LILIAN:

Unless you know what you’re doing, you’re probably at risk of breaking the model. And breaking the model implies that you could be making the wrong decision that ends up costing you tens of hundreds of thousands of dollars simply because you didn’t know which part of the financial model went wrong. 

CORWYN:

Good morning, good morning guys and great morning. Welcome to another fabulous episode of Exit Strategies Radio Show. Hey, I’m your host, Corwyn J Melette, broker and owner of Exit Realty Low Country Group in beautiful North Charleston, South Carolina. Hey, if this is your first time, I mean your very first time listening to this show, you sir or ma’am are in for a treat because our mission is very simple. That is to empower our community through financial literacy and real estate education. Guys, with legacy building, that is what we do. Always got to give a quick shout out to those who listen to us faithfully here locally in the Charleston region. Hey, elder and pastor. I start with pastor, Vanderbilt, I haven’t seen you, that dude will jack me up and I’ll put that senior on that guy’s name. My mama out there in Monkeys Corner and everyone back towards Hollywood with no good, we appreciate you. And those who listen to us up in the PD region, up in Marin and Mullins, look at y’all my hometown, y’all my homeboys, my homegirls, and we love you and we thank y’all for tuning in. So I’m super excited about this conversation and this show today. We always like to talk about growth and all that stuff and our show is really about mindset. We talk and focus on legacy and I want to encourage you all to make sure that you don’t allow this conversation or these conversations to go too far above you. And what I mean by that, you want them to go a little bit above you because you want to have something to aspire to, all right? But we don’t want to let them go too far where you feel they’re unattainable or unreachable. We want to make sure we focus on giving you micro bites, if you will, and giving you the connection so you can essentially climb the ladder until you get there. So guys, today is one of those conversations that we’re having. I’m super stoked about this guest that we have on the show with us today. Now I’m going to start by giving you this to kind of lead you in guys. So scaling from residential to commercial real estate isn’t just about participating or taking on bigger deals. It’s about making smarter decisions backed by solid numbers with hands-on experience managing financial models for an 80 million, that’s a big number, $80 million development pipeline building tools that simplify complex analysis for everyday investors. Our guest today, Lillian Chen, reveals how data systems and confidence driven models can help real estate professionals. And we talk real estate professionals, guys, we’re talking about you that aspire to. Now she’s the founder of Proptimal. I’m excited to get into that today, building the 10X real estate analyst platform that makes institutional knowledge, tools, and resources accessible, guys, to us here that are everyday investors, if you will. So she has advised on more than 10 billion in commercial real estate transacts across 200 plus firms from first-time investors to institutions with billions under management and has taught hundreds of how net worth individuals, that’s where we’re going, the fundamentals of real estate investing. Outside of work, she travels to over 40 countries and writes on how real estate technology, guys, and culture shape the way we live. So if y’all would, y’all give a slow clap, but let’s do it fast for Ms. Lillian Chen. Lillian, how are you doing today? 

LILIAN:

I’m doing so well. Thank you for having me on. I’m excited to share all the knowledge I have. 

CORWYN:

Well, I appreciate that. So one, thank you for taking time out of your business schedule to be on with us. So look, I’ve told them people what you do. I want you to give it to them in your own words. What is it you do? How do you make an impact? How do you make that big splash is what I’m going to ask you. 

LILIAN:

Absolutely. So my name is Lillian Chen and I’m the founder of Proctimal. Our mission here is to bring all the tools, knowledge, and resources that large real estate companies have to everyday developers like most of yourself by lowering the barriers so that you can also run complicated financial analysis and actually understand the numbers that are driving your deal, even if you don’t have any financial modeling experience or a fancy finance degree. 

CORWYN:

So what I just heard you say is that you take the complicated and make it more simple. So Proctimal is a fairly new company. Obviously, what you’ve been doing has been going on forever, but short version is it’s a relatively new company. Am I right? Am I wrong? 

LILIAN:

Yeah, absolutely. So a little bit history about ourselves. I started my career as a financial analyst working for a institutional company. And then what happened was when I first went off on my own and started consulting people, I realized that a lot of these small commercial real estate developers don’t really have a strong background in finance. And while they’re really good at making deals, they don’t have the time, nor is it worth their time to sit there and understand how every single cell of the Excel works, how to structure their formulas, and just sit there and do financial modeling. So I tried to scale my agency, and I realized it’s actually really hard to train somebody who is really good at financial modeling. So if I’m having trouble doing this, and I do this full time, how is the real estate firm going to hire, manage, and train their own financial analysts? So that being a roadblock, the obvious solution for it now is to build a software that allows anyone to build customized financial models, even without writing a single Excel formula. 

CORWYN:

So you’re touching on something. I literally just had this conversation fairly recently about understanding how to put a deal together as a developer. One of the things that I was having this conversation with a fellow developer, and the conversation was how to train people to recognize an opportunity. People bring stuff, but sometimes they just don’t know the other components and how to put this together. What I’m hearing is that your platform, Proptimal, what you guys do is you guys help people to basically pull that together, the information, aggregate the data, analyze it, and come up with, okay, this is what this is for this particular project. This is what this is, and does this work? Does that sound about right? 

LILIAN:

Yeah. So that hits on about the first part that we do. For the past five years, we’ve been working as a fractional real estate service agency. You can come, you can contract us, and we’re going to help you walk through your acquisition from beginning to end. We’re going to flag all the potential issues that’s associated with the market, with their business plan, or with that specific building. Now, with that, it still doesn’t allow us to scale and serve as many people as we wanted while keeping the cost affordable to the majority of people. Now, over the past year or so, we’ve developed this software so that people can both use it as an internal tool where they track all the numbers of their deal, but also as an educational tool as they continue to play with the software and understand, oh, when I change this lever, then this is going to impact my deal this way, or if I reduce my load, it’s going to impact my deal that way. And by playing with the financial model themselves without breaking it, people can have a better understanding on the financial literacy of the deal. Like you, Corwin, I know you care a lot about making sure people are educated. 

CORWYN:

So, for lack of a better way to put it, you guys allow people to manipulate the spreadsheet but not lose it. So, for example, where I’m going with that, in theory, as I envision it, because you put a deal together basically on a spreadsheet, you know, boom, boom, got a spreadsheet, boom, I plug this in. If this spits out and says this works, then that’s something that we should be doing or something we can do, let’s go. But what you guys offer is the ability to, okay, well, look, well, let’s play around with this, let’s move this, let’s move this, but not lose essentially the underlying formula to make sure that they can get back to where they were without having messed up. Because I’m literally thinking about, like you said, the lever, that’s real cool to me. 

LILIAN:

Yeah, absolutely. The thing is that everyone thinks they can just go online, get a template, and they can just use that template over and over and over. But the reality is, with commercial real estate especially, there’s always nuances that’s associated with every deal. So, whenever there’s a nuance, you need to build an additional component into the financial model. And unless you know what you’re doing, you’re probably at risk of breaking the model. And breaking the model implies that you could be making the wrong decision that ends up costing you tens of hundreds of thousands of dollars, simply because you didn’t know which part of the financial model went wrong. 

CORWYN:

That’s awesome. So, let’s talk about common mistakes. So, I’m going to hit you with probably a couple of things because modeling is important, it’s very important. So, let’s talk about and kind of bring that back to the common mistakes that people make, both in their modeling, but also when we get past that. Let’s say we built the model and, okay, look, this thing says that this is the business that we should be doing, then we should make this investment. Now, we got to take the next step and walk this to a lender. So, let’s talk about that as you guys know it, as you guys experience, and from modeling, but also walking it over to the lender as far as their underwriting process. Let’s take a short break. 

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LILIAN:

Yeah, absolutely. I think the biggest mistake that people make is that they don’t understand that financial modeling itself is both of an art and a science. To take it even one step further, I would go as far as to say, the better the deal, the more of an art it is, and the worse the deal, the more of a science it is. Let me explain. If you have a fantastic deal, a lot of times it’s because you’re able to buy a property at way below market price. No matter what you do, the deal has already been made. You have already been set up for success that this is going to go well because even if you just buy it at below market and sell it the next day, you’re probably going to make money. In that case, what you want to do with the financial modeling is that you don’t want to underwrite it to what exact predictions you think are going to happen. In fact, you’re going to under-promise and over-deliver by making your deal look worse on paper because in reality, your deal is so good. But on the opposite, if your deal isn’t that great and it’s barely pencil-y, then what you really want to do is you want to push as far as possible to try to predict the most accurate outcome that you’re going to have so you can afford to bid more without losing the deal. 

CORWYN:

If it’s too pretty, we’re going to throw some dirt on it. 

LILIAN:

Exactly. 

CORWYN:

We’re going to scuff it up. We don’t want to send it in there too shiny. And if it’s a little dusty, we’re going to try to wipe it down a little bit, wash it off a little bit before we send it in. That’s what I heard. I love that. 

LILIAN:

That’s a fantastic analogy. 

CORWYN:

Yeah. So feel free to use it. This is your arena. Lillian, I say to people, things that I do, I say, that’s my jam. That’s what I do when the music play. That’s what I’m doing. Some people got a two-step, some people might walk, some people might do an electric slide or whatever other dance it is that you may do when the music comes on. That’s your jam. For you, this is your jam. When all things are said and done, this is what you do. So what major lessons have you learned as you’ve been in this field and in this arena and helping and serving people? Like, what is the, like, okay, look, I realize this now that I didn’t realize maybe day one. And I know that’s a very large and maybe somewhat daunting question. 

LILIAN:

That is a very large and very broad question. I can talk about this in a couple of ways. So we can talk about this more in terms of what I learned from advising a lot of people with their deals, or we can talk about bigger lessons as well on the soft skills and the life lessons I’ve learned. Which one do you think we should start with?

CORWYN:

Well, let’s start with the former. 

LILIAN:

Okay. So I think one of the things that I’ve realized is that residential and commercial real estate are very different. And a lot of people who are new to commercial real estate have the wrong mindset and they need to unlearn everything that they have learned in order to be successful in commercial real estate. So to give you an example, in commercial real estate, there’s two ways to make money. Either you make money through the passive income that you’re getting every single month from your tenants, or you’re buying low and you’re selling high, right? So one is from the operating cashflow and one is from the capital cashflow. So what a lot of people don’t understand is that they come from a business background. So let’s say you’re an entrepreneur, you’re a lawyer, you’re a doctor, right? You’re used to looking at something and thinking this doesn’t exist yet, but I’m going to create so much value that I’m going to make this widely successful based on how much value I can create, right? So most entrepreneurs think that way. They are very used to seeing the upside as unlimited, but in real estate, that’s not the case. Okay. So if you think about it, the cashflow is pretty much going to be dictated by market. You can only charge so much rent. You can only reduce your operating expenses by so much, right? So on the cashflow side, there is not that much that we can do. Although you can argue if you’re a better operator, you can operate the building a little bit more efficiently, but that’s not where you make most of your money. Now on the capital gain side, you have the sales price and you have the buy side. The sales price is also going to be determined by the market. So you can’t really control what the next person’s going to pay for it or what the competitive properties in your area have sold for. So that gives us only one key lever to make the real estate a fantastic deal or a terrible deal. And that’s the price that you pay. So many entrepreneurs come into real estate and they don’t understand that by the time that you paid for the property, you’ve already set it up for success or failure. And it’s not like what we’ve seen on HGTV, where they just buy for an arbitrary price and they just try to make as much value out of it. That doesn’t work in commercial real estate. 

CORWYN:

That’s very true. So systems, Proptimal is like, hey, you need to plug this. When you set your office up, your company up, whatever, Proptimal to take this on to look at commercial real estate, investing, et cetera, development, that’s probably the first thing or one of the first things you should plug in. I guess you can turn the lights on first, but that’s probably one of the first things that you should plug in to have a system to analyze. So let’s talk about it. You guys have built a platform and a system and still developing it to essentially take on all these tasks. So let’s talk about it. First of all, what does it do? And then in turn, let’s talk about the key features, like what’s most important to commercial investors and how Proptimal meets that need for them. 

LILIAN:

Yeah, absolutely. So essentially where we’re trying to get to is we want you to be able to work on it for the beginning of the deal all the way to the end of the deal and have everything in one place. Now I’ve developed a software to manage a $80 million construction pipeline before. And through this process, it actually taught me a few things, which is most commercial real estate companies don’t need a super fancy software that charges you five, $10,000 a year, and then they don’t talk to each other, right? So that’s what a lot of the existing solutions are. They’re very expensive. They only do one thing. And that one thing, they go way into detail, and you don’t need all that. So most real estate companies, from what I’ve seen, is they just need 10% of every software, but they need the softwares to actually talk to each other, which is the part that has not really been solved in existing landscape because all the software mostly just do one thing. So Proptimal is trying to change that and saying, okay, well, instead of you paying for five different softwares that don’t talk to each other, why don’t we just provide you with one software and give you 20% of every feature so you don’t have to hop on and off software throughout your entire development process. And you can keep all your data, all your files, all your financial analysis, and all your tasks in one place. 

CORWYN:

That is huge. That’s amazing, because you sometimes forget where you put stuff. Like I got this over here, and I was doing this. Okay, well, did I finish this, or is this? Oh, God, look here. Yeah. So that’s huge. You’ve been in this arena and space, Lily, again, for quite some time. And obviously, what I’m understanding is you took the pinch and pain points that you saw throughout your career and said, okay, look, we’re going to create a solution for that to make sure that it’s all seamless, intertwines, weaves in well, and essentially establishes the fabric of an amazing commercial venture. It becomes, again, the initial stitching, if you will, by going through this. That’s huge. What’s your expectation for investors who are utilizing this system? What do you expect to happen with them, their business? How do you expect for this to help them reach their goals? 

LILIAN:

Well, that’s a good question. I’ve learned one thing that if I don’t want to be in a permanent state of depression, I lower my expectations. Because unhappiness comes from the gap between your expectation and reality. So what I do is I just kind of, I go with the reality, and then I meet people where they are. Now, there is the vision, vision is different, because vision is, here’s what I want to bring to the world. And I hope that solves problems for people. And as people tell me what they want, as customers tell me new features that they want me to build new problems that they need to solve, I am here to serve them. So it’s not about what I want. It’s about what my customers want. Now, the vision of what I’ve seen what my customers want is, they’re not exactly able to verbalize it yet. But I think what they really want is they want control. When you’re managing a real estate development process, and I’m sure you know this very well, there’s dozens of people, dozens of vendors, hundreds of invoices and receipts that you need to manage. So when you hire subcontractors, like financial analysts, like a bookkeeper, you’re outsourcing a key part of your business, which is the numbers to that external resource. Now, if your bookkeeper disappears, the next day, you’re left in the middle of I don’t know what I’m going to do now. I mean, they have all the knowledge of how your deal works financially, how much you’ve spent, how much you’re going to make, what are the dependencies and whatnot. So what I’m really trying to provide people is to give them tools so they can have control over their deal from the beginning to the end. 

CORWYN:

That’s huge. We’re getting towards the end of the show. So I want to take this as an opportunity. One, I’ve already jumped on the website, but I want you to tell people how to find you, how to find Proptimal, how to connect with you all. So if you don’t mind, let’s get that information out. 

LILIAN:

Yeah, absolutely. So the best way to find me is currently on LinkedIn. I post regularly. And if you send me a message, I usually try to respond to all messages. So it’s Lillian spelled with one L and then C-H-E-N is my last name. Alternatively, you can also visit our website at Proptimal, so proptimal.com. And you can also send me an email at lillian@proptimal.com. 

CORWYN:

Awesome. Awesome. Thank you. So you manage a large portfolio and I’ll reference it or refer to it as a large portfolio. Some people in certain spaces say that’s not, may say different. I always say that about my company. People say to me within the industry that you have a large company. I’m like, I don’t think so. I feel like I have a smaller one, but that’s what they say. And I get it. I understand where this has come from. The short version is you manage a very, very nice size portfolio and development pipeline. What in that process of assisting and analyzing, like what has been like, I’m going to ask two questions here and it’s kind of from both ends of the spectrum. One is what is the key thing that you have delivered in that process that has been instrumental in success? And then what is the key thing that maybe your client overlooked that may have given them an issue? 

LILIAN:

That’s a very interesting question. I think it’s always different for me to say I manage this portfolio and this is my company versus I manage this portfolio on behalf of someone else for a period of time. So I think immediately that sets me to be somebody else who can be unbiased and look at it from a non-emotional state because then I’m just here to solve a problem. My life is not on the line. So I think sometimes the emotion gets in the way of people trying to solve problems because they panic and they try to solve the most urgent questions. They’re not asking the fundamental important questions. So that’s where I have an I think a big part of what contributed to my success in helping these companies is that I come up with systems and I try to solve the root of the problem instead of the symptom of the problem. So to give you an example, the symptom of the problem could be we have way too many email communications. Nobody is streamlining these emails and we have too many documents that we’re just not saving. That would be a symptom of the problem. The root of the problem could just be, well, everyone who wants anything saved, just set up this new email account and just forward it to this email account. So when somebody could just go to that email account and then save everything, there’s no more things getting lost. So that’s the way that I like to think is every problem that I tackle, I try to peel it back one layer at a time until I get to the absolute root cause to make sure that there’s nothing left. And I try to solve it at the root. All the symptom goes away. 

CORWYN:

So let me pose this and we kind of talk, don’t hit, touch this. I want to say hit on, we touched on it throughout because you’ve worked with a tremendous amount of people. One, you’ve serviced, you’ve consulted, you’ve learned from people, you consulted, and you work with other commercial real estate people entities. Now, my imagination says that you have gleaned and learned a lot that has really reshaped, if you will, your perspective. Give us some of that, like what have you been exposed to or otherwise have learned in working with other professionals that’s really kind of redefine or reshape your perspective from when you first started? 

LILIAN:

That’s a really good question as well. I would say if you want me to identify the ultimate trend of what makes somebody successful in real estate versus somebody who is not going to make it, is that the most successful real estate operators are patient and they’re playing this for the long run. They’re doing this for the rest of their careers. They’re committed to the path, to the craft, their business strategy. They’re not changing trends. They’re not taking excessive risk. They’re making sure that they’re properly leveraged and they’re not taking on deals that are extremely risky just because they want or need to do more deal. So those people who treat real estate like a marathon tend to get good because guess what? They stay in the game for long enough to get good. The people who have not tend to be less experienced. So there could be a short period of time where the economy is doing really well and they’ve had a little bit of success and they think that this is going to last forever. They take on excessive risk. They love winning. They become arrogant at times and they get killed by their own hubris and they get taken out of the game. So treat it as a sprint and chase trends or treat it as a marathon and develop your unique advantage over a period of time. That is what is going to separate people from being average to being exceptional.

CORWYN:

Wow. Look here, that’s mic drop worthy right there. Figure out how you’re going to run this race. Either you’re going to run it short or you’re going to run it long. But if you run it short, you probably going to have more problems than you do if you focus on running it long. That right there, marathon versus 100 meter. That’s what I just heard. So mic drop for real right there, Lillian, for real. So I want to thank you for being on the show with us today. You’ve been amazing and you dropped some jewels and nuggets. So again, Lillian, thank you so much for taking time out of your schedule to be on with us today. 

LILIAN:

Thank you so much for having me. It’s been such a pleasure and I hope that your audience finds this helpful. 

CORWYN:

Well, look, our audience look here as y’all listening. Yeah, I’m talking about you, but I’m talking to you. Y’all need to take this information and more importantly, you need to plug it in. So I’m going to give you a couple of takeaways. First of all, I’m going to give you what I would say is our action item, guys. Remember that scaling into commercial real estate does not require a massive team, just requires clarity, smart modeling, which you have access to that now, and the confidence to evaluate bigger opportunities. And Lillian, from what you’ve talked about, we always, again, kind of bring this around and integrate this, interweave this, if you will, with legacy, because what we’re looking at and talking about today is trying to get to our tomorrows for those who are behind us. So legacy is not built by accident, it’s built through informed decisions, solid systems, and the courage to take the next step into bigger deals. So again, Lillian, one more time, I want to thank you for being part of the Exit Strategy Radio Show Family, and I appreciate you being on with us today. 

LILIAN:

Thank you so much again. It’s been such a pleasure and wishing all the best to everyone who’s listening to this and wishing you all massive success. 

CORWYN:

Awesome, awesome. So for our listeners, look, y’all know, y’all know, but y’all gonna get it anyhow. Y’all know how I feel, you know what I say, you’ve always been a tool, those things together. And I give it to you this one, which is to tell you that I love you, I love you, and we want to see you guys out there in those streets. 

CORWYN:

Short-term rentals are the rave, the crave, and all that other stuff right now is kind of the peanut butter and the jam. But it aren’t just side hustles anymore. They’re serious wealth-building tools. But a difference between quote-unquote another Airbnb and a lasting legacy lies in the data. 

Good morning, good morning, and great morning to you guys. Welcome to another fabulous episode of Exit Strategies Radio Show. Hey, I am your host, Corwyn J. Melette, broker and owner of Exit Realty Low Country Group in beautiful North Charleston, South Carolina. Hey, if this is your first time listening to this show, you sir or ma’am are in for a treat because our mission here is very simple. That is to empower our community through financial literacy and real estate education, guys, with legacy building. Y’all know what we do. That’s how we do it. And we’re going to keep getting on until we can’t get it on no more. So look, I’m super excited about this conversation today. Our mission, mantra, theme, title, whatever it is you want to put on that thing, our text, and y’all there to follow, y’all know what I’m talking about. Our text for today is building financial freedom and legacy through short-term rentals. So short- term rentals, guys, we know are the rave, the crave, and all that other stuff right now was the peanut butter and the jam. But they aren’t just side hustles anymore. They’re serious wealth building tools. But a difference between, quote unquote, another Airbnb and a lasting legacy lies in the data. So our guest today, Mr. Kenny Bedwell, is going to break down how to find the right markets, structure your deals, and use analytics to build a portfolio that supports your family for generations yet to come. Now, Kenny’s a real estate investor, so he speaks my language, and an entrepreneur specializing in high cash flow short-term rentals. So I’m super excited to have this conversation. He’s helped over 300 clients identify and acquire properties that deliver consistent returns. He’s a former data analyst at Citibank, so that means he’s been working with money for a long time. So he brings an analytical and results-driven approach to real estate investing. That’s huge. But he’s also the host of Cash Flow Positive, a top-ranked podcast that has reached number 30 on iTunes Entrepreneur category. That’s huge as well. Major shout out there. And he’s passionate about helping other professionals replace, quote unquote, their nine-to-five income. So I need y’all to dial in here, all right, and to achieve financial freedom through real estate. So if y’all would, please, I want y’all to give them the slow clap, but I want y’all to do it fast. Look here, y’all, please welcome Mr. Kenny Bedwell to Exit Strategies Radio Show. Kenny, how are you doing today? 

KENNY:

Good, good, Corwyn. I love that introduction. Thank you. I feel amped up. I’m ready to go, man. So giving out all secrets today. I love it. So let’s do it, man. 

CORWYN:

So look, I’ve given mine, right? So look here, I want you to tell them your version of who you are and what you do.

