385 | Paving The Path To A Real Estate Portfolio w/ Paul Shively

We know owning rental properties is a path to build wealth, and how building a portfolio of them is like building an income producing army, but while buying one or two seems doable, it's hard to imagine how we get to 3, 4, 5, and beyond.

That's why we called our ace guest host- Paul Shively, head of the Passive Income Club at Fortune Builders- to show us the path to building a portfolio!

Paul will join co-founder of JWB Real Estate Capital, Gregg Cohen, and Not Your Average Investor Show, Pablo Gonzalez, to talk about

- How the average investor creates a plan to save for multiple rental properties
- Where savvy investors find extra sources of capital to accelerate their real estate portfolio growth
- Why some investors are able to grow their portfolio without any additional capital outside of their real estate holdings

If you want to walk into a cocktail party and talk about your "real estate portfolio one day... you don't want to miss this session!

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Are you ready to seize the potential of real estate investing without the hassle? Look no further! Introducing our course, Not Your Average Investor’s Guide: Investing in Rental Properties... Passively. Enroll now!

🎙 Register for the next Not Your Average Investor Show and never miss a thing! - www.nyais.com

FREE RESOURCES:

🏠 Network with our family of ‘Not So Average’ Investors in our Facebook Group! https://www.facebook.com/groups/rentalpropertyinvesting

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💰 Ready to Build Your Wealth Plan?

If you’d like to schedule some time to chat with our expert team about how we can build and implement your plan for acquiring rental properties, visit https://chatwithjwb.com/ to set up a strategy session call.

⭐️ FOLLOW GREGG:

LinkedIn: https://www.linkedin.com/in/gcohen31/

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⭐️ KEEP UP TO DATE WITH JWB:

Facebook Page: https://www.facebook.com/CashFlowProperties

Facebook Group: https://www.facebook.com/groups/rentalpropertyinvesting

Transcript

Pablo Gonzalez: 0:00

We got a very special show today, folks. We normally do not get. Our hall of fame guest expert, resident professor extraordinaire on a Tuesday. But this is a special one, everybody, because. There is a giant misconception around the way that folks go from one home to a portfolio of rental properties. And we're going to look behind the curtain and uncover that myth bust a little bit and teach you something new. Bring you the Tuesday edition of the not your average investor show. I'm your host, Pablo Gonzalez with me as always the man that I affectionately GC because he's a great co host because he's got genius concepts because he knows how to generate cashflow and because his name is Greg Cohen. Say hello, Greg. Hello, everybody. Great to be with you. And as I alluded, our infamous, uh, resident experts, the head of the passive income club at fortune builders, a man who has taken part in a billion dollars of transacted real estate, no big deal. So he, we call him the Jason Statham of real estate around here because of his good looks and because he's rich. He is the enforcer. Anyways, Paul Sabley, welcome to the show, buddy. How you doing?

Paul Shively: 2:38

Just trying to help you out there. I'm good, man. I'm good. I'm excited to be here. As Greg said earlier, before we joined the call, I think I ate my Wheaties. There was something about the breakfast burrito in Southern California and the cup of coffee I had that just, I'm ready to go. I'm excited. I'm here, baby. Let's rock and roll.

Pablo Gonzalez: 2:55

I can tell you're at your weenies. I can see, I can see your, your, your biceps seem to have grown since the last time I was

Paul Shively: 3:01

also, I was also joking. I'm, I'm going to end up wearing just a big giant sack next time I'm on the calls and just see if anyone just doesn't comment about my, either my, my Jason Statham esque hairline. Or the fact that I'd like to go to him to burn off mental energy. Paul,

Pablo Gonzalez: 3:19

even, even if you cover up all your muscles and your beautiful face, I still think you're a beautiful soul. So I will still compliment you, my friend. That being said, we like to start these folks. I want to welcome the fortune builders community who has been showing up in droves every single time we bring Mr. Shadler to the show. Many of you have been sticking around here at the not travis investor show. You will notice. That we have a lively community. We want you to make friends in this chat. There is a lot of tacit knowledge being shared in this chat, people making real relationships, asking real questions, non biased. We encourage participation in the chat. And just to prove that we do, we have a little tradition that we'd like to start with. You guys know what it's called.

GMT20240312-163146_Recording_avo_640x360: 3:59

The roll call, baby.

Gregg Cohen: 4:00

The roll call, baby!

Pablo Gonzalez: 4:02

We started with a ringmaster today, Drew Barnhill checking in. We got our amigo, Bill Shields, saying, Buenas tardes desde Duval. We got our beautiful investor from Minnesota, Lita Song. We got our leadoff hitter batting third today, John Henning. We got the MVP that everybody knows. You guys know who the MVP is?

Gregg Cohen: 4:20

Mr. Lee Bishop,

Pablo Gonzalez: 4:21

of course, we got the world famous Steelers fans from Rockland, California, Lewis Hudnell checking in with us. We got the man of steel as star of the show last week, Vincent Barbarite checking in. We got our Airbnb expert who we met out at the fortune builders convention in Vegas called Barton checking in. Kyle, good to have you back. We got the mama bear, Cody Adams in the house. We got the shaman of real estate, Nadim Shah checking in. We got our regulars. Gary and Rosalind Riley from Marietta, California. We regard you. We got Big Papa in the house. We love it when he calls it Big Papa. The co founder of the co founder of JWB, Jay Cohen checking in. We got Eddie Harris from Hotlanta. We got T. Castor from Nashville, Tennessee. That's a new name, you see. New name, new name. Welcome to the party. Welcome. Speaking of new names, we got Mary Chima, Chima from Buffalo, New York. Mary, let me know if I'm butchering your name. That's a bit of a tradition here. Welcome to the party. Abaday Seifu from Virginia, another new name. We got the first family of the Not Your Average Investor show, Ken and Carolyn Malin. We salute you. We got Sir Peter James from the great Commonwealth of Virginia. Tip of the cap to you, sir. Who else we got? Chris Lee from Fernandina Beach in the house. We got Charlie Harding from Boston. Good to have you, Charlie. Joel Wixel from Santa Barbara. A little stretch of coast that you know I love. We got Marie Rockoff, who has been a while, Marie. Welcome back. Good to have you. We got Carolyn from Houston. Good to have you, Carolyn. We got, let me see. We got a, we got a lively, lively audience. Roll call today. Justine Herrera from SoCal. George Melendez. Good morning all. Who else? Tom Simjian. Oh man, this has blown up. Luis Olivares, our friend from Miami. a countryman, a fellow countryman of mine, Venezuelan. We learned that. At the Not Your Average Investor Summit. Kevin O'Brien from Rhode Island. Kevin, good to have you. Kendra Anderson. Lynette Cornell from Tampa. Tony Neely from Chicago. Remya Warrior from New Jersey. Alicia Thomason. Thomas from Emerson, Illinois. Oh my God, I'm just going to run out of here. I'm going to run. Delroy England from Maryland. Christine Stokes Station, North Carolina. All right, I'm tripping up. You guys want to start the show?

Gregg Cohen: 6:33

Let's do it, baby.

Pablo Gonzalez: 6:34

I ran out of steam, folks. I appreciate you checking in. This interaction is what we live for on the Not Traveling Investor Show. I promise you that if you show up, you will be acknowledged one way or another, because we take it very seriously to make you feel at home here and make you feel like you got some friends. But I'm just going to start off with my friend. Paul Shively, who is clearly having a, there's a tiff here between you and Greg. I'm not going to bring that up because it's, it's a little bit awkward. So we're just going to keep it professional fellas, but you and me are friends, Paul. And we were talking before the show that I know that, I know that when I entered the rental property investing game three years ago, my head was, okay, I got a certain amount of cash put away that I think I can put into rental properties. And then I'm just going to, Just like everything else, I'm just gonna set up a plan. I'm gonna stay save money dutifully, and I just wanna get there and start adding more chips to my portfolio as time goes on. Do you find that that is the most common way of, is, is that what people tend to believe as the way that they build a rental property portfolio? You who has educated so many?

