391 | Experience Investing In Rentals From 3,000 Miles Away

Markets like New York, Miami, California, and the Pacific Northwest make it hard for investors to acquire cash flowing rental properties, so savvy investors have learned to find teams in different markets (like Jacksonville) that can deliver an even better investing experience than in their back yard.

But we often get asked how and why people could possibly invest in rental properties far away from their hometowns without ever actually seeing the property in person.

That's why we're bringing on a guest investor that lives on the west coast of the US, to talk about how she has grown a small portfolio of properties in Jacksonville, FL.

She's coming to the Not Your Average Investor Show to talk to show host, Pablo Gonzalez, and share:

- why she would choose to own property 3,000 miles away from where she lives
- how she decided where to invest and who to work with
- what convinced her that this is a good time to get into rental property investing
- and more!

If you didn't get a chance to meet members of our community at the Not Your Average Investor Summit, you'll get your chance to meet one today.

Join our real estate investor community LIVE: 
https://jwbrealestatecapital.com/nyai/

Schedule a Turnkey strategy call: 
https://jwbrealestatecapital.com/turnkey/ 

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Transcript

Pablo Gonzalez: 1:17

Welcome everybody to the Not Your Average Investor Show. Today, we've got a very special guest. I know that we teased And the invite investing from 3000 miles away, but we're actually investing from 30, 000 miles away. Don't quote me on that, but it is really, really far where she made her first investment. She's been a part of our community almost since day one, I've been one of the first people whose name I started messing up from the beginning. And also one of the first nicknames as well. We got Jag Chatter with us. Hello, Jag. Milady Jag. Hello

Jag: 1:52

Pablo.

Pablo Gonzalez: 1:53

Yeah. It is great to have you Jack. I finally, I finally got to meet you at the summit, which was awesome. first time on the show after being here as a viewer for four years, what are you thinking?

Jag: 2:05

Avid viewer for four years. I was hooked completely. Oh, lovely being here. Thank you, it's a big sight.

Pablo Gonzalez: 2:12

Happy to have you. We're going to talk about your investing journey and the different decisions you had to make from doing a 1031 exchange, from having to invest from overseas when you were overseas to kind of like the difference in the investing decisions that you've been making from, when you first started in 2021 to the couple of properties you put on in 2023 to the different providers that you've been with. I think you have a lot of value to offer our community, but first we have a little tradition around here, Jack, do you know what it is while we start?

Jag: 2:41

Roll call.

Pablo Gonzalez: 2:42

It's the roll call! We got MVP Lee Bishop with a hello everybody. We got our fairy godmother checking in second, Jen Billson. We got our leadoff hitter, John Henning batting third today. We got the legend, the man who has a hockey arena named after him, Roger Voisnitz. Hello from 1500 miles away, Virginia. So hello. You got, you got him beat, Jag. We got Chris Lee from Fernandina Beach. That's only probably about 50 miles away. No big deal. We got our regulars, Rosalyn and Gary Riley from Marietta, California. Ooh, we regard you. We got the mountain manna! Billy Green from saying good morning from the velitudinarianly refrigerant mountains of Colorado. Billy, you are really testing me here with all these consonants at the same time. Who else we got out here? We got the mama bear. Cody Adams is here. We've got the shaman from the naturopathic community, Nadim Shah from the West Coast with this. Good morning. Good afternoon. Who else we got in here? This is a lively roll call today. We've got. Okay. Everybody's saying hi to each other. Okay. We're going to, Oh, we got the, we got the patriarch and matriarch of the first family, Ken and Carolyn Malin. Ooh, we salute you. And of course the patron, Santorio's is in the house. Michael Santorio's from Northern Virginia. And a big pop is in the house. We love it when he calls him big papa. The co founder of the co founder Jay, Cohen, Sandra Ro, Rocio, Rocio, I hope I'm pronounced that correctly, new to the show. Sandra, great to have you. Hope you make a habit out of it. We've got a lively community. Make a friend in the chat with any of these lovely people that are talking. Aaron O'Neill into the lights. Good to see you, Aaron. Glenn Schenken, past star of the show. El amigo Bill Shields. Buenas tardes, amigos. We got Tamara Combs Williams. from Charlotte, North Carolina, Luis Olivares, or maybe you may have met him at the Natural Average Investor Summit. Luis and his wife were there from Miami. Good to have you all. Jag, tell me, you were just telling me that when you first started. You were in India, right? What was the, What was the thing that made you think, Hey, I'm in India. I want to start investing in it. Nowadays you live in New Jersey, right? Right. All right. But what was the thing that got you thinking I'm in India and I want to invest in single family homes in the United States? Give me the, the first aha moment for you.

Jag: 4:58

I had a alligator on my hands. I had an apartment in New York that was, uh, Eating away my cash flow because it was in a co op and the co op started charging exorbitant amounts just for me to keep the apartment and to let it out. And it got to a stage where I was actually paying money to the building just for me. Or the privilege of renting out the apartment till I got back again to New York. So I thought, well, can't do this. What can I do? And it felt like the right thing to do because we were overseas. We didn't need a primary was to switch it into an investment property or properties. And that was kind of the journey. And then when I dug a little further into it, I felt given all the different asset classes, I felt that I felt most comfortable with a single family home because it was saleable to the end user or an investor. It kind of, it felt like something that I could tackle. It was kind of my sized investment. I was just starting out very green, knew nothing about anything. And, and that's how it started.