KENNY:

Yeah, for sure. So my name is Kenny Bedwell. My company is called SDR Insights. But before I got involved with, had my own company and doing my own thing, I started investing about eight years ago in real estate. Now, at that time, I was living in Buffalo, New York, and I bought a duplex. I was living in one half with my wife and the other half we were renting out. This is in 2017. And we’re like, hey, you know what? We’ve used Airbnb before. Let’s try that. Let’s see how it goes. If it doesn’t work out, we’ll just long-term rent this thing and slowly build both that way. And the Airbnb model obviously worked at that time. You know, you could literally throw up any property, rent it out and make money at that time. And that’s exactly what we did. We started buying houses in Buffalo is really affordable. I bought that duplex for $145,000 in 2017. Unfortunately, it’s not that today, but it’s more. But even then, it’s still relatively affordable. And we started doing that in and around Buffalo and growing a portfolio, but I ran into a problem. So I realized that over time, I started seeing this in other bigger cities where they were starting to ban or regulate short-term rentals. And I knew I needed to look outside of my current market, but I had limited information that was available to me. Meaning like there was not really like, if you wanted to know other places to invest in, you basically had to go online and just Google it, go on bigger pockets, go on social media and just ask people, where should I invest? Where are you investing? And just learn markets that way. And at the time I was working at Citibank and doing data analytics in the equities market. And I really, I took that the skills and I said, Hey, what if I took average revenue of properties in all these different markets? And I looked at the housing prices that fit my budget. And I put the two together to get a what I call a gross ROI. So revenue and purchase price, I put them together and I compared based on their percentages. So like a 20% return, 21, 19, whatever I compared and sorted the top markets. And I did that. I had all these spreadsheets. I compiled them together and I found a list of the best markets for me. And I bought a property in a vacation market, about four hours away from me on a lake. I bought it for $350,000. That property nets me each year, $80,000. That’s net profit. That’s not gross. That’s the money after all of my expenses, mortgage and utilities and insurance and whatever, $80,000 a year. So that alone helped me start to scale and grow and get other properties. And so now I own short-term rentals and those are in New York, North Carolina. That’s also where I live too in Raleigh, Kentucky, Texas, Arizona. And I have a hotel, a small 14 unit hotel in New Orleans downtown. So yeah. 

CORWYN:

Oh, look here, man. Look here. You’re giving me chills. Give me chills, my man. I love it. I love it. I love it. Let me kind of, obviously you aggregate all this data, right? And I mean, first of all, you got to have an eye for it. If you don’t have an eye for it, you’ve got to have somebody who does. So I know that’s part of what you guys do. And we’re going to kind of circle back around on that, but how do you spot these opportunities? I know you, you’re asking analytics and all that stuff, but how do you identify these opportunities? Are you pulling data from listing services? Are you just kind of keying in and honing in when these certain markets and certain areas, what does that look like for you and your team? 

KENNY:

Yeah. So for me and my team, I guess there’s, there’s the heavy analytical way, which yes, we are pulling listing data and we’re doing all this like technical stuff behind the scenes. But what I teach people to do, I have found a way to do it without having to basically like rely on different cert like technology to help you. What I mean by that is I teach people that in order to find profitable markets, you need to do five key things. So number one, you need to understand what your budget is, your goals, what you’re trying to achieve. So basically when you see a deal, you know it’s a deal. So being able to recognize, start from the beginning, like I have X amount of cash on hand to invest. I know what I can afford to buy. Then you need to go in number step number two is the markets you’re interested in. They need to be markets that are what I call drivable within one to three hour max of a major city. They need to have tourist attractions and other reasons why people are traveling there. And then step number three, we need to see revenue. So this is where I would use a data tool or data provider and there’s free tools out there and I can go through those as well. And there’s paid ones. There’s air DNA. There’s STR insights is free. There’s data Rabu, there’s price labs. They’ll tell you the revenue of these properties. So basically if I know I can afford a three bedroom in this market that I’m interested in, how much money are three bedrooms making? And then I can take that revenue, that average revenue and compare it to the prices of homes there to know if that market is quote unquote investable, meaning if I’m going to get a decent return. So if I find three bedrooms in this market or $500,000 and they’re grossing $80,000, that would be a 15% return and that’s decent. Or if you have higher standards and it’s not decent, I don’t know, but start there. And then the fourth step is I look at regulation, which you can go online. You can start. I actually, I use chat GPT. I go, Hey, what’s the regulation in this market? And then it spits it out then. And this is important that this is a step that everybody misses because they think chat GPT and they’re like, that’s cool. Pick up the phone and call. I always call the municipality. And so I checked the regulation and make sure I can legally STR there. And then finally I check resource or their cleaners or their like short-term rental resources to handle the operational side of not the management side. I don’t do property management myself managed, but are there my cleaners? Are there my handyman? If I had something that happened to that property, could I get somebody over there? How hard is it to find those resources? And if you follow those five steps, I mean, you can find some really cool investable markets near you. So. 

CORWYN:

Let’s take a short break. 

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CORWYN:

That is wow. Okay. So you touched on a number of things in there. So I want to start with kind of the last thing that you touched on, which is the regulation component. Because oftentimes people just jump, you know, with my years of working with investors and things like that, they sometimes say, Oh, I just do this. And well, no, you got to verify because a lot of municipalities are imposing regulations or otherwise they are restricting at times, you know, what you can do with STRs. So if you don’t mind kind of throw that out, like what is maybe the most restrictive that you’ve seen? And obviously I guess the least restrictive was be a municipality or a particular area where there is no regulations currently, whatever reason. So what’s kind of like the most restrictive that you’ve seen? 

KENNY:

Well, Charleston’s pretty restrictive. That is true. Yeah. And man, when I actually funny story, is it, what’s the name of that area? Is it Mount Juliet? It’s one of the suburbs. Is that the name of the area? 

CORWYN:

Mount Pleasant. Yes. 

KENNY:

So in 2014, I lived in Somerville where you’re at and I was doing door-to-door sales just for the summer while I was in college selling pest control. I happened to be knocking doors and Mount Pleasant is really strict, like very strict. And I was in a neighborhood that was in whatever town was next to Mount Pleasant, but little did I know that the other half of the neighborhood was in the city limits of Mount Pleasant, but there was, it was the same neighborhood. And so I’m literally at the boundaries and I knock on this guy’s door and he’s a cop and he just gets super mad at me. And I’m like, Hey man, I’m just a college kid, like trying to earn income. You know, like I’m just like pest control. Like you can just say no and I can move on. And anyway, he had his like cop buddy come and they literally like had me sit in the cop car and like decide if I should, I’m like, guys, this is ridiculous, but never go back. I will never go back to Mount Pleasant again. So anyway, but yeah, so number one, this ties into how I look for good markets, investable markets. Number one, I always think about what is the community sentiment towards short-term rentals. I take that example with Mount Pleasant, like obviously the community sentiment there is very negative towards people knocking on doors, peddling or whatever you want to call it. And so like I’m kind of setting myself up for failure there by just going into a market that’s, you know, I’m going against the current. So I love to go after vacation markets where people love vacation too. Now that you could argue urban markets are vacation markets and that could be true, but they also tend to have a lot of regulation as well. And so I don’t look for no regulation. I look for areas that are just looking for, that have standards that are looking to protect their residents, but also they welcome short-term rentals because it provides value to the economy. And so the number one thing I, that’s really the number one thing I look for with these markets is, Hey, how do people feel about short-term rentals in the community? Because am I going to be fighting an uphill battle? Like my goal isn’t to just, I mean, yeah, we all want to get rich quick, but it real estate is a build wealth. It’s not a get rich quick. And so this is a long-term play. This isn’t a buy this year and then get out the next year. And so if that’s the case, like I really need to be, I really need to understand the community and their sentiment towards short-term rentals. And so that’s like, number one, I think of New Orleans, their regulations are, they, I would say they hate short-term rentals, but they, it feels like that. Like they’re the rules. There’s a lot of hoops, there’s limits on occupancy and all these different things for short-term rentals. But for hotels, it’s a lot easier. You know, they welcome hotels. That might be because there’s a really strong hotel lobby there. That’s paying them money to do that. But the reality is like they welcome hotels. And so I literally bought a hotel there because they are kicking and shutting down short-term rentals in that market. That’s the competition for hotels or short-term rentals. So like, I’m not going against the current by trying to open a short-term rental there. I’m going with the current. I have a joke I tell people all the time is like, we’ve all heard this before. If you can’t beat them, join them unless it’s illegal. Like with politicians, it boils all of our blood. When they’re sitting here like, oh, they have $150,000 a year salary and they’re multi-multi-millionaires once they leave politics. And I saw an ad a few years ago, it’s a auto trader thing. And it said, if you can’t beat them, join them. I was like, you know what? That’s right. I subscribed to the app and I started following trades. I know we’re not talking about trade, we’re talking about real estate, but it’s just a fun story. Trades of the politicians and that portfolio that I have, that money and those trades I’ve made in the last three years has a 48% return on investment compared to my like normal 401k. That’s like barely 10%. Like you can’t beat them, join them. And it’s the same thing with the regulation, right? Like don’t fight in those areas. Like our natural tendency is to only want to invest in places we personally know. And so we need to use data. There’s so many places that people vacation to. And so if you’re wanting to get to the short-term rental space, look for those areas that short-term rentals are common, that they’re welcomed, and it just makes life so much easier for you in the long run.

CORWYN:

Makes perfect sense. So you hit on something in there, Kenny, I want to pull out. True investors take the emotion out of it, right? So oftentimes that’s something that we struggle with as we’re getting into. Sometimes even when we’re into it for a while, we have all these feelings and all this other stuff that we want to play in or add or incorporate into our decision-making. Why is it key to remove the emotion as you’re considering building a portfolio, if you will, of short-term rentals? 

KENNY:

Well, not to get like too deep in, you know, in the feelings and everything, but it ultimately comes down to your why. Why are you doing this? If you’re doing this to have like, so I’m going to pick on short-term rentals. So I’m going to say focus on short-term rentals. So if you’re doing this to own a property in a vacation market that you like to vacation to, and you’re going to use that property vacation and you just want it to pay for itself by renting it out on Airbnb, then that’s your why. You know, go buy in that vacation market you want to vacation to. But if your why is to make money, whether that’s for to quit the rat race, leave your nine to five, build legacy wealth for your kids or whatever it is, basically make money, right? If that’s your why, then you really have to try your hardest. It’s not, it’s difficult, but try your hardest to set the emotion aside and rely on the numbers. I see too many investors today, especially when they’re offering on properties, they feel like they got a, it’s ego starts to creep in when they’re making offers and trying to negotiate with sellers. And they’re trying to get the best deal possible and win the deal and get one up on the next guy. And it’s just like, look, let’s cut all the crap. If the seller’s playing games, look at the numbers, do the numbers make sense as is. And if they do great, if they don’t walk away and move on and go on to something else, it’s all about the numbers. If you’re trying to make money, go back to your why stay rooted in your why. And that’s what will help you like get through and make those logical decisions, not the emotional decisions. 

CORWYN:

That’s about how to save some money, man. I mean, the reality is that, you know, as you’re investing, the goal is the creation or end or accumulation and growth of wealth. We talked a lot about legacy on this show about generations to come, what we do now and how we can set them up for better success and leave them in a better situation. So Kenny, one of your things is tax saving structures, if that makes any sense as to how to essentially save money by investing. So let’s go there. 

KENNY:

So the nice part about short-term rentals or short-term rentals are considered active income. So meaning it’s not passive like long-term rentals because you have to actively manage your property. There’s guest communications and revenue management and software and all these like things that make up a short-term like managing a short-term rental. And then unless you hand that responsibility over to someone else, like a property manager, you are managing those things. They’re actually pretty easy. I self-manage. I don’t hand over 20, it’s 20% pretty much to pay someone to do that for you. So for me, I self-manage using technology and these things. But the tax benefits side, now when I am doing or my CPA is doing my taxes, I get a lot more active benefits. I can start writing off certain things. I can take advantage or I can take advantage of depreciation and something called accelerated depreciation. That was actually a law that was just recently passed where you can actually accelerate the depreciation of an asset of a short-term rental all the way up into the first five years. I mean, so you think about it, a normal property, a long-term rental is I think 27 and a half years, short-term rentals are 39 years. So basically every single year you can depreciate things in your property like the roof and the hot water tanks, but it’s split up, it’s divided by 39 years. So it’s like a very minimal tax savings amount that you get every single year. It’s kind of the government’s incentivizing us to buy and purchase real estate rather than just renting. However, with short-term rentals with a new law that was passed to incentivize people to buy commercial properties and active income properties like short-term rentals, we can take all that depreciation and get it really into the first five years and majority of it bulked up in year one. So I can buy a, we’ll take a $500,000 home, I can buy a $500,000 home and save 20, 30, even $40,000 in taxes depending on where that property is off of my tax bill. That’s huge. I can go from the highest income bracket, tax bracket, all the way to like the fourth or the third or whatever, like go from 37% down to 22% by just buying the right property. And you can’t do that with passive income. You can only do that with active income and commercial properties and short-term rentals. And so there’s a whole lot of benefit on top of if when you’re starting a business and being able to deduct writing things off and expenses and things like that, there’s a lot of benefits from short-term rentals on the tax side as you start a business because it is an active business. We are entrepreneurs even though we’re owning real estate. 

CORWYN:

Kenny, look, man, for our listeners, guys, if you come back and listen, pull this episode, I need you to get to this point. I need you to go back about two, three minutes and catch it because Kenny, what you just said, man, I mean, you just gave me something I didn’t know. I didn’t realize, oh my gosh, I didn’t realize that short-term rentals, if you manage yourself, you take care of handle that is active, which then completely shifts the dynamic tax-wise. I mean, I’m familiar obviously from passive income, but I didn’t think about it that way. That is huge. Man, that’s huge. So basically, you can almost, I mean, acquire a short-term rental and you handle internally your own management of it. According to what your money look like, you might can zero out, right? 

KENNY:

Yeah, that’s the goal. That’s exactly the goal. So like for example, this year, so a couple of weeks ago, I sat down with my CPA, my tax strategist who understands these things and he’s like, all right, let’s look at your income. So I’m an entrepreneur, I’m self-employed, whatever, and I don’t pay taxes until the following year. And the reason why is because that money that I could pay taxes on, I use to invest in other things. And so I have to do apply strategy or I have a fat bill at the end of the year or at the beginning of the next year. And so my CPA is like, hey, you need to go buy property. You need to go buy short-term rentals and we’re going to depreciate it. So we depreciate the hotel, we depreciated the short-term rentals I bought this year and basically offset all of my income to where it looks like through depreciation, I’m not going to owe any taxes where I should probably owe about $50,000. 

CORWYN:

Man, look, that right there, man, we still got stuff to talk about, but that right there is kind of like the mic drop right there, man, for real. I mean, seriously, like as people are looking and thinking, people are afraid to purchase real estate because of what money, right? And then, okay, I don’t want to have this rental property because it might change my, I mean, I’ve heard all kinds of stuff, right? And the reality is now that this is huge, especially as it offsets other income. Let’s say that your short-term, you’re just setting it up, but you can depreciate this much, but you have income from other, that is huge. I mean, I got a client right now that I need to have this conversation with and make sure his people is doing this. 

KENNY:

Yeah. No, it’s a really, a lot of our clients, once they learn, they’re like, hey, we need to get property. And that’s exactly what my company does is we help people find properties so that they, a lot of them are doing this strategy. But the beautiful thing about real estate, whether it’s short-term rentals or long-term rentals or whatever midterm rentals is you really get four key benefits. You get cashflow, you get appreciation, you get tax savings, and then equity pay down. And all four of those things build what the true ROI is of that deal. And it depends on where you’re at. Some of us today, like a lot of people listening, they’re not going to be in the high tax bracket. They’re not going to need to take advantage of the tax savings. They really should be just focusing on deals that make them money. But at some point in time, you’re going to be flipping. You’re going to be like, wow, I’m making a lot of money and I’m happy to pay a lot of taxes. Crap. I need to get rid of the taxes and offset that. And so real estate is just a really cool wealth vehicle that you can take advantage of in multiple ways. And so it’s like understand where you’re at and then attack. And then as you scale, your position’s going to change and you can leverage the strategy that works best at that time. 

CORWYN:

So Kenny, look, I got to make sure I get your contact out and I’m going to be very transparent and say this right now. We have got to get you scheduled to come back. I mean, like seriously, there’s so much more that we can unpack in this conversation for people who are, one, people who are doing it, the stuff they don’t know, two, people that want to do it and is trying to figure out how to get started and everybody kind of in between on both sides of the spectrum, if that makes any sense. So how can people connect with you and connect with STR? 

KENNY:

Yeah, yeah. So I’m not like that cool and popular yet. And so I tell people, just reach out to me on social media at Kenny_Bedwell, B-E-D-W-E-L-L, on Instagram, Facebook. I think there’s a TikTok out there, but I don’t know. I’m not a TikTok person, but I created an account. But just message me. You can find me on Instagram, all the social media platforms. Just reach out to me. I message people back personally and talk to people all the time. So I’m happy to, if you have questions, if you’re interested, my company website is strinsights.com. You can check us out there. We have some really cool free resources that you can use. But at the end of the day, just reach out to me. I try to answer general questions or whatever when people reach out.

CORWYN:

Well, that’s awesome, man. That’s awesome. I mean, I’ve already looked, I’ve already pulled you up and followed you on Facebook, just FYI. So our listeners, look here, y’all better get on this train. Some of y’all can be an engine, but don’t mess around and be no caboose. Don’t come out here too late. You know what I’m saying? They don’t use cabooses on trains too much now. So I’m just saying, I’m going to tell our listeners, man, to get this thing here right, Kenny. Because I mean, I mean, this is a game changer. Like seriously, I’m saying it jokingly, but throughout the conversation, you have dropped so many jewels and nuggets that it’s straight up ridiculous. So I’m going to ask you, quote unquote, I do call it, I might drop question at times. It’s a hindsight question. It’s that old adage, 2020, if you go back and bubble up, look at this thing and do this thing all over again, what would you have done differently? So I’m going to ask you that because I think based upon where you are, I’m pretty sure I can imagine some of the things that you might say. So if you don’t mind, drop that on our listeners. 

KENNY:

Yeah. So, I mean, I give the classic adage, start sooner, you know, like get more aggressive, leverage more debt. But the reality is like, that’s just not like, I don’t know. I don’t feel like that’s like, most people take that as good advice. They’re like, okay. So for me, for short terminal specifically, I think if I could have taught them, because I’ve made some mistakes, it’s not been a perfect, I own some land in the middle of the desert that I can’t build on. And I know I couldn’t build on until I spent over $10,000 trying to figure out if I could build on it. And it could have been solved by one simple phone call. I had to sell a property because I didn’t have any parking. And it was a really beautiful house. It made a lot of sense. But the one thing I didn’t think about, and this is so important. So number one, I’d say like, go back to the regulation conversation. Don’t be afraid to pick up the phone. That was my mistake. But the other thing though, that I would teach myself going back is whenever you make a real estate investment, especially with short term rentals, always think about the person you’re going to be renting to. What things would they enjoy, especially with short term rentals? Like what amenities would they enjoy? What things are they going to do? What’s going to make their experience? And if you do that, you’ll actually make more money by adding the correct things to the property for them than trying to just cheapen out or half, just do it halfway. Like just keep focus. I call it the guest avatar. Focus on the who and the why and build everything around that. And that’s how you actually maximize revenue, the riches and the niches. I know everyone’s heard that before and that’s cheesy, but it’s so freaking true, especially in the short term rental industry. If you can be more targeted and more specific, you’ll actually make more money. 

CORWYN:

Wow. That’s huge. So Kenny, look, we have gotten to the end of today’s show. I mean, first and foremost, I want to say thank you for taking time out to be here. 

KENNY:

Yeah.

CORWYN:

Yeah. It’s great. Really appreciate it. Let me drop a couple of things for our listeners. Now, first of all, look, guys, y’all need to do something. Real estate is not just about passive income. Y’all have heard it today. Active income, like active income might be the way to go, but it’s really about creating assets that continue to serve your family long after you’re gone. Again, we’re big on legacy here. So whatever we’re doing today, we wanted to benefit our family on tomorrow. Now, Kenny, look, my takeaway from what you’ve been saying, what you’ve been talking, building a legacy starts with smart data, like really starting out with analysis and analyzing so that you’re disciplined in your investing. That’s one of the things I think a lot of people miss. They’re not disciplined because they don’t look at it. They look at what they want or what they think or how they feel. But it endures through the systems that you leave behind as well. Because again, in our legacy, by being disciplined, by teaching that discipline to our generations yet to come, we inherently give them or allow them to inherit from us that discipline in their investing going forward, which will continue to serve our families for generations yet to come. So Kenny, one more time, man, I want to really say thank you from the bottom of my heart for being on the show, for being part of the Exit Strategies Radio Show family. I really appreciate it. 

KENNY:

Yeah. Thank you for having me on. This was fun. Awesome. It’s awesome. 

CORWYN:

So for our listeners, look, y’all got it. Y’all better do something with it. If y’all don’t, somebody might come take it away from them. And look here, if we can do anything to help you know where we are, please come check us out. But most importantly, please get in contact with Kenny and his team because they are doing some amazing work and helping people make an amazing and phenomenal amount of money. So look. y’all know how I feel, you know what I say You know, I always put the two of those things and I give it to you this way Which is to tell you that I love you. I love you and we gon’ see you guys out there in the streets

CORWYN:

Raising capital isn’t just about having a good deal. It’s about reaching the right audience with the right message at the right time. Good morning, good morning, guys, and great morning to you. Hey, it is a wonderful day, a bright and sunny day. As you guys can see, I got a glow going about me today. I figured this thing here out. So look here, guys, look. 

Welcome to Exit Strategies Radio Show. Hey, I’m your host, Corwyn J. Melette, Broker and Owner of Exit Realty Low Country Group in beautiful North Charleston, South Carolina. Hey, y’all know what this thing here is. If it’s your first time listening to this show, you saw a man ran for a treat because our mission here is very simple. That is to empower our community through financial literacy and real estate education, guys. We are legacy building. I always tell you to put that thing, a hashtag on that thing, let people know what you’re really, really, really, really doing, which is you’re making a change, not just for today, but for generations yet to come. And we’re super stoked and super excited, guys. Always got to give a shout out to our faithful listeners, Pastor Vanderbilt Evans Sr. If I don’t put that senior on that thing, y’all know that dude will snatch me up. Look here, y’all guys rock. So, there’s so, so many. Y’all know where I holla at. Hollywood, all the way out to Monkey’s Corner. And I always got to give a shout out to my hometown, Mullins, Marion County. Look, thank you guys for tuning in. We really appreciate it. And most importantly, we love you. So, look, today, scaling capital and community wealth through data-driven investor strategies, guys. Raising capital. Look here, we’re talking about that money. That money, money, money. Raising capital isn’t just about guys having a good deal. It’s about reaching the right audience with the right message at the right time. With over 900, 900, that’s a lot of people, clients, guys. And over 500 funding campaigns under his belt. Our guest today is like the man in this space. Jason Fishman reveals how data-driven marketing, community-based funding models and investor, because we’re talking about investors and raising money, guys. Trust can transform real estate projects into long-term legacy building ventures. So, Jason, look, he ain’t no stranger to none of this. He is the CEO. And y’all know every time I say CEO, I’m talking about the boss of DNA Investor Marketing in Los Angeles. He specializes in data-driven growth strategies, has steered, again, over 900 clients and over 500 fundraising campaigns, is an expert in regulations, CF, A&D, crowdfunding, and digital commerce, helping raise non-figure capital, guys. That’s a lot of money. He’s known for traffic algorithms that scale brands and investor outreach. He’s an industry speaker and respected thought leader in this space with over 65,000 YouTube subscribers. So look, he’s the guy that I’m chasing. Passionate about breaking down complex growth tactics. So I want you guys to pay attention to this conversation today. It is meaningful. Most importantly, it’s going to be impactful. Get your hands right and let’s start clapping right now and welcome Mr. Jason Fishman to our show. Jason, how are you doing this morning? 

JASON:

Doing great. Doing great. Excited to be here on the Exit Strategies Radio Show. 

CORWYN:

Well, look here, I greatly appreciate it. Now look here, you got a long resume, man. So look, we’re going to jump right into this thing. I done told them people about you, but I need you to tell them who you is. So tell them, who are you? What is it you do? 