Paul Shively: 7:40

Yeah. It's a great question and it's a great topic. I'm glad we're doing a show specifically about this because it's, it's Greg and you probably get this as well too, Greg. It's probably one of the most common questions that like my kind of distant relatives or friends who come over who aren't in real estate and come over for dinner or drink or whatever. Everyone talks about how do you, I didn't get how to kind of start. I understand how I get one, maybe two investments, but I have no How did you get to a billion dollars of transactions? Greg, how did you go from your first house to your first 20 houses? How do you make those jumps? And it's very natural, it's very normal to create I love the thoughts because people are thinking and acting and taking control of their financial future. I love that thought. How do I get from where I think I can get to now To like step 25, right? And then where's the gap? And people like to, we as humans, We like to kind of see a lot of green lights in a row before we start to go down a path. And what most successful investors do, what a lot of the people in this community do, which is great. I know, Greg, you've done that probably you've done it, is You don't wait till there's maybe every green light in front of you to go. You wait till maybe just the first one's green. Maybe the second one's green as well too. Like you meet the right people, you get educated, and you start to take action. And you trust that all the green lights in front of you, you can make them turn green instead of waiting for them to turn green. And that's what I think we'll talk about today is what are the steps? How do we get the first couple of green lights on? And then what are some of the steps to turn some of those other green lights in your head? It's like, Oh, I know how to get to you. I have some tools now. I understand the path to building a portfolio. Super common question. obviously I don't say about it. So I'll pause. But Greg, what about you? I mean, I, I hear it a lot and I think it's a great topic to do a show about.

Gregg Cohen: 9:33

I hear it a lot. And if you talk to folks who have gone through that process, like you have Shively, like you have Pablo, like I have, like our clients have, you start to hear some trends develop of how did people take that first step? And the first step typically is some combination of mentorship, education, some type of trusted partner to help that person get over that first, get to that first green light. And you know that I think that starts right here in the community and the hundreds of folks that show up every single week for the community. And it starts right there with fortune builders, our fortune builders, friends, you guys, everybody should feel really good because you're dedicating an hour. right now in the middle of a work day, no matter where you are in the world to be here to learn. So that's, that's an important first step that the rest of the world doesn't take, but it starts with the, it starts with kind of what I did when I first started, which was, I met Fan Merrill, Paul Lasagian and Conrad and the, before they were fortune builders, I met them at a conference and I said, you know what? I know something about those guys. When it comes to real estate, they are much farther ahead than where I am right now. And I, in all humility, I knew that they were so far ahead. And all I wanted to do was to build up a relationship with them and then follow their advice. And that's simply what I did in the beginning. And now we have the opportunity to follow that same path through so many easier forums. I didn't, you don't have to go to a conference and spend thousands of dollars and hope that you'd run into a great relationship like that, right? The Not Your Average Investor community is here. Fortune Builders is here. And that really kind of fills that bucket for folks to say, you know what? It's okay for me. I'm not saying that they are better than me in everything that I do in my entire world, but, but for real estate or for building a portfolio of single rental prop, single family rental properties, they're there. And I'm here, and I just need to make sure that I build that relationship, talk to those folks, be a part of these communities, get on the phone with those folks, so I can start to elevate my real estate game to get there. So, if you go back and you talk to anybody, and I'd love for everybody to chime in too, if everybody has, if anybody has bought one property, or three, or ten, or twenty. Right. It always comes down to some combination of education, resource, mentorship, and just hitching your wagon to that person or that organization. That's just a little bit farther than where you are right now so that you can elevate yourself to get to that success.

Pablo Gonzalez: 12:06

Way to bring it back to the foundation, GC, man. That's what I like about you. I think that is why we started this community, right? Like this idea of making it approachable to meet other people that are not just, you know, You know, 17 years ahead of you, like you are GC ahead of other folks, but maybe one step ahead of you, like I am or Gerard, who's got three properties, he's chiming in or Mary who's got four right now. and really at the day, at the end of the day, if you're not familiar with JWB, if you're not familiar with our community we do this every Tuesday and Thursday. We bring in experts. We talk about the current market conditions. We talk about all things that you need to know about rental property investing and other things happening in the market. And then at the end of the day, what Greg and his partners have done is build a company that is designed around making it easy for people to invest in real estate, making it so that you don't have to be the expert. You don't have to be the plumber and the property manager. You don't have to settle. For amateur service and all of this stuff. You can work with a company that's fully vertically integrated that dominates one of the most attractive rental property markets in the United States, which is Jacksonville, Florida. And what he's saying of getting on the phone is go to chat with JWB. com. The moment that you want to start that conversation, and you want to start examining these scenarios that we're about to talk about for yourself, you go with chat with JWB. com. You pick a time and the first call is really just understanding your why and what you're trying to do and see if this stuff kind of fits for you. So just a good thing to get started. If you go to chat with JWB. com, but that being said Paul, I want to kick it back to you. You said something really interesting to me, man. When I was talking about, I thought that I, when I first started, I thought that the plan was to buy something and then save, save, save, save, save till I can buy another one. And then save, save, save, save, save. So I can buy another one again and, and you, you, you said it was a different type of language that you use that wasn't exactly saving. You want to, you want to tell me about kind of like that ideology of, of people thinking that way?

Paul Shively: 14:09

Yeah.

Gregg Cohen: 14:10

Follow. Is he frozen for you, buddy?

Pablo Gonzalez: 14:12

He's frozen for me too. why don't you go ahead and take that question, Brett?

Gregg Cohen: 14:16

what was the question, by the way? I could probably take it, though.

Pablo Gonzalez: 14:19

Yeah, the question was, listen, I was talking to Paul about, um, You know, this idea of saving and saving up until you can buy a property, then save until you can buy your next property. And he said, you know, it's really just about being a good steward of your money and knowing what you're going to do and sticking to a plan and sticking to a discipline. so I wonder, kind of like, what's your thought on that? Like, I know that you at JWB, you haven't just built a property acquisition and property management company. You also have this like service department that serves as kind of like the quarterback for this, like stewarding of your money. You want to tell me why you thought that that, that was a good idea to build as part of your service offering.

Gregg Cohen: 14:59

A hundred percent. I love this term, being a good steward of your money. my dad, who's on the show with us right now, he always talked to me as I was growing up and being a good steward of my money. And as he's an investor now being a good steward of his money. And it's always just rang true for me. And if I, if I think about it, you know, the most impactful book I ever read in real estate was rich dad, poor dad. And if anybody who is on the call is, has not read that book yet, you absolutely need to. But being a good steward of your money is very similar to what it talks about as a main theme in that book, which is to mind your own business. And that doesn't necessarily mean starting a business. It means minding your business. Your, your job is not just to go to work every single day, earn a paycheck, and then turn your mind off afterwards. Right? But, as we're talking about, the normal way that people go about their daily lives and their investments, they tend to just put their money towards something, turn their mind off, and not truly understand and hold it accountable for how it's working. So I think the first step is for us to all have some personal accountability to know how our money is performing in the places in which we put it. And create some standards. And measure that performance and compare apples to apples. Because that doesn't typically happen. Your money might be in one place. You might think it might be doing very well. But it might not be because, you know, frankly, you don't go and measure the return on the investment. You might not even look to see if it had a loss last year or what it's done over the past five years or ten years. And you might be accepting a lesser return and really not being a good steward of your money, of your own money, not minding your own business. So I, I find that a lot. And I think that's really important to have that personal accountability because when you start to kind of. peel back the layers when it comes to a single family rental property portfolio. You find that there's a lot of misconceptions out there and that this type of investment is one that wins because it pays you five different ways. It pays you across five profit centers. It's incredibly resilient and consistent. And, the returns are quite nice, especially compared to other asset classes. So I think that's really important to kind of start there and mind your own business. Now you asked, why did JWB set up this vertically integrated business? And it's because that's a great start. And if you're a, if you're a, an above average investor out there, you get there, but where almost all investors fail is actually measuring your results. creating a plan and then helping you stick to that plan so that this can be a vehicle to change your life over the next five years, 10 years, 20 years. And so when we talk about how JWB is built and the fact that we have over a hundred teammates here, And a good portion of those teammates are invested in your plan and help you build your plan, your real estate plan. So we know how many assets our clients need to own. We know what time they need to acquire those assets so that they can get to the finish line and get to that amount of income that they need at retirement or in 10 years or whatever the goal may be. And that's just really lacking in the real estate world. So it became kind of our calling card. It was not, we know that there's a million ways you can buy rental properties and most of them honestly get a bad rap out there, but what you can't find is this world class service and helping somebody get from the planning process. actually measuring their results and getting them holding their hand all the way to the finish line. But that, that is truly how you can change a client's life. And that's what we love to do.