Pablo Gonzalez: 6:07

Interesting. So you valued the idea that the single family home seemed like the right mix of like liquidity for you. And also if you ever had to do something to it yourself, it was just like less intimidating from like, approach it from like a business standpoint, operationally.

Jag: 6:25

Right. I didn't feel like I could handle a multifamily and all the regulations that might come with it from the state and all of that. It just felt a little more overwhelming. Yeah.

Pablo Gonzalez: 6:36

Interesting. Interesting. Well, so you had, you owned an apartment complex before that in New York? Was that, was that like a first go at?

Jag: 6:43

It was an apartment, but it was a co op, never buy in a co op, anybody listening, don't buy in a co op.

Pablo Gonzalez: 6:50

So it was a primary residence that you had bought while living in New York, and then you moved to India, but you were holding onto it.

Jag: 6:56

Right, thinking we'd be back and Yeah. The board ran out of patience. I mean, everybody knows New York boards, right? Yeah. Well designed reputation. Yeah.

Pablo Gonzalez: 7:06

Interesting. Interesting. Okay, cool. So at that point you're like, all right, I'm going to get rid of this thing. I want to turn this. Did you ever think I should sell this piece of real estate and like just put it in a different investment or was it always going to be real estate to real estate or, or did somebody tell you, 1031 and this is what that is?

Jag: 7:26

No, it was real estate to real estate. Cause I'd seen, the power of how real estate can grow, you know? And I thought, well, I, I don't want to lose that. I'd like to use some of that. And then I did have people telling me, put it in a DST and I didn't feel comfortable, I didn't understand it. And I didn't want to invest in something I didn't understand. So I steered away.

Pablo Gonzalez: 7:50

Got it. when you say you had seen how real estate could grow back then, but think about yourself before three years of watching this show, how would you have described that, that idea of like, you've seen how real estate can grow?

Jag: 8:03

so we were living in New Delhi, right? And in New Delhi, in India, in any case, there are vast discrepancies in income and wealth and all of that and property prices. I had seen properties that were like a few hundred thousand dollars that have ballooned into multi million dollars in the course of a couple of decades. And that really brought home to me the power of just, you know, being able to just sit tight on property and not selling, or if you are selling, reinvest in another property right away.

Pablo Gonzalez: 8:35

Interesting. So basically you're talking about home price appreciation, right? Like in so many words, it's this idea that we all understand they're not making any more land. People value land. People value real estate. When you buy in a city that grows, home prices go up in a way that, it's hard to replicate. And it's, interesting that that's the first thing that you thought of when most real estate investors, particularly in this class come in from the idea of, or at least not most, but the average real estate investor comes in from the idea of just like, Oh, I want to get some kind of like cashflow off of real estate, but you know, maybe they were, maybe they're thinking that, but. this tangibility of like home price appreciation and how that can change your life. Um, seems like it was a much more natural thing before I knew about real estate for whatever reason.

Jag: 9:23

Yeah. I mean, I, I think I didn't want to lose out on, like, you know, if you got, for example, if you sold something for a hundred K and then the ability to spend that a hundred K in a lot of ways or fritter it away. If you're not putting it in a sound investment, it's so easy. And then you get priced out of markets, right? Cause you didn't, you didn't take action. Yeah.

Pablo Gonzalez: 9:46

I've definitely seen that. That, that is exactly what my experience was in Miami, right? Like not having bought when I first graduated college or. You know, even when I first moved to California, not having bought something there because I was kind of thinking that I was in this like impermanent lifestyle of being moved around early in my career. And then you come back to this market and all of a sudden it just feels totally out of price, right? Like wanting to, wanting to have something to like stake your, stake your anchor there. That makes a lot of sense. it actually reminds me a lot of the reason why I ended up, you know, as, as I think, you know, right? Like I was, I've been living here in Jacksonville for five years. And I had been renting up until three months ago when I, my wife and I bought our primary residence, but we decided to buy rental properties like our second or third year here after like a year of hosting this show because of that exact feeling, this idea that I wasn't sure where I wanted to live yet. But I knew that I wanted a piece of real estate here in Jacksonville before getting priced out.

Jag: 10:43

Yep. I can understand that completely.

Pablo Gonzalez: 10:45

Yeah. we've got a couple of questions. Sondra asks, what is the DST? You know what, Sondra? That's a great question. Cause I actually have no idea what a DST is. Do you know how to.

Jag: 10:53

It's a statutory trust. So you can actually invest in this trust. based out of Delaware that's set up to take 1031 money. Please don't ask me anymore, but you can Google it. I didn't understand it then. I don't understand it now. And I'm not interested.