JASON:

Absolutely. I’m a marketer. I’ve been doing this for over 15 years. Started my own agency after being in the ad tech space and working with a lot of Fortune 500s. Wanted to focus on startup mid-market businesses. Began a growth agency here. Quickly found capital raising as a common theme in the conversations with founders and learned about Regulation D-506C, which allows for solicitation of accredited investors. High net worth, high household income audiences. With my advertising background and data partnerships, I was suddenly able to target investors with ads, bring them to different opportunities, offering online, virtual vertical pitch deck, often with the video. Our first campaign raised over $2.83 million and with a very light ad spend. We were introduced to more issuers from there, companies issuing shares or different types of investment opportunities. Reg CF, Regulation A-plus, those are other exemptions that went into law around 2016, allowing us to also target retail investors and across a whole spectrum of different verticals and industries. So for Reg CF, as of right now, it creates up to $5 million on a Regulation Crowdfund campaign, up to $75 million on a Regulation A-plus campaign. There’s not a cap for Regulation D and you get to set your valuation, your share price. I started getting approached by different types of funds, many in real estate and a variety of asset classes from there. At first Reg D campaigns, you know, 25, 50k minimums, deals up to $500,000 as the minimum entry point for an investor, millions, tens of millions of dollars in many of these rounds. And whether we’re looking at a Reg CF campaign where it’s more of a $1,500 average investment and building a large audience base that’s going to continue to promote what you’re doing or bringing in six-figure, seven-figure investments from accredited investors. There’s still a crowd element. There’s social dynamics at play. I’m going to get into that today. I’m happy to be an open book, but I showcase a lot of the results in my podcast, test by scale. I do a monthly webinar, serve on a bunch of professional boards. I try to be transparent about what we see working and not working in the world of digital marketing to reach investors and effectively bring on capital. 

CORWYN:

And one of the things I’m interested to kind of get into, so I guess let me start with this and we can kind of work through, because that is a strategy. Again, what is you guys do? You guys are essentially a mechanism that investors can use to fund their projects. Is that a lay way to say it? 

JASON:

We’re on the marketing side, bringing investors to those investors, to those funds, to those founders. Yes, if they’re looking to meet more investors, we can use digital marketing to bring them to them. We’re an agency, we work on behalf of the entity, the company that’s hiring us, of course. There are broker dealers, there are FINRA regulated portals, marketplaces with many of these investment opportunities. There’s some that are real estate specific you could find online, others that have list of different verticals, real estate being one of them in there. And then we market on behalf of that company. It could be a group of investors, a sponsor around a project itself. So we market, we bring the investors in and convert them.

CORWYN:

Let’s take a short break. 

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CORWYN:

So crowdfunding is kind of one of the things that I kind of threw out there. One of the things that essentially what you guys in some shape, form or fashion or what you do. So how can crowdfunding bring local investors into property deals and development projects? A matter of fact, let’s not even, obviously it’s hit local, but the opportunity is endless, right? 

JASON:

Yes. Well, I like how you bring up local because proximity has a power to it. Okay. If someone calls me about a project in Marina del Rey, where I live, where our office is in Los Angeles, I’m going to pay a lot more attention than if it just says properties across the US or the market I’m not familiar with. And notice I mentioned Marina del Rey. Could have said Los Angeles, could have said Southern California, but Marina del Rey, I may run into these individuals at the market. I could go meeting for coffee, even if we just set up a call, I still feel more connected to them immediately. So I love your question in the sense of, hey, how do I bring on target audiences that have a geo-targeting element to it? And yes, crowdfund, more commonly used around Reg CF, Regulation A+, that terminology. I would also classify Reg D as a crowdfund, an investment crowdfund. But looking at a crowd sale, you want to bring investors to the deal from your first degree network first and inspire them to share. So it gets into second degree network, referral traffic, referral introductions, so that you have some validation, something to point to. Hey, we’ve raised 100K of a million, we’ve raised 500K of 5 million, 200, what have you. You can then start introducing traffic from advertising, from outreach, and digital allows you to be very focused. We can do zip code targeting with advertising and reach people in a specific area. We could AB test that and have variance and contrast the performance, the results from audiences, just playing off my example from earlier, that are in Marina Del Rey audiences that are in Los Angeles, maybe excluding Marina Del Rey audiences that are in Southern California, or are following specific pages online, they’re visiting specific sites, they’re reading articles around content with keywords that we’re targeting with contextual targeting. So we can absolutely be laser focused with advertising, can do something similar with outreach. I love LinkedIn for outreach. You can search by city, search by town, larger, greater, DMA areas at that, can be doing outreach and can even change up your messaging, change up your advertising, creative accordingly. So something that you said, one, here’s what I heard. 

CORWYN:

I heard hyperlocal. So let’s start hyperlocal, not LA, but Marina Del Rey. So that way you like honed into almost like a smaller community, if you will. So hyperlocal. And then also what I heard you say is like start and then kind of circle out. So it circles out. So you got this first ring, which is your internal and so forth and so on. But you touched this, but I want to go a little bit further because by doing it that way, when you talked about recognition, you talk about the potential of, hey, I may bump into whoever it is with this local, but what does that do for credibility? In the eyes of people that may be looking to invest, what does that do for credibility? 

JASON:

Sure. People don’t believe what they see online. Social proof, third party validation are best practices for any digital marketing campaign. We see the same thing with offline fundraising. Of course, you’ll have some investors who are on the fence. They haven’t closed yet. And then you’ll have a major investor, someone who’s very well known, come in and start seeing more checks come in right and left. Same with digital. For these types of offerings online, there’s typically a total raise amount and volume of investors that’s showcased on the offering page. And it speaks loudly to a cold audience, someone who doesn’t have a direct relationship with the team, with the project company, what have you. So it absolutely checks a box and serves as a validator. It makes it seem more exciting, more trustworthy. If an amount of funds have already been raised, if there’s already a strong number of investors involved, given the type of filing. And then it gets into the world of third party mentions. So logos on a landing page, offering page. As an audience member, you could scroll down and may not remember what those logos are, but those could be strategic partners, publishers, local news stations, websites, blogs, social pages. You can have testimonials from lead investors. Hey, here’s exactly why I got involved with the project. Audience can project themselves there. And the more times we hear the same information from the same sources, the more we believe it. And if that’s shown on the page or if a prospective investor searching around doing their due diligence, and this is what they’re finding is articles, podcast appearances, conference appearances across the board. Everything seems more trustworthy. It could even create a bit of fear of missing out if you get involved. If it closes before I can get involved, that’s a loss. 

CORWYN:

That’s huge. That’s huge. So obviously you’ve done this a lot. Over 500 campaigns. 500. Yeah, that’s a lot, man. And as much capital as you’ve raised in doing this, give us some of the lessons learned. And real estate, you know, obviously is part, a good focus on what it is that we do. But give me some insights on that. 

JASON:

Absolutely. So digital, measuring the amount of traffic. You’re anticipating an average conversion rate. And if there’s not enough people getting to that offering page, your campaign is crossing its fingers for some large investor to find you out of nowhere. By the advertising, that’s why the outreach has been so impactful for us and the campaigns that we run. As an example, Reg D campaign, accredited investor. You’re going to need to drive a lot of traffic to a landing page to get information to contact those individuals. Phone number, email. You may have a few questions. Drop down menus they’re selecting from. If we’re running advertising, we know roughly every dollar, $2 we spend on most channels is a visit to that landing page. We may still have to spend $50 on average to get a lead. Maybe some channels, it’s $5, $15 based on what we’re spending and what equates to the lead. And this is round numbers and maybe $16 and 32 cents. But if we then have channels where it’s $50 to $100 per lead averages into $50 and then we look at the closing rate of those leads. Maybe one out of 50 closes. That accounts for people not showing up for calls. We need to be accredited. So high net worth or household income. We go to the specific numbers, of course, to actually invest and you have to do a KYC process and know your client to ensure that they’re accredited. So maybe some of the investors think they’re accredited, but they’re not. At least they don’t have the right information to justify that. Maybe some investors say they’re going to get back to you. They don’t. Some say no. Whatever it looks like. We’ve all been in a sales conversation before. If one out of 50 comes through and it’s a $2,500 acquisition cost, $100,000 or more is your average investment. OK. Your AOV, your average order value as a digital marketer would say. That’s a 40x return or higher. I would tell you if your minimum’s $25k, $50k, you’re probably looking at $125k or more. If $100k is your minimum investment, probably $260k or more as your average investment. The amount of people coming in at that benchmark, at that minimum level, others coming in at higher amounts. So you need to have enough traffic where even if you’re getting a standard conversion rate, even on the retail campaigns, the investment takes place on the offering page and you may not ever speak to the individual offline. That is great. That means 98% of the people who get there won’t be moving forward. And even the 2% that do, it may require multiple touch points, a lot of follow-ups, a lot of content going out to them to actually see them convert as an investor. So you want to have enough traffic coming through, reasonable projections, not just testing a few channels or reaching out to a few people. Hey, my deal’s live online. It’s the internet. Someone’s going to find me. You want to be able to say, hey, we’re going to get 50,000 visits from these traffic sources. We’re going to get 100,000 from those, 10,000 from those. Based on that, we’re going to get 1,000 leads if we’re able to convert 20 of them and they come in at $100,000 each, $200,000 each. It’s 200 and 4 million off of that. You really want to be able to put together those type of algorithmic roadmaps to how you’re going to be able to hit those goals. 

CORWYN:

So what I heard and what stood out to me, Jason, and it’s funny because ultimately we speak the same language, right? There’s a cost per lead. Then based upon what your conversion is, then I forgot the term that you put in there, OV, whatever it is. 

JASON:

Average investment, average order value. 

CORWYN:

Yeah. Average order value. That’s what it is, AOV. So we speak the same language in that because I was impressed by your average cost per lead, but I’m definitely way overpriced, way over impressed with your AOV. So love that. I love that. So you guys really focus on like algorithms and all that stuff to kind of funnel investors in and things of that nature. What does that look like? What, like who is, obviously accredited investors are included in this. How do you dial this in to get it to do what it is that you get it to do? 

JASON:

Yeah. Great question. There’s different advertising channels. Meta, Facebook, Instagram. Sometimes I hear misconceptions like, oh, investors aren’t on Facebook. 

CORWYN:

I was going to ask that. 

JASON:

Join daily active users. Who you’re looking to reach is absolutely on Meta. Not, you know, 100% of that audience persona, but definitely some of them. There’s Google. You can have search ad placements. You can have display banners, a whole ecosystem of places to buy display banner ads. You can purchase them on major media websites and apps, mid-tier sites, lower tier sites. A lot of times boring sites will have the best performance. Think like a weather.com. You know, hey, I want to sell an investment. You’re not calling weather.com. But on an advertising exchange, you could put together a site list. Hundreds, maybe thousands of sites. And you want to chiffle some of these big box sites, top tier sites. And they don’t always sound exciting, but it’s all a matter of who you’re reaching. Almost less where you’re reaching them. But you could absolutely have in there various types of real estate sites. Even real estate marketplaces have lots of ad placements on them. Investment sites, financial management sites. You can do what I mentioned earlier of contextual targeting. So you put in a keyword. Let’s say you’re saying real estate IRR. And now you’re running ads with articles that have real estate IRR featured in there and banners alongside it. Web, mobile, mobile app and have ads running inside apps. So you can do display. You can do similar types of sites, publishers for video ads and sponsored content. Those articles they say sponsored next to it and pay maybe something like that or as a thumbnail headline. Those are cost per click. So you’re bidding 15 cents, $1.50, somewhere in between per click. Video and you determine, hey, which ads am I going to use to prospect to meet people for the first time? And then which ads am I going to use to retarget? And those are the ads that feel like they’re following you around, but you keep seeing them everywhere. You could actually be far more aggressive with the advertising follow-ups than you could with email or direct messaging where they can see an ad for you every day. When clients, when we speak to investors and ask, hey, where did you learn about this opportunity? They’ll say somewhere online. I just, I kept seeing you guys. It’s usually not an advertisement or I saw a banner and it’s part of their phone time or screen time. They just remember seeing you online, but you look at the different channels. Then within the channels, you want to set up campaigns that balance out traffic and retargeting initiatives, what you’re optimizing towards for each one of those campaigns. And then you look at the audiences, the creatives and the funnels, who you’re targeting, what you’re targeting them with, the visuals, the messaging and the funnels. It’s a digital term where picture a funnel, you’re taking audiences from the top awareness, consideration, intent. Even those who intend to invest, there’s going to be a drop-off. Only percentage of them actually move through to conversion. Depending on the type of campaign we’re running, the retail ones, it’s often repeat conversion that we’re playing for. And at the bottom is advocacy, peer-to-peer marketing. How could you get an investor to tell their brother, co-worker, you should probably take a look at this, that that is the ultimate form of marketing. So you can take audiences down different funnels and you can vary and test and run for 10 different audiences, previews, even funnels, probably less of the funnels, maybe two to five, four to 10 on the others. And then you’re looking for pockets of performance. You’re looking to say, hey, getting a good cost per lead on audience two, creative three, down the primary funnel. I’m going to spend more on the advertising and buy more traffic, even just reallocating from other audiences, other segments to that performing ad set. And essentially you want to be able to look at the cost per lead, cost per acquisition, the retail campaigns, we’re measuring the investment and see, hey, it’s costing us a hundred dollars. It costs us $200 to get an investor. Maybe the average investment, average order value is a thousand, $2,000. We’re going to 5X, 10X return on ads. It’s somewhat systematic to buy more traffic, to reach more investors. These laws were created to democratize access to capital for companies that we’re raising. It’s no longer limited just to who you know or who your family knows. You can solicit, you can market, you can reach out and advertise to all different types of investors. On the investor side, it gives you access to growth stage deals. It’s no longer limited to the deal flow from your network. You no longer have to be a member of a certain country club or social circle or went to a certain school or a fraternity, sorority. You can seek out these deals on these marketplaces. You’ll likely be advertised, messaged about, advertised to, messaged about these types of deals. I believe this is going to be the primary approach towards capital formation in years to come. I’d say we live online today, but more and more and more of our life is going to be online years down the line here. 

CORWYN:

So Jason, this is a great time because we’re quickly getting to the end of today’s show, but tell people where they can reach you. Because you’re dropping a wealth of knowledge on our listeners. Where can people reach you? Where can they find you, find DNA? Where can they get you? 

JASON:

Sure, I’m accessible on LinkedIn, Jason Fishman, Marina Del Rey, Los Angeles, DNA. You’ll find me. You can go to our website, digitalnicheagency.com. You can go to our YouTube channel. I believe it’s youtube.com/digitalnicheagency. Have my podcast playlist on there, my webinar playlist, guest appearances, a lot of educational information and can reach out to us through any social channel for that matter. But always welcome a warm marketing conversation and can share exactly how we’re bringing investors today. Awesome, awesome. 

CORWYN:

So, Jason, I want to take you, I want to thank you for taking time out to be on the show with us today. I got some takeaways. So, for our listeners, look, y’all stay, y’all hold tight one second, I’m about to give it to you. But Jason, again, thank you for taking so much time and being with us here today and dropping these jewels and nuggets on our listeners. Now for our listeners, hey, look, let’s get it. Raising capital, look here, raising capital, get that money up, isn’t just about asking for money. You’re an investor, looking to do invest, looking to do larger projects. You want to scale, you want to bring money in. It’s about showing investors a clear path, a trustworthy vision and a project they can believe in. People give from their heart. Now, Jason, my takeaway from what you said today is growth becomes predictable. I love it. Predictable when you combine data, credibility and consistent communication. That’s how real estate professionals, real estate investors can create lasting wealth and community legacy. So Jason, again, I want to thank you one more time for being on the show with us today. I really appreciate you taking time out of your busy schedule. It was an honor. Thanks for having me on. Awesome. For our listeners, guys, look, hey, y’all got some amazing information. Don’t just sit on a plot, reach out to Jason. Let’s get in contact with your DNA and do something. How about that? So look here, y’all know how I feel. Y’all know what I say and you know how we always put those two things together and we give it to you this way, which is to tell you that And we’re going to see you guys out there in those streets. 

CORWYN:

Most homeowners believe that renovation risk begins when construction start. Bad contract is a poor material, bad timing. But in reality, the biggest financial loss usually happens before a single hammer even swings. When rushed decisions, vague scopes, and unclear comparisons quietly drain equity and inflate costs. 

Good morning, good morning, and great morning, guys. Welcome to another fabulous episode of Exit Strategies Radio Show. Hey, I am your host, Corwyn J Melette, broker and owner of Exit Realty Lowcountry Group in beautiful North Charleston, South Carolina. Hey, if it’s your first time listening to this show, you, sir, or ma’am, are in for a treat because our mission here is very simple. That is to empower. Look here, we’re going to focus on that word. We’re going to dig in on that word. We’re going to empower our community through financial literacy and real estate education. Guys, we are legacy building. That is what we do. So I always got to give a shout out to those who listen to us faithfully. You guys rock. Evans, Elvin West Ashley, Pastor Vanderbilt Evans Sr. and his beautiful bride, Miss Sandra Evans, my mom out there in Moncks Corner, y’all. Look here, I even got to give a shout out there in Moncks Corner to FedUp Postal Unit. You guys are tuning in. You guys are sending us feedback. We really appreciate it. So you guys need to get something mailed out. Go see FedUp Postal Unit out there in Moncks Corner, guys. So look, for our folks in Marin and Mullins, thank y’all so much for tuning in. The Troys always love you. Always love you. And our family and extended friends there. Look, let’s get it. So today we got an amazing show set up for you. And I’m super excited about it because one, it ain’t every day that you get, quote unquote, a founder and CEO. I like those titles. CEO means the boss. That’s what that means. So I want to set the tone here for you this way, which is most homeowners believe that renovation risk begins when construction start. Bad contractors or poor material, bad timing. But in reality, the biggest financial loss usually happens before a single hammer even swings when rushed decisions, vague scopes, and unclear comparisons quietly drain equity and inflate costs. The real mistake isn’t overspending on materials. It’s entering construction without finished decisions, documented inspections, or true cost clarity. So the proposal bid founder and CEO RoDevia Brigham explains why renovation outcomes are driven by decision quality, not construction activity and how upstream clarity can protect long-term property value and financial stability. So I want to introduce to you again, RoDevia Brigham, the founder and CEO proposal bid a platform focused on governance and accountability in property repair bidding. He’s a former fireman, firefighter, and former cyber security analyst. Look here. I love this. Advocate for treating renovations as capital protection decisions, not emotional events. So if you guys please would join us in welcoming RoDevia to the show. RoDevia, how are you doing? 

RODEVIA:

Good. Thank you for having me. I’ve been following you for quite some time and it’s an honor to be here and to talk with your audience about the decision layer that happens even before the money’s even moved around renovations and capital projects. So hopefully the audience has some patience with me. This is an infrastructure topic, not necessarily tips and how to and do it yourself, but more of a thought process that happens for audibility, consistency, and the documentation piece even before the first bids and estimations are picked or before the vendors are even sourced. So thank you so much for having me. 

CORWYN:

Well, you’re quite welcome. Thank you so much for taking time out of your business schedule to be here. So I’ll have an overview, who you are, what you do. 

RODEVIA:

So I’m RoDevia Brigham, the founder of ProposalBid, and we focus on the decision layer of capital projects. And what that is, is that it’s the upstream structure that determines whether renovation outcomes behave predictably once the construction begins. So we don’t manage construction, we structure the decisions. But secondly, ProposalBid also produces structured scopes, bids, and estimations. We standardize those. We do defensible estimations, not on the execution services, but on the governance artifacts. So basically, we exist as the capital decisions that can be comparable, and it’s explainable, and it’s reviewable before the money is even committed. Because once the construction begins, most of those financial trajectories have already been hard-coded in and set in. So I believe this conversation is more about where the renovation outcomes are actually formed and why construction reveals the decisions and not actually makes decisions once those decisions are made. 

CORWYN:

One of the things, and if you don’t mind, let me, I’ll jump in, but I got a question for you because one of the things we opened with is about the mistake happens before the hammer swings. So let’s peel that back a little bit and give some insight there. 

RODEVIA:

Yeah, so construction is where the renovation outcomes appear, but they aren’t really created there, right? So most renovation stresses is blamed on the contractors or the construction long before the work is even done. So that does feel logical because it’s visible, it’s loud, you can point to it, it’s expensive, but construction is where renovation outcomes actually appear. So it’s not where they’re actually created. So by the time construction remodels, rebuilds, repairs begin, most of those renovation outcomes have already been constrained by the budgets, by the timelines, by the guidance. And so the scope has already been implied if you have a scope that’s ready for the audience that you currently have. And the expectations have been, how do you say, already assumed. So the budget tolerance has already been mentally set. This is what we’re going to spend. And then the construction does not invest or it doesn’t invent those actual conditions. Construction and the remodels operate inside of those constraints. So if renovation outcomes are largely shaped before the work begins, what exactly are homeowners managing? 

CORWYN:

So what I heard was, we have a vision of what it is that we want a renovation to look like. But long before that, in the very beginning, we also have basically what we budgeted, what we’ve allocated financially for this to take place. So if we don’t get those two things right on the front end, you know, in the hiring of a contractor and the scope of work, which is defining what is going to be done to give us that outcome that we envision. If we don’t get those things right, then one, we won’t achieve budget and we won’t get to what the end project, what we envisioned it to look like. Is that fair? 

RODEVIA:

That is fair, right? Because what you have is, you might have a clear budget and defined scopes, but that’s all interpreted at the end. So if you don’t have the decision framework set up before the money even moves, those are already hardcoded in. 

CORWYN:

Makes perfect sense. So you want to be clear is what I’m also understanding as well, as far as what it is that you are asking for and make sure that what you’ve asked for is embedded in your quote for your project costs, scope or whatever you put there, your deliverables. For those who think about this stuff a little differently, what is there so you can make sure you get where you’re going. So what have you seen like some of the financial impacts of having, if you will, an ambiguous scope of work or ambiguous list of deliverables versus a very clear one? Let’s take a short break. 

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RODEVIA:

Yeah. So for the scopes, what we find is that ambiguity is typically the definition that’s happening. It’s not the contractor performance that determines the financial trajectory. So what isn’t clearly defined before the pricing will be interpreted during the construction. So the renovation budgets, the remodel budgets rarely encode because of the execution. They actually erode because the key decisions were never fully defined in the first place. So most homeowners believe that they’re managing construction. In reality, they’re actually managing a sequence of decisions. So they’re managing the scope, they’re managing the finishes, they’re managing the boundaries, and also the timing. So what isn’t clearly defined before the pricing will be interpreted during that period of construction. So if the interpretation isn’t malicious, it’s actually mechanical. So when something is unclear in the budgets and all that, someone has to fill the gap. They have to make assumptions, they have to take on those risks, and they must decide what happens in that particular motion. And the decisions made in the motions behave differently than the decisions that are made in clarity, outside of ambiguity. So renovation budgets rarely erode because of the execution. They typically erode because key decisions were never fully defined in the first place. Now, those definitions are quantifiable based on the actual project that’s made, based on the key assumptions that are made, the risks that you’re willing to take on or not take on. Construction doesn’t struggle because people are incompetent. They struggle because the clarity ran out in the very beginning, and that’s at the beginning of the process. 

CORWYN:

Makes perfect sense. So let me stay on this vein of ambiguity, but I’m going to kind of back this into those things that change on us. The hitting costs. If you don’t have a clear outline, if you will, scope of work or deliverables, how does that get us to quote unquote change orders or otherwise get us out of line with our budget? 

RODEVIA:

Yeah. So for change orders, construction and change orders that are done in the construction period or remodel period doesn’t create most of the problems. It actually reveals the definition, the level of definition that existed before there was actual commitment. So when something isn’t fully defined before pricing, it has to be interpreted later. And then interpretations behave unpredictably, and that’s why we have change orders in the first place. And then the price variations doesn’t automatically signal disagreement, but often signals different interpretations of the same exact request. So if you have bids and estimations out there, they’re actually solving each individual problem based on the scope that was actually submitted in the first place. That’s if you even submitted scope. So your vendors and contractors are answering just one level of questioning. They’re not actually answering the framework that was put in the first place. So therefore, the change orders typically are blamed in the visible phase, but the visible phase isn’t the origin phase, if that makes sense. So if the boundaries are incomplete, the outcomes reflect that, and it’s not incompetence. Even excellent contractors operate inside the boundaries they’re given, and you still have change orders that happen in the end. So if budgets are overrun, they’re often overrun because it’s framed as a spending problem, and it’s usually a definition problem. And that definition problem then translates into the change order itself. That’s what we found anyway. 