Pablo Gonzalez: 18:55

Love it. You see, I know you're going to love this example and not get it, but Paul's going to get it. And I've been actually doing some research on In N Out Burger and the founder of In N Out Burger. And for those of you on the West coast that know In N Out Burger, you know that. You go there for a burger the first time, and you're like, Wait a minute. Why is everybody so happy? Why is this such a good experience? Why does everybody keep, you know, telling me about this place? And you get it immediately, right? Like you realize that they have built a team that's there to over deliver on promises and bring you value in ways that you didn't understand the east, the southeast coast equivalent is Chick fil a. But I use this in and out burger analogy all the time. And coincidentally, I've started listening to the founder story there and I can't wait to share it with you. But Paul, what's, what's your take on that, man? Do you, do you find that when people are in the steward phase, they stay in the steward phase or do you see them taking other leaps that make it a little bit faster?

Paul Shively: 19:54

Definitely taking other leaps and apologies. I had to reset my hamster and give him more cheese to, to have the internet go faster. Apologies. You're good, man. Um. Yeah, I mean, steward phase is number one, it's about accountability, it's about opening your mind, it's about education, which is all, everything we've talked about here and continue to talk about and are going to talk about until the cows come home, because we all believe in it so much, right? but then the next step is, okay, Take that approach, take a hard look, in a good way, but take a hard look at what you've got, and do some basic budgeting, basic accounting, basic, what do you bring in, what needs to go out, and then like Greg said, what are we automatically putting towards, different portfolios. What are you automatically doing that maybe your employer is doing for you because you signed up some paperwork at the very beginning and when you first got hired and never really looked at it again. Where is all of your money going? You know, I remember this conversation I had with my aunt. Love her to death, Aunt Vicki. Hi, if you're watching. She had no idea. I'm like, how much do you contribute every month to your, your company's retirement account? How much do you contribute every month? She had no idea, right? So that's step one is just know where all of your funds are, right? Which is, you know, it's an amazing place to start because you find some hidden money often that you didn't realize things were happening. And then you can go very simply. Okay, well, how many rentals can I stack every single year? And that's kind of basic step one, in my opinion. And what I mean by stacking rentals, is we want to generate this concept of a flywheel. And we kind of hear about it a lot is, Oh, well, it's so easy for the rich to get richer. It's so easy for the wealthy to get wealthier. And yeah, it kind of is, right? Well, how do you take advantage of that? How do they do it? And here's how it is. It's the power of compounding. And very, very simply, when you start to acquire, let's use an example, two rentals a year. Okay, just two rents a year, just based off your income. You've got x income coming in, you're a good steward, you manage your expenses, you know where all your money is going, so you can afford x amount of rentals per year. One, two, one every two years, whatever it is, okay? And you just stay disciplined to that first step of the plan, and you start building, you start stacking. Well, things become easier as you go. For some of you that may take one year to get started, some of you can start right now. Some of you could build a portfolio, go four or five right now. But what I'm talking about is step two the next year, step three the following year, step four after that. What do I mean by compounding? Well, you're creating additional income. You're doing all these things because real estate makes money five ways, like Greg talked about, and we can get into it in a little bit. But things start to compound on themselves and get easier. It's not just a trick the wealthy can use, you can do it too. At the beginning, the wealthy had to take some time too. They didn't do it all at once. Unless they inherited a hundred million dollars, which I don't know anyone who actually did. I don't know, Greg, maybe you do. The highfalutin down there in Florida, I don't know, maybe you did. Right? I don't know those people. That's not me. So I worked hard. And I was very disciplined and very slow and steady at the beginning. I took my income, managed my expenses, started buying some rentals. Right, started investing. But what happens is it starts to compound. The second year and third year. Oh, all the income I've produced off these rentals. Well, that helps me not save, but I can be a good steward of that money. Dump it back into another rental property. Oh, wait, I did a good job and got smart debt. We can talk about this a little later. I've been paying down that debt. Ooh, there's an additional source, right? So it starts to compound on itself. And we could talk a whole entire show about that, right? But that concept is very powerful. And I want to drive home the point. The take home point is, starting with one, two rentals a year, and just working that plan for two or three years, four years, is very, very powerful. You know, I literally have created probably a million dollars of equity just by doing that, right? And you've heard me on other shows, just a couple rentals a year, and my dad just closed on the house actually last week, that is Palm Springs dream home. He used the equity from those that he did, right? Took that, bought that rental property. So there are things that you can do by just sticking with the plan. And that's just kind of step one. We can talk about the other steps. later on as we go. That's just step one in my opinion. Greg, anything to add to that?

Gregg Cohen: 24:24

Yeah, I love it. In fact, I thought this would be a perfect time because as you're talking about starting with one and starting with the plan, I think about my boy Pablo over here and thinking about his journey over the last three years. So Pablo, why don't you, why don't you bring some, some of your, your story here? And I'm going to end the story by telling you just, you don't know this yet cause I haven't shared this with you. I haven't shared your reporting with you in a little bit, but I'll talk about the equity you've gained in your three properties. So we can talk about a real life situation that Shiley was just speaking of as well. So.

Pablo Gonzalez: 24:56

Yeah. I was the same, right? Like I think where Lee referenced in the chat, I was renting my home and You know, wondering if I should invest in rental properties, right? And we had a bunch of conversations around it on this show and you and I in private on our morning runs, Greg, but I knew that I knew two things. I knew that I wasn't really ready to call Jacksonville, my permanent residence at that moment. And I also knew that I wanted a piece of the Jacksonville real estate market because I see a city that's becoming this like next great city in America and all the things that I saw that happened in Miami happening. So I had. A little bit of cash that I had, you know, there for a special investment. And I said, okay, I'm just going to get started with my first rental property. And I'm going to figure out the rest as I go. Now, what ended up happening for me is I made, I made a really, a really smart investment in, February of 2020. bought into Peloton in February, 2020, and as luck would have it, pandemic happens. A year later that stock went from, I bought it. I think I like 40, I sold it at like a one 21, because I wanted to lock in my returns and lock it into another rental property. So, you know, in that way, I was just kind of lucky that I had a, why I knew I wanted to build a real estate portfolio. I ended up stumbling into like extra kind of net worth from this, from this thing that happened and what I decided to do, you know, if I was to zoom out, I just kind of said, okay, man, I'm looking around. I know that I want to grow this. this plan. And I was afraid of, you know, what, what could happen if I stayed in one place. So I wanted to move it to a safer place that I had that I knew had long upside and more state or more stability. So I did that. And then once I did that, I was just like, man, I feel I'm really close to this, like three home portfolio that kind of creates this, really nice diversified balance of exposure to upside. And risk mitigation with cashflow and all these different things. So again, I looked around at where I was invested. I realized that I had a bunch of cash in a, in a retirement account that, I just never really felt like it was doing what I wanted it to do for me. And I made kind of like a not conventional decision to, to think to myself, Hey, where is the market going to go here in the short term? I'm not sure what I, what I liked the indicators. This was when like inflation was raging and everybody was predicting kind of like a, like a, like a next crash or a next recession. I took it out of my retirement savings that I had from a past company, paid the penalty, rental home and now have three rental properties. And then most recently, now that I have that going for myself, I did decide to make Jacksonville my forever home. I once again, realized that there was a shift in the market in that they changed. The regulations and allow people to buy small multifamilies two to four unit buildings with a 5 percent conventional loan. And as long as you live in one unit and I said, this is it. This is my moment, I can go by the place that I want to live in. As a duplex so that I can live in one and rent the other one out. And now I'm at five doors and I have this kind of like self creating like flywheel that's happening for myself. And that was like in a span of three years, right? That's what I was going to say.

