than my doctor job is. So it happens.

12:24

and I think you bring up a perfect point. This is something that's been on my mind.

12:27

Um, I know it's, it's caused me some friction to get started in the real

12:33

estate game and it's come up before. It's like, Hey, I love what I do.

12:36

Or maybe I'm so in momentum of what I do.

12:39

I don't know the first step.

12:41

Like, what is that thing that I can do to take action?

12:44

You know, let's say. Um, and I might be jumping a little bit because I do want to break down

12:49

some of the elements of the math. Like, what are the things that we really should understand?

12:54

But, and maybe that is partially this question.

12:57

Because I feel like with anything, the more we know,

12:59

uh, potentially could slow us down from taking action.

13:03

So I guess, to frame the question a little bit better, Tom, here

13:05

I'm thinking, What are the key things, if you were to say,

13:08

like, three things, uh, to get someone into action, to kind

13:12

of simplify, boil it down? Where should we focus to then get into action and

13:18

not lock up in the process?

13:21

figure out what you want to do or what you think you want to do.

13:23

Whether it's real estate or something, you know, figure it out. And so that's, you know, maybe it's your, you want to, you want to buy

13:27

some kind of real estate or you want to get in some sort of real estate.

13:30

So that's step one. You gotta, you gotta have a direction you want to go, right?

13:33

You can't go anywhere without a direction. Then I would, I would get, I would get.

13:40

in a, I would get in a network of people.

13:43

I would just get in a situation where there's other people doing that.

13:45

And it's easy these days. You can just Google where are people that are buying things I

13:49

want to buy, you know, where real estate meetups or where's, you

13:51

know, business owners, where's this, get around with them.

13:54

And what'll happen is because that's going to take you to step three,

13:57

you just got to go do something. You got to go.

14:00

So understand before you go in and buy something, invest in something.

14:03

You've gotta get in there, because paper trading, you

14:05

can look like a Star, and you just don't learn the lessons.

14:07

When you've got money on the line, you learn more lessons.

14:10

And you don't have to go in big. So, I would, I would understand what you wanna do.

14:14

You know, I think I might wanna go invest in, in single family homes.

14:18

Go find a bunch of people that do that. That's going to do a couple of things.

14:21

It's going to give you the confidence to maybe do it, It's

14:24

maybe gonna give you motivation, and it might give you the opportunity to go in there and buy a house.

14:28

Uh, and some mentoring or education on how to do it.

14:31

However you do that at some point, dip your toe in.

14:35

And I suggest to people to, if you're doing it for the first time,

14:39

try to go in small, you know, don't make it your biggest investment.

14:42

Go in small. Don't risk a lot of your money because You're going to get some

14:47

lessons, either good or bad. And, you know, the size of the lesson is going to be the same,

14:52

no matter how much money you put into that first investment.

14:55

So, start small, get the big lessons, and as you learn

14:59

more, then you can start investing with more confidence.

15:01

Whether it's in something you buy yourself, if it's real estate, or

15:04

if you invest with somebody else, either in real estate or businesses.

15:08

So, it's all good. quickly kind of understanding what you want to do,

15:12

get a good feel for it. And then, you know, which will include learning how to

15:16

analyze it and all that stuff. And then you gotta go do something or you'll just be, you

15:21

know, you'll just be professor Joe for the rest of your life

15:25

until you get in the game. Yeah.

15:27

Not, not, not dirty hands, Joe, or getting in there and

15:30

doing some stuff with it. Right on, right on.

15:32

And that was a perfect breakdown of the, I would say, the, a good mind,

15:36

a great mindset to get in action.

15:38

And I guess, you know, as we, so back to the math thing, and

15:43

I think this might go into, you know, Hey, I'm investing in 401k,

15:48

or I'm doing my IRAs, or I'm, you know, investing in my business.

15:52

So, you know, you mentioned real estate, and I would love for you

15:56

to break down why real estate, like, what are the, what are the,

16:01

Let's talk about the benefits. Uh, the benefits of real estate in your mind as, you know,

16:05

as an entrepreneur myself, you know, there's things that

16:08

I can control, uh, my time, cashflow, the way that I maybe

16:13

invest, give it, give it to me.

16:16

Yeah, really, you know, there's a lot of things to invest in, you

16:19

know, uh, Uh, 401ks and stocks and things like that that they fit

16:24

certain people, uh, and there's nothing wrong with them at all.

16:26

Uh, uh, real estate's not the answer to everything, but the benefits

16:31

of real estate, and we've talked about one, it can produce cashflow,

16:35

which is money that comes in, whether you're sleeping, working,

16:38

playing with your kids on vacation. Or sitting on the couch binging some Netflix series, you know,

16:44

it's always going to come in. So that's one.

16:46

Cash flow, cash flow is important. That's that income that can help buy back a little bit of time.

16:51

You know, just think if you've got, and you don't have to

16:54

completely replace your job income. You could just maybe replace your mortgage or your utility

16:59

payment or your, you know, Yeah.