Pablo Gonzalez: 11:09

Good. Good. So Delaware statuary trust. All right. Thank you. we'll, we'll Google that sucker. Michael Santoris is asking about the, the 1031. Let's, let's get into that 1031. motion. I remember right before we got on, you're like, I jumped into a 1031 like people jump into marriage. They just think it's going to be real easy. And all of a sudden they're like, what am I in? So

Jag: 11:27

I, I realized, that I would have to do a 1031 to preserve my capital. in because the property that I had appreciated quite a bit since I'd bought it. So I wanted to preserve that. And I, in fact, just side note, I ended up, splitting ways with my accountant at that time because I reached out to him for a second time saying, Hey, I really want to do a 1031. What do you think? And he said, Jag, it's 1031. It's really complicated. And he w he was in New York. He said, it's very complicated and it's too much paperwork for me, so you shouldn't do it. And after I investigated that for a bit, I thought, you know what, I'm going to lose a lot of money listening to this gentleman, so found another tax advisor and started learning about a 1031 and, felt that was a way to preserve capital. And then I had to figure out a way of doing it from India. So that's what I did.

Pablo Gonzalez: 12:22

Interesting. So 10 31, in case anybody, I put it in the chat to see if anybody wanted to like say what it is in case somebody doesn't know, how would you describe what a 10 31 is? Like the way 10 31

Jag: 12:32

is where you are able to exchange one property, into another like property, meaning it can be any. any property actually, within a certain timeframe and within certain price constraints and some other conditions surrounding it. So, I had, you normally have an identification period where you need to identify what properties you will be buying. And that period starts right after you sell your existing investment property. And when you've identified your properties, you have A few more set amount of months to be able to close on those properties. And the money never really passes your account. So you have an intermediary who holds the money from the sale and then deposits it to the new properties. Once you buy them, the main thing is you can't do it with a primary home. It has to be an investment property. So that's very important. Yeah.

Pablo Gonzalez: 13:30

You're getting, you're getting good reviews from Billy Green over here saying good explanation, Ms. Jag. I, I don't know if you mentioned that the reason that you do it is because then you don't have to pay taxes on, on the capital gains.

Jag: 13:41

It's huge. So you can literally, depending on the property you're selling, like imagine if you were selling a multi million dollar, multifamily, which I wasn't, but if you were, you could literally save. hundreds, if not hundreds of thousands of dollars of deferred taxes. So what you're doing is you're really deferring taxes. and if you are a long term buy and hold investor, you can, really pass the property on to your heirs, when you pop it and they get it on a stepped up basis. So they don't pay tax on the capital gain. So it's an incredible way to build generational wealth as well.

Pablo Gonzalez: 14:17

Yeah, it's something that a lot of people in our community have used. Uh, Cody, our community manager, mama bear, put a link in the chat for, a past episode on that. If anybody wants to check that out, they want some more information. The way I describe it, which is just a very common example for us here, because we get a lot of investors from like the West coast or from New York or whatever, but you know, you bought, you bought your home 20 years ago for 200, 000. It's now worth a million dollars when you sell it. If you do a 1031 and you do all these things that Jack had said, of course, consult a tax professional in order to like comply. But you can basically take that 800, 000 in gains and invest that somewhere else without having to pay taxes. At that moment, as long as you are buying also real estate assets that are worth, I think, equal or more in value. So like assets that are worth equal or more value within a certain timeframe, according to a certain kind of rules. But it just gets real convenient when you don't have to pay, taxes on 800, 000 worth of home price appreciation before you need to go invest that money, right? Like you're able to buy. An extra couple of houses with that money. If you don't have to do that, Jack patron Santorius, Michael Santorios is asking, did the fact that it was a co op ownership, add any kind of like wrenches to the 10 31 exchange? Was there anything like special that you had to do because it was a co op ownership or was it just kind of like you cash that thing out, you got this pile of money, 31 exchange thing.

Jag: 15:42

Yeah. So, actually being a co op didn't have any Issues at all with because really you're selling it. They don't give a toss, right? You're selling it. You're going to get out of there. They're getting their money from the person coming in. It's only a matter of timing, right? So if you're selling a property for a 1031, you want to make sure you know what you're going to be identifying, because your identification period is pretty, pretty small. And you want to make sure you can close on those properties at the price. that you need them to be at. So if you can figure all of that out beforehand, the core board is irrelevant to everything. The sale property is irrelevant to everything. It's more about timing of the sale for you so that you have your ducks in a row to start the 1031.

Pablo Gonzalez: 16:31

Got it. It's great advice. Great advice happening in the chat right now from the community of like different questions people have. Jack, when it comes to, so that's the, you decided to 1031 it because of those advantages. You decided to stay in real estate. You decided to make it single family homes because, it seemed like a manageable asset for you. Right. You said it was like at your scale. I like that. I like that. Um, imagery. you also made the decision You mentioned this idea when I decided to do turnkey, right? Like you were, were you thinking of doing more active, like short term flip stuff versus a turnkey buy and hold? Or what were you deciding in between when you went single family?