Gregg Cohen: 28:29

Three, four years. It's one to two rentals a year, just like Shively was talking about. And yeah, I was just running your equity numbers there, Pablo through those investments. Those three JWB investments you've already accumulated over 130, 000 in equity. So as we are talking about how, yeah, exactly. As we are talking about how you stack these wins, how you build this army of income producing assets and the compounding effect of it. Pablo, you're living this out in real time for everybody to see on this show. Shyly, you've been living this out for decades. I've been living this out for decades. Our clients are continuing to live this out every day, but it's not some unobtainable goal because Pablo, you are doing this as you are starting your business as well, right? This was not easy for you to do, but because of your ability to be a part of this special community, It became real. You saw other people doing it. Yeah. And I think, you know, you've always talked about, Pablo, your goal is to be able to use the equity buildup in your JWB rental properties to continue to build onto that next one. Well, you know, you're somewhere pretty close to having, you know, more than enough for a down payment for that next JWB rental property as we sit here today. Yeah, man. That's

Pablo Gonzalez: 29:51

surprising. That's cool.

Gregg Cohen: 29:52

So, you know, and Oh, people's

Paul Shively: 29:55

minds live on YouTube. I love this. That's the truth.

Gregg Cohen: 29:59

I was just digging into it yesterday, prepping for the show. I love it. That's cool. And that's, that's very normal. That's very normal. The other thing I wanted to point out is we've talked about how you, from, you know, from you know, getting from one and just one to two a year and scaling up and how, you know, this asset works really well for that. Many people in their minds think, well, I have a really hard time getting to one. How do I get to one right? Purchase prices have gone up. Interest rates are a little higher today, which means that you have to put more down in order for it to be cashflow positive. And so it's really tough to get to one, but. I say this with all sincerity that, you know, if you surround yourself with the right people, finding the money for your first rental property should work itself out. It does with every single client. Everybody who gets on the phone with JWB and gives us enough time to put the plan together and fill your mind with all these positive concepts and ideas, if you put a little attitude and effort towards it, you're going to get there. And a couple of sources that I just wanted to share. is that that will help you get over the hump for finding the capital for your first one. Number one, retirement accounts. So Pablo just talked about how he tapped into his retirement accounts in order to purchase his, first properties with JWB. He mentioned there that he actually paid the penalty. We openly talked about that. We put that plan together. It made sense for Pablo's situation, but what I want to share with everybody here is that you do not have to pay the penalty. It made sense for Pablo because we sat down and we planned it out. Sometimes that does, sometimes it doesn't. But for all of you who have retirement accounts, maybe you don't know what they're doing. Maybe you don't know how they're performing. You can absolutely use your retirement accounts to start your real estate portfolio. And you can even get loans inside your retirement account to purchase rental properties and get started there. So there's a, a, a source there that gets to you. It's highly misunderstood, but many clients tap into their retirement accounts. And why do they do that? It's because this asset class is built perfectly as a vehicle for a strong, stable retirement. This is a get rich slow asset class, which is exactly what you need for retirement. It's consistent. It provides income. And so looking at those retirement accounts might get you kick started you. and finding the funds for your first purchase.

Paul Shively: 32:27

can we expand off that as well too, Greg, cause I love that. And Pablo, I know you, I'm supposed to defer to you cause you're the leader here, but do you mind if I jump in on that one? I just want to expand on that one a little bit, if that's okay. The more that

Pablo Gonzalez: 32:37

you speak and the less I speak, the smarter everybody's gonna get. So go

Paul Shively: 32:40

for it. I love it, brother. Number one, I'm pumped for you, dude. That's awesome. I'm like so excited for you. I've been there. I've like discovered, like you just discovered a hundred grand. Did you realize, like, how does that make you feel? You just discovered, right? Pretty awesome. Right. I love it. Greg, he just made his day in the Philippines. I love it. But that's the power of real estate. So, and Greg, I love what you talked about. There's some sources out there that people may not think of. To get started. There's also some sources that we can talk about to Put fuel into the flywheel. That's kind of like how I like to say it. We're talking about creating this flywheel, right? You buy a couple, you get some cash flow from them, you build some equity in them. You can use that to buy more. And I see the questions. We'll talk about how to do that. I love that. Pablo, we'll talk about how specifically, what actions you should be taking right now. I'd love that. We can, we can make some, we carve time out for that at the end of the show. I want to add another source that people, they may think about, but they may not be armed with the tools of how to think about it, right? And that's looking at. your current investments, you know, the more traditional investments that you have, and learning how to view them, and how to actually, in an educated way, compare them against your other options. And in this particular case, compare them against Single family, passive income rental properties, right? How do you compare them? Because a lot of people will just say, Oh, well, the stock market did X last year. And my rental properties, I'm staring at Y. And it's like comparing, like, It's hard for me to even make an analogy. It's like apples to Coca Cola or something, right? They're both technically food.

GMT20240312-163146_Recording_avo_640x360: 34:21

Technically?

Paul Shively: 34:21

One is sugar water and one is like a healthy, whole, nutritious food. Take out wherever you will, Right? They're both food, but they're very, very different. So what people usually do when they compare their more traditional investments is they look at, and Paul, but you did it, which was great. Nothing wrong with it, right? I bought it at X and it's now Y, right? Or I've invested X dollars and I get a statement once a year that I may look at, may not look at, and my portfolio has grown X percent. 4%, 8%, 6%, whatever. Number one, also look at the fees that are being charged on that. What's the net percentage to you? I would always argue that. Number two is that's the only number they look at. And then they look at and compare that against the rental income, one of the five sources. And they're like, well, why would I invest into something making me two or three or 4 percent and against something that made eight last year or 18 last year or whatever. Well, you're, you're, you're comparing apples to Coca Cola. Let's look at all the income sources and all the income sources and compare them together, right? If you look at the rental income, you look at the growth and the appreciation, you look at the tax benefits, right? You look at the principal pay down, you look at the mitigation against inflation as Greg taught me, right? To add that fifth one, love it, right? And you look at all of those, that comparison is often, in 10 plus range easily, right? And we can show you that we've done whole shows on that. We can get on the phone with JWB. They can educate you and literally show you how to calculate every single one of those five income sources. And then you are not your average investor. Then like this show talks about, you are educated. You have knowledge. You're being a good steward then, like we talked about earlier, you have the education and the tool to pull out of your tool belt and say let me compare apples to actually apples, right? What are the cash flow dividends from my portfolio that's in the stock market or in an annuity or in a ETF, whatever, right? And neither of those are bad, I'm not saying any of it's bad, I'm saying compare it, but actually compare it, right? Is it actually producing income for you? Or is it just growing in value? Oh, well, the growth in value is the second income stream over here. This one produces rental income and grows in value. Let's compare apples to apples. What are the tax benefits, right? Did you acquire any debt to help pay it down, right? Does it have any actual built in inflation fighting things like rental escalations like we do over here? Does that automatically happen over here? And actually compare apples to apples. And when you do that, I'm just giving, I'm not giving financial advice. I'm telling you what I have done. I actually compared apples to apples, and then I make a very conscious choice of where my money goes. Right? I want to be very clear. Zero degree. You do you. I'm not giving you financial advice. I'm giving you the tools of how to analyze your portfolio. And when you do that, a lot of people make a choice to make a different decision. But that's, you know, that's your job. Take that education and actually do it. Apples to apples. Greg, does that make sense? I love it,

Gregg Cohen: 37:39

brother. I love it. This is just a plea for everybody listening to do your own due diligence, to be a good steward of your money, to mind your own business, right? To understand how your money's working because most people don't. And I love how you were talking about comparing apples to Coca Cola, right? Let's go. I want to do just a simple example with everybody, just to show you many times how things are misunderstood. Okay. When we hear of one asset earning a 10 percent return, and we hear of another asset, which is real estate growing, appreciating at 4 percent a year, you're saying, well, geez, 10 percent is better than 4%. But let's, let's dive into this a little bit. Okay. I'll show you how 4 percent can be better than 10%. All right. So we've all got cell phones here. Handy, bring out your cell phone here. Let's say that you bought a hundred thousand dollars of an asset, right? That you can't use leverage on, right? You know, many assets you can't use leverage on. So let's say that you bought a hundred thousand dollars of an asset and it went up 10%. You put a hundred thousand dollars in your cell phone times 0. 1. That means that you earn 10, 000 for that year. Alright, that's your 10 percent return. But if you have real estate that appreciates at 4 percent a year, let's just say that that house cost 100, 000 to be simple for this example. Obviously that costs a lot more than that, but we'll keep it for this example. Well, if you bought that house for 100, 000. But you use leverage and you only put 25 percent down. Now, what we're talking about is a 25, 000 investment. But that house appreciated 4 percent that year. That 4 percent is on the 100, 000 value. So that means your gains from appreciation are 4, 000. So we'll go back to our calculator and we'll put in 4, 000 divided by 25, 000. What we get is a 16% return on investment. You only put$25,000 in. You take that$4,000 of gains that you earn, you multiply that times four because you have bought four properties. In this example, now you're all in for a hundred thousand at a 4% appreciation rate, but what you earned is$16,000 of gains. So that just shows you how you really gotta understand. You gotta be a good steward of your money because. We just talked through how 4 percent real estate appreciation is better than 10 percent of something else that can't use leverage. And everywhere across the five profit centers, there are misunderstandings like that. That's what we're passionate about helping everybody see.