CORWYN:

So let’s get this to, this is the one that always gets most people, right? And it is the lowest bid, why it isn’t, or sometimes isn’t, the lowest call. We watch people in all phases, whether they be mom and pop investors that are looking to do a renovation on a property, or whether it’s another larger scale project or something of that nature, sometimes always looking for, I mean, I literally just had this conversation explained this a few days ago, a client that decided to choose the cheapest contractor, and in turn, work wasn’t as well. So why is that? And because apparently their deliverables and that agreement didn’t reflect what it is that they expect on the back end. So comparison of apple to apples, or apples to oranges, lowest bid to lowest cost. How do you see that? Yeah. 

RODEVIA:

So the original question that I always get is, like you said, why choosing the lowest bid often leads to higher total costs or might not be the right choice. And the way ProposalBid likes to frame it is why price variance is usually the definition of failure and not the contractor disagreement or the agreements, right? So bids do not disagree. They answer the question they were given. Large price differences usually reflect different interpretations, right? Not different pricing philosophies. So that refrains what bids represent without advising behaviors. So when you have the three bids that come in far apart, most homeowners assume contractors disagreed, but bids don’t disagree. They answer the questions they were given. So if a project was loosely defined, each contractor solves those definitions by slightly different versions of it. So that creates different assumptions, different boundaries, exclusions, terms and conditions. And large price differences usually reflect different interpretations on the vendor’s parts, not different pricing philosophies from the vendors. So the numbers are not necessarily fighting. They’re just the definitions that were created based on the scope that was put out there based on what the homeowner had requested. So instead of it becoming an analytical aspect, it becomes an emotional aspect because there was no definition to begin with. I was actually on a call on another podcast with someone else and they were like, well, I just went out and got three bids and I just chose this one vendor. And I said, well, why did you do that? And he really couldn’t answer why he says, well, it’s just the price was lowest. I said, so what was the other comparisons that she made in order to make that determination? And what were the decisions that were set up in the beginning to go ahead and choose that vendor in the very end? And he really couldn’t answer that. And I said, so five years from now, when you, and this is from an institutional setting, I said, so five years from now, when the artifacts are being presented, how do you determine why you made the decisions that you made in the first place versus why? I just don’t know. I just went with the lowest bid. That doesn’t mean it’s the correct bid to begin with. So that’s something that we found and proposed a bit, quite a bit. And the way we structure the bids and estimations is not only in the terms of conditions and the comparability and does it meet the budget, but does it also meet the decisions that were made in the first place on what the risks, the assumptions are, and then how those bids and estimations fit into the actual scope that was provided by the client. 

CORWYN:

So let’s delve into, you know, ProposalBid. How does it work? How does it help to mitigate some of these potential issues? Like what is the advantage of people utilizing the platform? 

RODEVIA:

So ProposalBid originally started out as a bids and estimations platform, being able to source quality bids on client behalf, starting out with property management. So that’s the second piece, right? That’s not the governance piece. What most people are concerned about currently is how do we source the bids? So ProposalBid has the capability of creating customized scopes of work based on the condition of the project itself. And that’s done through an intake. That intake is then created into an RFP that’s customized. That RFP is then marketed out across the United States in which vendors are able to answer that RFP based on their workload, their materials, the season. And when those bids and estimations come back, we are able to do a comparison apples to each vendor and also to the actual scope of work itself. On the client’s behalf, we’re able to request changes to that bid, the estimations to meet the RFP, and the RFP is actually marketed out in such a way that vendors will then be able to collaborate, not necessarily together, but as a consensus on the answering of that RFP versus let’s say you have a remodel and you want architectural and the owner wants architectural drawings to be done with the bids and estimations and you put this out into the ecosystem. Vendors are going to come back and say, well, we’re not going to give you architectural drawings when we haven’t even won the bid yet. So that’s also a correction and a learning experience for the owner’s behalf too, or on the institution’s behalf. So once those bids and estimations come back, we are able to do a comparison apple to apple and then create a customized grid and decision making framework for the customer so that they can go ahead and choose the best bids that matches the scope, the RFP, and also any other decisions that they may have had that’s outside of the RFP itself. Currently ProposalBid is able to source seven plus bids per project in less than 14 business days, which is not done in the industry. If you look at the industry itself, if you’re doing homeownership, property management, institutional rates, most businesses and owners are only able to source one to two bids within 30 days and those bids don’t match up. And to get that third and qualifying bid might take 45 days. And so ProposalBid has a system and ecosystem to be able to source those bids and estimations within those 14 business days. We do give a 45 business day window. So that’s the first part that ProposalBid started out with. And what we found is that that’s the tools that ProposalBid is able to use to help owners and institutions and homeowners to be able to source the bids. But what we found is that what determines the renovation outcomes have to have predictability to begin with before the construction begins. And so that’s where that decision layer for the capital projects moved up the chain. And so that’s what we’re exploring now. So if your clients are interested in the bids and estimations, we’re able to do that for them. But we do start out with the framework of the decision layer itself. And of course, that’s customized based on the project, based on the team, based on a timeline, and then based on what their risks and assumptions and their frameworks are. And if they even have frameworks to begin with, we built those out for them so that when the bids and estimations do come in, they have a guidance and guardrails to be able to choose the best bids that come in at a later time. 

CORWYN:

So what I keep picking up is that you all have built an amazing ecosystem, if you will, that consumers can tap into to help them manage their projects better. So instead of the random one-offs in this, you all are able to get multiple people in an essence competing for their business, which I’m assuming that has some influence on overall cost. Am I right? 

RODEVIA:

Oh, does the workflow influence cost? Does it keep costs down? Does it keep costs in line? Yes, it does. Now, cost is, it’s fleeting. And what I mean by that is that you have a set idea and a set budget, and you’re probably emotionally tied to that. Someone is, right? And with that cost, the cost is actually what is the decisions that are going to be made in order to not have to come back five years from now, four years from now, 18 months from now, and your budget has ballooned 150K because the assumptions, the boundaries, the exclusions weren’t determined in the first place on what the risks were by not choosing a particular bid or by choosing a particular bid based on the decisions that were made and the frameworks that were made in the beginning. So we can’t guarantee that the client is going to make the right decision because it’s the client decision. What we can guarantee is that we will have a framework set up so that you can come back and trace the decisions that you had made. And that’s why the costs are the way they are in the future. And so that’s something that doesn’t sit well with people currently because they have to take ownership and authorship of the decisions that they made even before the costs were implemented and either were reduced or were increased in the first place because now you have a traceable framework to say, well, yeah, we deployed $6 million for your audience, maybe $30,000 in capital, but we knew that there was no definitive scope to begin with in the first place. And now you’re 18 months in and you ballooned $100,000. And so that’s the narrow, that’s the chasm that we’re crossing there that most people just jump over and they fall into eventually at some point. And so those thought processes and those frameworks that we tackle to begin with and then move to what is the best bid and estimation, the best contractor, the best vendor to go with. And then you have something to stand on 18 months, 24 months, five years from now, and that’s not really talked about in the industry. And that’s what Proposal Bid is tackling. And these frameworks are things that people can try to build on their own too, but we specialize in that. 

CORWYN:

You always want to use an expert. That’s why they want to call you because this is what you all do and you have a process in order to do it. The reality is, and RoDevia, please disagree, but the majority of people don’t spend a lot of time shopping contract estimates when they have need. They have one, they get one, that’s it, and that’s the end of it. And they go with it unless it’s astronomical or what have you. And the time it takes to go across multiple people sometimes sets them back on their original plan or their goal. So having a streamlined operation and system such as Proposal Bid to assist with this makes perfect sense in my opinion. Do you disagree? 

RODEVIA:

No, it does make perfect sense. And I think the other piece that we’re really honing in on is the documentation, right? Why documentation is a governance function and not necessarily administrative tasks. So we’re talking about choosing a vendor. We go with our preferred vendor. That doesn’t mean we’re getting the best prices. That doesn’t mean we’re getting the highest quality materials, that we’re actually making the correct decision. And in that, what Proposal Bid specializes in is helping our clients do the documentation because documentation is a governance function. What we like to say is what is written down determines what gets executed. And renovation outcomes are constrained by what was defined, not by what was hoped for. So documentation is often treated as paperwork, but what is written often determines downstream that execution. And construction does not build on conversations. It builds on instruction. It doesn’t build on expectation. It builds on specifications. And renovation outcomes are typically constrained by what was defined, not by the hope. 

CORWYN:

So RoDevia, I want to make sure we get your contact information out so people know where to reach you. I’ve been on your website, but I’m going to let you tell them. But I’ve been on the website. It’s beautiful, well put together. So how can people reach out to you, get connected to you? 

RODEVIA:

Yes, thank you. Proposabid, P-R-O-P-O-S-A-B-I-D dot com. That’s proposals and bids. We just jammed it together. You can reach me at RoDevia. That’s rodevia@proposalbid.com. On our abouts page, there’s my email address, my phone number. I’m on LinkedIn. I think it’s RoDevia Brigham slash RoDevia Brigham on LinkedIn. Yeah, give me a call. Would love to talk with you about what projects you currently have. We are able to, how do you say, plug in into any part of a project that you may have started, you’re coming to an end to, you need reviews of. Or you’re thinking about a project that you need to have done and you want that framework set in place so that you’re not just choosing out of three bids. You’re choosing the most quantifiable decision, financial decision, so that you can create long-term, so that you can avoid long-term headaches. That’s what we have for Proposabid. So I thank you so much. 

CORWYN:

Awesome. So look, guys, as we close out today’s show, first of all, listeners, guys, before you renovate, finish your decisions, before you finish your budget, what do you want? Clarity protects equity more than speed ever will. Trying to do it fastest or just getting to it sometimes is going to cost you more money. And RoDevia, my takeaways from what you said to me today was when owners define their projects clearly, they compare truly comparable work and move decisions upstream. They don’t just avoid those costs overruns. They protect their upside and preserve the value they’ve already built that is huge. So guys, renovations don’t just change a property, change the financial trajectory attached to it. Better decisions before construction begins often determine whether equity grows or if it quietly slips away. So guys, we want to make sure we do this the right way. Please make it a point. Go to Proposalbid.com. Check them out. Engage. Ask questions. Make sure that you do it the right way. It’ll help you all the more. So guys, as we close, you know how we do this. You know how I feel. You know what I say. You know, let’s put the two of those two things together and I give it to you this way, which is to tell you that I love you. I love you. We’re going to see you guys out there in those streets. 

CORWYN:

Homeownership is the first step, but understanding and managing is hidden cause is what turns in a legacy in order to create your version of homeownership. Don’t let the opportunity pass by. Good morning, good morning, great morning, guys. Welcome to another fabulous episode of Exit Strategies Radio Show. Hey, I am your host, Corwyn J. Melette, broker and owner of Exit Realty Low Country Group in beautiful North Charleston, South Carolina. Hey, if this is your first time listening to the show, hey, you know what it is? Well, you should know, but you’re about to find out our mission here is very simple as to empower our community through financial literacy and real estate education. Guys, we’re legacy building. That is what we do. Always got to give a shout out to those who tune in faithfully. Love us so dearly and we love them even the more. Elder and Pastor Vanderbilt Evans senior. And please let me get that thing right. Pastor Vanderbilt Evans senior and his beautiful bride, Miss Elder Sandra Evans. Look here. Thank you all for tuning in. My mom out there in Moncks Corner. Y’all know, y’all know all the way back to Hollywood. What you know, no good. My people in Mullins and Marion. Guys, thank you all for tuning in. We really appreciate it. And we got an amazing show today. For anybody who’s known me for any length of time knows that I am a creative thinker. That’s just me. That’s what I am. So today we’re going to set our hook this way. So creative financing, guys, and the hitting cost of home ownership and building family legacy. That is our title today. Our theme, if you will, for our hook for many families, the dream of home ownership feels just out of reach. Rising interest rates, strict lending rules and unexpected costs can make it seem impossible. But what if they were ethical and creative ways to own property sooner, protect your investment and start building wealth that lasts for generations today? Our guest, Mr. Caleb Christopher, is the guy, hey, a creative finance expert and cybersecurity professional. And he’ll help us by revealing how innovative financing strategies can help families and investors secure real estate safely while avoiding hitting costs that can erode wealth and threaten our legacy, your legacy. So he is the founder of Creative TC, DOS Guard and Creative Title. That dude over here building businesses, he’s going to help you all build some business and make some money. So the expert, again, of creative financial methods included subject to and seller finance deals. And he’s a passionate advocate for helping families and professionals protect their assets and build wealth responsibly. Caleb, how are you doing, my man? 

CALEB:

I’m wonderful today. Thank you for having me on. It’s an honor. 

CORWYN:

Well, thank you for taking time out of your business schedule to be here. So look here. I don’t tell them people what I think you do. Tell them what you do in your own words. 

CALEB:

Well, listen, if you’re trying to buy a house or sell a house and it’s not going over the normal way, sometimes you got to get creative and you can think outside the box. That’s where I live. And so when you start thinking about how could I do this, maybe seller finance, that’s actually pretty vanilla to me. So when you’re talking about creative ways to buy or sell a house, that’s where I come in and help. And it’s really easy to paint yourself into a corner with a conversation like, how are we going to do this or what are we going to do? And then you come to Caleb and you say, hey, this is what we were thinking of doing. And I’ll say, great, I’ve done this 250 times before. Here’s what you want to watch out for. You’re going to want to structure it this way. Here’s the paperwork you’re going to want to use in the state you live in. This matters and this matters. What are your short term plans, your long term plans? Because when you do a nonstandard transaction, you’re kind of stuck together for a while and you’re going to be in a relationship with somebody. And I just help people think through that stuff. So I call myself a transaction consultant, and that’s company number one, CreativeTC. I built what wasn’t there for me when I had to do the deals. 

CORWYN:

So for our listeners, we had a good tickle about this behind stage a little while ago, if you will, because as you framed it, like, OK, you got this, now what? Now, in my mind, immediately I started thinking people out here chasing opportunities and chasing as an investor, you’re chasing deals, you’re trying to figure out as someone who’s looking to own a home, maybe you, OK, well, look, I’m trying to, maybe I’m trying to lease option or whatever it is I’m trying to do. 

CALEB:

Sure. 

CORWYN:

Once you done chased down the opportunity, now what? Now I frame it like the dog that done caught the car. You know, you see dogs chase cars all the time, right? And they catch the car and then all of a sudden you see them, they stop barking, they stop running, the car stop, and now they looking around like, what’s next? So, say look, let’s go talk about it. 

CALEB:

It’s really easy to get into these conversations where you’ve got an idea and both parties agree. But sometimes in my analogy, that’s what we were joking about. You said that. And I love that analogy. And I said, you know what? I have a similar analogy where the dog has a stick that’s too wide for the door and it’s so excited. He’s like, I’ve got what I’m looking for. I’ve been trying this whole time and into the doorframe. I’m the guy who’s like, come on, little buddy. And we just grab the stick and twist it and then you get right inside. But that’s your deal on paper. Hey, I’ve got the seller on the line. Hey, I’ve got the buyer on the line. This is what we want to do. Can you help us? Absolutely. Let’s talk through it. And so that’s what CreativeTC does. 

CORWYN:

So let’s define some of this stuff for our listeners, because not all of them do. Not all of them know. Seller financing, subject to. Let’s start with seller financing because that is always an interesting one. So the two’s are a little more complicated. But let’s start with that. Define, give your definition of what seller financing is. 

CALEB:

Seller financing is any time that the seller becomes the bank. And there’s a whole different, a whole slew of different ways this can happen. However, generally, the easiest way to think of is an elderly person has a paid off house. This is the typical scenario. An elderly person has a paid off house and they say, yep, I’ll take a down payment. You give me 10% down, 20% down, and you can make payments on the rest just like a regular mortgage and I’ll be the bank. That’s generally seller finance, but it can take on much more complex formats. 

CORWYN:

And on the other side, you also made mention of subject to. So define that, if you will, for our listeners. 

CALEB:

Subject to. Corwyn, if I buy your house, you give me the deed, right? You sign it over to me and now legally I own it. But I just agreed to pay your mortgage instead of going and bringing my own loan. Because if it makes sense, because you’ve got a 4% loan, I want that loan, baby. I can’t get a 4% loan right now. If I can give you $50,000 cash right now and then just take over your payments, that’s a subject to. When I buy the house, subject to your loan staying in place. 

CORWYN:

Let’s take a short break. You found a perfect property. You got the vision. Now you need the capital. At MelliFund Capital, we specialize in funding real estate deals for investors who want to build, blip or hold and don’t have the time to chase after banks. Whether it’s new construction, a fix and flip or long term rental, we offer simple terms, fast approvals and access to private capital. We even work with manufactured housing projects because we know what it takes to build value from the ground up. You bring the deal. We bring the money. Visit MelliFundCapital.com or call 843-619-7038 to get pre-qualified today. MelliFund Capital, we fund what you build. 

CORWYN:

So how easy it is, and let’s start with the latter and then work ourselves back. So, as a matter of fact, hold on. I’m going to get a glass half full guy, right? So you heard I say how easy, not how difficult. It’s like I’m not going to make it overly daunting. But how, what does that look like? And do it however you want to. You can be how difficult it is or how easy it is to put something like that together. And what does that look like? 

CALEB:

I think you’ve got a good point that it is really easy. But the problem is it’s a blank canvas. And so when you have a blank canvas, you can draw whatever picture you want, but you may not draw the right picture. So I’ve seen people get into subject to deals. You give me the deed. I make your payments. That’s as simple as it is. They just write a purchase contract that says I’ll make your payments and then the deed transfers and you’re done. That’s too easy because what if your buyer defaults on your mortgage? These are the conversations we need to have. So it should be a little harder than it is. And that’s where attorneys have their place. I’ve got my place and I’m not an attorney and I work well with attorneys. They often learn from me because this is all I do. Right. This is a little side rabbit trail for them, but it’s all I do. And so respectfully, as an influencer, not a controller, I say, Mr. or Mrs. Attorney, respectfully, here’s what I want to make sure we do. I’ve got great templates. You’re welcome to check them. You know, in fact, do check them, send them back with corrections. That’s a free attorney console for me. I don’t care. I don’t have an ego in the deal. I want to make sure this deal is safe, legal and ethical. And there’s a lot of conversations that people don’t have ahead of time. So now that they’re under contract, let’s go talk to Caleb and his team and see if we’ve got the right things in place. That means we’re going to have to have a purchase contract, an addendum with a bunch of disclosures that says, hey, yes, my loan is on. My loan stays in place. Credit is on the line. If you don’t make my payments, I can get foreclosure on my record if you don’t make my payments. And now you start seeing the, oh, I got to think through all of that. Yeah. Why would anybody ever do that? There are plenty of reasons. Usually it comes down to money or reduction of pain. A lot of times people don’t have equity in their house. And so if they got foreclosed on not only would they lose the house and make no money, but they may owe money even after losing everything. That’s a pretty terrible position to be in. And if you’ve got an ethical investor who steps in and says I will catch up your payments. I’ll reinstate your loan. So there’s 10K out of my pocket. I’ll give you $10,000 for cash and moving expenses and stuff like that. So you go find another apartment or something. And then I will make your payments ongoing and I turn it into a rental. You go from pain to good promises and hopefully good results. 

CORWYN:

So one of the things, Caleb, I’m going to throw this out there. And I don’t want to necessarily stay in this space because there’s a lot of other creative methods and options for ownership or acquiring real estate. But acceleration, how often do you see that come into play? And if you don’t mind, start by explaining what acceleration is. 

CALEB:

I was going to explain. A loan acceleration, they’re speeding it up to the tune of 30 years becomes due in 30 days. Okay, that’s a super acceleration, light speed. Basically, a loan acceleration happens if you default on the mortgage in a few different ways. One of the options that they have is to accelerate. So the bank can say, all right, I’m done messing with all this stuff. You’ve defaulted A, B, and C. You haven’t followed instructions. Just pay me off in 30 days or else I’m going to take it to foreclosure. That’s what a loan acceleration is. One of the ways, and I think this is where you were headed. One of the ways that you can default on the loan and get an acceleration is if you sell it without the bank’s permission. So, Corwyn, if you sell your house to Caleb and we don’t tell the bank because we won’t and I start making your payments, if they notice, number one, and if they care, they can accelerate the loan. That’s called a due on sale clause. They can say, ah, you sold it without my permission. I’m going to call it due on sale. We’re accelerating the loan. Pay us off, please. So that’s what the acceleration clause is in a mortgage and how it applies to a subject to transaction. Because the bank didn’t sign up for Caleb to be the payer. They signed up for you to be the payer. 

CORWYN:

Very true. 

CALEB:

That’s where the acceleration clause comes in. Now, how often does it happen? Was your question? 

CORWYN:

Exactly. 

CALEB:

Very rarely. My company closes, helps other people close. We’re consultants. So we touch anywhere from 30 to 50 deals every month nationwide, except New York and New Jersey. I just don’t deal with double attorneys. I’m sorry. There are people who do, that’s fine. But we touch 30 to 50 transactions every month. And I think over three and a half years, I have had two dozen, not even, those weren’t even the ones that were all with me. I think I’ve had six come back that were mine. I just fix other people’s transactions that go due on sale as well. So I built that solution. Then I built a company because everybody asks, well, isn’t there insurance against that? No, you can’t eliminate the due on sale clause. It’s the lender’s right. And if you were the lender, I’ll just finish this aside. If you were the lender, you would reasonably want that in your loan. If you’re going to sell or finance a house to somebody, you should put a due on sale clause in there because it doesn’t force you to accelerate the loan. It gives you the option. It gives you power and control. And if it’s your money on the line, you want some control. 

CORWYN:

So, Caleb, let’s switch this up. And I want to make sure we got that out because we do see a number of subject to offerings, if you will. And just to be transparent, man, want people to know that, hey, these are the things, some of the pitfalls, some of the things you need to watch out for. Obviously, if you’re considering or if this is appealing for a reason, so you need to consider that there’s a reason why it works or why it may be a great idea, a good idea for you to do. So let’s get this back over to some other options. Do you deal with a lot of lease option, purchase, those types of purchase methods or not? 

CALEB:

My company and team, we typically don’t. A lease is a lease and then you add an option to it. And so, yes, we’ll do some of those. But a lease option is conceptually it’s rent to own, except legally it’s not. I just want to make sure we differentiate and we could do a whole episode on the difference between rent to own and lease option. But lease option is the way to go there overall. But they have the option to purchase the property. So the tenant can get a one year, a three year, a five year option where it’s like, hey, I’m going to rent this house. I like the house. I like the location. I’m going to take good care of it. And I’ll give you an extra fee up front if you’ll give me the right to buy it for the next five years. 

CORWYN:

Makes perfect sense. 

CALEB:

That’s a great way to negotiate homeownership. And given our target audience here, if you’re a tenant right now, you can ask your landlord about, hey, what would it take for me to buy this? Can I buy it on seller finance? Can I have an option to buy this thing? That’s absolutely a worthwhile conversation because some landlords are just like, I don’t know what I’m going to do with this thing. I’m kind of tired of managing it. But if I get a responsible tenant who takes care of the property, who doesn’t miss payments and they’re going to bring their own financing, great. 

CORWYN:

Exactly. So, obviously, you know, in your realm, you’re probably, obviously there are some probably on occupants that you guys are doing consulting work with. But my imagination says majority are probably investors. Sounds about right. How do these strategies play out on the bigger field? Let’s get off the lowly field, so to speak, and get on to the major league field. What does this look like as far as the employment of these strategies? And give us some of the successes that you may have had recently, if you can. 