Jag: 17:06

You know, Pablo, I never really got to know the real estate. market. I mean, it's immense, right? There's just so many ways to invest, but I started, educating myself on what my, what my potential, pathways could be with the 1031. And, I realized pretty, so I started looking at this in 2018. I started really reading up, doing webinars, like, Outreach everything to try and learn everything about how I would execute the 1031 and I found that By the time I actually got around to doing it, it was COVID, right? So COVID had hit, it was 2020, start of 2020. And in Delhi, they, it was almost a state of emergency. Like everything was clamped down. You weren't allowed to really get out and travel and, and do all that stuff. And, so it was a very different, I mean, there were constraints that were, were normal also at that stage. It wasn't easy to just get on a plane and come to the States and try and figure it out. So, and then of course, then we started seeing the feeding frenzy happening in the U. S. with all the prices going nuts, right, over that time period. And so a 1031 needs, A price you can depend on and availability you can depend on. Otherwise you're, you are, right? You have a failed 1031. So the only way after a lot of kind of thinking it through and all, when the time came to do it, and I had actually, put the, put my apartment on the market, I felt the only safe way of doing it was through a turnkey, uh, Scenario. So I did feel that I would give up on, maybe some initial equity, right? If I had been able to buy it on the market, but at that stage, it was such a pipe dream. It wasn't happening. I mean, the way the, it was like candy flying off shelves, right? So it wasn't like the only way I could guarantee that I would have a property that I wanted at a price that worked for my 1031 at the time that I needed it to happen. was by doing turnkey. It

Pablo Gonzalez: 19:14

makes a ton of sense. So I guess what I'm hearing, I thought when you said you decided to do turnkey, I was thinking maybe you were going to be more active or not more active, but the, difference is this idea of with a turnkey provider and with, you know, someone like JWB that has inventory of homes and the team in place already there. And you know that it's a one stop shop. You're going to end up giving up a little bit on. price versus you trying to find some kind of off market deal that would fit the right timing that you can close on that would lie, that would fit the 10 31 exchange window. So since you needed timing to be right, and you needed to be able to count on being able to put this thing into your portfolio and having that deal go right, you paid, you found it worth it. To pay somewhat of a premium for safety and assurance and making sure that you didn't end up paying those taxes.

Jag: 20:10

I mean, I was sitting in India, I was doing all this long distance. So I just wanted where possible to reduce complexity. I didn't realize, you know, now, now people say, Oh, you know, I'm, I'm, I'm gearing up to do a 10 31 and people get really stressed. Well, I had no idea how, just how many things might have gone wrong. But I did know that I just wanted to reduce complexity so I could sleep at night.

Pablo Gonzalez: 20:33

Yeah.

Jag: 20:33

That makes sense. And I wasn't watching your show. Yeah.

Pablo Gonzalez: 20:35

You weren't watching my show. You were watching the show?

Jag: 20:37

No. When I wasn't watching it. Oh, what? Night as well.

Pablo Gonzalez: 20:42

I see what you're saying. You're saying that the show puts you to sleep. I totally understand. Yeah.

Jag: 20:45

Yeah. You get that, right? Yeah.

Pablo Gonzalez: 20:48

So just, just, just throwing it out there. Anybody that's listening, that's trying to do a 1031 to change, is trying to go at it by their, you know, by themselves. If you really want that thing to happen, you want assurance, and you want to work with a team like JWB that can control the whole process for you. Go to chat with jwb. com, pick a call, and start that process going. you know, JWB does that stuff all the time. So that first call will help you kind of like sort stuff out. so what did you buy with the 10 31? Like, I think you told me that you bought in multiple markets or did you, did you before? Yeah. Tell me about that.

Jag: 21:18

So I was like, remember that I didn't know JWB. Apart from what I was reading and I talked to you guys and all. And so I was trying to kind of figure out what else might go wrong. Right? So I thought, okay, maybe I should spread my bets a bit. So I did invest with three different turnkey providers and I bought three different properties and one is fine. It's kind of still going. I just had a turn on it. It's been a nightmare, but it's now tenanted. Hey, so that's happening. The second one was essentially a fraudulent transaction. And like I was telling you earlier, that was my PhD in real estate. So that was the reason why I didn't come back and reinvest. So it did cost me cause I lost a whole year. Of not investing because I was dealing with this and I really wanted to understand, what happened. And then I invested in a JWB, which was, smooth sailing, knock on wood. It just stays the same way. But, and so I had the worst possible experience and then I had, I think what is the best possible experience. So I had the spectrum at the same time.

Pablo Gonzalez: 22:25

You said you got a, you said you got a PhD in real estate in that terrible experience. Can you tell me what, what was the, if you got a PhD in real estate, what are the names of the courses? What did you get schooled on?

Jag: 22:37

Well, one of them was how not to buy fraudulent property, right? So one of the, actually one of the major, lessons I learned from it, and it's so funny because I had an attorney and everything, but it's understanding how to use your resources also. I bought a property and this was the only property that was not fully rehabbed. Well, when I identified it, it was being rehabbed and the turnkey provider that sold it to me, they said, Hey, don't worry. You know, two weeks left. That's all. So every time I checked back with them, it was another two weeks left. And by that time I had already identified it. And like an idiot, I did not identify. a fourth property possibly as a, swap, right? And so I was stuck. If I didn't buy that property, my exchange would have fallen apart. I would have been taxed on that part of the capital. So we came to the point where I had to close the exchange and it was still the same story of two weeks out. So I said, okay, so they suggested, listen, why don't we just put an addendum and say, here are the things that need to be fixed and we'll sign off on it and you'll be fine. And they had come referred to me by somebody very reputable. And I thought we're done business with them for decades, right. Or at least for a decade. And so I thought, okay, you know, that's fine. And so I did. I went ahead, took the plunge and bought it almost on the same day that I bought the JWB property. I think of the same day we signed papers on both of them. And then I got busy cause we had just moved back to the U S at the same time as the closing, and we were in the middle of buying our primary home and. Our baggage was arriving from India and there was too much going on. And so for like the next two, three months, I took my eye off the ball and I thought everything's fine. You know, we'll figure it out. So in January, I realized, hey, I haven't heard from these guys. What's going on? So I reach out, turns out, they hadn't finished the rehab. They just left it exactly where it was. And there was, you know, pretty much no tenants. The place was like code violations, all kinds of horrible, horrible stuff. So it was a learning experience of how not to get into that situation. That was just nightmarish. And then everything flowed from there. Pablo, I learned a lot from there. You can imagine from there on.