Paul Shively: 41:13

I love that. And that's a really great example, Greg. Right? I love it. I think that's Pablo's brain cells. Maybe just pop. I think maybe you're going gray now a little bit like me because we're getting some hardcore financial education in you, which I love. Right? You go, you go grayer, the more hard, you know, financial education you get. Is that what it is? I hope to go really great at it. That's my excuse, right? But. I want to drive the point home. What Greg just went through really is like two of the five profit centers. What you just said there, Greg, at the end, I don't want to lose. That is a portion of what we can talk about with all five profit centers, right? That's why you need to get on the phone very like, hey, very bluntly, jump on the phone with JWB. What is it, Greg? chatwithjwb. com. You can just

Gregg Cohen: 42:02

send an email to keep it easy, info at jwbcompanies. com.

Paul Shively: 42:08

If you want more education, number one, you go back and watch all the other shows, right, that I'm sure they're hosted somewhere. We go through all these different five profit centers. We talk about them, but to jump on the horn and get educated about them, get those calculations on every single profit center, we can help you with all of that, right? But I think that the drive home point before we move on. Moving to Pablo's, what we should be doing now in your portfolio, Pablo, which is applicable to everybody's.

Pablo Gonzalez: 42:31

Oh, wait.

Paul Shively: 42:32

We, we go back to, we're trying to expand your brains. We're trying to help get the education, the gray hair, the gray hair that Greg maybe covers up. I don't know if you cover it up yet, man. Maybe not. It's impressive that you don't have to. God, I'm just old. But that education expands your brain so you can be a better steward, so you can make better decisions, right? You can start comparing apples to apples. And my point is that, that example Greg just went through. There's at least six other examples like that. I can think of right off the bat where I can show you how in a long term window, 10, 15 years. Real estate consistently is a high performer because there's a lot of different profit centers, right? And that's what we talk about. We're going back to how do we path the portfolio? Why do we just belabor this point? We belabor this point because if you want to build a portfolio, you need to take a hard look at where all your money is. What is it doing? Take a hard look at it and then make whatever choice you want to make, right? That's number, you know, that's the big take home point, right? So number one, path to portfolio, be a good steward, take a look at your income, start stacking rentals, right? Step number two, analyze all the other things you have going for you, right? Look at your retirement accounts. Look at the equity you may have in other homes. Look at all those things. Add another source of hidden money that you may not have known about. Number three, take a look at your investment portfolio. Where is it? What is it doing? Is it performing? Get the education of how to go apples to apples and compare it to, right? So we talked about three things so far, right? Before you transition into like, I think number four would be Pablo's equity that he built up. We just found him 100 grand, which is pretty amazing. Greg, anything to add to those three? I think the natural NAX transition and Pablo. So I'm trying, I'm taking your job of a facilitator. I apologize. I'm just so excited for you. You have anything else to add to those three, Greg?

Gregg Cohen: 44:20

I'm good, man. I think, I think we jump into what I think Pablo's stories applies. And it, and that cash out refinance is such a critical part of the, of the plan for a lot of JWB clients. I know it's been Pablo. It's been in Europe. in your noggin since the time you started to first invest with us.

Pablo Gonzalez: 44:34

I've been, I've been wanting to follow that Herve Francois turn three into six plan that we keep hearing about. But before, before we get into that Paul, and I, I hate to disrupt your show. I just want,

GMT20240312-163146_Recording_avo_640x360: 44:45

I want to

Pablo Gonzalez: 44:47

get into, I want to get into Alex Diaz's question because I think it, it hits on a topic of, are we overvaluing one thing versus another? Are we comparing apples to Coca Cola or, you know, I'm in the Philippines, they love mangoes over here. Are we comparing apples to mangoes? Alex asks, I have two properties with JWB in Jacksonville that require both the rental and the flood insurance, that both the rental and flood insurance because they've, Performed a certain way. He's found that the passive cash has gone down. Is selling or 1031 exchanging those properties a good strategy if we have a good equity and want to trade for new 1031s? What do you say about that, GC?

Gregg Cohen: 45:29

Well, Alex, I really appreciate the question about this. You know, I think the most important thing to know is when you go into an investment, what are the numbers? What are the numbers so that you can understand, are you going to be cashflow positive? Are you going to be cashflow negative? It sounds Alex, like you've purchased a couple with JWB and you purchased those in the past. So in the past, what happened was we Of course, knew those numbers when you went in, but you know, some things have changed. And some things have changed for the extreme positive for you, Alex. And some things haven't gone according to plan. We'll start with the ones that haven't gone according to plan, right off the bat. Insurance costs. Insurance costs in the state of Florida have gone up more than they typically would over the past few years. A lot of rules about that. We've done a number of shows on that as well. You can go to our YouTube page and see other shows where we had insurance teammates and professionals be able to explain the insurance market a little bit. But at the end of the day, what you care about is that your insurance costs have risen. But what many people are not aware of is that the increases to the rent rates have gone up way more than normal. And so for most clients, they're actually either breaking even or are cash flow positive when you count not just the expenses, the additional expenses of insurance, but also the increases to the rental income. It's just many people don't feel that you just, you were kind of all conditioned to look at that big insurance. cost more than we expected and say, Oh, geez, the cashflow can't possibly be as good. So I would invite you to get on the phone with our team, Alex, and we can actually break down your cash flows and let you know if you are actually cashflow positive when you take both of those into account. But one thing that I know is absolutely in your favor, Alex, that tends to Maybe not be visible as well is you are just like Pablo, buddy. You are just like Pablo in the sense that the equity appreciation or a client that purchased homes, call it over the last few years is so much higher than the original expectation we had going in. And, you know, I would invite you to think about your investments with JWB as a whole, think about it as if you're giving some money to JWB and you're saying, JWB be a good steward of my money and return back to me. exactly what you told me you were going to or more. And I feel really good because knowing how the equity gains have happened for our clients and knowing how the rental income gains have happened for our clients, even though we've also had additional costs on the insurance front. I know you're winning. So I would really encourage you to reach out to our team. We have a whole performance review process set up with all of our clients. We typically do it about once a year and we'd have to be happy to sit down with you at any time and review the performance of your portfolio.

Pablo Gonzalez: 48:19

There you go, Alex. Speaking of just like me, I've got a bunch of buddies called Alex Diaz in Miami. So I feel like you are just like me. All right, so let's get into this. I want to talk about, you know, I have questions, right? How do I. If I have a hundred thousand dollars in equity, but it's across multiple properties How would I access that? Like, how does that work?

Gregg Cohen: 48:41

Yeah, I'll take that. It's really not too difficult, right? You're already connected with JWB as a vertically integrated provider. So we already have all of the information to properly plan for you. So what it would start with is Pablo sitting down with your portfolio manager here, JWB, and saying, all right, how can I use the existing equity that's in my portfolio so that I can acquire another property without having to bring any cash out of pocket? And that's a fun conversation, a beautiful conversation. And many times we're able to do that. So it would be that conversation. You know, Pablo, you already know the lending network at JWB that you're a part of and you have access to. So once we put the plan together with your JWB portfolio manager, the portfolio manager just says, okay, let me direct you to the, to the correct lending teammate. That lending teammate already has the plan in place. We say, okay, well, we're going to refinance this property. We're going to do it at this rate. We're going to put this percentage down. And so they're fully informed of the plan ahead of time. And then it's about execution. And, you know, of course they know our level of service. You're not just a number when it goes to getting a loan for your JWB property or your refinance or a JWB property, same level of, of customer service and standards. And then we're there to walk you all the way through the, the, to the finish line and the closing table. And, you know, You know, in this situation, Pablo, and for many client situations, you're able to just basically start stacking those victories. That's, that's how these things start building on themselves, this compounding effect. It's not like every client comes into an extra 50, a year from their active income and they're like, okay, cool. Now I'm ready to buy another rental property. No, it's this planning process. It's this ability to access funds either through. other investments that have gained equity, or through retirement accounts, or you name it, we're able to kind of craft that plan so you can continue to stack assets without having to come out of pocket.