CALEB:

Yeah, so I bought a property subject to the loan back in December of 2022, 2023. 23, I think, I don’t know. The couple had two houses. They were making payments. Their agent had told them, yes, we can get house number one sold. So don’t worry about it. Go ahead and buy house number two. Well, it didn’t sell. It’s worth what’s owed on it. And so even if they sold it with the agent, with agent fees, in case you guys didn’t know this, you have to pay an agent fee as the seller. And so they were going to have to come out of pocket $15,000 anyway, even if they sold it for what it was owed on the property. It just that was the unfortunate circumstance. So it sat for six plus months. And somebody, an investor, calls me and says, I can’t take this deal, but I want to help these people. You’re a smart guy. See if you can do something. Can I just give them a phone call with you? I said, sure, let’s talk. And they said one of us works in financial services. We can’t have any late payments or our job is in trouble. Got two house payments. We can’t afford them anymore. We just had a kid. We moved 45 minutes away already. I don’t want to deal with tenants. I don’t know what to do. I can’t afford to make this payment anymore. And I said, let me look at the numbers and I’ll show you my spreadsheet. I’ll show you my credit score. If I can help you and be your buyer, I’ll do it. I looked at the house. It’s OK. It’s not the most desirable house. It’s a nice house on kind of a less nice street. And I said, you guys, this general is honestly will not rent for what is owed every month on it. Here’s my comps. I’ll show you. I’m not trying to trick you or hide anything here. So here’s my offer. If you paid me $200 a month instead of the 1200, you’re paying the mortgage company. I will make the mortgage payment. Put renters in. May go vacant for a while. I don’t know. I don’t think it’s going to rent that well. But five years from now, this will be a great deal for me. Today, it’s a terrible deal, which is why nobody’s taking it. If you help me, I can help you. And so they saw the opportunity. They said they waited two days. They called me back and they said, we’ll take that deal. We’ll pay you $200 a month for two years. And that was basically enough to offset the long fallen rent for the two years before I could raise rents to make up for it. And it did end up sitting vacant for a few months. And so I’m out of pocket on that. But that’s OK, because I picked up an asset at 3.625% interest. So the investor picture, going back to your question, what’s the bigger picture here? Investors can acquire low interest properties loans that you can’t get right now. Investor loans are 6, 7, 8% interest right now. So if I can go start talking to distressed homeowners and actually help people and build a portfolio with low cash outlay, who loses? 

CORWYN:

It’s a win. 

CALEB:

Yeah. So that’s the big plays. You can scale a portfolio. If you have $50,000 cash and you’re an investor, you could buy two sub two properties or one non sub two property. Well, it depends on your market and the prices and down payment range. But you get the idea. You can scale more with less cash and get better monthly payments. 

CORWYN:

That’s huge. That’s huge. The thing that really stood out to me in that is that essentially you’re transparent. You gave them, hey, look, this is what it is. This is where I am right here. This is everything else. This is what this looks like. This is what I need to need in order to make this work. If you’re open to it, then great. If not, then best of luck. 

CALEB:

Yeah. Can I tell you the three things I tell people, investors? Please. Creative finance transactions. And that’s the category we’re talking about. Like sub two seller finance contract for the lease option. Like name any of the strategies. These are creative strategies, and that means they’re non bank financing, non institutional funds do the transaction. Any of these. It really matters that there’s a story behind the deal because people don’t do weird stuff for no good reason. Creative finance is weird. It’s not normal. It’s creative, which means it’s not normal. So anytime you do not normal, there’s got to be a good reason, which means there’s a story behind it. Or you probably don’t have a deal. You’re tricking yourself into the deal. You’re tricking somebody else into the deal. And a lot of those fall apart before closing. And a lot of those turn into very distressed relationships in the longterm if you don’t get it right on the front end. And so the three things, man, I’ve got a long runway before I get to what I want to say. Don’t I? 

CORWYN:

No, no, no. You know, I’m looking here. We got to get some acceleration, man. We can’t take off on a show. Yeah, man. Come on, man. 

CALEB:

That’s a steam train building up. So the three things that I recommend all investors and homeowners, if you’re selling, all investors should be looking at these three things. Does a cash offer work? If they can take cash, do the cash offer. Simplest, it’s arm’s length and arm’s length. By the way, people ask what’s arm’s length and what’s not arm’s length. Here’s the illustration. Arm’s length is I’m looking out for number one. You stay back. Not arm’s length is like me and a buddy like, hey, let’s, uh, I’ll do this price, right? And we’ll just tell him it was a different price. That’s not arm’s length. I know the person we’re doing an inside deal. Arm’s length is two self-interested parties negotiating at a fair rate. So the cash offer is such an arm’s length transaction. It’s clean and you’re done. It may not be the best deal for everybody, but it’s a fast, clean exit. And it’s smooth. If you can do that easiest. Number two, realtor, put it on the MLS. Is there a realtor? Is there an agent who can help you sell this house? Now go back to my story in Colorado, the cash offer. Wasn’t going to work. Why do you remember? 

CORWYN:

Uh, numbers do one ran. 

CALEB:

So yeah, and it was worth what was owed on it, which means the cash offer, anybody who’s buying for cash buys at a discount, which means they would have taken a loss. That would have been an offer of two 50 or a, it would have been an offer of one 50 to one 60 on a house. That’s worth two 13. That’s not going to work. So cash doesn’t work. They tried the realtor route. They listed it, ran it for six months, had showings, nice house, bad street, just didn’t sell. So they tried cash realtor and then keeping it. That was the last discussion point I had with them. I’m like, why don’t you guys rent this out? It would be less lossy, right? It’s the same proposition as if I rented out and you pay me $200 a month. Why don’t you do it? It’s 45 minutes away. We don’t want to deal with tenants. That freaks us out. Okay. So if the cash offer won’t work, right. Because my offer would be one 60 and they’re like, absolutely not. Yep. I get it. The realtor didn’t work already and you don’t want to put it under another six month listing agreement. Nope, definitely not. We’re running out of time. Okay. And you don’t want to deal with tenants, right? Absolutely not. Okay. Now the conversation shifts. Here’s the magic of doing that. We go from me throwing offers and asking them to sell to me at my price on my terms. When they say those three normal things don’t work, I say, here’s how I can help you. And now I’m saying, I have this cash available. I have these terms available. If you’ll do those, that helps me help you. And so I said, I will make your payments. Here’s my credit score. I had a tenant not pay through all of COVID. Caleb never missed a payment. Caleb doesn’t miss payments. He honors his commitments, hence the credit score. So if I take this house off your hands, I will make the payments. Even if there’s no tenant, even if there is a tenant and they don’t pay, that’s building rapport and establishing that trust and it’s providing a real solution to people. That’s my favorite thing about creative finance. So cash, realtor, keeping it. If you can’t rule out those three things, you shouldn’t jump to creative finance. Creative finance is a last option. It’s a very good option if the other three don’t work. 

CORWYN:

Well, it’s funny you should even mention that because Caleb, oftentimes, a lot of times people approach things with creative financing before ruling out the other options. They, sometimes my phone will ring and I want to do this. Well, wait a minute. Why haven’t you, have you looked at this? Have you looked at that? Tell me why. Don’t just, let’s leap to that because as you may mention of, if there are other options, you leap to a creative option and you’ll either have an issue or problem or otherwise a transaction that fails because that wasn’t the best option. 

CALEB:

Yeah. Well, and I would still say, so I’m not against people leading with the creative finance offer. However, you still need to disqualify the other things because you’re setting yourself up for some heartache and headaches if you don’t do a good job disqualifying the wrong options. 

CORWYN:

Makes very good, very, very good sense. Caleb, this is probably a very good time for us to drop in your contact information. How can people reach you? How can people get out to you and your team? 

CALEB:

So the easiest central way is calebchristopher.io. And then you can find me my email. I do, I share my monthly business and real estate financials. There’s no guru crap where we’re hiding and putting a wall of BS up front. If I lose money in a month, I tell people I show red numbers. You don’t get the full P and L, but we show real numbers. So you can follow my businesses. You can follow the real estate portfolio. So if you’re dabbling in like, I wonder if I should buy houses and rent. There are some hard months. I’ll tell you that’s all right. That’s life. And I’ll share the honest truth with you. So you can find my email, the newsletter, and then all the businesses that I own. So creativeTC, that’s going to be creativetc.io. But again, you can find all of that stuff in one spot. And we just opened a title company in Colorado. 

CORWYN:

So look, Caleb, I want to touch on, because you guys have this new company, a new work company, Do As Guard. So tell our listeners about that. We talked about a little bit ago. 

CALEB:

So the do on sale clause, that’s pretty scary. Yes. I would say it’s kind of like shark bites though. Very intense, very scary. But infrequent. Okay. So you want some protection. People ask me for a couple of years, where is due on sale insurance? Somebody give me due on sale insurance. Caleb, surely you can make due on sale insurance. I’m like, it’s not a thing. You can’t get insurance for that, but I will fix due on sale. And if I can’t, I’ll give you your money back. And so we just turned that into a productized offer. So if you’re buying or selling a house subject to, you can get DOS Guard, D-O-S, due on sale as a prepaid remediation with a money back guarantee. If we can’t fix it, you can have your money back. So it’s as close to an insurance policy as I can get, but I definitely don’t want to be regulated by calling it insurance because it’s not. 

CORWYN:

I like that. Okay. Closest thing too. That’s awesome. So you guys obviously have built an entire business around this particular arena of creative financing and the pitfalls, and again, you’re trying your best to fill in the gaps and things of that nature to protect people, but also educate people in the process and assist them to make sure they get it done the right way. So kudos to you guys for what you guys have done, because it definitely speaks volumes as to what your intent is to educate people. 

CALEB:

As a broker, you yourself and your agents, you have a fiduciary responsibility to your sellers and your buyers. And so I understand, I just want to say this. I understand why agents say no, because if you don’t understand what it is and you’ve got other things on the table and other offers, it makes sense to say no to what you don’t understand. I just want to make sure that you guys know that I’m available. CreativeTC.io. We have free inbound consults, 15 minute call for free. We’re here to make sure that deals are safe, legal, and ethical, because that’s not what was there for me when I started. And I’m like, this is not okay. The industry needs an ethical, moral authority on what’s the best way to do these deals. 

CORWYN:

So Caleb, look, I want to take a moment here to thank you so much for taking time out of your busy schedule to be on with us today. Thank you for the insights and the counsel and all the things that you’ve given to our listeners here on the show today. 

CALEB:

Absolutely. It’s my pleasure. I love educating. 

CORWYN:

Love it. So look, guys, our listeners, guys, let me get you with a couple of takeaways. So one, homeownership is the first step, but understanding and managing is hidden cause is what turns into legacy. So when you have an opportunity to plug in with people such as Caleb, to plug in with him and his team, he’s an expert and a leader in this particular field in order to create your version of homeownership. Don’t let the opportunity pass. Creative financing done right. Isn’t just about acquiring property. It’s about protecting what you build, avoiding the traps that drain your wealth and passing it on stronger than you found it. Again, Caleb, I want to thank you so much from the bottom of my heart for being part of Exit Strategies Radio Show family. And thank you again, sir, for being on with us today. So for our listeners, guys, look, y’all know how I feel. You know what I say? You always give it to you and put the two of those things together this way, which is to tell you that I love you. I love you. And we must see you guys out there. 

ALAN:

When we actually do write down and really clarify that vision of what we want out of life, the real question needs to become, who do we need to become as people to reach that vision? 

CORWYN:

Good morning, good morning, and great morning, guys. Welcome to another fabulous episode of Exit Strategies Radio Show. Hey, I am your host, Corwyn J. Melette, broker and owner of Exit Realty Low Country Group in beautiful, beautiful North Charleston, South Carolina. Hey, if this is your first time, you know what I’m talking about. Listening, tuning in, maybe you caught it by accident. I don’t care how you got here. If this is your first time listening to this show, you saw a mammary for a treat because I’m mission here. This show is very simple. That is to empower our community through financial literacy and real estate education. I love putting those two things together. So guys, look, I always gave a shout out to those who listen to us so faithfully. Funny enough, I taught one of them right on up. They walked right on in the office the other day. So look, you’re super excited. Thank you, Elder Evans, for stopping by and visiting. Pastor Vanderbilt Evans, seeing you, that dude really will, really will snatch me up on my tippy toes if I don’t put that senior on his name. Love you, love you guys so much. My mama, auntie in Monts Coney, y’all know what I’m talking about. All the way back to Hollywood, no, no good. And guys, my folks in Marin County up there in Mullins, you know how we do it, what we do. I love y’all so much and I cannot stand it. And there’s nothing that you can do about it. So look here, today, we’re going to have a blast. I always tell people, look, when you start talking about money, you talking my language. Now, granted, I ain’t going to tell you that I’m not a thesaurus or a dictionary when it comes to it, which is why I bring in those people that got it all. They got all the other words and technology and all the other phrases and all that stuff. We kind of put all that stuff together. And I’m super excited to have a conversation today. I’m always trying to make sure we bring things that are relevant and content and information to you, our listeners, because not only do we value you, we want to provide value to you. So we want to help you get to that next level. And how do you manage and take care of what it is you already got, guys? So that’s one of the things that we’re so focused on. So today, look, we’re going to set the hook. Bait, line, and sink, all right? So we’re going to set the hook. What if the financial choices that you make today could secure your family’s lifestyle, build multi-generational? We like that multi. That signals increase for those who know where I’m coming from and create a lasting legacy. Alan Franks is our guest today. And Alan shares how thoughtful financial planning can turn goals into generational impact. Now, Alan ain’t just anybody. He’s somebody. He is a certified, look here, he check all the boxes, y’all. Financial planner, that’s the guy. Providing fee-based services, providing holistic, serving a whole man, whole woman, financial planning nationwide. He specializes in working professionals, business owners, and young families. So for those of you thinking about starting out, and look, I want to tell y’all right now, financial planning is not out of reach. And he helps them to build multi-generational wealth, focusing on client-centered, tax-efficient, and cost-effective strategies for long-term, we call it down the road, y’all, financial success. So Alan, I want to say thank you for being on the show with us today. Welcome to the Exit Strategies Radio Show family. My guy, how are you? 

ALAN:

Hey, I’m doing great. I’m just excited to be here, Corwyn. Thanks so much for having me on and for the listeners to listen in. Hopefully, I can deliver. Hopefully, I can be as entertaining as you were in that intro, man. I’m excited about today. 

CORWYN:

But look, so am I, because look here, like I said to you, and if you will, behind the scenes, guy, look here, you’re talking about money, you’re talking my language. Now look here, that might not be the only tongue I have, but what is worth, that’s a dialect I enjoy speaking. So look here, let’s get cracking. Let’s get to it. If you don’t mind, tell our folks, your version, who you are, how level, and what you do. 

ALAN:

Yeah. So I’ve been doing this for 15 years. I’ve been a financial planner, helping people reach their goals. What we like to do is we like to figure out what their goals are and then reverse engineer a financial plan to help them get there, right? So what we’re trying to do is figure out exactly where somebody is, exactly where somebody wants to be, and draw that straight line from point A to point B. Now the line’s never straight. Life is not linear. Business is not linear, right? But if we could draw a straight line, we at least have a map. We’ve got a guide point, right? And so what a straight line is in the financial planning world, is this the most tax efficient and cost advantage way of getting from point A to point B, right? So when we’re looking at financial planning, there are so many moving parts here that can affect the trajectory of somebody. It’s really hard for one person to know everything. Heck, I’ve been doing this for 15 years and we still rely on a team of people. When we meet with somebody who’s DIYing their finances and doing it themselves, what we’re going to find is that they’re typically really good at one or two areas. Maybe it’s stocks and bonds or so, maybe stocks and cashflow. They may have no clue what to choose on their employee benefits. They may have no idea how real estate and utilizing other people’s money, how that can work. They may have forgotten to get their estate plan and their wills and their trust on, right? So what we did with our book and Power of Money was actually create an A to Z workflow on, hey, if you were not to hire somebody, if you were to DIY it, here’s what you need to do A to Z on here to have a really good financial plan. And obviously my hope is throughout this, at some point you say, you know what? I need help here. Let me give Alan a call. Maybe he can help. 

CORWYN:

So Alan, you stuck something in there and I don’t want our listeners to miss it, okay? So you are the author, which I didn’t say in introducing you. Let’s break this thing down to quote unquote, Ms. KRS once said it sometime ago to the very last compound. You put the words in the paper together. I did. Yeah. And wrote a book called Empowered Money. I love it. I love it. Matter of fact, guys, look here, I think he just moved a copy of it around on the desk. 

ALAN:

So if you watch this- I wanted to show you, if you’re watching on video here, this is not a fluff piece. This is not a marketing gimmick here, right? This is a very expensive business card. It is. And it gives me an awesome podcast like this one right here. But the truth is, is I wrote this as a labor of love. I wrote this as an obligation to help share the information that I’ve learned over the last 15 years to people that may not be ready to go buy my services quite yet, right? I did not hold anything back in here. There’s an entire chapter on real estate as well, and understanding what wealthy people know, is that debt is simply a tool, a tool that wealthy people know how to utilize well, but most people do not. And so I want to share with you that copy and show it to you to say, hey, this is no fluff piece, right? This is the best I’ve got over the last 15 years. And a lot of the stuff is time-tested and true. I will say this, the bulk of the writing did happen pre-COVID, and we do live in a very different world here. So some of the things might not be as in style as they once were. We might be having to get a little bit more creative on how we generate wealth, but still the basics and the fundamentals are always going to be the same. 

CORWYN:

So one of the things for our listeners, guys, let me give you these subtitles. So empowered money, name of the book, build security, accumulate wealth, and live your fullest life. So Allen, I want to kind of come back around on this, because on this show, and just by general practice theory, all that stuff for me, I am huge on a life by design. I’m always asking people, how do you want to live? And whatever it is, then we need to get that in line. So what you started off with in explaining how you guys work and how you work and helping people, okay, this is where you are. This is where you want to be. So we’re going to draw a line and figure out the course that we need to take to get there. People need to know where they want to be. That’s just a real, real topic. Where do you want to be financially? And my assumption is, so I know you have a holistic approach. So this is a question that I’m weaving together here, which is, how do you approach that? Like, you know, is it just merely because people tell you all the time, I want to be a millionaire, or I want to have a hundred million dollars or whatever number it is that they want to have. How do you, together, what do you want life to look like? Like how much income will you need, or do you need, or do you want to have, how do you want to live, home, all that stuff? What is that entire approach that you guys kind of start people with? Let’s take a short break. 

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ALAN:

Yeah, I want to take one step back. When I was growing up, my father was always reading books, and his favorite book, and it’s still my favorite book today, is The Science of Getting Rich by Wallace D. Watts. Now we’ve all heard of Think and Grow Rich, and if you want to read that, that’s great. It’s 400 pages, sure, but I like the much more shorter, much more succinct The Science of Getting Rich, because what it does is it talks about the metaphysics about envisioning what you want, and how we tend to gravitate towards that. The truth is that when we’re setting goals, when we’re setting dreams, what we’re doing is we’re getting ready. We’re getting ready to accept the opportunities that are going to fall into our laps. If we don’t have a dream, if we don’t have a navigation of where we’re going to go, and all of a sudden the best opportunity hits us right in the face, we may not take it. We may not be ready. I equate it to playing basketball, right? You got to be ready to shoot or shoot. You got to be ready to shoot. You’re always looking for the shot here. Well, if we don’t know that, if we don’t have a goal of winning the game, and knowing what it’s going to take to win the game, then maybe we catch the ball, and then we look to shoot. By that time, it’s too late. The defense has gotten there. The opportunity is gone. When I say we like to reverse engineer a financial plan, we have to have a guiding light here. We have to have a why behind what we’re doing. I’m about to ask you, Mr. Client, to do something that is totally outside of human nature. I’m about to ask you to save money for a future date. Let me tell you something. You have about 500,000 years of evolution that is saying, don’t do that. If you think about our ancestors, however many years it was ago, they didn’t have to think about retirement. They weren’t even living to age 65. Heck, our grandparents in the 1900s weren’t living to age 65. Even today, healthy life expectancy is only 75. You’re telling me that, Alan, I’m supposed to put away money at 35 that’s going to grow and that I’m going to be able to spend at 65. For hundreds of thousands of years, all that humans actually cared about is what were they going to eat next? What was their next meal? I think we need to understand that human nature is not working for us. Us planning for 30 years in the future to live another 30 years after that is really not natural. We’ve got to put some systems and processes in place here to help us stick to this when we’re not motivated, but it all starts with motivation and inspiration. That’s what that dream does. Now, when we look at this and say, okay, we want this, we want that, and then we can reverse engineer. How much do I need to make? All that stuff. We can do all that. I’m not certain. I think it would be a good exercise, but I’m not certain that it would really be impactful throughout the year. I want to approach this from a different question. When we actually do write down and really clarify that vision of what we want out of life, the real question needs to become, who do we need to become as people to reach that vision? I own a business, Corwyn, you own a business, and if you’re a high achiever like I am, I know this about you. You always feel that there’s another level that you haven’t reached yet. Every high achiever feels that way. If you feel like you are at your pinnacle, that you are overproducing, I don’t know how to relate to you because I’ve been a high achiever for a very long time and I always feel crappy about where I’m at. I’m like, man, I should be here instead of there. We’ve got to not only set that vision of where we’re going to go, but we also got to ask, who do we have to become to be able to reach that? 

CORWYN:

That’s what we’re talking about just in general and conversations that I’m having. You got to adapt. You got to become the person that is the person that has what it is that you want, if that makes any sense. Real estate, our show fundamentally, again, is about money, strategies related to it, obviously, and how to manage it, and then real estate. For your clients, are you advising them on real estate holdings? Are you incorporating that as a part of your strategies that you’re advising on? 

ALAN:

Yeah, we believe that there’s three main ways to build wealth. Number one is the stock market. All you got to do is go to work and click that little button that says, add to my 401k or 403b. The truth is that the stock market is an insanely easy way to get your money working for you. Think about this. You have the best, the smartest, the hardest working people in the world running these companies here, and you’re purchasing a piece of that. As they’re working really hard to grow that company, your portfolio will grow as well. Now, I want to be clear, it’s not going to grow linearly. It doesn’t always grow. We do have corrections. 2022, the stock market was down 20%, even 2008, which was a legit crisis. It did recover. We got to understand it doesn’t always go up, but in general, over time, it does. We can’t lose faith in the American economy and the capitalism right there. Generally, stocks do go up. That’s the easiest way, maybe. The second most common way is through real estate. What I love about real estate is this idea of leverage. If you go buy a $500,000 house, you don’t have to put $500,000 of cash down. You get to put, let’s just call it 50,000. The next you know that $500,000 house, the same goes to $600,000. You’re like, oh, that’s nice. We got a nice little rate of return on that half million dollar asset. You only put 50 in. You got 100% rate of return there because you put in 50 and it grew by 100. That’s a really, really good idea. That being said, we got to understand where we are currently in the market, which Corwyn, I know you know this, but the real estate market’s in a little bit of turmoil right here. We’re in a little bit of a wait and see. What’s going to go on with interest rates here? What’s going on with the market right here? The truth is real estate’s been an awesome and fabulous asset class for so long here. I’m not saying it’s not going to be there for the future, but it needs to be part of an overall financial plan. I personally own six rental homes myself. We have some long-term. We’ve got some executive rentals. We’ve got some short-term Airbnb. I also like the real estate syndicates with multifamily there. I’m a big believer that real estate needs to fit into the portfolio to some extent right there. What I do find, and this is more on the Instagram reels, Twitter feed, is that we get in our own algorithms. Next thing you know, if you like stocks, all you’re going to get is stock stuff. You like real estate, you’re going to see it all through a real estate lens. You like crypto, you’re going to read in, and you’re going to validate your beliefs on crypto. What we find is we’ve got our real estate bros, our crypto hoes, and our stock junkies. If you’re in that field, that’s all you see. I’m here to tell you, hey, can we take two steps back? Can we admit a couple of things? If you were in one of those fields, you won over the last five years. It doesn’t matter. If you’re a real estate, crypto stock, you won over the last five years. It’s been really easy to make money the last five years. Can we also agree that the next five years are going to be different than the last five? Right now, it’s different. It feels different. It doesn’t just feel different. It is different right now. It’s almost like, and I don’t want to sound insensitive, but let’s talk about business and money. It’s almost like those COVID years were the party, and right now we’re dealing with the hangover. It’s tough right now. Inflation is high. Business is slowing down. Real estate transactions are slowing down. We’re entering definitely into a different world. What I would say is you mentioned something earlier about adapting. Going back to Charles Darwin’s theory of evolution, it’s not the strongest that survives. If it did, T-Rex would still be roaming this earth eating us. It’s the one that adapts the most, right? T-Rex no longer here. Turtles are still here. They were there back then. They adapt. As we are looking at ourselves as humans, as business owners, as investors, we got to make certain that we are in tune with what’s going on, and we can’t just fight for the status quo because that’s what we know. We got to be willing to adapt. 