Pablo Gonzalez: 24:59

I can imagine, but I'd love to hear kind of, so, so one is this idea of like staying on, I don't know. what's the lesson there. If you went with somebody that was referred that you kind of had vetted, I'm hearing the lesson of identifying a fifth property just in case, right. If like it isn't done in time.

Jag: 25:17

Yeah. don't think you should ever buy a property or put a property under, probably even in the identification period, put a property. Well, see, that's a tough one because. The property identified with you guy, the JWB was under construction. Things could have gone really wrong. Right. but I think if I had identified another property at the same time, I would have had a little bit more leeway to not go with one that had, that was not rehab by the time it came to closing, that was the biggest thing. The second lesson, I think in hindsight is I should have got my attorney involved In the addendum, I should have had my attorney involved probably a month before closing to talk to the turnkey provider directly with legal language involved to make sure that I had a very watertight contract going in, not just a standard one, right? So that was the second thing. And I think those were the two big lessons, I would say. Yeah.

Pablo Gonzalez: 26:20

We talk a lot about the differences between like turnkey and real vertical integration of having like all these trades in house and like having a certain like critical mass of like a hundred people working for you and the, the footprint that JWB has. Is there anything to that? is there anything to that? Absolutely

Jag: 26:37

right. Pablo, you're so right. Because actually when you look at JWB and you see the operation for starters, it feels like one cohesive company. the communications are consistent, so I think you're right. You can tell when you're dealing with somebody that's more organized and on the ball. but I didn't know what I didn't know then. I didn't know that difference at that stage.

Pablo Gonzalez: 27:01

Was there any, was there any of that whole like, Oh no, but it's the, this person's fault or that person's fault as opposed to just like taking ownership of it the way that we talk about of like having like one number to call and like there is no like hiding behind something because when you're really vertically integrated, was that going on? Or did they just kind of ghost you?

Jag: 27:19

No. So you mean after I bought it?

Pablo Gonzalez: 27:21

Yeah. I'm just trying to understand. I've only bought with JWB and I've, and I've grown to expect, you know, what we talk about here on the show.

Jag: 27:28

So after I bought it, it was a nightmare because nobody'd want to return my calls. There was always this thing about, oh, you know, we were going through so many problems and all the contractors left. They, we couldn't get a contractor. I mean, there was always an excuse and they, they didn't seem to be very competent people. In the back office, right? So you couldn't depend on the maintenance team in house. You couldn't depend on the property management team and the team, I think would have been a fancy word, even though they were meant to be a fairly decent size, but my God, I mean, it was like. Phone calls, I would just go to voicemail and never get answered, right? owner who would not respond unless it was legally threatened. I had to get the attorney involved. I had to get their real estate brokerage involved. I had to, I mean, it was just a nightmare. All right, well, I want to

Pablo Gonzalez: 28:23

stop. I want to stop making you relive this nightmare and I want to focus on it. It sounds like that was not a good time. you know what I remember about you, Jag? I remember early on, you would ask really tough questions. Like you, like you'd be on the show and you would always have these like very specific questions. pointed questions, which made me think that you were either highly educated or highly experienced or you had had a bad experience. So like, you know, you knew kind of how to ask. and I'm wondering, you know, you, you've talked about this idea that you found the show and the show helped you get educated on what to expect and stuff like that. But these questions that you brought to the show, you were clearly getting other, you know, Other sources of like education before all this, what, where did you, like, where were you drawing from? Like, where did you get educated before actually getting to the not travel investor show? And what are those sources that you've kind of like kept up with that? You, you know, that you draw, you're obviously a sophisticated investor.