Pablo Gonzalez: 50:43

Interesting. Paul, anything you want to add to that since I'm just out here asking for advice from a couple of experts?

Paul Shively: 50:49

I love it. Number one, I'm really excited for you. Cause like Greg said, that's a really fun conversation to have. And it's a conversation I feel like we have a lot with a lot of our mastery students, a lot of our people on the call and the Not Your Average Investor Because they make good decisions, they invest, and they start to build wealth, and then all of a sudden they look up and they're two years in, or three years in, or five years in, or they have a house that they may have inherited from a family member, or you know, there's a lot of different situations. This is Financial engineering at its best, right? Where we can take a look at what is the equity that you may not realize you had, probably didn't probably realize you had that hundred grand. And we financially engineer, how do we get access to it? And there's a lot of different answers. And Greg talked about probably the primary one. Which I love, but that, this is, I want to tie it back to what we talked about earlier in the show. This is the flywheel. This is the rubber meeting the road on how did the wealthy get wealthier and how is it so much easier for them than it is for me when I got started. This is, this is exactly the answer, right? Things compound. You make good decisions, you start stacking, you analyze what you have, maybe you, you know, change where you're investing, make good decisions, and all of a sudden you look up, two years, three years, four years in, boom, now we have this conversation. This is the start of Pablo's flywheel, like right now, right? And I guarantee you, Pablo took three years or so, the next conversation we have on this will probably take one and a half years, right? Because it compounds on itself, and then from there, it takes about eight months. To do it again. Then from there, it takes about four months. You see, it flywheels. Right? And it compounds. That's, this is exactly how we talk about, how, a path to a portfolio. Perfect example.

Pablo Gonzalez: 52:33

A little bit more. Can we do this show every week? Can we do this show every week, guys? Can I invite my wife? We'll continue on. No, I love it. I love it.

Paul Shively: 52:42

a little bit more in the logistics, right? So logistics, hardcore, nitty gritty financial education. Paul, if you built 100, 000 in equity in this particular case, right? The logistics of it are, is we need to do, and Greg talked about it, that planning call. Well, what's going to happen on that planning call? What are you going to experience? The experience you will have. Right. And just like you and just like me, I love this experience. I love knowing what's going to happen. I can jump on, right? Just like you. I'm going to say, okay, here's where I am. Here's rental property number one. Here's the current debt I have on that rental property. I bought it at X. I used to owe Y, I have paid down over the course of two or three years this amount. So my current outstanding loan round number 50, 000, right? Just, just a round number. Okay. So that's, you just uncovered, well, here's the equity it's worth. Now I bought it at a hundred. Now it's worth 120. I only owe 50. That's my equity. You with me? Just round numbers. So we need to identify what the equity is, right? And then what JRB will help you do is say, okay. Let's make some assumptions. Let's go back to the bank and say, Hey, I only owe 50 on this particular asset. It's worth whatever it's worth. 100, 120 in this particular example. How do I get some of that delta? How do I go get it? And the bank will say, Well, hey, option number one is Let's give you a new loan. When we give you that new loan, that, you know, 70% ish, 60% ish of that new value, right? And we say, hey, we need to pay down that 50 or so that you had, that other debt that you still have, we have to pay that down. But if we give you a new loan at 60 or 70 percent of your new value, here's the cash you would receive, From that loan, that's the cash out, right? So a cash out refinance really just means pay off the old loan, get a new loan, right? Once you paid off the old loan and you're getting that new loan, whatever's left over in that scenario goes to you Pablo, right? That's the cash out part of it. Here's the beautiful part of those things. Equity you receive from that, it's not taxed. Okay? Consult with your tax professional. I am not a CPA. Right, but that's a hundred grand that we just created for you Pablo, right? We talked about that Greg created for you. I didn't I don't give credit for that. Greg did that Greg did that and his team and all his people behind the scenes and JD would be a you know, the Jacksonville economy That is tax free income. You don't pay taxes on those Right. It's pretty cool. Right. So that's the, it's just some of the logistics. So that's the conversation you'll have with like a portfolio advisor. Right, Greg? They're gonna walk you through. What's your current property? One, two, three, Main Street. Cool. What do you owe? I owe 50 grand. Cool. What's it worth? Well, it's probably worth X. Okay, cool. If we get a new loan, you're going to get Y out of that property. You're literally taking it out, the equity out, boop, in your pocket, tax free. Then you can choose to be a good steward about it or not. You can go buy a Porsche. It's up to you, right? But I know you're a good steward, so you're going to reinvest that cap, right? And continue to build your net worth. That's the flywheel, right? And then there's all kinds of cool, crazy things you can, that's just one cash out refi. You can do a whole portfolio loan. You can do it. Sometimes there's home equity lines of credit on investment. Probably there's all kinds of cool things. And we get into the weeds of financial engineering at its best, we can probably do a whole show. Please have me back at some point. I would love to do that. Right. But that's just one example. Like Greg talked about earlier. He showed you that 16 percent versus like 8 percent or 10%, right? That's one example. Same thing here. That's just one way you can pull that equity out. It's the most common way. It's a really good way. I've done it myself. That's how I was able to buy my dad that Palm Springs retirement house. Thanks. is from J. W. B. Rental Properties we bought. Couple year. Every year. For about five years. Right? All of a sudden we're sitting on X in equity. My dad wants to retire. What do we do? Hey banker, give me some of that equity. Pay off the old loans. Get the new loans. They've grown in value. I may go down in cash flow, but I just took out

GMT20240312-163146_Recording_avo_640x360: 57:16

a

Paul Shively: 57:16

couple hundred grand for my dad to go retire. Hugely powerful. Right? Talk about secrets of the wealthy and how the wealth get wealthier. That's exactly right. So let's pause there. Pablo, what do you think? What are you feeling? Questions do you have? Right? You're kind of the on the spot guest show of this one, which is cool. Right? So yeah, questions, right?

Pablo Gonzalez: 57:40

Well, the first thing is we're right at an hour. So I just want to be conscious of everybody's time here and thank everybody that only made an an hour to be here and really encourage you to go with chat with jwb. com to have your own personal. Conversation about this. I'm hearing some really great questions from, from Pramrod. I'm hearing great questions from April from Leo that all seem like they want to get the journey started. The first step really is to go to that chat with JWB. com. Start this conversation so you can get a one on one financial engineering conversation. Like I'm being gifted right now in a, in this really wonderful surprise guest episode that I'm having kind of like an out of body experience, but you can have the same experience by going to chat with JWB. com. Second. Before we get off, Paul, I believe you said that you have this like worksheet that you want to offer people if they go to chat with JWB. com that could help them do this analysis. Do you want to mention that? Maybe

Paul Shively: 58:37

I'm super happy to Greg, I'm not going to hijack it whatsoever. I mean, my company and your company are, are basically, yep. Right. We have built a calculator that does all of that math and all of that work. For you, right? It takes a lot of the math. That's kind of like, Oh, I'm not sure exactly how to do that. How do I go? Where do I do it? What do I divide what by what? I got you. Right. We built it right. So we have a lot of really smart people on the team, smarter than me. And we built, Hey, you throw in your property exactly like I said, what you buy that, what's your current debt? How much do you owe? And then you put in some assumptions and jwb the key to to use it is get on the horn. Like with JWB or someone who knows what is assumptions should be made on your new loan. Right. And what it does is it visually will say, Hey Pablo. Throw in property number one and then throw on the new loan of property number one. Ryan and JV can help you fill out those assumptions. There's like three things you need to fill out. What would it be worth? What would the new debt terms be? Boom. And then it will literally kick out. Well, you will get X. Approximately in cash out. It'll do all the math for you, right? So it's a refinance, cash out refinance calculator. Does it all for you, spits it all out, which is cool. So Greg, if you want, I'm happy to send that off to you. Yeah, I love it. It's just a, it's a cool visual to show you exactly what we just talked about,

Gregg Cohen: 1:00:01

right? I love it. That sounds fantastic. I mean, you are going to be surrounded by, with that tool. and so many other tools. We're going to be able to map out your entire portfolio for your path to retirement, if you'd like. We're going to be able to show you how much net rental income you're going to earn from your portfolio before you actually start to buy your first investment property. Or how much tax savings are you actually going to get? Who knows how to calculate that? Well, only 17, 18 years. But we know all of that. That's a part of the plan right off the bat. How much home price appreciation should you get? over a full market cycle. You might not know. Well, we're going to be able to map that out. What percentage of your overall returns are going to come from home price appreciation versus net rental income versus tax savings versus principal paydown? You're going to be so informed and absolutely we'll include the cash out refinance calculator. We do that typically with our current clients that are going through that process. But, you know, I'll make a note with our team that for anybody that signs up for a call, we'll make sure that we can share that with you on our initial calls as well. Just so you kind of get to see the resources that are at your disposal when you work with a provider like JWB.