CORWYN:

That’s very fair, and that’s very good information and useful. Obviously, as you’re talking about wealth building or revenue income producing strategies, so growing money through market, growing money through real estate, et cetera, now you got to get to what the next piece or component would be, which I imagine would be how to manage that cash flow and be strategic with debt. What does that component look like for you as far as ensuring that you’re still achieving growth, but you’re also limiting risk? 

ALAN:

Yeah. I would say I did mention there’s three ways to build wealth. I didn’t tell you the third. The third is to start and sell a business or to buy, build, and sell a business. Now, I want to be clear that’s also the hardest way to do it, and there’s a lot of broke entrepreneurs in this world. They’re either broke financially or broke personally because they’re working for their business in there, man, and it’s tough. It is really tough to start and run a profitable and successful business that grows year over year. Now, what I will say about that is if you do that entrepreneurial mindset, there are definitely tax advantages. The IRS tax code incentivizes business ownership there. When we’re working with our clients, we are trying to help our clients reduce their biggest expense. Oftentimes, that’s not their mortgage. That’s not the car payment. That’s not the food that they eat. It’s the taxes that they pay. As a business owner, Cory, and you probably know this, you have different things you could do than a W-2. There’s a lot of benefits there, but to go back to your question of cash flow here and also mitigating risk, we need to understand a couple of things. I’m going to curse, but I hope it’s not too bad here. The famous Forrest Gump once said, shit happens. We need to understand that in life and in business and in finances, it is not linear, bad things. We need to take some time. Great book, A Minute to Think. We need to take some time to worry about bad things happening. Worry without action leads to stress. Worry with thinking and a plan can really help you sleep better at night. Whatever it is you’re worried about, it could be your health, could be your finance, could be your business, could be politics, it could be this earth. There’s so much we can worry about here. I could tell you, don’t worry about what you’re going to. Why don’t we actually think about this stuff and get a game plan here? If Forrest Gump is correct and SHIT does happen, what are some things that we can do? Number one is that we got to build an emergency fund. This is just step one. In my opinion, you can’t do anything until you build three to six months of living expenses. Now, how do you do that? You get there through cashflow and you get there through budgeting and watching expenses and making more than what you’re spending and then automatically having that go to that emergency fund of three to six months. Once you get past there, now all of a sudden we can graduate up and we do need to look at looking at things to protect ourselves. After the emergency fund, we like to focus in life and disability income insurance. People die. A hundred percent chance, Corwyn, you and I are going to die. We don’t know if it’s in 40 years. We don’t know if it’s tomorrow, but I always ask people, Hey, if you don’t wake up this morning, what happens? What happens to your business? What happens to your finances? What happens to your family? Do we have your estate planning and your wills and trusts created? Do we have enough life insurance to take care of your family to keep that standard of living on going? What if it’s not a death? What if we’re just sick? We’re one bad visit from the doctor to not being able to do what we do. Particularly you and I, Corwyn, who are performance driven, right? If my wife, who’s an internal accountant at a corporation, gets sick or hurt, she’s going to have an amazing disability policy. She’s going to have a lot of leave, right? That’s all through her company providing for it. Me and you, we got to go out. We got to sell. Even if we’re not feeling our best, that’s not about battling cancer. It’s, Hey, if I don’t feel good that day, my results aren’t going to be the same. Whereas my wife, no offense, but she can go to work and maybe even have heartedly a few days a week and be totally fine, right? Me and you can’t, right? We are not in that world. So we got to protect from what we can. What does that mean? That means entity structures and LLCs protect against lawsuits. That means cashflow management and emergency fund. That means proper life and disability. That means estate planning, wills and trusts and health directives. We’re going to do what we can, but not taking the time to take a step back and think about what are some things that could really derail me and what are some action items and a plan that I can have in these decisions? The end of the day, it could cost you, but it is going to lead to stress because you’re worrying about it anyways, but you’re not coming up with a plan. 

CORWYN:

That’s very fair. That’s very fair. So Alan, look, this is probably a great time to make sure we get your information out. So how can people reach you? Where can people get the book? Let’s talk about it. 

ALAN:

Let’s go. The easiest way, the easiest way is to go to empowered-money.com. And there, a couple of things. Number one, you’re going to be able to see every single podcast I’ve ever been on. You’re going to be able to see my podcast that I host. You’re going to be able to get my book where you have a 10 minute free financial plan that you could do right there. And then also you can email and reach out to me, Alan, A-L-A-N at empowered-money.com. We love to talk to you. This is our passion. This is what we do. We’re here to give back. We are mission driven here, and we want to help people not just survive financially, but get them to a place where they can start to thrive. 

CORWYN:

Look, yeah, I love that. I really, really do. So Alan, look, hindsight question for you, and you can give this in respects to yourself or a client that you have served because we all have those moments. Something happens, something you kind of look back like, man, if I’d have known this back then, man, dog gone it. So what is that moment for either you or an application with a client where you was like, man, dog gone it if I’d have known that, that would have changed everything for you or them? 

ALAN:

I think, and so another way to ask this is, Hey, what would you tell your kids to do? And I think I grew up in a small town and I was used to being a larger fish in a small town. And I tell you what, when I moved to a larger pond, I was trying my best, but man, I just wasn’t feeling good about it because it was so used to being at the top of the top. Right. And so I would tell my kids and also looking back, I wish I would have moved in one of the biggest markets that I could have right away. I went to college at Mercer University in Macon, Georgia. I stayed in Macon, Georgia. To be clear, I stayed there because my girlfriend now wife was there and I do not regret that one bit, but I would tell my kids, I was like, get in a car, get in the jet, go to New York, compete against the best of the best for a little while. Go get your MBA that way. Second thing is that I graduated in 2010 in the depths of the economic recession. And man, it was tough. There was no jobs. I became an entrepreneur at 22. I’ll be honest with you. I wasn’t ready to be an entrepreneur. I needed some structure. I needed some learning. So I think if I were to go back, maybe not a long time, two, three, five years, I don’t know, while I was trying to find myself, I wish I had somebody tell me exactly what I needed to do during that time so I could learn a little bit more discipline, which I ended up learning. It took me longer. I went to the School of Hard Knocks. And I would tell you this, Horne, the one thing I wish I’d have known, and I don’t know if it would have mattered, but this goes to finances and to business ownership, is we oftentimes, we hear this, I wish they taught us this in school. I want to be clear. There’s no way to learn how to be a business owner except being a business owner. There’s no way. There’s one school that teaches you how to be a business owner, and it’s not Harvard. It is the School of Hard Knocks. The MBAs that are coming out of Wharton and Harvard, they’re not built to be entrepreneurs. They’re going to be consultants, investment bankers, really, and they’re going to make a lot of money. Don’t get me wrong. But I wish somebody would have told me that, hey, you’re going to become a really good financial planner, but your business acumen is going to take forever to build up. And that’s what we’re doing right now. My new company, the Business Planning Institute, is there to help teach business owners what I’ve learned through all the books I’ve read, through all the things that I’ve done personally, through the perspective of working with hundreds of business owners out there, saying, hey, let me help you not make as many mistakes. Let me help you accelerate your business growth here by three, four, five years by just giving you perspective on what works, what doesn’t, what to be worried about, what not to be worried about. So I think that would have been created by, so I’d say, move to a big city, move to the largest fund you can, compete with the best of the best, and then just know that, hey, there is school after school, it’s called life, and buddy, it slaps. 

CORWYN:

Yeah. So what I just heard you said is, look here, I got my head busted a white meat, so you ain’t got to get yours bust. That’s what I just heard. 

ALAN:

That’s right. 

CORWYN:

I love it. 

ALAN:

That’s right. And let’s talk multi-generation, my ceiling, therefore, on here. And that’s what my parents were able to do for me. But I tell you what, man, I got into this business at 22 with no clients, no salary, no income, nothing. And I never wished that upon my kids. I was questioning my identity at times. I remember crying, all my girlfriend, now my fiance, then my wife’s four, saying, I don’t know if I could go on. I don’t want that. I want them to take over businesses flourishing and go 10X it. That’s what I want because I still, I learned a lot in those five years. I learned a lot of grit. I did. I learned a lot. I have scars that are so self-limiting from those times. I want them to listen. They’re going to have scars. I just want their scars to be at a little bit higher level than mine were. And so that’s my hope. 

CORWYN:

So Alan, look, I want to thank you for that. I want to thank you for being on with us today. And that was great commentary. And look here, you gave me some visuals in there for sure, man. So I’m loving it. So again, thank you so much for being, taking time out of your business schedule to be on the show with us today. I appreciate it. Thanks so much for all. Appreciate you. So for our listeners, guys, let me give you these takeaways. First for you listeners, your wealth isn’t just about what you earn today. It’s about what you leave for tomorrow. We’re always talking about legacy here on this show. My takeaway from Alan’s discussion, from that discussion today, strategic financial planning transforms your hard work into a lasting legacy for your family and also for your community. So Alan, again, one more time, man, thank you so much for being a part of the Exit Strategies Radio Show family. Again, I greatly appreciate you taking that time out for us today. Thanks so much for all. So for our listeners, look here, y’all know how I feel. You know what I say. And I always put the two of those things together and I give it to you this way, which is to tell you that I love you. I love you. And we’re going to see you guys out there in those streets. 

KRISTA:

Think about how you’re going to exit. Don’t go into anything unless you know how to exit properly. Real estate doesn’t do anything for you unless you exit properly. 

CORWYN:

Guys, good morning, good morning, great morning to you. Welcome to another fabulous episode of Exit Strategies Radio Show. So look, for those of you who’ve been watching us, who have been following us for some time, y’all probably was digging our new intro. I’m so stoked. I’m so excited, guys. We have been moving the needle. We’ve been seeing people do miraculous things in their lives, changing their entire trajectory with their family. It has been amazing. And I want to thank you. Thank you all for continuing to do what you’re doing right now, which is to have tuned in, whether you’re in the car and got us on the radio, whether or not you’re at home flipping flapjacks or pancakes or making waffles and chickens and waffles. Y’all call me if y’all making chicken and waffles now. Whether you’re doing any of that, guys, whether you’re catching us on our website as a podcast on your favorite app, guys, thank y’all so much from the bottom of my heart. So I’m super excited, guys. Again, always got to give a shout out to those people that listen to us faithfully. Pastor Vanderbilt Evans Senior, look at that dude will jack me up if I don’t get his name right. So I always got to say hello to him and his beautiful, wonderful, amazing wife. I’m Ms. Sondra Evans. The Kellers, the Lequeu family, my mom out there in Mark’s Corner, y’all that listen out there in Hollywood, my people in Marin and Mullins, guys, thank y’all so much for tuning in. So I’m super excited about this show today because every time we get to talking about money, that’s a different type of conversation. You know what I mean? We got to rub our hands together. We got to smile and all that stuff. And how do we build and create legacy? And our guest today is an expert in this field. I’m super excited that she’s taking the time out to be with us here today. So today I’m very fortunate to have none other than Mrs. Krista DeBrine. She’s a proud alumni of, yeah, she had to tell me about that. Look, it’s like, look here, we going to un-brine a turkey. That’s what she said to me. But a proud alumni of the University of North Florida, a business development specialist. And she works in the South Carolina Low Country. She has more than a decade of experience across sales with real estate and logistics and helps investors and property owners make smart, practical decisions when navigating complex transactions. So what makes her especially valuable today for you all as our listeners, she talks and speaks to homeowners, investors, future buyers on her ability to translate. Yes, she speak this language, guys, of tax and real estate investment strategy. She makes it plain for us, all helping us to understand not just what your options are, but when they really actually make sense. So today she’s going to help us break down some of the rules around 1031s, how they work, but she’s also going to talk about some of the 2026 new tax rules. So guys, I’m super excited. Please join me in welcoming Krista to the show. Krista, how are you doing today? 

KRISTA:

I’m doing well. Thank you so much for having me on your show and congratulations on all your success. It’s been such a hit. 

CORWYN:

Well, thank you. Thank you. I appreciate that. So look, I always like to ask people, you know, a high level overview, who you are, what you do, and let’s get into a conversation. I’m excited about this today. 

KRISTA:

Thank you for having me. I have been in real estate for years now, as you’ve heard. I’m new to the low country for two and a half years, but for those two and a half years, I’ve been lucky enough to work with Banker Exchange and my company, Banker Exchange, they have been deferring taxes for over 34 years. So while it’s new to me, it’s definitely not new to them. And while it’s new to me for two and a half years, I can definitely say that every day I’m learning something new. And from where I started from here today, it’s countless information. It’s endless information. I always feel bad for whoever gets in an elevator with me because I share too much on the subject. So we only have so much time today. 

CORWYN:

Look here, I love it. The elevator speech. So look, let’s give an introduction. Some of our listeners may be familiar, many may not be. What is a 1031? Simple terms. What is a 1031 exchange? 

KRISTA:

Perfect. Simple term. You have an investment property. Say it’s a rental property. You’re selling said rental property and you’re selling it and hoping to get a profit like everyone would want, right? That profit is called the capital gains and the IRS says, well, I want a portion of that. I’m going to tax that. So it’s called the capital gains tax. A lot of people don’t love this idea, right? Would you want to pay, lose all that money when you’re selling this property? No. The point of a 1031 exchange is to defer your taxes. So you’re not avoiding them, but you’re kicking the can down the road a little bit. But that means you actually still have more capital you can put into your next project. So if you’re selling a rental property, you can buy either another rental property or an office building or land, as you can mix and match it, which a lot of people don’t know. Defer those taxes. You sell at 600,000, you buy maybe at 800,000 and you defer those taxes. Now you’re not wasting money on taxes right now. You’re investing in your own future and you’re continuing your legacy. 

CORWYN:

That is huge and that’s perfect. So one of the things, Krista, obviously we’re in a new year. We’re in that season period of time of this is a tax season. My accountant who I’m fortunate enough to have right down the hall. So when I got a question, I literally just stick my head in his office. Short of it is he is nailed to the wall right now, literally in day and night, overnight, almost sometimes working on returns, et cetera. So what rules related to 1031s and these types of transactions have changed for 2026 as people file their taxes? What does that look like? 

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KRISTA:

Luckily for 1031s, the one big beautiful bill actually solidified the purpose and this value in our economy. And so it’s never been a better time to do a 1031 exchange if you’re looking to sell your property and invest in another. And the reason being is because we can’t always predict the future, right? Every presidential election, someone dusts off the shelf the 1031 bill and they say, hey, let’s revisit this. And it’s always on the chopping block. And then it comes to decision time and they look and they decide that maybe they all have investment properties and they all make the right call or they look at it and they actually look at how much money goes into the economy overall. I mean, majority of the time, people level up by 30%. And if that means new capital goes into the next property. Now, Ernst & Young is an accounting firm, well-known. They did a deep dive study on the 1031 exchange. And what they found is that it’s actually 80% of the people who have property and then 1031 to another property, 1031 to another property, 1031 to another property, 80% of them cash out at the end instead of giving it to their next generation. And that means that it’s not that there’s individuals or companies or LLCs or entities that are holding these taxes and not releasing them into the government that we’re not reaping the rewards of. They’re actually increasing over time, but that means their income and their profits are actually increasing over time. So when it comes time to pay out, if they want to exit, yes, their taxes are higher, but their profit margin is so much more significant that it doesn’t matter or it doesn’t hurt as much. And so, but 80% of it goes back into our economy. That’s a beautiful thing. 

CORWYN:

So one of the things that, you know, a lot of people sometimes I think, and please, Krista, please correct me because you’re the expert in this field. I’m just a novice. I’m maybe even more of an amateur, but a lot of people that take advantage of 1031 are really mom and pop investors, like own individual. They’re trying to scale up and grow the portfolio and they leverage this for that. Am I correct? It’s not usually institutional people, correct? 

KRISTA:

Yeah, the average exchange that we see is maybe a million to 3 million, somewhere in around there. So those are the averages. So those are the mom and pops. Those are the ones that maybe have a fleet of Airbnbs up in New York. And then what happens? They all move to South Carolina, right? We’ve seen them. We know they exist. They’re out there. And so they don’t want their fleet of Airbnbs up there where they can’t manage them. So if they sell their property at 600,000, they get to put that 600,000 to their property gear. And so it puts money into this economy, defers those taxes. They’re in the same situation they were previously, but now they get to manage their portfolio or they want to diversify their portfolio. Maybe rental properties on the water in Florida is not the best solution for them. Maybe they want the mountains. Who knows? They can make some money. 

CORWYN:

So that’s interesting. And shout out to our folks from New York that got the fleet of Airbnbs. Please make sure you reach out. And for my folks, we always say everybody’s from Ohio that moves down here. And we love our folks from Ohio. But look, let me ask you this one. Why is this relevant? Regulations, and you made a very valid point. Being within the industry from the side that I’m in, we see 1031s literally every year or every congressional session. It seems like there is something, somebody talking about 1031s and trying to leverage it as a means, essentially to take it away. And we see time after time, year after year, that it’s always preserved because it makes sense. Everyone advocates for it because it makes sense. But from your point of view, from your perspective, why are 1031s still relevant? 

KRISTA:

Oh my goodness. And do we have enough time? It’s so relevant for everyone’s specific uses. I mean, you can go from someone who has a rental property, just one tiny rental property. Maybe it’s a townhouse or a condo, or maybe you have a client who has a hotel and they want to move from one hotel and then finally expand it. So they need a new hotel. Do they deserve to get hit with so many taxes when they sell that little hotel because they finally have enough business to expand? That’s going to hurt them. So in every different type of way, if you’re selling real estate and you’re hoping to go into the next real estate venture, this is the smoothest transaction you could possibly do. And it’s the best time to take advantage of it because again, we never know really when it’s going to come up. We have within our FEA, realtors have their National Association of Realtors, QIs, which is what we are, Qualified Intermediaries. We have the Federation of Exchange Accommodators, the FEA. And so yes, we have our own police force, if you will, our big head honchos. And so we have a Government and Affairs Committee that actually goes and they check on all the different regulations. If there’s going to be new bills, we know we are up to date. We know more than anyone else will probably have at their fingertips. Like for example, in California, there’s a proposed bill that they’re going to be limiting the 1031. If they do that, if they limit it to maybe it’s 500,000 that you can exclude, most buildings, most properties go for one more than that. And so that’s going to limit it. It’s going to hurt the everyday mom and pop for sure. And it’s going to definitely hurt the bigger guys too. If they’re going to be moving from their big company from one building to the next building, it’s going to hurt their flow too. And it’d be interesting to see where that trickles down into the economy between how that’ll relate to them, where they’re going to find that extra income to put into their property, if they’re going to be not saving on taxes. 

CORWYN:

So let’s kind of take what I would call a shift, Krista. For our listeners, what we’re going to talk about now is how you help people to understand the 1031 and whether or not it’s a realistic option or something they just heard about, but never really, if you will, understood. And that’s what we’ve been talking about. My apologies. So let’s talk about mistakes. The costly mistakes. This is where people start to like, oh, yeah. 

KRISTA:

We’ve seen them. 

CORWYN:

What about the folks who sell first and ask tax questions later? 

KRISTA:

It’s always so sad. I always wonder if I get a call from a client who says, hey, Krista, you know, my realtor told me to call you. I asked her about a 1031 exchange and I says, okay, well, tell me what you’re thinking. It’s like, well, I heard about this reverse exchange. So I sold my property yesterday or like last month, some time in the past. I’m like, when you say sold, tell me that you under contract. You didn’t exchange keys yet. And they’re like, no, no, no, no. It’s sold. It’s done. It’s like, oh, no. And I’m always wondering, did the realtor have them call me so I could deliver the bad news? Because I know that I taught that realtor better. There’s no rain checks with the IRS. So if you go to buy a property and then you’re thinking, oh, okay, well, that’s great. I’m going to buy my replacement property. And okay, now we can go and sell our rental. There’s no rain checks. You can’t involve us later. So I guess the number one mistake is involving us too late. There’s never a too early to engage in us. And by engagement, I mean, call us up. I mean, I will have realtors call me up saying, hey, I have an appointment I’m driving to and they have land they’re thinking of selling. What are those questions you want me to ask again? And I’ll run it over with them. Make sure you know how it’s titled. We have clients who it might be in a multi-member LLC. So it’s maybe Mary, Gary, and Bob. And Mary, Gary, and Bob own an LLC together and they own this land. But when they go to sell it, they find out no one tells us, but then Gary says, well, I’m actually going to take my portion and go to Tahiti. Well, you’re all in the LLC together and that’s how it’s titled. So the titling needs to match. So if you’re titled together one way, when you sell, you need to be titled that same way together when you purchase. So that’s the mistake of not calling us soon enough to find out because we can guide people through what to do for those situations. It’s fine if Gary wants to go to Tahiti. We’re happy for him. Ask him to send us a postcard. But we got to make sure that Bob and Mary are in the right position that they can take their two thirds and 1031 out. 

CORWYN:

It makes perfect sense. And that’s interesting because people don’t think about that. And Matthew, you may have given me another question here, but I’m going to ask you this one here first. What about the mistake of missing the timelines and disqualifying the exchange? 

KRISTA:

That could be a rough one. And people because, OK, so when you’re selling property A, the property that you’re selling, your rental property, the day that closes is day zero. So your clients are going to have 45 days. The next day is day one. They’re going to have 45 days to pick out what they want to buy, right? And picking out doesn’t mean they have to be under contract. It doesn’t mean that they need to be closing within those 45 days. It means you need to give us a list of which properties we’re going to say to the IRS, this money is designated for these properties in those 45 days. And it’s calendar days. And so a lot of our clients say, well, 45 days isn’t going to be long enough. Well, they’re calling us. And it’s interesting because sometimes they call us before their property is listed. So it says, well, why don’t you start looking now? Your 45 days hasn’t begun yet. You’re not even under contract to sell yet. It’s not even a future date yet. So go ahead and take your clients and have those serious conversations. Do you want to buy again in South Carolina? Because with the federally recognized tax code, you could buy anywhere in the United States and the U.S. Virgin Islands and Guam. So narrow down where the location. Find out what kind of property. Is it land? Is it you want to mix and match, get a rental and land, maybe an office building in there, whatever you want to buy, have a conversation with your clients. So that way it narrows it down. So that way they feel more focused in on what it is that they want to go into next. So they get excited and then they can stay on top of that timeline because if they miss it, it hurts them. But it’s like when your kid has to go and get a vaccine shot, right? It hurts them, but it hurts us so much to watch them cry, right? It hurts me more than it hurts you. It was so sad. So that happened today. So it’s sad because day 46, whatever properties your clients have identified, that means those are the only properties in the arena of real estate we can release that money for. And that’s what’s hard too is because the 1031 is a fantastic, incredible, there’s nothing better in the IRS codes for saving the economy, for personal use, for investment purposes. But you have to do it right. We like to think of ourselves as the expert tour guides for the game. Now, once you’re in that 45 days and after those 45 days and you’re locked into the arena, that’s the only properties that we can release your funds into. And if say one property burns down, a seller takes it off the market, you got outbid, we’ve pled that case to the IRS and said, listen, our clients, they only picked free properties and none of them worked out. What do we do? We either have to hold their funds so the clock runs out at day 180 because it goes from day 45, day 46 to day 180. We have to hold those funds until day 181 when we release it. Or the IRS says, well, everything’s for sale. Go make them a better offer. No one wants to have to do that. So, luckily we have very in-depth conversations with our clients because we want to make sure it’s clear. We don’t want to overwhelm them by the stress of the regulations, but we want to make it clear so that way they feel more empowered and that they got theirs and that they’re confident in what they’re going into. 

CORWYN:

Makes perfect sense. So, Krystal, thank you for that. So, we’re going to take a moment here and just kind of plug this in. Hey, guys, you’re listening to Exist Strategies Radio Show where we help you make smarter real estate decisions that support long-term wealth and legacy building, not just quick wins. So, we’re talking to Krystal DeBruin today and she is talking to us about 1031 tax-free exchanges. And before the break, guys, we’re talking about the mistakes. But Krystal, we don’t want to delve on what could go wrong. We want to make sure we know how to get it right. So, a question I have for you is, why should strategy come before transactions? 