Jag: 29:18

No, I just, uh, I just found that I had to learn a lot and, and, you know, the only silver lining in COVID in Delhi was that we weren't allowed out. So we were at home like almost 24 seven, right? So I would sit and I would just. listen and read copiously, trying to educate myself. And I actually enjoyed it a lot. So, started with, Bigger Pockets, of course, which everybody seems to be, you know, doing as well. And then from Bigger Pockets, I picked up a whole bunch of different, turnkey providers as well, like REI Nation, like Real Wealth Network, like there's a whole bunch of them and they all put up podcasts. So just started listening a lot and seeing what people were saying, what investors BP regarding turnkey operators as well. And, read Rich Dad, Poor Dad. That was great. And then started reading a lot of books that were being recommended, downloaded a whole bunch, and then started doing an outreach to turnkey property providers and then to the mortgage brokers and asking them for references, like, asking them like, Hey, if you were investing, who would you invest with? And they'd say, well, so and so is a really good. team is really great, you know. So that was, that was great. and then I found, Michael Zuber. He's amazing. he just talks about how buying one property changes your, life trajectory and how to do it. So it's about knowing your market really well, knowing your zip code really well, and, and keeping an eye on it for 60 days and understanding the rents. The prices, et cetera. So, you know, a good deal in your own market when you get it. And so every market is different. So in fact, that's a spreadsheet I used when I was looking at properties to buy from JWB too. So he really changed my trajectory. And I, in fact, reached out and you know, I never paid a course ever before, but for him, I actually was like, you know what I'm in, I want to do your course and I want to, and it was really, it was like a one 99, right. And I got to talk to him and he helped me strategize. He was just incredible. And he still is, he's quite amazing. So I still keep in touch with him. I like, coach Carson. I listen a lot to him. And, most recently I'm into learning all I can about creative financing, seller financing. So that's where I'm at.

Pablo Gonzalez: 32:37

Love it. What a great list, Jack. Like this is something that I dream for, for people that tell me like all the content streams that they consume. Cause now I'm like, all right, I want to get coach Carson on. I want to get Michael Zubon, like bring them on the show, see if we can create partnerships with them and stuff like that. So, anytime. And I think Cody just put something in the chat. If anybody has recommendations or podcasts that you follow, email Cody at Cody at JWB companies. com. Cause as you all know, we inform the show strategy and the education, the community based on what you all are, are learning about and want to learn about. So this is super, super helpful. back then, Jag, you bought, I think you told me in Cleveland, in Jacksonville and somewhere else. How did you think of. The markets that you wanted to invest in. Did you pay much attention to that or were you already going down the whole like team first, then market, or were you going property team market? What were you thinking back then?

Jag: 33:30

So I did have an investor tell me the team is your key to the kingdom. and this was a very seasoned, investor who'd been investing in the Carolinas for the last 20 years. And I kind of get that. At the back of my mind, which is why I was looking at the teams, but I also wanted, look at the markets. And I was kind of understanding this thing about, cash flowing markets versus appreciating markets. And I wanted to make sure I had a balance so that if something didn't cash flow. I wasn't out of pocket hugely because I had balancing properties that were cash flowing. And that was my thinking then. And so when I bought JWB, it was kind of, it was better cashflow than it is now, but, but it, it was kind of more of a break even cashflow. But then I had these other two markets that were theoretically cash flowing markets that could balance any, emergency funding needed.

Pablo Gonzalez: 34:24

Got it. And what were the other two markets?

Jag: 34:26

Maryland and, Ohio

Pablo Gonzalez: 34:28

and I got, that's interesting. So you, you had already, that is not a very average investor thing to know, right? Like this idea of like team first. Um, then getting that insight is huge because what we normally find is people, the average investor is thinking, Hey, I want to go find a property. And then from a property, I'll find my team. And then, Oh, it just happens to be in this market. But this idea of like, knowing to look where the teams are and then evaluating the market for how it performs financially for you. And then thinking about it as a portfolio right off the bat, to get started knowing that you had the team and whatnot, like property felt like a very secondary tertiary decision for you.

Jag: 35:05

Yeah, you know, I think at that stage I was going off this one investor who I trusted. but I didn't quite understand what he said. I mean, I didn't, it was intellectual. Okay, I get it, but I really didn't get it. And then after my PhD, when I went to do my second 1031 exchange, I was like, okay, I know where I want to be now. I want to be with JWB. And in fact, when I was down during, a fabulous conference, a fabulous summit, it really, really consolidated how I'd like to build my portfolio in Jacksonville. lovely story, definitely, but also definitely because of JWB. Because of the team.

Pablo Gonzalez: 35:45

Tell me more about that. did you come down to the summit thinking I want to build a real estate portfolio? I'm still not fully sure if I want to just like go all in on Jacksonville. I have these other ideas. And then the summit got you there. or something else? talk me more through that. Like the journey that you went on to consolidate that opinion.

Jag: 36:02

So, in Jacksonville because of JWB and, you know, yeah, Jacksonville growth, et cetera. Good. let's just do that. and by this time I was like, if I'm doing a 1031, I want to do turnkey. Then. I came down and I was sort of blown away with the downtown story. I didn't really grasp how strong the potential is. Right. Till I came down and saw it. I know that's weird. it shouldn't have been necessary, but it made me feel a lot better about investing in J in, in Jacksonville. but as I look to build my portfolio, I think I would do it with a combination of turnkey, but I think just because of, capital constraints, I would like to also see if there's a way that I can be buying through creative financing, and then just say to Greg, Greg, please, could you just rehab it and put it in your in your management company? Because I think a combination strategy might be the way forward. Now that I've found JWB, I don't want to, not leverage that as much as I can.