17:02

Yeah, just those little bites at a time. We'll start with that.

17:04

That'll turn that light on and realize, wow, that's covered and

17:06

I don't have to work to do that. So, and then that that will help your other question

17:10

where, you know, I like my job.

17:12

Well, you can just make your job nicer. If you don't have to do certain things that are maybe annoying in

17:17

your job, you can get rid of those. So cash flow, uh, and there are, there are those.

17:23

Great tax benefits with real estate.

17:25

So there's like these four pillars. Basically real estate has four pillars.

17:29

One is cashflow. One is tax benefits, and you get that through depreciation, which is,

17:34

we won't go deep into it, but the government gives you an allowance

17:37

for your property wearing out. And so you get a tax deduction on that.

17:41

Plus you get to deduct all your expenses and things like that.

17:46

That that I noticed that quickly in my tax and my tax returns

17:50

as things started happening. It was very nice. So tax benefits.

17:54

Another is amortization. Uh, you know, you're paying.

17:59

So if you own a house, uh, this is this is great.

18:04

If you own a house, you got a 30 year mortgage every month.

18:07

You write that check, right? Some got some interest.

18:09

It's got some principle at the end of 30 years. That house is paid off.

18:12

And then everybody, anybody that does that should be really proud of themselves.

18:16

You can do the same thing with real estate. You get 20, 25, 30 years to pay it off.

18:20

And again, it's a little bit of interest, a little bit

18:22

of principle, but you know what the cool part is, Joe,

18:25

What's that? you're not writing that check.

18:27

Your renter is giving you the money to pay that off.

18:30

So your renters pay off your property for you.

18:33

So each month, a little bit of principles being paid.

18:36

So. The loan that you got is dropping every month and which, which as the

18:41

loan drops, you know, you bought it for here, you bought it up here.

18:44

Then the loans here as the loan drops, that gap widens at

18:48

your equity and the property. So amortization increases your equity, which increases your

18:52

net worth and your wealth. And the fourth pillar, so we've got, we've got cashflow,

18:58

tax benefits, amortization. And the fourth benefit is appreciation.

19:02

Real estate, not always, but often and typically on

19:05

a trend will go up in value. That's just due to the fact that, you know, it's not that the house

19:10

becomes more valuable, but you and I know that the dollar, the

19:13

purchasing power of the dollar goes down all the time and the purchasing

19:16

power of the Euro goes down. And so the house 10 years ago is worth a heck of a lot more today.

19:22

So you get that appreciation. So that same gap, I showed you as your.

19:25

As your loan's being paid down, you bought it for 300,000, well,

19:29

five years later or 10 years later, it's worth $400,000.

19:33

That gap is all yours. So four really great benefits to real estate and they

19:38

all work in your favor. No kidding.

19:40

And that's where, you know, the big thing, I like that you have

19:43

tax benefits as that second piece.

19:46

Cause cashflow is pretty obvious. And you know, once you, and yeah, it might seem like not a lot, let's say

19:52

your example with a 100 a month, but as you said, that's, it's not only a

19:57

light bulb, you know, light switch, it's also, it could be stacked.

20:00

You can use that to leverage and get other properties, you

20:04

know, and kind of build that, that, uh, that asset class,

20:08

so that a hundred dollars that I made back on that

20:11

property almost 30 years ago. Uh, that 100 was not taxed for many years because of the

20:19

depreciation on the property. So, uh, that, that passive income was offset by those passive losses.

20:24

And if they're, if I didn't have enough income, those

20:27

carried forward and I could use them for years and years until

20:29

those passive losses ran out. So that's one thing.

20:32

So I got to keep all hundred dollars now, you know, as a doctor, if I'd

20:35

have made that a hundred dollars, I would have gotten to keep the

20:38

whatever 65, 70 of those dollars.

20:41

So that's a benefit right there. And another thing is, you mentioned it, you said leverage,

20:46

leverage that, that money. One thing I suggest to people is that, you know, when you

20:51

create this golden goose that's laying these eggs, don't eat it.

20:55

You know, let the, let that, let that cash flow, that

20:58

hundred dollars stay in some sort of separate account.

21:01

That you're going to aggregate with your other cash flow

21:03

that you make from your real estate or your investments.

21:05

And eventually that grows and it helps you buy another

21:08

one or you're adding to it, but it starts to steamroll.

21:12

I like to talk about, you know, have your money make babies and

21:15

then have those babies make babies. And it becomes a perpetual machine and that steam, that

21:20

snowball gets bigger and bigger. So that was a really good point to bring up.

21:24

that's a point where I would love to dive deeper in on is this leverage.

21:28

Cause I feel like that's, it's another unlock moment mentally

21:31

for folks is, is how can leverage, like, what does that

21:34

look like as one deal is done?

21:37

And then, as you said, you started to acquire other deals

21:40

pretty quickly, other properties. Then of course you got more complex, but yeah.