KRISTA:

Yes, love this question. Well, let’s put it this way, Kwaren. Have you ever sold a client a vacation home, like a second home? 

CORWYN:

Yes. 

KRISTA:

I’m sure you have. And they have no intention of doing anything except it being their second home, their vacation home, their beach home, their mountain home, whatever it is, their cabin. Now, if you call them up today and say, hey, are you thinking about selling in one to two years? And they’ll say, well, I don’t know. Maybe. It depends. You’re like, okay, well, if you are, would you be putting yourself in the right position strategically to defer your taxes? Because if you were to sell it today, you couldn’t do a 1031 exchange. But if you strategize and you start renting it today in one to two years, when you go to sell it, you then have the option to defer your taxes. Maybe they’re sick with the cabin rental. Maybe they’re ready to move down to the beach. And by renting it, I mean, here’s the best part. It’s only a minimum of 14 days out of the year that we require for it to be a rental property. Fair market value, 14 days, doesn’t need to be consecutive, but it’s strategizing and it’s having those conversations. That’s so important. Sell a vacation home today, it does nothing for your clients. 1031 later, now they’re excited about buying another property, which one, can be another investment or sales for you, but also it defers their taxes and it allows them to level up. It’s more capital in their pocket that they can buy higher up. 

CORWYN:

So you just said something Krista that really sparks and makes sense. So someone legitimately could buy a property in a market area where they want to be at. Obviously, you know, an area that you can do a 1031, but you could buy a property, sell an investment property, buy a property there and short-term rent it for a few weeks out of the year. If that, I mean, the prescribed time period is and still qualifies. Is that correct or am I incorrect in what I just said? 

KRISTA:

So if you’re buying a vacation home and you go to rent it, you have to limit your use on vacation days. Now, maintenance days are free. Those are free days if you’re going to check on the house and make sure you change out the air filter, such as that, that’s a free day. 

CORWYN:

Okay, interesting. So that is completely expands and gives people additional options. So let’s talk about how life defines how it’s done, meaning how life changes such as retirement, heir’s property, cash flow, that stuff affects these types of decisions. So give us some insight on that. What should people be thinking about in their strategy? 

KRISTA:

Absolutely. I mean, there’s a product out there called a Delaware Statutory Trust, and it’s for kind of layman’s term, our retirement clients. Those clients who are sick of the tenants, toilets and trash. They don’t want their rentals anymore and they don’t want to deal with the property management anymore, but they want their mailbox money and they just want to do whatever it is that they want to do. So they can 1031 into real estate again, or they could 1031 into a Delaware Statutory Trust, also known as a DST. There’s two different types of DSTs, but this is the Delaware one, nothing to do with the state. So the Delaware Statutory Trust, it’s kind of like a time capsule because once you put in your money, say you have your client has 400,000 to put somewhere and it’s day 40 in their timeline and they say, I have no properties I want to identify into. Everything looks like a hassle. What are my options? And I will not be paying taxes right now. Figure out a way to defer them. Well, a DST would be a great option. So what it is, is you put it into Delaware Statutory Trust and it’s a real estate development project essentially. And it’s a, you might find a one that has like a two to four year hold or there’s a four to six year hold. So there’s different time holds and there’s different minimum buy-ins and they all kind of have their own kind of flavors and menus. Like if you were going out to eat and it’s Italian or Mexican, there’s one that’s renewable energies. There’s one that’s Ford Motors. There’s different, like there’s medical, there’s different uses for them. But when you put your money into a Delaware Statutory Trust, it’s locked in until it completes. So you will get mailbox money. You’ll get your monthly payouts. You’ll pay interest on that. But at the end, say you put in your 400,000, you get your 400,000 out after. Now, when that completes, it’s important, is you have four options. You can cash out and pay your taxes. You can put it back into real estate. If you prefer saying, I want control over my properties, I want to put up a wall, add a bathroom, add a kitchen, make it a duplex, however you want. I personally love the control of real estate. Or you can put it into another Delaware Statutory Trust. If your client really loves that, wow, this is perfect. It was hands-off and I got a check in the mail every month. That was fantastic. Let’s do it again. Or some DSTs roll into a 721 REIT. Now, some DSTs are scheduled to do that and some are not. Some have that option. So that’s something to consider too when your clients are looking, okay, what’s a good solution? There’s no fail-safe. There’s pros and cons for everything. A con for a Delaware Statutory Trust is you can’t get your money out and you can’t really control that equity. When you put 400,000 in, you get 400,000 out. You can’t go in and add a bathroom. You can’t go in and renovate the kitchen. And it’s locked in. So if the project completes in four years, you have to wait for four years to liquidate that. Where real estate, you could say, you know what? Slap on some new paints, take some pictures, and let’s put it up on the MLS. So there’s different pros and cons for everything. I mean, it’s all about a personal choice. It’s what’s best in that individual’s life for their circumstance. So everything has its options. We had a client who they have the big family compound, like the big family complex. There was a big house and stuff and they were so excited. They always had their family reunions there and stuff. They were going to leave it to the grandkids. The grandkids finally sat them down. They said, listen, in a couple of years, that roof is going to need to be replaced. And that roof is going to cost more than we make in a year. And the grandparents thought about it and said, okay, you know what? This is probably not the best solution here. So they sold that property and they bought student family or student rentals, student housing rentals. And so every grandkid got one. So once they inherit them, they already inherit a fully functioning rental business for their own rent student housing. And if they want to sell, they can. They would get that step up in basis by the day they inherit it. Say it’s then worth 600,000. If they go to sell it within that time, if that’s 600,000, zero basis, zero taxes. But if they hold it for a while and now they go to sell it at 700,000, there’s going to be some gains. If they 1031 exchange it and put it into another property, they continue their family legacy like how their grandparents did for them. 

CORWYN:

That’s huge. So Crystal, we are quickly gotten to what theoretically would be the end of today’s show. So I want to ask you though this final question and I’m going to ask you the question from the perspective of somebody who was starting now. You know, I always like the hindsight, the 2020 question, if you can do this thing all over again. And maybe you can incorporate yourself into it as well. But if you were telling someone today what they should be doing as succinct as you can, what would you tell them? 

KRISTA:

Think about how you’re going to exit. Don’t go into anything unless you know how to exit properly. Real estate doesn’t do anything for you unless you exit properly. 

CORWYN:

That is huge. So Crystal, I want to thank you so much for being on today. You just blew my mind with that. We are definitely going to get you scheduled and get you back on because we got a lot more to unpack. So I’m super excited to tell you that and we’re going to do that. For our listeners, guys, look here. Y’all know what this thing is. Y’all know how I feel. Y’all know what I say. Y’all know what’s put the two of those things together and I give it to you this way, which is to tell you that I love you. I love you. I love you. We’re going to see you guys out there in those streets. 

CORWYN:

Legacy comes when you use business ownership, not as the end goal, but as an engine, you know, it powers that vehicle, if you will, that powers lasting wealth and as well as impacts. Good morning, good morning, guys, and great morning. 

Welcome to another fabulous episode of Exit Strategies Radio Show, guys. Hey, I am your host, Corwyn J. Mellette, broker and owner of Exit Realty Low Country Group in beautiful North Charleston, South Carolina. If this is your first time listening, hey, buckle up, tune in, you’re in for a treat. Our mission here is very simple, that is to empower our community through financial literacy and real estate education. Quick shout out to those that love us and that we love as well. Elder Pastor Evans, thank y’all so much for tuning in. My mom out there in Monks Corner and all y’all out there in Hollywood and everywhere in between that. And also always got to give a shout out to my folks in beautiful, wonderful, as I like to call it, Muddy Mullins out there in the PV. Thank y’all so much for tuning in. Today, today, look, starting a business can feel overwhelming, but those who’ve done it, those who adventure to do it, guys, it can be overwhelming, but the right vehicle becomes the foundation for freedom, wealth, and legacy. Today’s guest, Giuseppe Grammatico, has helped countless entrepreneurs using franchising, not just to build businesses, but to create lasting opportunities for them and their families. Now, Giuseppe is a franchise consultant with over 20 plus years of experience, both in the corporate finance world, as well as he, look, entrepreneurs with cereal. I tell people all the time, look, we can find a business and everything. You figure out how you’re going to roll the grill out to the backyard and we probably can figure out how to make a business out of that too. His background includes roles, UBS, and JP Morgan plus hands-on success as a franchise owner and master franchisee. He is known for guiding aspiring entrepreneurs to choose the right business model. That’s very important, secure funding, very, very important in that capital stack and reinvest profits into wealth building vehicles like real estate and stocks. So if you all please would, let’s give a drum roll, but most importantly, let’s give a round of applause. Giuseppe, thank you and welcome to today’s strategy radio show.

GIUSEPPE:

All right. It’s a pleasure. Very, very excited. Thanks for that intro. That was awesome. I really appreciate it. 

CORWYN:

Well, just so you know, I’m available. You can rent me out for introductions on stage and stuff. I love this. 

GIUSEPPE:

I love it. I may take you up on that. 

CORWYN:

So Giuseppe, if you don’t mind, give our listeners high level overview, who you are, what you do, and let’s get into a conversation. 

GIUSEPPE:

So Giuseppe Grammatico, it’s a mouthful. So a lot of guys just call me G and yeah, I help individuals that are stuck at their jobs and figuring out what their next steps are. In New Jersey, born and raised, grew up in the Italian restaurant business, was in the investment world for many years and just didn’t like great pay, great income, just didn’t like what I was doing. So I was looking for that, what else was out there? I knew employment wasn’t the right fit and couldn’t then figure out what the business was. What was that business that I should launch? And came across a franchise coach online, sometimes called a franchise consultant. And I said, yeah, I need to learn about franchising because the franchise kind of has everything figured out for you and opened up some franchises. I sold those businesses, became a coach and get to help people figure out what those next steps are. As you mentioned, what is that vehicle that’s really going to help me get to where I want to be? 

CORWYN:

So Giuseppe, why franchising? I mean, oftentimes people start business or think to start business and they always, I say always, but a lot of times they focus on the mom and pop approach. So I want to open a ice cream shop. If I want to open a burger restaurant or a chicken restaurant or what have you, oftentimes we think about it from our own perspective. So why franchise? Why franchising? 

GIUSEPPE:

Yeah. So a franchise is a business on training wheels. A franchise gives you an unfair advantage over a mom and pop. Now, thinking a step back, franchising is not for everyone. You have to be open to the following systems. You’re not buying McDonald’s to change the menu, but there are 4,000 franchises in every industry. So for example, you look at a roofing franchise. What’s the advantage there? Well, you’re up and running in 90 days or less. You have the systems that everything already put in place for you. You get to leverage your relationships with franchisees all over the country, as well as national accounts that the franchisor may be able to feed you and refer to down the road, as well as economies of scale. Just the pricing alone makes a franchise really attractive in what you’re paying for shingles versus a mom and pop. National brand with 500 franchisees can have so much more buying power. So there’s so many advantages, but the biggest thing is what is your time worth? Some startups are great. You may not have to pay a franchise fee, but you’re paying for time. It may take you a few years to make that company a reality, a franchise, a non-brick and mortar type of business. Three months and you’re really attractive when it comes to business. 

CORWYN:

So that’s important. I mean, obviously, when we look at starting a business, the sooner the better, so to speak. The sooner we get customers, clients, or what have you, whichever they fall under, and the sooner we can get to deals or business or transactions or what have you, the sooner we start bringing in revenue, because everything leading up to that, it seems like every time you turn around, you get thrown it out. So that definitely makes sense. So you have been a franchisee, but also a master franchisor as well. Give us some of those experiences that you’ve had personally, as well as some that the people that you’ve assisted have experienced as far as their startup. 

GIUSEPPE:

Yeah. So the nice part is sometimes it’s not what you’re reading, you’re actually experiencing it. So the master franchisee and master franchisor, I’ve worked in corporate America, been laid off, been downsized, and I’ve also owned an Italian restaurant with my family. So it’s nice to have those experiences to kind of compare the things you like, things you don’t like. The franchise side, check off all the boxes. I had everything created for me so that I can follow that system. When we had the Italian restaurant, we were figuring things out. Well, at the time, shouldn’t we have a website? That’s how far back we go. What about social media, creating a Facebook page? You’re really figuring everything out. And there wasn’t really much assistance aside from, let me hire a marketing person. With the franchise, they really figured it out. And I’m not saying it’s perfect, but they know how to go about doing business. They know how many leads it’ll take to get a new customer. So when you look at a franchise, so this is kind of the thing I learned over the years versus a startup, you have to look at it a little bit differently. A startup, that’s your baby. You’re creating everything from the ground up, from the low note of the colors to just about everything else. A franchise I look at is more as a vehicle. I’m not necessarily as concerned about the widget. I’m not concerned about the service offering. As long as obviously there’s demand, I’m looking for the support from the franchise. That’s a little bit of a mindset shift because going back to roofing, it’s a very simple business model. I want to know that I can hit the ground running. I have all the roofing and all that stuff to be taught, but what is my main role in the business and my main role in a roofing franchise is typically networking, going out there and maybe doing some sales calls and building a team, which is what you’re going to do with many branch. You’re building a team. You’re putting those systems in place that you can back off the business. So you’re not working in the business. You don’t want to be on the roof replacing shingles, but you want to be creating agreements with property managers, commercial accounts and things like that. So if the demand’s there, it’s really figuring out, okay, do I meet the requirements of an ideal franchisee? They call it a franchise avatar. And who’s going to support me the most? Who’s steering the ship, which is usually the founder or CEO, and who’s going to support me the most? Because ultimately there’s going to be good days and bad days. And when things aren’t going right, you need that coach or that individual to go to. So those are some great advantages, as well as your colleagues. You have a built-in group of mentors and other individuals, which are essentially the franchisee system that can help you operate and get that business out and running quick. 

CORWYN:

Let’s take a short break. 

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CORWYN:

So I’m going to add in, I guess, one more piece on that from my own experience, but you also have fellow franchisees as well that you can share experiences with. But let me shift this up a bit and let’s get on the other side because people talking about starting a business, buying a franchise, or what have you, they got to understand the numbers, right? So what is your experience with that and how do you advise and inform people or coach people on what they need to understand before taking that type of endeavor? 

GIUSEPPE:

Yeah. I keep it simple. It’s a business just like any other business. It’s what you make of it. Franchise is giving you a system to run with. The advantage you’re going to get with the franchise is, well, first off, what is the goal? It’s Exit Strategies Radio Show. I always start with what’s the plan? Is it the plan to grow this and sell it in five years or to create a legacy for your kids and grandkids? Those are probably going to be two different strategies and two different types of businesses we’re going to look at. But when it comes to the financials, the franchisor is providing you as much data. They can’t guarantee or tell you what you’re going to make, but they’re going to give you… There’s two sections in a franchise. That’s a franchise disclosure document. The item seven, it’s going to be an investment range. This is all the data that they collect from the franchisees. It’s going to be a low and a high, and there’s going to be big swings. It may say 100 to 300,000, 200 to 500,000. Why is there a big swing or big range? It’s because it depends on how you’re running that business. If you are running it full-time, you may not need the salary of a general manager. You have a general manager, obviously that’s going to increase your investment, which is typically the startup that you need to get it up and running, plus the first 90 days of operation. So 200K investment doesn’t require you to come up with 200K out of pocket, but that’s the amount you’re going to incur roughly over the next 90 days to get that business up and running. So that is your investment. Franchisors can help you with the pro forma, and then they’re going to give you an item 19, and that’s a financial representation. They’re going to give you data collected from all the franchisees that have had at least a year in business. So if they had 11 and a half months, they will not be in that agreement, they’ll be in the following agreement. Based off of all that data, they’re going to say, the top 25% are doing this, the middle is doing this, the bottom is doing this. In some occasions, they’ll include every profit loss for every franchisee that has a year’s worth of data so that you can look at it and then come back and say, these are ranges, right? Realistically, we’ve had a lot of people in the business two years, and they’re averaging about a million in revenue to 100,000 bottom line. It’s not an earnings claim, it’s not saying what you’re going to make, but it’s going to say, this is what the top guys are doing, these are the bottom, these are the guys in the middle. Ultimately, you have some numbers to work off of. The expenses are pretty easy to figure out, but ultimately, you’re kind of guesstimating what that revenue is going to be. So they’ll give you historical data on that, but ultimately, it’s up to you to kind of follow through it and plug in your own number. So you’re given kind of these spreadsheets and you can do kind of a worst case, a best case, and that kind of an average scenario. And the numbers are really what you make out of it. So some brands have a lower profit margin, but they make it up in AUV, average unit volume. So maybe a cleaning business, they have a little bit lower of a profitability from a percentage standpoint, but they tend to do twice the amount of revenue. So they’ll break that down for you so you can plug in and run your different, not different scenarios. 

CORWYN:

So what are the pitfalls? Inevitably, there are pitfalls to what we do and what a business owner does. So what are those pitfalls? 

GIUSEPPE:

Pitfalls in franchising? I mean, I don’t know if it’s necessarily a pitfall, but franchising is not for everyone. Just because your neighbor is doing well, owning a Subway or McDonald’s doesn’t mean you’re going to do well. A lot of people fall in that trap. They assume, well, if he’s doing well, I’ll do well. Well, you and I have different skill sets. You may be an extrovert and I’m an introvert, and you may have management experience that I don’t. So it really depends on what you bring to the table and finding that right match for you. As I mentioned, there’s 4,000 franchises in just about every industry. I will tell you this from doing this for two decades, close to two decades, not every franchise is built the same. So just because you’re looking at a roofing franchise to keep it consistent and you’re looking at two brands, one may not give you the same support. One may have you full-time on the roof and the other one is going to have you kind of working from a distance and networking and things like that, more bigger picture. So if you are not okay with following systems or going back to the McDonald’s example and you want to recreate the menu because you’re a chef, I wouldn’t call it a pitfall. I would just call it not a fit, but some brands will have less autonomy in running the business. They’re a lot more structured. We’ll have more flexibility in the home services space. If you love to talk on radio and video and podcasts, you have autonomy to market your business that way. Whereas if someone’s more introvert and they just want to do paid ads and things like that, that’s fine. So that’s going to be a case by case depending on the brand. But yeah, if you’re buying a roofing franchise, you’re in the roofing business. And then if you add complimentary businesses, like something that’s not competing, like a cleaning business, we’ll call it servicing the home. Then you have the option of saying, okay, do I want a franchise or a non-franchise business as a bolt-on business? And you have those options. So it really comes down to the match and if a franchise is even the right fit for you.

CORWYN:

So that brings me to afterwards, because obviously you kind of layer this stuff. And what I mean by that Giuseppe is that you have the first piece that is, well, look, this is what I want to do. You then have, okay, should I do this? So let me explore what this looks like, et cetera, et cetera. But let’s make the assumption that we’re going to take the plunge, right? Because we jump around here and that’s what we do. So if we take the jump and the leap, then let’s get on the other side of it. Once you’ve started a business, once you’ve figured out that it’s successful or otherwise it’s throwing off revenue, throwing off cash, you also advise, okay, what to do with this money when it comes in and how to grow and leverage. So let’s talk some about that. What do you advise your folks to do? 

GIUSEPPE:

One last thing I forgot to mention is you have to be a word of the franchise at the end of the day. So it’s not, I’m going to invest in this, obviously the franchise or you and the franchise don’t have to agree together that it’s a fit. When it comes to building a business, everyone is bringing different things to the table. I always recommend if you can, two things. One, if you could run the business full-time, give it your full-time effort to start. I think that’s my recommendation. That’s the way I did it. Plenty of brands will allow you to run it part-time, but it’ll help you grow faster, get a better appreciation, wear all the hats so that you can kind of figure out what your role is going to be. Second is use year number one in any franchise as your builder year. If you can, reinvest all the profits, find the right team, get all the marketing dialed in. So that’s your builder year. So then you can start growing exponentially from there. So that first year is crucial. That first hire may not be the right hire. It happened with me. I had to replace that person. So get the right hire, learn the systems, decide kind of what your role is in the business. You may have a sales background, but you may realize it’s really like the bookkeeping and customer service. I’m looking at the complete opposite. So you can start figuring out and saying, okay, this is going to be my role. So these are now the roles I need to hire. I need a general manager. This is what I have to pay that general manager, and these are going to be the roles. So for that first year, build it, grow it, reinvest back in the business, get the additional truck if need be, buy that second territory if that’s an option for expansion of that future growth. Just getting everything in order. And then if you want to start taking money out, if you can hold off to the second year, but if you want to pull back and you can, but definitely don’t withhold from the business. If you’re paying yourself too much of a salary and you can’t pay for marketing, this is the groundwork that you’re laying to build something big. 

CORWYN:

So you kind of brings us back on that back end because you’re advising people or advise people how to make sure that they are fully engrossed, engaged, quote unquote, full-blown, hands-on couple of years, and then identify who they may need to replace themselves with as they grow and go. What has been your experience? And if you don’t mind, I mean, inevitably we tend to fail forward. So what was a learning, what was a situation that you learned, but you failed forward on and from your own journey, if that makes any sense? Yeah. 

GIUSEPPE:

I learned a lot. I failed a lot and that’s going to be a whole nother show. I joke. This is what I learned. I learned that you can find employees that will do most of the work better than you. I felt like I had to be the expert in all areas and marketing and sales and all. And there were plenty of people that were much better than me that could just focus on sales, that could just focus on marketing. And I should have hired sooner than I did. I waited a little bit longer than I should have. I just kept saying I wasn’t comfortable. And maybe it was because it was the first business that I was a hundred percent on my own. And the franchisor suggested that. So again, it’s the franchisor’s recommendations I held back. So again, franchisor can only guide you, but it’s up to the franchisee, business owner to take that into those recommendations. So I waited a little bit too long to hire. When I did finally hire a general manager, it took a lot off the plate. I think compensation-wise, I screwed up too. I offered sand inequity, which I’m still a big fan of where you’re getting a percentage of the profits, but I was doing it on an annual basis, which makes it very difficult because you don’t know unless you have access to the P&L where you stand. So doing a quarterly distribution to your general manager, person that’s running the day-to-day, maybe they earn 2% a year for the first five years to say, we’ll call it 10% or more, just making these numbers up. That’s something I would have done differently than a quarterly distribution via phantom equity. Hired better people than me much sooner because I was in the weeds and I was like, all right, well, I was figuring out the social media, I was figuring out the website. So yes, I saved a ton of money doing it on my own. What did I give up? The opportunity costs of meeting another two or three property managers per week, which could have turned into millions of dollars when you annualize it on the amount of work. So everything comes at a cost. There’s an opportunity cost for a startup. I don’t have to pay a franchise fee, but I just lost two years figuring out how I’m going to create this system when I just bought, invested in the franchise and maybe paid a $30,000, $40,000, $50,000 franchise fee. So if the systems are in place, run with it and always look for ways to eliminate yourself because when you do sell that business, write the name of the show, how am I selling this? What’s my exit planning? They’re going to want to know what’s your growth, what are your financials, but more importantly, what’s your role in the business? Because if you’re working 100 hours a week, they’re going to have to replace you and they’re going to come back and say, well, I need a manager. And if you’re showing 200K in profit, they’re going to come back and say, well, you may need a manager at 100K. So you’re only making a hundred, not making that 200,000. So those are the things I wish I had done a little bit sooner. I learned, I advise people not to make those same mistakes and hopefully they’ll take my advice. 

CORWYN:

Well, again, failing forward, Giuseppe, failing forward. Yes. That’s the thing. I’ve learned in my years in this particular realm, some of the things that you made mention of and it’s quite interesting to see, but what I also love, and I do want to kind of drive this point home as we bring it home, so to speak for our listeners, you strongly advise like, okay, once you get it balanced out and this thing is doing what it’s supposed to do, that you expand and grow that business and you diversify by getting into stocks and things of that nature. So a tidbit, if you don’t mind, but give it to us now.  Your experience with this and why this is what you advise and why.