Pablo Gonzalez: 37:13

It's interesting. First of all, I don't think it's weird that you'd have to see it to believe it. That's, that's exactly why we do the summit to a large extent. I think as we do it more, And more people go through it, then I think other people will not have to see it to believe it because they'll hear so many people saying, I saw it and I believed it. but, you know, to your point of that, like, there's a lot of Jacksonville residents that haven't seen it to believe it, right? Like, people that don't live in the urban core have not seen what people that come to that summit have seen of this, like, Powder keg giving of sparks of real estate investment that's happening in the middle of the city. That's going to make everything around it do well. And I find it really interesting that there's so many different ways to do it. Like going back to what You said this guy, Michael Zuba saying how like one investment property changes your life. Now that you've gotten a couple of properties, you've gotten some experience, you've realized that there's these different ways to do it. Turnkey was for you for a time. Now you found like the market that you really like because you've seen these like insights. You've also found a team that you really like working with. Now that you have all this experience, now you're like, okay. I can carve my own path here of still leveraging this team, still leveraging this market, but even then finding my own advantage, um, just really supports this whole idea of man, getting in the game. Cause once you get in the game, you'd like figure it out afterwards. And those are the stories that I, that I keep hearing, right? Like it's really

Jag: 38:42

cool. It's like a career, no, you start on something. And then you're going to find your path and you just, it keeps changing.

Pablo Gonzalez: 38:49

Yeah. Another thing we were talking about before, it's just like how, how people would just find different careers in life. Yeah. 100%. That's really cool, Jag. All right. can I show some of your properties and performance? All right. This is the,

Jag: 39:01

I'm such a new investor. I don't know what there will be to see. Cause it's, well, you're

Pablo Gonzalez: 39:05

going to, you're going to, You're gonna see you invest. You bought it a really good time in 2021. So there is something

Jag: 39:11

more with you guys at that stage, right?

Pablo Gonzalez: 39:13

That's what everybody says. all right. So here we go. All right. Just a quick disclaimer. These are, these are Jags figures. Do your own due diligence. Um, because, uh, Because yours

Jag: 39:24

could be better. Huh?

Pablo Gonzalez: 39:25

Yeah, it could be. It could be. All right, Jack. So what we have here is you have, we don't have the addresses here, but here are the zip codes in, in Jacksonville. You bought your first one. That was that 10 31 from that co op. You bought a house for, I need to make this a little bit bigger so I can read it for 200, 000 in cash. That was the 10 31, right?

Jag: 39:46

Yeah.

Pablo Gonzalez: 39:46

So total initial investment of 200, 000 to 1, 500, 000.

Jag: 39:49

That's the other thing I forgot to say. Sorry, Pablo, that was one thing. So I reduced some complexity in my 1031 by just parking some cash in one property rather than going and buying more because I thought that's where I lost a year with my PhD because I thought I could come back. and then take some of that cash out and rebuy, which is still what I'd like to do.

Pablo Gonzalez: 40:16

Tell me more about that. So you, this one, you bought cash, the other two you finance because you thought you were trying to reduce complexity.

Jag: 40:22

Yeah. So I just wanted to reduce the risk, right? So when, so now I'm looking at that 200 K thinking it's all cash. I should really leverage it in some way.

Pablo Gonzalez: 40:32

Yeah. So, so what you're saying is If you could do it again, you may have bought two or three properties with that 200 K

Jag: 40:41

I should have done that. It's all your fault. You owe me a house.

Pablo Gonzalez: 40:47

I should have started the show a year earlier. I'm sorry. Cool. So that's an interesting take. Thanks Jack. Thank you for that. And then. And then in 2023, you came back and you bought two more properties with conventional loans of one 78 to 20, which a much lower down payment. Can you talk to me with, you said that that was a second 10 31 that you did?

Jag: 41:06

Yeah. So that was the second 10 31 I did. And there I, I really needed to balance the leverage and the, and the total amount. So I liked my JWB experience and. Honestly, 1031 exchanges, when you marry them with turnkey, it's like the perfect marriage. So I didn't have to think very much and the JW team was really great in helping me figure it out.

Pablo Gonzalez: 41:33

Was that one of the other properties that you had bought with a 1031 from before or was this another property that you acquired that you 1031 it into?

Jag: 41:39

Oh, that was my PhD going bye bye.

Pablo Gonzalez: 41:41

Oh, that was the no more of you guys messing with my money, I'm going to put this somewhere else kind of thing?

Jag: 41:49

Oh my God, yes.

Pablo Gonzalez: 41:50

Got it. Okay. Interesting. all right. So this is it. So you've only, again, you've, you've only had it for, one house since November of 2021 and then two homes in late 2023, right? But already what you see is you've had 70, 000 in home price appreciation. You've had 437 in principal pay down, 2, 000 in saving, and 15, 000 in rental income since you had bought that thing, straight cash in the first one. You have a high amount of rental income for a total profit of 87, 000. Anything here stand out to you?

Jag: 42:25

The home appreciation stands. I know that the first property I bought with you appreciated pretty quickly, but this looks like the other two have already appreciated a little bit. Is that correct?

Pablo Gonzalez: 42:38

I, so Greg does these and he's, he's away on spring break, but I would assume that that first property probably appreciated more than you thought. And these other ones have appreciate a little bit.

Jag: 42:49

I was amazed how much that first property appreciated.

Pablo Gonzalez: 42:53

I mean, you bought at a really, really good time, right? Like that just goes to show the whole, like, why now versus wait, the, just the appreciation when you put, when you put the appreciation that you saw in just like a, what is it like two years? When you're talking about 200, 000, right? Like 10 percent appreciation is 20, 000 bucks. Yeah. so I think it went up like 20 percent the last couple of years and now it's a little bit more normalized, but that, that equity really just moves quickly because percentages of such large numbers are large amounts, right?