21:45

everything it's just, you know, but the mechanics are about

21:48

the same, but yeah, that's one thing about real estate. And I didn't mention, maybe it's a fifth wheel on this four

21:52

pillars, I don't know, fourth, fifth pillar, but leverage.

21:55

Uh, there's leverage, there's leverage in the stock market, leverage in businesses, we can get loans.

21:59

But the leverage in real estate is, is, uh, significant, uh, until,

22:03

until recent times when interest rates, you know, went up quickly.

22:08

Uh, we could get up to 83%.

22:11

Of our property paid for by the bank and only had to come up

22:13

with 17 percent of the property.

22:15

Now that's extreme, but that was when times were good

22:18

and that's sort of federally backed HUD 40 year loans.

22:21

But you can, you can put down, you know, if you're buying your

22:26

own home, you can buy, you can put down zero, three percent,

22:29

five, ten, just depending on, you know, if you've got military

22:31

benefits or something like that. But typically in the investment world, you're

22:35

going to put 20 percent down. These days it's more.

22:38

We just bought one where we put down 50%.

22:41

So, uh, it's just, well, it's just, you know, that keeps, keeps you,

22:45

it's a, it leaves them a buffer and a margin of safety, but.

22:48

Would, would you suggest that's like, is that pretty common you're

22:51

seeing now with the current trends?

22:53

Yeah, there are a lot of people putting in more equity, using fixed

22:56

debt, and that's no whole other discussion, but you, you get, you

23:00

get to use other people's money, you get to use the bank's money.

23:02

When I bought that little, little property that I bought, I put

23:05

down about 20%, you know, it was a small, I put down a whopping

23:09

16, 000 or something, you know.

23:12

By the way, that, that 100 now is like 1, 500 a month

23:16

from that same property. I still own it. And the last time I saw that property was the day

23:21

I walked it to buy it. So I haven't seen it for 30 years.

23:23

Um, so anyway, uh, the leverage leverages, it helps.

23:28

The leverage cuts two ways. That's why we are, that's why a lot of people are using

23:32

a lot lower loan leverage. Now they're, they're borrowing 50, 60, 65 percent of the

23:38

value of their property. And that's due to safety and also due to the banks aren't

23:42

going to give you any more leverage than that right now.

23:45

But, uh, if you leverage a little too high and you don't do your

23:49

numbers right, your property doesn't do well, that leverage

23:51

can turn around and bite you. So it does take some education and your education is your

23:55

hedge against trouble. Mm hmm.

23:58

That makes sense. And so the model more or less, and this is me kind of in broad

24:03

speak talking about is like, okay, you're acquiring properties and

24:06

of course you're starting to gain more of that value over the time

24:10

that you're getting that renter to pay it off, you know, your

24:13

principal and at the same time, what your net worth is growing.

24:17

So you have, you know, these, these things are kind of, uh, you know,

24:22

compounding all at the same time. And then eventually some of that can be leveraged to acquire

24:27

other properties, uh, along with other, yeah, along with

24:30

other cache that you might have accumulated somewhere.

24:34

Absolutely. That's, you know, beauty, beauties of real estate.

24:38

Say you take one of these properties, you buy it in

24:40

year one and All those four things are working, right?

24:43

You're getting cashflow, depreciation, amortization,

24:46

and appreciation. You go enough years, all of a sudden, that gap I

24:49

talked about is really big. You bought something for 200, 000.

24:52

Now it's worth 400, 000 and you only owe a hundred.

24:54

Well, you can do a refinance. You can get a new loan and take out more cash.

25:00

And that cash, you can get that cash.

25:02

It's actually tax deferred cash. You don't pay taxes on it.

25:05

Mm hmm. Um, and you can use that as you just said, you can use

25:09

that to buy another property. Now you've got two properties work and you've got banks

25:12

money on both of them. The bank's happy to give you that money cause you're

25:15

paying them every month. Um, they just want their money back.

25:18

You get all the benefits of all the depreciation, all the

25:21

amortization, all the appreciation, you know, so it's, it's a

25:26

leverage works really well. And if you're just disciplined, this stuff compounds and grows over time.

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27:09

I want to go back to the speed of things. Cause I love that.

27:11

You said real estate is slow, you know, it's not this fast

27:15

and we're living in a world of everything is so fast and

27:19

only speeding up all the time. You know, AI is not helping in that respect.

27:23

Uh, we love it, but also, you know, I, I find myself often going like, I

27:28

want to go more analog with things. I want to go slower.

27:31

Like, how can I pace myself along everything I'm doing?

27:35

So, um, I don't have a perfect question here, but like, how do

27:39

you look at the speed of things?

27:41

Cause you know, with real estate, everybody wants this, I'm sure

27:45

faster than they're going to get. And they're probably looking for the big deals, the big returns, but

27:50

maybe, what's the mindset there. It takes a little maturity or a little experience, but

27:56

of course we want it fast. I mean, I wish somebody, you know, plop 10 million in my

28:00

pocket today, but you know, there's no free lunch, right?