Pablo Gonzalez: 1:01:12

There you go. So that being said, Paul, I have a billion questions, but I also have a service teammate at JWB that handles my portfolio and I don't want to hog up all the air here when there's a bunch of other really good questions from our community that would, that I would like to poke in. So I already got a ton of value. Our amigo, Bill Shields over there the king of Duval. Has a question saying I am looking at possibly doing a cash out refi on our second home slash Airbnb to purchase properties, but that would add a chunk of money to our payment. So I'm wondering where the additional money per month would come from since we are just covering our mortgage at this point. Am I thinking about this wrong? The second home slash Airbnb is our only current investment. Thank you.

Paul Shively: 1:02:00

Greg, do you want to take that one or do you want me to

Gregg Cohen: 1:02:01

take that one? I'm happy to take that one. Me and Bill are tight. Bill's a good friend of mine as well. And Bill, I think this conversation as far as exploring the cash out refinance on the Airbnb is a really healthy, healthy thought track for you. We would of course need to sit down and map this out, but just generally speaking here what you'd be investing that the money that you're pulling out of that cash out refinance, you're putting that into an asset that is cash flow positive. Right? That pays for itself every single month. So this isn't something that you would basically be taking that cash out and then putting into something that you are losing money every single month. So you know, you'd be basically having enough income from that new property to offset the costs. That you're incurring from the additional debt that you're taking out for the cash out refinance. And we could just map that out. So, Bill, I know you've talked with the team a bunch over the years. Now's a great time to kick that conversation up. And that is the essence of what we love to do. It's to help a client start down that path of real estate ownership and that journey. and bring the assets that you got, bring the resources that you have, whatever you have, and say, Hey, can this work? How can you guys help financially engineer this so that I can walk away from here without potentially bringing any more money to the table, but starting to stack assets. So let's do it, buddy. Jump, go to, chat with JWB. com or send an email to info at JWB companies. We'll get you squared away, buddy.

Paul Shively: 1:03:27

I could just take 30 more seconds on that one. It's a great question because I can see that he's thinking it through and trying to be a good steward. I love that. And you do need to think about the overall financial picture. You need to take ownership of not just, well, how's this one asset? Is this a good decision for this one asset here? Look at the whole portfolio. Look at everything, right? And that's what Greg and his team are really good at. Let's put the whole picture together. And when you put the whole picture together, I'll just use myself as an example. I have done cash out refinances because that short term cash flow was a lower priority for me than growing and building my portfolio of assets. I wanted to add more assets to get the flywheel to go faster. So I chosen some of my assets. to go a little bit cash flow negative for a year or two until rental price appreciation until I get my rent bumps that were built in and then I was positive again in order to take that cash out to buy another one and buy another one and buy another one. That was a choice I made for my own self, right? But I'm also 36, right? And I have income coming in from other sources. You need to be a good steward. And you need to take the education we're doing, get on the phone, chat, JWB. com so they can help you get more education and apply it to yourself, right? That's the key. We're not giving you financial advice. I'm giving you financial education. Right? Your job is to take that education and apply it to yourself. Part of that is what's the whole picture, right? And it's not, it's not this cardinal sin to add more debt necessarily if it adds to the whole picture, right? It's good debt versus bad debt. That's a whole unique individual one on one conversation. And I want to just take a minute and be like, hey, that's a really important question because you got to take some ownership on that as well, too. Does that make sense, Greg? You, is that okay? 100%.

Pablo Gonzalez: 1:05:26

Okay. Then let's give Gemma. First of all, you gentlemen have a little bit of extra time to go through some of these questions. Yeah. Okay. All right. Well, I know I'm, I'm, I know I'm with important people here, so I don't want to take your time for granted. All right. Nadim Shah, the shaman of real estate of our real estate community out here is asking if I do a 1031 exchange in another state, do I have to reinvest in the same state or can I invest in another state? Easy. You can invest in any state you want. Easy peasy. All right, next one. Pramrod Abraham is asking a bunch of questions. I know that Pramrod is looking at a bunch of different options and is hoping to connect with other fortune builders mastery students, but wants to learn about using leverage with self directed IRA and 401k funds to invest in rentals. Any kind of like quick one on one that you can give Pramrod.

Paul Shively: 1:06:14

Yeah, I think it's, you know, debt in a retirement account and really debt anywhere. Debt's an accelerator, right? So you use debt to accelerate the net result you're looking for, right? You use debt to, to accelerate. The acquisition of more assets to build the overall flywheel we are talking about, right? And like in anything there are, you know, pros and cons with every decision, right? There's always trade offs everything, right? So sometimes the more debt you take on sometimes your cash flow goes lower, but your buying power is greater, right? So there's there's ups and downs. There's things you need to consider, right? So I love debt. I use as much debt as I possibly can. I have a lot of debt. I love it. But it's a tool. You have to understand how to use the tool, right? And how to apply it to you. So before you go, I love it, but before you go into that conversation with JDBB to talk about using debt specifically, what I want you to bring to that conversation, your assignment, right, is be exactly crystal clear on what your investment objectives are. Right. Is it super cashflow centric? Is it long term growth centric? Is it, I want to leave a legacy to my family centric. Is it, I want more time, freedom and owners. Like what is it you're trying to do? And then what JWB can do really, really well is if you're clear on that, they can help couple, well, what kind of debt options should you use right to that? Cause there's a lot in, in a retirement account, you can absolutely use debt. It's called non recourse debt. It's really cool. It's a cool tool. But it does specific things. We need to match those things to what you're looking to do to make sure it's a good fit. Right, Greg, anything to add to that? Yeah,

Gregg Cohen: 1:07:49

100%. And especially for your retirement accounts when it comes to investing in real estate, you, you absolutely have to work with a team who knows what they're doing. because it is an unbelievable opportunity. It's something I'm really passionate about sharing this message more is helping people use their retirement accounts put into real estate to be able to accomplish those retirement account goals, but there's more rules with it. We need to make sure that we do it the right way. We need to make sure that. The, the income in is appropriate for the debt going out, especially when we're talking about non recourse because you can't just automatically just pull from your personal bank account and start to contribute into your retirement accounts. So nothing to be concerned about. We do this all day, every day, but you absolutely need to get on the phone. With our team, talk about this. And the cool thing is, again, we map this out for you before you even start to invest in your first property. We say, okay, well, here are the ultimate goals. We've got X amount of dollars to put into this real estate retirement portfolio. Okay, we're going to do two properties in cash and Two properties with non recourse loans or some combination of the above to make sure that all goals are hit. You see exactly how it's going to work over the next 5, 10, 20 years, whatever your horizon is. And you walk in with so much confidence, knowing that this is going to provide for your lifestyle when you need it most. So jump on the phone with us. I think you're going to be pretty excited, especially with the high quality of questions that you've already shared so far,

GMT20240312-163146_Recording_avo_640x360: 1:09:19

Primrod.

Pablo Gonzalez: 1:09:21

Good stuff. Primrod's also asking to be connected with a member of our community. I'm going to put out the bat signal. Would not be surprised if you get a phone call from MVP Lee Bishop. I've got a great question from Sandra Morales in the chat, which I want to get to, but I think we can answer. The Man of Steel, Vincent Barbarite's question really quickly. He's asking, is there a software or an option with JWB to add outside properties to your JWB portfolio so you can see the big picture and go over it with your portfolio manager?