Jag: 43:26

Actually, I have a question for you, Pablo. I don't know if you can answer it or if it's a Greg one, but if I look at the If I am looking at my Portfolio 10 years out, right? And we always talk about, what might that appreciation component be just for financial planning, right? Saying, okay, 10 years, hence, there may be this much equity, we can pull it out and reinvest or whatever. Do I base that off the initial 200 and then do 10 years from there? Or if I'm doing Okay. 10 years from today, what value should I be taking? Do you know what I mean? Cause it makes a huge difference to the numbers.

Pablo Gonzalez: 44:02

Yeah, no, for sure. I would qualify this by saying, I do think it's a Greg answer, but my guess would be you based it off of today. Right? Like if you're thinking 10 years out from today, I would assume that you're going to take that historical home price appreciation of like 5 percent and start compounding that from the value of it today.

Jag: 44:19

Okay, because otherwise it would end up normalizing that increase. And so what it's showing as appreciation today would be the, almost the total appreciation for the period 10 years. That's how big a difference that makes.

Pablo Gonzalez: 44:34

Maybe. Yeah.

Jag: 44:36

Okay, great. Just I love Greg's perspective on it as well, but yeah, thank you for that. I'll get that to you

Pablo Gonzalez: 44:42

for sure. That's a, that's a great question. finally jag, the thing that we like to show the Pac Man, right? This idea that, you know, people make all these decisions have weighing so much in cashflow. when you look at the total ROI that you've had thus far, even having a cash house, it's just this piece of the pie here. And the darkest one, the other two are small slivers, but again, the Pac Man is very, very present for you and home price appreciation being the majority of returns is what we see over and over again, or rental property investors that buy and hold, no matter how you look at it, it's always this idea of like, if you're in a growth market, then you're maximizing for the biggest piece of the pie. And you've done that really well by being here in Jacksonville.

Jag: 45:24

Yeah, this is great. This is amazing.

Pablo Gonzalez: 45:27

Well, a little reward for being brave and coming on the show, Jack. That's how we, uh, that's how we reward people out here. Jack, I really want to thank you for doing this. I know that you had to move a couple of, uh, appointments to, to make this happen, but you know, since we spoke at the summit, I thought that you'd be a really, really interesting story. And yeah, you totally showed up and gave a bunch of great value around the 1031 decision, investing from really, really far away decision, the, the PhD that you got in dealing with different providers. I thought it was super, super valuable for our community. Thanks for making time.

Jag: 45:58

Thank you so much. Thank you for having me. And it was so nice to meet all the summitees. I really miss them. I miss you guys. And thank you for this.

Pablo Gonzalez: 46:07

Right. Agreed. Agreed. I miss, I wish we could do the summit every month, but I think we would drive, a lot of people crazy if we were to do that, but that was a really, really good time. I'm glad you came. I'm hoping that we figure out a way to bring your daughter next time and get her involved as, as you said, do you want to get the, um, Jack throw it out there. You said that you want to get the second generation involved, right? Like you got some ideas around like, you know, Things that we can do to get them involved.

Jag: 46:30

Yeah, I'd love to see if there was a way we could get like the teens involved in a way that they really understand a little bit more of. What investment can make happen in your life as well as giving back so sort of mixing it up with a little bit of volunteering so they give back to maybe, maybe a two week internship is what I'm thinking at JWB, a group of 10 teens from current investors, right? Who can come in and do something with you guys and, work in the community. Plus learn. I don't know.

Pablo Gonzalez: 47:04

I have no power to volunteer anything that JWB does, but I think it's a great idea. And I love putting it on camera. So we're peer pressuring everybody to make it happen. Um,

Jag: 47:13

sorry, JWB university.

Pablo Gonzalez: 47:15

Um, I know that you're in that WhatsApp chat, everybody, if anybody has really good ideas of getting the next generation involved that we can like make actionable, put it into the WhatsApp chat that we are all that we're all in. I would love to discuss that stuff. I think it's a really great idea. I really want to thank the community. They came out in droves for you today, Jack. We had 60 plus people on the call listening to your story, gaining from your PhD third hand. and, uh, in my opinion. And, and a quick reminder, this is, we are focusing on these Tuesday shows. There will not be a Thursday show we're doing Tuesdays only from now on, because we're focusing on on demand content, with our Hollywood producer, Justin Sena, who's in the house over here. so if you have ideas for better content, that's easier for you to consume that ideas that you want us to explain. For example, this question from, from Jag, we'll make a, a bite sized snackable. size piece of content for it so that it's easier for you guys to understand it, share it, tell people that you love, get them involved and get more, not your average folks involved here. So never take it for granted that you take an hour here on Tuesdays. Really, really appreciate it. And, we'll see you next Tuesday. Jack, any piece of advice for anybody logging off from here until then?

Jag: 48:28

No, just read and consume vociferously, learn as much as you can and don't miss the JWB shows. For learning. Brilliant. Agreed

Pablo Gonzalez: 48:37

it. Agreed everything you said. And don't be average. See you all next week. And don't be

Jag: 48:41

average.