28:03

But it's, it's real. It really does work.

28:06

So, you, if you want it fast, you might want to go do something else.

28:10

You know, I don't know, buy Bitcoin, buy, you know, buy a lottery ticket.

28:14

But, but that's a lot less sure than real estate.

28:17

And so, You want to have, uh, you just got to understand it's going

28:23

to take some time, but it will, it will, it'll probably, unless

28:27

you really want to do this by next month, it's probably going

28:29

to happen faster than you think. You know, we overestimate what we can do in a year.

28:33

We underestimate, we underestimate what we can do

28:35

in five years, Peter Drucker's quote, number of other people.

28:38

So if you just stick with it, it's, it's like, it's like going to the

28:42

gym, Joe, you, you know, you can't get big pecs by one set of pushups.

28:48

But if you do those pushups every day or do the bench press every

28:51

day, eventually the muscles grow. It's the same thing with real estate.

28:54

You just use the same habits. You turn that bench press into a habit.

28:59

You turn whatever creates real estate investments

29:02

for you into a habit. It's either finding people to invest in syndications or finding

29:07

that next single family home or buying that next storage property.

29:11

And you, persistence and diligence wins the game.

29:14

You know, time makes you, you know, Time makes you look really smart.

29:18

It'll make a bad deal look good and a good deal look great,

29:21

as long as you don't lose it. So it makes you look really smart.

29:25

So just hang in there.

29:27

My path, it was a 10 year path.

29:29

I was just, but again, I wasn't trying to do it fast.

29:32

So lucky me, I didn't have to battle that demon, but I

29:36

just wanted, extra income. And it was a fun game to realize, look, I could pay my

29:40

utilities with my passive income. Oh, I could pay, you know, something else.

29:44

And then it just kept growing because of that compounding

29:47

effect just kind of went in this non life changing, slow,

29:53

you know, slow slope growth. And then all of a sudden, one day it just kind of did this

29:58

just because of all those four things I talked about.

30:01

So I didn't give you a concrete answer other than Hang in there.

30:05

You know, you can't, you can't force the birth of a baby.

30:08

It takes nine months, right? So, you know, you got to learn to be patient there.

30:12

So be patient here, but, but don't stop.

30:15

Don't do one thing and then wait for it to happen. Keep adding to it because you'll compound your knowledge.

30:19

You'll compound your money. You'll compound your network.

30:22

All of those things are going to increase your

30:25

ability to create cashflow. And the whole goal is for you to have cash that's coming in that you

30:30

don't necessarily have to put your time to that gives you the choice.

30:34

Of deciding what you want to put your time to, That's right.

30:37

Yeah, no, and it's a perfect answer. It's honestly, it's a better one than I can even imagine because

30:42

it's, it's, it's life, right?

30:45

It's, it, it, it feels very organic real estate and the

30:48

way that it can all work. It's very complex, but at the same time, like you said,

30:51

it's, it's, it's pillars. It's, it's certain principles and it takes consistency.

30:57

You know, it's the power and compounding really at the end of the day, it

31:00

seems. Yeah. it, it does. And those pillars, you know, pillars are designed to

31:03

hold up heavy roofs, right? So, and I just gave a little nugget.

31:07

I didn't realize I was given, but that property I bought.

31:10

My first property. I still own the thing.

31:12

It has taken this much effort for the last almost 30 years.

31:17

So, oh my gosh, it's been a long time. So, you know, you get it, man.

31:21

And it, it just continues. I just can't stop it.

31:24

It keeps sending me money every single month.

31:27

So they don't all work out like that, but it's the long lasting,

31:31

uh, aspect of it too, that people don't want to forget.

31:34

It takes time to build an engine like that, that

31:36

really lasts for a long time. Yeah, well, so you mentioned 30 years ago and you're, of course,

31:41

still in the game doing things. And I'm curious of of kind of the evolution.

31:46

Let's let's curve that for a second of of your thinking.

31:49

But, like, let's say someone wants to start now and.

31:53

Maybe approach this one of two ways is he talked

31:57

about the first three steps. You kind of get going, but things, things that are

32:01

rolling around in my mind. I'll just give him to you is like location.

32:04

How, how does that yeah, I'm in San Diego, for instance, and I

32:08

know, you know, Mike canings, you're, you're on his show as well.

32:10

And, you know, I think he's, he's kind of battled with

32:13

the same kind of mindset. So location, uh, am I too old for this?

32:18

You know, am I too late in the game? And I'm thinking a third one here, just to give

32:23

you a couple of things is. the environment, like the economy right now, higher interest rates,

32:27

like you said, uh, you know, just the factors that are kind of out

32:32

of, out of our control a little bit. What would your steps be?

32:36

What are you, what's your mindset going into things now?

32:38

Is it different or what are there things you would

32:41

do a little differently? Uh, probably not.