Gregg Cohen: 1:09:49

Vincent, I wish there was there is not, there is not an option to add properties outside of JWB properties to your JWB client ROI report. It shouldn't be that unexpected because there is so much vertically integrated knowledge that goes into producing these reports that if they're outside properties, we wouldn't know what your maintenance costs are, what your vacancy costs are, what other details went about those properties. So sorry, that's not possible. But what it should reinforce is just how. incredibly accurate and helpful this reporting is for you because we're vertically integrated for your JWB properties. You're going to know exactly how much money you're earning from your net rental income from all five profit centers. What is your rate of return? And it's just not possible or feasible really to get that type of outside information when we don't manage it completely.

Pablo Gonzalez: 1:10:43

Sounds like hard to get the projection stuff, but maybe Paul, Paul, do you think your sheet kind of does a little bit of that of what Vincent is looking at? It's just like pricing equity into future stuff. And I mean, I don't really know

Paul Shively: 1:10:57

the real answer. And Vinny, I love you, man. It's been a while. How you doing? That's where you need to be a good steward. And yeah, you take the tools that JVB has and does it for you. And if other companies don't do it for

GMT20240312-163146_Recording_avo_640x360: 1:11:09

you,

Paul Shively: 1:11:10

you roll up the sleeves and you do it right. You roll up the sleeves, you put your numbers in, you get your end of the year reporting, you know, that the, the 1099 statements, the end of the year reporting you get from your other property managers. And you throw it in there in an Excel spreadsheet and you do the hard work, right, that J2B does for you. That's, that's the real answer.

Pablo Gonzalez: 1:11:29

All right. I got the last question of the day. It is a scorcher from Sandra Morales. She is asking, being in peak market cycle, would your stacking strategy change and how? For instance, if your portfolio loses equity, who wants to go first on this one? I know you guys are chomping at the I know

Paul Shively: 1:11:51

Greg is chomping at the bit to take this one. I love this one. I just took over your show. I'm just gonna say,

Gregg Cohen: 1:11:57

I'm gonna literally step back. Um, and this was Sandra, uh, that asked this question. Sandra, what an incredible question. I love this question. And I think one of the cool things is instead of giving you some theory or, hey, this should happen or whatever. I've, I've lived. exactly what you're concerned about. I started to invest in 2006 and 2007. I took this exact strategy that we're talking about as far as stacking, stacking income producing assets. And I had a long term view and I bought 40 rental properties within the first year or two. And guys, I was 23. I didn't come for money. I had no real estate experience. So everything that we're talking about on the show, I'd used, I used debt to my advantage to be able to acquire 40 properties in the first year and a half. And, then what happened?

Pablo Gonzalez: 1:12:46

Great recession.

Gregg Cohen: 1:12:48

It was a great recession. Nobody saw that coming. I certainly didn't see that coming. but what I went back to, and again, the power of mentorship, you know, establishing a relationship with those who are so far ahead of where you are in real estate. I lean back on the foundations that I have and my mentors. And you know what they said? They said, don't worry about this. Okay. You bought this as an asset that pays for itself every single month. If the, if the values went way up, you're not going to sell because this was your retirement plan. So the values are way down right now. It doesn't matter to you. Your quality of life doesn't change. You're in for the long haul. And guess what? Real estate is about the best asset to be in for the long haul. And what they said is over a full market cycle, real estate, the pattern repeats itself. And over the full market cycle, you're going to see that you're going to be just fine on home values. And oh, by the way, all these other profit centers are going to work to your advantage. So I lived that and I've gone back and I've run the numbers on those rental properties. And guess what? They were exactly right. The long term appreciation rates. since 2006 all the way to 2024 today have matched or slightly exceeded what the historically accurate average long term appreciation rates are in Jacksonville and in many parts of the country. And so what this should reinforce is that if you buy an asset and you start stacking these wins of getting these income producing assets in your portfolio and you have a long term view, it's hard to lose. And investing in rental properties where you can get in trouble is when you start to buy assets that don't pay for themselves every single month. Now, what shyly is talking about is an absolute part of the strategy. Sometimes we do go cashflow negative, especially for our more advanced portfolios, that can be a good thing. But just generally speaking, you can start to get in trouble if you go too far cash flow negative and your horizon is only one year or two years or three years. That's called speculating. So the assets that we're talking about today are assets that pay for themselves every single month and they're for investors that have a long term view. And if you are that type of investor, You shouldn't worry about where you think we are in the market cycle today, because give it 10 years to 20 years. I can tell you, it doesn't matter. At the end of the day, home values are going to appreciate, call it four or 5 percent a year, somewhere around that on average year over year. And I just say that with confidence because I've tracked it all the way back to 1982. And this is the way it goes. Every single market cycle repeats itself. So that's the big picture. And then I will add one little caveat. I hope you continue to come back to our show, especially shows that are coming up on Thursday and then the following Tuesday, they're going to be really market specific with a lot of market metrics. And I would certainly challenge you to think that we are at the peak right now, because I absolutely don't believe that the data doesn't support that. A lot of talking heads out there have been saying that for years and years and years now, and they've been wrong. And they're wrong again. You know, I, I certainly don't believe we're at the peak. So hope that gives you a little bit of confidence. It's all about buying assets that pay for themselves, having a long term view, and you have to work with a team that you really love to make sure that this is an enjoyable investing experience for you.

Pablo Gonzalez: 1:16:09

Paul, you got anything to add there?

Paul Shively: 1:16:10

When the Picasso paints, you just sit back and enjoy it, right?

Pablo Gonzalez: 1:16:15

Yeah. Yeah. I love it. this has been phenomenal folks. And I'm not just saying this because I was told that I have an extra a hundred thousand dollars. I feel like based on the fact that we had 160 plus people here for the show, really, really great questions from our community. Really, really great questions from our guests, from fortune builders that are following you here, Paul, and we always welcome you. I hope that you make it a habit to continue to come here. Tuesdays and Thursdays. Check out the pot, the past episode on the podcast on your favorite podcast app in our YouTube channel, because we have a lot of this data. In fact, I believe it's next week that we're doing the JWB Q1 market update. So Sandra, you really want to watch out for that one. That one's on Tuesday coming up. We always have. a really, really high attendance for that because JWB clients that sometimes don't show up to the show, come to that one. It's a big bonanza, but this Thursday we're doing something that we normally do on Tuesdays, which is one of our favorite content pillars. It's called the not your average insights pillars. And we're doing the first ever, not a book club, but a movie club. Netflix just came out with a movie called dumb money that reviews the GameStop Wall Street bets, Reddit fiasco. And there's a couple of not sure average insights to take away from that movie that GC and I are going to get into talking about why it's called dumb money, talking about these like short squeezes that people are talking about and talking about something that we're seeing a lot, not just in this moment, but across many, many different asset classes. It's just Appearance of FOMO investing, and we're going to talk about this and how it can affect you. But for right now, Paul, man, I just want to thank you for what you do for this show, man. You always show up. You bring a ton of value. You bring a ton of entertainment. You like to make fun of Greg, which I'm, you know, kind of a fan of as well. And you bring a ton of friends, man. So just, you really have earned that Hall of Famer jacket that one of these days. It's not gonna be an IOU anymore. You were little be You will be wearing a Hall of Famer jacket, but thank you for coming. And really thanks to our community. You are the reason why this show exists. We knew that if we can surround you all with people like you, it's going to help you. And I really feel like today, we helped a bunch of folks make better decisions to become better stewards of their money. So we hope you join us on Tuesdays and Thursdays coming up. We hope you go to chat with jwb. com to get this thing started. Paul, you got any final words before I sign us off here? I don't want to just completely take your show away from you.

Paul Shively: 1:18:48

No, man, I just, I love this community. I love being a part of it. I'm grateful you allow me to be a part of it. I get excited as you can tell I get, I keep going. So thank you for allowing me that. And yeah, no, just take care. And I, well, one of my favorite podcaster says take care, but then also if you can't take care of someone else,

Pablo Gonzalez: 1:19:08

I like that. You know what my favorite podcaster says, GC, how do we sign off on this show?

Paul Shively: 1:19:12

Don't

Gregg Cohen: 1:19:13

be average. See you everybody.