32:45

I'd probably give you that same answer when you said,

32:47

how do you get started? Because if you just look, so, and I'll answer your last question,

32:52

you know, it is a, it is a bit of a difficult time now, but

32:57

no matter what the state of the market, there's a deal out there.

33:00

There's always deals out there. They're a little harder to find at times.

33:05

12 to 15 years, you could throw a dart and, and make

33:08

money on apartment complex. Now you really got to sharpen your pencil, but there's deals out there.

33:13

People are finding good deals in all kinds of asset classes, at

33:16

least in the real estate world. And, you know, Businesses do the same thing.

33:20

They go up and down. There's good times to buy businesses, right?

33:23

Time to buy an empty office building right now.

33:25

You got to know what to do with it. So that's the one thing.

33:28

So there, there's always a deal. Some, some fell from way back when he said, he said that the

33:33

deal of the century is around the corner every day, every week, no

33:37

matter what kind of market it is. And he's correct.

33:39

There are people finding screaming deals right now.

33:42

Uh, they're just few and far between.

33:44

So that's one thing. He just, it's hard to work.

33:47

You know, who shied away from hard work? We don't, like we said, this is simple.

33:51

It's just not easy. The numbers will make sense.

33:54

Um, number two. Yeah, yeah, you talked about location and that's a, that's

33:58

a huge thing in real estate. It really does come into play.

34:01

You're in San Diego. I'm in Austin, Texas, two really popular places.

34:06

So in my world, in the apartment world, there are a bazillion

34:10

apartments being built. So our rents have gone down for a while.

34:13

But there's a reason for that because everybody moves to Austin.

34:16

So you can, so if you have a, you have a piece of real estate in

34:22

Austin, if you bought it right, it's got a good chance of doing

34:26

fine for the next whatever, 10, 20, 30 years, because a lot of

34:29

people want to move to Austin. You might get a great deal in some small town in Iowa or North Dakota,

34:37

the numbers might work, but people aren't moving into North or at

34:40

least let's assume people aren't moving into that particular area.

34:43

Well, then you've got no renters. So location is very important.

34:47

It follows, you know, you want to be in a location where populations are

34:50

growing, jobs are growing because that produces people that have the

34:54

money to rent and want to rent. So that's one thing.

34:57

Uh, and it's just that if you want to buy a place in San Diego,

35:01

you'll You know, fight hard to find one that makes sense.

35:04

But remember, we said way back in the beginning, it's just math.

35:07

You know, so do the numbers and the numbers will tell you what to do.

35:11

Don't let, you know, don't let the heart and the frontal lobe get into

35:15

the game because you'll fall in love with how pretty a property is.

35:18

Just try to let them know because I've done it. I've made that mistake.

35:20

Of course, I've made every mistake. That's the only reason I'm here.

35:24

Um, so it's fall in love.

35:26

And then. Are you too old?

35:29

I think you, Joe, I think you are too old, so you

35:31

just need to give it up. Uh, you know, so, which is sad to say, because obviously that means

35:37

I should be like in my grave and never doing anything, you know,

35:40

I mean, Hey, what is it that, you know, the best time to start was way

35:45

back when the second best time is now it's just, it's going to work.

35:48

Uh, I've, it took me 10 years cause I was a slow learner and, and, and.

35:53

And didn't know what I was doing. And I had good resources.

35:57

I had good people resources. I didn't have all the electronic resources.

36:00

I had really great people helping me out. I've seen people do it in, in less time.

36:05

I had to replace a surgeon's salary, which was a little high.

36:08

I wasn't planning on doing that, but that's what happened.

36:12

So that happened without really trying. I was just doing the habit thing.

36:15

I just kept buying stuff, you know? So, uh, you know, the, the, That's maybe the lower amount of

36:22

money that you need to replace. Easier it is to replace.

36:24

The corollary is that you've probably got a little less money

36:27

to buy things, but there's, there's always a way you

36:30

can, you can have the money. Like a lot of, a lot of professionals and doctors, they've

36:35

got the money, but they simply don't have the time and they

36:37

love, they might like their job. So they'll go find somebody in a syndication that's got

36:41

the experience, the network, the education, the knowledge,

36:43

and they'll, you know, those two will work together and

36:45

it's kind of a win win deal. So, um, it, it, you're never too old.

36:50

I've seen people do it in a few years and, and you're

36:52

so much younger than me. I mean, I'm still wondering if I'm ever going to make it, but, uh,

36:56

we're still going to keep going. think you're doing all right, Tom.

37:00

Well, I mean, you kind of dovetailed a little bit into what

37:03

I've been thinking is all right. Business owners, myself included, yourself and most people listening

37:08

here, we're, we're connected. We have a network around us.

37:12

There's people, I talk about this all the time with.

37:14

It's like, Hey, you want to go get on shows or you want to start

37:18

your own show or there's all these virtual stages and there's people

37:21

that you know, that have influence.

37:23

They have access. They have knowledge. Same goes with real estate here.

37:27

And it's going to shorten the gap, the learning gap, you know,

37:30

there's mentors there, but also you mentioned syndication deals,

37:34

just doing deals with partners. And syndication, I've had folks on this show, so it's not a new

37:40

topic, but I would love to at least bring up the idea of like

37:44

how to work with partners in deals like syndication deals to maybe

37:48

shorten that gap or, you know, Sure.

37:52

That's a, you know, that's a, like I said, that wasn't necessarily

37:54

available to me back when they really opened it up, you know,

37:57

as I was kind of on my journey and it can work really well.

38:01

If you have a, you know, if you have a, if you have a, so there's

38:06

the sponsor and the investors, the sponsors, the, the guy or the group

38:09

or the person or the group that's got all that knowledge, got the

38:12

network, knows all the people, knows where to find the deals, how to put

38:15

it together, et cetera, et cetera. Often those folks, they may do a series of deals and their

38:20

money runs out eventually. Then, so they want to, they need large amounts of money.

38:24

You may, rather than, you know, 16, 000 to buy my little first

38:28

piece of property, they may need 15 million to buy something.

38:32

And so you, you get it from a group of people. It's called a syndication.

38:35

So if that sponsor cares about your money as much as you do and is

38:42

competent and has a good team, It's a great marriage because if you're

38:46

somebody that has discretionary income, you're great at your job.

38:50

You're a great doctor. You're a great business person.

38:52

You're a great professional of any sort.

38:55

You know, we get good at that business. People are really good at running businesses and they

38:59

don't necessarily have time to go out and look at property.

39:02

So or look at investments, whether it's whether it's

39:05

investing in businesses or not. So If you put those two together, you're the person that's got

39:11

the, the investor's the person that's got the money, but

39:13

not the time, the knowledge, the network, the experience.

39:17

They give that to somebody that doesn't have all the

39:19

money they need, but they've got all those other things, so they're complementary.

39:23

And those two go together. And, and, and if it's a successful investment, the investors get

39:28

paid back first while they continue to do their job.

39:31

So they're working at their job, making whatever they

39:33

make, hopefully getting raises and making more each year.

39:36

Now this passive income starts coming, coming in and

39:39

starts adding to the pot. So it's a great situation.

39:43

The caveat is, is you don't always find sponsors out there that care

39:47

about your money as much as you do. Most of them do.

39:51

There are really, really good people out there. There's a lot of them.

39:54

But before you do that, I would get with somebody who can, who

39:59

can help you identify red flags, give you some, some structure

40:03

on how to do the due diligence on, on somebody and find out.

40:08

You know, just try to give it your best guess that not your best guess.

40:12

Give you as much confidence as possible that they've done this

40:14

before and they're good folks. That's, that's called the due diligence.

40:18

And that's important. And once you find one, as I have before, I've

40:22

found people that I trust. I just keep giving them money.

40:24

If I've got extra, I'd give them money. I don't even have to ask really how much, what the deal's

40:28

like because I trust them. Yeah, and that's why I feel like I've always heard

40:32

with the real estate game. I mean, it goes with most of life anyway, you know, you

40:36

build those trusts, you build the bonds and networks over

40:38

time, you're doing deals. So you have a track record and people change, but not

40:43

that much, you know, the same principles usually stay intact.

40:47

Yeah, you bet. Find some good ones. It's a great team.

40:50

It's a great, it's a great way to, to leverage their time

40:53

while you do what you do best. And over time, maybe they'll start, maybe that, that cash

40:59

flow will start buying back a little bit of your time. And if you choose to want to go do it by yourself, you'll

41:03

have extra time to do that. I love it.

41:05

And Tom, this is, it's given me, it's putting together a lot

41:08

of the pieces that have been floating around in my mind and.

41:12

It doesn't seem as scary. You know, sometimes these big models you talk about syndication deals

41:17

or just real estate in general. It's people can tune out because of the complexity

41:21

that I think you've done an incredible job breaking it down.

41:24

I know your book does as well in a lot of ways.

41:27

It's not all real estate, but. Tell me a little bit about what you've been working on with people.

41:34

Maybe some of, um, you know, how you're, how you're now

41:38

progressing and evolving yourself.

41:40

And I'm kind of curious of, yeah. What you're involved in now.

41:44

Yeah, remember I talked about that stock chart where things

41:46

go up and down and up and down? Well, that's, you know, that's my life, of course.

41:50

It's been great. Blessed to have a great life. But, you know, great lives always have their ups and downs.

41:54

And so, I got to where I got by just doing it.

41:58

Doing what you and I discussed, just habitually buying or investing in

42:03

stuff that would make cash flow. They didn't all come out.

42:06

You know, sometimes I, you know, sometimes I'd have losers and

42:09

sometimes winners, but more winners and losers and that through

42:14

good partners, good mentorship, just blind luck and all of a

42:18

sudden there was that money that worked out really nicely over

42:22

time as we created one company.

42:24

We that was the philosophy we wanted to create.

42:28

Cash flow and we did that for a time, but the market sort of

42:32

ended up turning things to where I believe it ended up being more of a

42:35

kind of a capital gains mechanism. And I talk about that in the book where we built something, sell

42:40

it because that's what we did. We built apartments, we built it and sell it.

42:43

That was good for the investors. It was good for us.

42:45

And that's just what the market wanted. But boy, that kind of up and down thing got, uh, got a little chaotic.

42:52

It does make it. There are a lot of people that do that, and it's a good way to go

42:55

because you you add a lot of value when you take a a raw piece of dirt

42:59

and turn it into a pretty building. So, uh, my evolution has been to kind of And things got chaotic.

43:07

This is for, for people, if they're younger, I can just

43:10

tell you I've been through it. Like I said, I've made every mistake possible.

43:13

So I've got an entity map sitting behind this computer

43:16

that just looks like this. There's a, you know, I guess you can't see my hands.

43:21

It's just everywhere. So many entities.

43:23

So my word for the year is simplify.

43:26

And so, uh, My company now, we focus on one thing.

43:31

So I've gone to just a simple focus, one asset class, one asset type.

43:36

It's easy to explain and that's sort of my evolution.

43:40

So back to the cash flow that, that got me here.

43:43

And, you know, I'm aware as we start this venture, it's

43:47

going to take some time. So I have to, I have to eat my own cooking and be.

43:52

And be patient and wait for the, you know, cause got to take care of

43:55

the investors first and make sure the properties do what they do.

43:58

So that's sort of been my, my kind of evolution.

44:00

There was, there were some hot times during the late teens

44:04

and early twenties, and, uh, they were exciting and then

44:07

they were not so exciting. So I'm kind of going with the steady flow right now.

44:12

Yeah, that's, I mean, Hey, is it, uh, is it something

44:15

you could describe here? Was it even worth, um, you know, kind of the, the new

44:19

venture now that you're doing or Oh, it's, yeah, it's really, you know, basically the simple, I went

44:26

from building apartments and build to rents, things like that, which is

44:29

a fabulous, fabulous, uh, business, uh, to simply buying apartments.

44:35

We're now buying apartments that are under, undervalued, so to speak.

44:40

You know, now is a really good time to do that, and that's part of why we did this.

44:43

It's been two and a half years we've been working up to this,

44:46

but, There are a lot of apartment buyers that came into the market

44:51

late and maybe didn't have as much depth of experience.

44:54

And, and some that even did have some experience really

44:57

got caught by surprise with this rise in interest rates.

45:00

And so there are a number of properties that are struggling,

45:04

uh, from a financial standpoint because their values have

45:08

dropped, their leverage was too high and they need to sell.

45:12

So, you know, when you can buy properties at.

45:15

20 and 30 percent discounts or at the value of the debt.

45:20

That's a good, that's a good buy. You know, they always say you make your money on the tee box.

45:24

That's where that I'll tell you. That's a, that's a real estate expression.

45:27

You make your money on the tee box. So if you can buy right.

45:30

Uh, and sit tight through these high interest rates and only

45:35

very slowly growing rents. There's going to come a time in the next 12 to 18 to 24 months when

45:41

all the new supply of apartments is going to kind of dwindle, but the

45:45

population is going to keep growing and that's when we think rent

45:48

growth is really going to take off. So that's our strategy is to just pick up good deals right

45:53

now that make good money. Nice, steady, low returns that gradually grow each year and then

46:00

get them, hopefully as the rents grow later, we will refinance,

46:04

give people back their money, tax deferred and move on down the line

46:07

and keep, keep buying property. So that's the new evolution for Tom Burns.

46:12

I like it, Tom. Yeah. Thanks for sharing.

46:14

And it's, it's, I'm always interested in, in what, you

46:17

know, as you've gone through the journey ups and downs, like,

46:20

okay, so what have you learned? And then now what are you doing?

46:22

You know, how does that evolve? Sure.

46:31

Uh, I can just tell your listeners, you know, you see these

46:35

presentations and speeches, even mine, it's like a Facebook post,

46:38

but behind that is just a bunch of failures and a bunch of mistakes.

46:42

And, uh, 23 was, 23 was kind of a year of failures, so I should

46:47

be really smart by now, but I'm trying to figure out if I really am.

46:51

But. A lot of mistakes, but if you just keep your head up, keep your knees

46:54

moving, uh, you know, you'll, you'll eventually get there.

46:58

The guy that keep the persistence wins, wins the race.

47:01

That's it. And I'm trying to find the quote in the book.

47:04

It's from one of your chapters. It's not a quote by you, but I mean, it's essentially, it's like, Hey,

47:09

opportunities that come from hard work, you know, I'm paraphrasing

47:12

and, um, it's one of the, you know, front of your chapters, you have

47:16

all these really awesome quotes. Opportunity favors the prepared mind.

47:20

There you go. There's another one. Maybe that's a Tom Burns right there.

47:24

Yeah. Well, Hey Tom, this is, this is brilliant.

47:27

I love it. Um, a couple of things, uh, shout out where we, uh, you know,

47:32

how folks can find the book, how they can go contact you and

47:36

maybe explore more of your world. Let's start there.

47:39

Um, yeah, just go to Amazon for the book. Just look up why doctors don't get rich book or Tom Burns and

47:45

you can find the book there. It's, it's uh, I appreciate it.

47:49

And give me a review if you like it. Yeah, there you go.

47:52

As far as getting ahold of me, you know, probably the easiest thing

47:55

is I got nothing to sell you. Just, uh, if you go to my website is rich doctor.

48:00

com. So if you go to rich doctor. com forward slash newsletter.

48:04

Yeah. I put out a newsletter every week and it's all,

48:07

it's educational stuff. There's, there's a lot of, a lot of stuff on real estate and

48:13

investing, some tips and tricks. There's some mindset tips and.

48:17

You know, I'll usually tell you about the mistakes I've made, you

48:20

know, and what lessons I've learned. So it's, it's just there to, to help people.

48:25

So if, if you're interested, hop on the newsletter and if

48:28

you want to, if you want to ever contact me, just send an

48:31

email to hello at rich doctor. com and I'll always answer your emails and we'll hop

48:35

on the phone if you like. There you go.

48:38

I can attest to that. Tom's fun to chat with.

48:40

Uh, we've had a couple of chats now and it's always

48:43

unlocking little things here and there that I know add up

48:46

to, to big things compound up. Yeah.

48:48

If so, and, and your book isn't just for doctors, by the way, I

48:52

want to preface that to, to folks in

48:54

No, it's, it's, and you know who came up with the title?

48:58

who's that, Robert was it?

49:00

Oh, was it awesome. It was his idea to, his idea to write the book and I said no at

49:05

first but anyway and he said yeah you should write this book and you

49:08

should call it Why Doctors Don't Get Rich and so I thought that

49:11

was funny but I tested that title for two years and couldn't come up

49:15

with a better one but what it is Just if you think about it, it's

49:18

a metaphor for the fact that no matter how much you get paid per

49:22

service or per hour, you could make a million dollars an hour.

49:25

If you get sick, or you get hit by a bus, the music stops.

49:29

Real wealth, or one pillar of real wealth, is having

49:32

assets that produce cash flow. that buy you your time so that you can work on the other

49:38

pillars of wealth, which is your spirituality, your health, your

49:40

family, your social network. So wealth is a lot of things.

49:44

Money's not the most important thing. Zig Ziglar says it's right up there with oxygen, but money will

49:49

help you buy that time, which then will help you do what you want.

49:53

I, I had somebody the other day, a small anecdote.

49:58

I had a phone call yesterday with somebody.

50:00

He says, you may not remember. He said, but In 2018, you talked to me and told me to

50:05

buy, you know, get assets. And he said, my dream was to walk my kids to school.

50:10

He said, I didn't even realize it, but on August 14th, 2023,

50:15

he walked his oldest child to kindergarten for the first time.

50:18

And he almost broke down in tears because he was able to,

50:21

he was able to make his dream. So that's the kind of stuff that passive cashflow does.

50:25

It gives you the time to, to be with family and, and.

50:30

You know, when you get my age, you realize that that kind

50:33

of stuff's really important. And hopefully a lot of younger people realize that too.

50:36

Oh, and I'm and thank you for sharing because you shared

50:39

this with are similar to me with me before on the call.

50:43

And I have two little ones, one's four and a half,

50:45

one's five months today. And that's exactly the frame right now is like, you know what?

50:51

I worked really hard and I'm I'm Still good at that, but at the

50:55

same time, I'm looking at, okay, where's both the ceiling, the

50:59

timeframe of things and how I can diversify into things like real

51:03

estate, other investments to get to that passive income, because

51:08

that's freedom, you know, in so many ways, that's pure wealth.

51:12

It really is. It's it's absolutely liberating and there's a ton of other ways

51:16

to do it besides real estate. And certainly that's what we've talked about today.

51:19

But it is absolutely liberating.

51:21

And you know, to spend time with your kids and have them, you know,

51:25

and be part of their lives as they're growing up and forming.

51:28

It's it's huge. It's giant. And my kids are adults now.

51:31

My kids are Probably older than some of your listeners, but, uh,

51:34

we've got a fabulous relationship and they did not have perfect

51:38

parents, but by golly, we had a, we had a great time together.

51:41

So That's, that's all that matters, man.

51:43

None of us are perfect. So, that's right.

51:46

well, Tom, appreciate you so much, man.

51:48

And being open and honest here. I know it turned on some light bulbs for folks.

51:52

So, I hope so. all right, we'll chat soon.

51:55

Thank you. All right, bud. Thanks, Joe.