GIUSEPPE:

Yeah. I come from Wall Street and that’s primarily where, and that’s where I learned the game and I learned about investing and that there are a lot of vehicles out there. Number one, you don’t have to invest in everything. If you don’t understand crypto, if you don’t understand commodities and gold and things like that, you don’t have to invest in everything like that. My uncle Warren Buffett always tells us, invest in the things you understand. But I believe in having a couple of drivers when it comes to some of the big revenue. For me, it’s my franchise consulting business. That’s where a majority of my active income comes in. And then I reinvest. I reinvest in real estate, real estate syndication. I’m a big believer in the stock market. So I have a considerable amount of percentage, I should say, of my assets in the stock market. It’s tough. It does take up a lot of my time. There’s a lot of history there. There’s always going to be risks. I know that my time commitment is going to be minimal. Real estate’s going to be a little bit more. Running a franchise is going to be a lot more. So kind of look at what the time… But yeah, I flow everything from my consulting business and then I diversify. I have a retirement plan. That’s 100% in stock market. I have investment accounts, real estate. So I like to diversify. So I have passive streams of net income specifically from real estate. And if the stock market’s down, well, will that affect my real estate portfolio? Possibly, or maybe not. So there’s a lot of also tax benefits as well. So in any investment strategy, my background, always look for the tax advantages. I hired a team of an attorney, a financial advisor, as well as a CPA, three women that live just south of my town. And they all talk with one another and they always put together a plan looking at the legal, tax ramification and everything else and kind of what the entire financial plan looks like. So have that true to income, your bread and butter, and then consistently reinvest. And I’m trying to get to the point where my past income covers all our expenses and we’re getting there. We’re not completely there. So that you kind of have that base and then everything else is just a bonus. 

CORWYN:

Awesome. It’s awesome. So Giuseppe, where can people reach you? Let’s make sure we get your contact information out here for our listeners. Where can people connect to you for advice, insight, or otherwise for your assistance? 

GIUSEPPE:

Yeah, we’ve got my website. It has everything there. So GG, my initials, the franchise guide, G-U-I-D-E, so ggthefranchiseguide.com. You have 250 episodes of the podcast with a search bar, type a topic in like exit strategy planning, pull it up. We have a webinar as well as my book here, Franchise Freedom. It’s my exact blueprint of finding a franchise. If you’re going to do it on your own or work with folks like myself, free download on the site. And if you just want to say, you know what? I’m ready to have a chat. You could book a call. We do a 20 minute call. Guys, the best part about this is my services are free. There’s no cost for anything. We’re paid directly from the franchise companies, a referral fee, just like a real estate agent. So even if you just have a general question or you’re thinking about it in a few years, the time is now to just book a call, figure out if the franchise is even the right fit and then putting together. Maybe it is, but credit score is too low. The timing isn’t right. I had someone recently go through a divorce and we just, we sidelined it, but I gave them additional resources to check out. I’ll reach out. No silly questions, no dumb questions. I give straight advice. I don’t sugar coat. And in many cases, the franchise is not the right fit and that’s okay. We have other people and individuals in real estate market, career transition that we refer you to. So it doesn’t cost you anything but 20 minutes of your time. 

CORWYN:

Awesome. It’s awesome. So Giuseppe, thank you so much for taking time out to be with us on today. You have been a wealth of knowledge and insight. I really appreciate it. And most importantly, I’m so glad that you were willing to share that information with our listeners. For our listeners, guys, look, let me give you these takeaways today. Don’t chase income. Don’t just chase the money, guys. Choose a business model as you explore opening your own business that creates freedom, security and opportunities for your family. We’re all about legacy and that is what we do. And Giuseppe, from my takeaway from what you talked about today, that legacy comes when you use business ownership, not as the end goal, but as an engine. It powers that vehicle, if you will, that powers lasting wealth and as well as impact. So I want to thank you so much again for being part of the Exit Radio Show family and dropping those jewels and nuggets for us today. I really appreciate it. From the bottom of my heart, thank you. 

GIUSEPPE:

Thank you. It was an honor to be on the show. I really appreciate it. And yeah, just here to help as many people as possible, empower them in their decision making process and challenge them to look at things a little bit different. That’s it. 

CORWYN:

Awesomeness, awesomeness. So for our listeners, guys, y’all know what it is. We’re going to give it to you anyhow. Y’all know how I feel. Y’all know what I say. You know, I always put those two of those things together and I give it to you this way, which is to tell you that I love you. I love you. I love you. And we’re going to see you guys out there in those streets. 

CORWYN:

You guys may have noticed, may have seen that we’ve been on this tangent because we’re trying to make sure we expose you guys to affordable and sustainable building options because we want you to know there’s more than just quote-unquote the traditional, if you will, and there’s more to construction and building and design than just the automatic, we just want a roof over our head, how do we make sure our roof is going to be there and it’s going to be sustained. 

Good morning, good morning, and great morning, guys. Welcome to another fabulous episode of Exit Strategies Radio Show. Hey, I am your host, Corwyn J. Melette, broker and owner of Exit Realty Low Country Group, in beautiful North Charleston, South Carolina. Look, always got to give a shout out and much love to those in appreciation, those who tune in to us faithfully, the Q family, Pastor Vanderbilt Evans Sr., you know, that guy always jacked me up. I mean, I’m a big guy, that dude will snatch me literally up on my tippy toes if I don’t say that thing here right and make sure I put that Sr. on that God name. Love him so much, his beautiful wife, Elder Evans. Thank you guys for tuning in. Always got to give a shout all the way out the monkey’s corner because y’all know my mama live out there, y’all, and then all the way back to Hollywood, which you know no good, and obviously where I’m from, where we were born and raised, out there in Marin County, Mullins, South Carolina. Guys, thank y’all so much for tuning in, guys. Look, I love you, love you, love you. Can I say that enough? So I’m super excited today for this particular show, all right? You guys may have noticed, may have seen that we’ve been on this tangent because we’re trying to make sure we expose you guys to affordable and sustainable building options because we want you to know there’s more than just quote-unquote the traditional, if you will, and there’s more to construction and building and design than just the automatic, we just want a roof over our head. How do we make sure our roof is going to be there and it’s going to be sustained? So today I’m very excited to have with us a leader and an expert in this particular field, Brian Falcon. Now Brian is LEED certified. I mean, he’s got a number of letters behind his name, AIA, LEED, AP, BD, plus C, CP, and HC. And look, he’s going to tell us what all that stuff there means today. He’s a partner with Alter Eco. I love that play on the name, which is an award-winning architect and sustaining building firm. They’re experts in this field. He has appeared on podcasts such as Home Green Home, Solve for Nature, and Green Building Matters. Look, Alter Eco, again, is a full-service design and building firm specializing, guys, in zero-energy ready homes and sustainable building. They’re based out of Pennsylvania, outside of Philly. Look here. So that guy probably knows something about some cheese steaks, too, having won a tremendous amount of awards at the local as well as national level for net zero-energy ready projects. So look, I’m super excited to have him on the show today. Brian, welcome to Exit Strategies Radio Show. How are you, my guy? 

BRIAN:

Thanks, Corwyn. I’m doing great. Thank you for having me. Looking forward to speaking with you today. 

CORWYN:

Well, look, so for our listeners, guys, let’s go ahead and set the hook. What if the home that you build today could protect your family, your wealth, or even your community for generations to come? Our guest today, Brian, will show us how sustainable construction and climate, resilient housing, aren’t just trends. They’re essential for building a lasting legacy. So Brian, if you don’t mind, give our listeners that high-level overview of who you are and what you do. 

BRIAN:

Sure. So as you mentioned, I am an architect by training, and I developed an interest in sustainability in the late 90s, probably when I first got into the field, where the academic side in college sort of taught you one thing about architecture and what you’d be doing. But then when I got into the real world, I noticed I was working on a lot of projects where the first thing you do is strip the site of everything on it, all the nature, all the trees, everything, to basically make a blank canvas. And I really, being young and real green behind the ears, I wasn’t real, I didn’t quite understand that. Obviously, it’s economics and stuff. But to me, as someone who grew up loving the outdoors and always being out hiking, camping, fishing, and all those types of things, it just struck me as very odd that you’re developing something for people, but then you’re stripping away all the natural environment around what you’re building. So that piqued my interest in the 90s, and I ended up going to graduate school in 2000 to study sustainability specifically. And that’s where my professional interest in this grew and sort of learned the technical side of what that really means. And it’s sort of been a growth process ever since then. And about 10 years ago, my mentor, who is now my partner, Joe Lombardi with AlterEco, he reached out to me asking about my interest in starting a small construction company based on our shared frustrations of designing high-performance or green buildings, and then having them sort of, either the green features sort of being washed out or people thinking you can add it to a standard project cost-effectively, which you can’t. So that got our wheels spinning in 2015. And then we eventually, you know, we started AlterEco to focus solely on residential and small-scale commercial and using the Department of Energy’s Zero Energy Ready program as our basis for our performance standards, and then moving up to passive house and higher levels of getting closer and closer to zero energy before we even need to add any renewable energy to the projects. 

CORWYN:

Let’s take a short break. You served your country with pride. Now it’s time someone serves you. At Country Boy Homes, we believe every Veteran deserves a safe, beautiful, and affordable place to call home. We proudly offer VA loan-friendly, manufactured, and modular homes built with integrity, quality, and your family in mind. Whether you’re retiring to the peaceful low country or starting fresh with your family, we’re here to build the future you’ve earned. Give us a call today, 843-574-8979. Country Boy Homes, built to honor, built to last. So let’s break this down and make it simple. What does this really mean for, you know, standard housing, if you will? Break this out for us. What does that look like? 

BRIAN:

Yeah, so there’s a few different categories within your project that make it a high performance or close getting you towards a zero energy in performance. So one is the building envelope, and the two components of that is air tightness and added insulation. So those are two things that generally there are code requirements, but some areas are a little bit more lax on what the requirements are. So generally what we do is we super insulate our envelopes, and then we add two levels of air sealing. So we do tapes, caulk sealants, things like that. And then we also use a process which pressurizes the home and then basically blasts a phase-changing gas into the building, which fills all of the nooks and crannies in your envelope, which is where all your moisture and air leakage really is. That’s with the envelope. And then you get into high-performing doors and windows, which have added insulation value to them, and they also have…they minimize solar heat gain with the low E coatings and things like that. And then you get into your systems. So when you minimize the energy needed to heat your home, you can use smaller, more efficient systems. So we try to electrify all of our projects as well. Not all customers like that. Some people, for example, still like cooking with gas and things like that. And we understand that, so we try to be flexible. But the intent of the electrification is if you lower the load and then you electrify, and if you’re able to put solar on the roof, then you can technically be net zero, depending on your demands versus what you’re generating on the roof. And then, of course, we look into low and no-ZOVOC coatings and finishes inside the building to minimize off-gassing and bad smells and things like that. So we often hear back from folks who have either asthma or breathing problems or allergies, and there’s a notable difference in the air quality inside the home. And the other part of that is when you have an airtight home, part of the systems is, in addition to your HVAC system for heating and cooling, we have a fully balanced ventilation system, which where you are would be an HRV, but where we are, it’s an ERV, Energy Recovery Ventilator. And that basically does low volume but balanced supply and exhaust air throughout your home. So you’re supplying all your living spaces with fresh HEPA-filtered air, hospital-level filtration. So your bedrooms, your offices, your family rooms, they’re getting fresh, low volume of fresh air 24-7. And then your dirty rooms, your kitchens, bathrooms, laundry rooms, mechanical rooms, they’re being extracted at the same volume of what’s supplied. So it’s always balanced. So those are the key features from our end to creating these types of homes.

CORWYN:

Now that’s huge, because obviously if you’re going to box it all in, the people, so, you know, for our listeners, and most people think that when you box a house in, so to speak, they don’t think that ventilation isn’t taking place with their traditional HVAC system. They’re thinking that’s where all the air is coming from, and that’s really not it. The house leaks air, it brings in air outside of, and the system recycles air or pulls in air and then cools it, heats it or whatever and redistributes it. But if you’re going true self-contained, like what you’re talking about, then you got to get fresh air in. The only way you can get it in was ventilation. So let’s take this, because obviously climate issues, you know, somebody who’s allergic or have allergens or whatever, this is probably a perfect type house that you just described. Let’s get into those climate issues, building this kind of product or something more self-sustaining in diverse locations. What does that look like? What is that process? How does it protect families and their wealth as we talk about from natural disasters? 

BRIAN:

So those are a couple. One, from the building itself standpoint, you’re creating a much more resilient home. When you make an airtight envelope with minimum or excluding any possibility for thermal bridging through the outside of your building, you’re minimizing moisture buildup in your exterior walls and roof and floors. And that’s where mold and all those nasty things start to build over time. And one, it creates health problems with people in the building. Two, it rots the outside of the house. So then you’re going to get holes in your envelope. You’re going to get termites and other things. It just gets worse and worse over time. So the intent of the way this is done is you’re minimizing that or eliminating that from happening. So from the longevity of the building, it helps in that respect. From the homeowners, you know, you have your health. And then also these homes are designed to use 50% to 70% less energy than a typical code home. So if you’re looking at cost versus value, if there’s, say, a couple percentage points of a premium on the front end of building the home, your value turns into a cost savings for the life of the home. So when you add up all these systems into a holistic project where everything, the sum is greater than the individual parts. For example, we use heat pump water heaters, which use a third of the energy of a typical water heater. So you figure probably, what, a three-year payback on that. And then from that point on, you’re using 70% less energy for your water heater for the life of your home. So all those things in tandem create a pretty significant difference in the way you live. 

CORWYN:

So that’s a perfect segue into where my next question or questions are going to be, which is the affordability piece. I mean, green homes, and I’m going to frame it very loosely because that’s a very broad term, especially nowadays, but green homes, you know, there was a myth about the cost. I mean, everything that you did that was energy efficient costs more money. And obviously my imagination says today, that’s not the case. I’ll let you as the expert define that for us, if you will. But what does that look like now as we talk about energy efficient green, or that myth, I’m sorry, let’s just call it what it is. It’s a myth about the cost of these types of homes and projects being unattainable or otherwise out of reach. 

BRIAN:

Yes, as architects, we get to speak with a lot of contractors and builders that we’ve worked with over the years. And what we found is that we’re at cost parity with those other custom builders for the types of homes we’re doing. Now we’re typically doing custom homes, 2,500 to 3,000 square feet for generally couples who are about to retire or just retired. That’s generally our demographic. Currently, we’re looking to expand that. But generally what we’ve found is that you can incorporate those as you’re making design decisions. And that’s part of the process as architects that we take into consideration. So an example would be we use high performance, triple glazed vinyl windows, a lot of our homes. Now we can use upgraded passive house level wood and aluminum windows for the higher end jobs, but those windows we use meet the same performance requirements at a fraction of the cost. So it’s not that really high-end custom home with those Marvin or other types of windows. But again, we look at the overall performance of the whole as well as the design of it to get you to combine your cost with your aesthetics with your program goals. So another thing we do is during the design process is we’ll get sort of the wish list from a client of, we think we want this many square feet, but we’ll be able to, by different ways of, for example, different visual lines within the floor plan, open spaces, higher ceilings, things like that, be able to create a sense of scale and feeling like you’re in a larger space, but in a reduced footprint. So when you’re looking at generally a per square foot cost for construction, those are some of the strategies we’ll use to reduce the overall footprint, to reduce that dot per square, the overall dollar cost, but get the same effect that we want programmatically within budget and then still maintain the performance we’re looking for. Okay. 

CORWYN:

All right. So you guys focus on, on scale, I guess is what I’m hearing. So you guys, obviously my imagination says a lot of your product is designed for it. The efficiency, maybe, I won’t say small, that’s not, maybe not how I want to frame that, but it’s built for the efficiency, if you will, but you can expand or otherwise create larger projects that still maintain as you scale the same relative efficiency. Is that correct? 

BRIAN:

Yep. Absolutely. Yeah. So whatever size home someone wants to do, if you implement these strategies, you’re going to be using much less energy than if you didn’t. So if you just met code, you’d use X amount of energy. If you implemented these strategies, it would be great, reduced 50 to 70%, I would say probably. 

CORWYN:

That’s huge. That’s huge, especially in light of just where we are in general, just efficiencies, energy costs, everything is going up. You’re talking about the expense of your home, your construction, design, construction, all that stuff now being whatever that number is now, based upon what history has taught us, it will be more later, but the efficiency, the savings that you’ll realize on energy costs, et cetera, are going to carry going forward. So that as energy costs, again, continue to increase, which I don’t think I’ve seen anybody anywhere. I don’t even if I ever remember a time in life, the energy costs came down. Never, never. So while other people are continuing to scale up significantly, you’ll still see a dramatic savings over the cost that someone else that doesn’t have these efficiencies in place is otherwise experiencing. That’s huge. 

BRIAN:

Yeah. Another part of that is if you’re able to add solar and purchase a solar, not do it as a power purchase agreement, but if you purchase it, the benefit to doing that is you lock in at the rate of that loan and it never goes up. So for example, where I live, I’m sure where you are as well, energy bills have skyrocketed over the last two years. And I’ve seen some local Facebook groups, people really, really struggling with that, of these bills doubling over the last couple of years. And I have for my home, I have a photovoltaic array on my home and my bill in the summer is $10. So it just feels good to have that freedom of, you know, now you are paying for a 25 year loan, basically on the system if you don’t pay cash for it. But that loan is locked in. You’re paying the same amount every month, no matter how much energy you use. And then you’re generating more than you’re using. You’re actually getting a check back from your utility, depending on where you live. 

CORWYN:

That’s huge. Yeah. So as we quote unquote, get in the fifth gear here, what is your thought process on future next generations, right? What does that look like? Why would you advise or tell someone they should be thinking about this long-term, whether it’s family bond for whatever, and what the future may bring and investment and all that other stuff, et cetera. 

BRIAN:

I mean, what I see is doing this at a neighborhood scale where these principles that utilize standard materials and assemblies can be implemented at scale where you’re getting your cost savings or even more when you’re doing numerous homes at the same time within a neighborhood. I think you’re going to be looking at localized power generation and storage. So for example, you have a small neighborhood of 20, 30 homes. You could have localized photovoltaic power generation and storage within your neighborhood. So the energy is not going from a coal power plant 30, 50 miles away through power lines. And with high levels of energy loss, by the time it gets to you, it’s literally in your neighborhood. You’re looking at having backup, onsite backup as well. So when your power goes out, you’re still going to have battery use. And I see that being combined with a more ecological landscape design where you’re living. And I see that as sort of the future of how we’re going to be going. It’s got obviously pretty big environmental impacts, reducing our energy use. You’re going to, I think, sort of build a little bit more community if you have these tighter, smaller scale neighborhoods as opposed to 300 or 400 home neighborhoods, sort of do more localized, smaller communities. I see these as potentially smaller scale starter home types, where you can have them be more cost available to younger people. And they could also be available to those who are downsizing after they’ve lived in larger homes for a number of years. Kids are gone. They’re looking to retire. They don’t need 3,000 square feet anymore. And they could be surrounded by other families and have a sense of community. 

CORWYN:

That’s huge because people that this is their thing, right? So if this is a person’s thing, then typically they want to be with and around other people that this is their thing too. That creates community. It’s a lifestyle, but it also begins to create and kind of checks those boxes of getting, if you will, into lifestyle. What is the lifestyle? What does that look like? Now, Brian, look, this is probably a very good time for us to get your contact information out. How can people reach you, get in contact, find AlterEco? Again, I love that play on that name, but how can people get connected with you going forward? 

BRIAN:

Sure. Yeah. My email is B as in Brian Falcon, F-A-L-C-O-N at AlterEcoBuild.com. And that’s also our website, AlterEcoBuild.com. And I’m also on LinkedIn. You can just look up Brian Falcon, you’ll see me there. I’d love to chat with anyone who’s interested in this. 

CORWYN:

Awesome. Awesome. Awesome. So Brian, you say you kind of got into this to realizing that in order to build something sustainable, eco-friendly, you had to basically kind of, you found yourself destroying the current ecosystem in order to do it. And that just didn’t quite make sense to you. So you guys have now managed, what I’ve heard, what I’ve been taking away from our conversation is that you’ve managed to create a system or otherwise factor in current ecosystem into your design and into your build. So the results of that are now something that is also sustainable, energy efficient, and kind of checks all the boxes without having to quote unquote, clear the slate each time. How instrumental has that been and how important does that remain to the clients and to the prospective buyers and people that you all assist? 

BRIAN:

For us, it’s huge because we made a decision very early on when we first started that this is all we’re going to do are these types of projects. There’s a lot of really great builders where we live in our area. We work with a lot of, we don’t want to compete with those folks. So when we first started, it was a lot of educating people about all these things, but now the tide has turned and everyone is much more educated and they’re doing their own research on YouTube and looking at different products and systems. So they’re seeking us out specifically because of our expertise in this type of construction. So really we’re getting calls and emails from people saying, Hey, I want to do a really eco home, a zero energy home, a passive house, whatever it is. And you’re one of the very few people we can find in the tri-state area that even do this. There’s architects that do it. There’s designers that do it. There’s a few contractors within a few hour radius of here that do it. There’s not many. So we engage with them. We ask them, what does that mean to you? Sustainability or zero energy? Why do you have that goal? And we learn a lot about them in that early process. And then it’s a continual education process back and forth during the design and construction with them and also with some of the subcontractors. If we haven’t worked with them before, a lot of it is educating people about why we’re doing what we do, what the impacts are, what the big difference is, the cost savings, things like that. And we found a very positive response from everyone we’ve worked with on those details. 

CORWYN:

Good deal. Good deal. So, Brian, we have quickly gotten to the end of today’s show, but I want to ask you this question as a final, as we go into our wrap up for today. You have focused on, in this particular arena and area, in order to make a difference. So if you don’t mind, give our listeners what difference you feel you believe that you’ve made and why this is important for them to consider in their home design and construction needs. 

BRIAN:

To me, I think it comes down to two very simple things. I guess three. One is you live in a more comfortable home. You don’t have drafts. It’s not leaky. It’s not cold at your windows. Your rooms are all very comfortable. You’re saving money and you’re living in a more durable home. It has a positive environmental impact. Those are really the three key things. So I usually put that last because it’s a big issue for us, but I know not everybody is as concerned about that. So we always tell people it’s going to give you more money to go on vacation with your family and to do the things you love doing. And I have four kids. Three of them have some level of asthma. So I did this with my own time and money and effort in my home. I’ve seen a huge difference in my kids being able to breathe easier in our home and things like that. So I think it’s health and comfort and saving money. 

CORWYN:

Awesome. Awesome. Well, Brian, I want to thank you so much for being on the show with us today. And before we do our final, I want to make sure I take this as the moment to put our wrap up in for our listeners. Guys, I want you guys to focus on thinking beyond the price tag of your home. Invest in one that not only protects your family, but also protects your financial future. And Brian just really just articulated that very well with sharing about your children. And a takeaway that I have from Brian’s discussion, our discussion today, is sustainability isn’t necessarily an extra cost. It’s an investment in your legacy. So Brian, I want to take a time here, a moment here to say thank you again for taking time out of your busy schedule to be on with us today. And thank you so much for being part of the Exit Strategies Radio Show family.

BRIAN:

Thank you, Corwyn. I really enjoyed talking to you today.

CORWYN:

Awesome. Awesome. So for our listeners, look, y’all know what this thing here is. It ain’t no surprise. Look here. We do this all the time right here. Y’all know. So let’s get at it. Y’all know how I feel about you and you know what is real about you. And that is this. I love you. I love you. I love you. And we’re going to see you guys out there in those streets. 

CORWYN:

Wealth that ends with you is success, but wealth that outlives you is a legacy. So I want you to take that. And from what we’ve talked about today, the goal isn’t just to make money for your family. It’s to build a system that keeps making money long after you’re gone. Good morning. Good morning, guys, and great morning to you. Welcome to another fabulous episode of Exit Strategies Radio Show. You know who I am, but I’m going to tell you anyhow, I’m Corwyn J Melette, broker and owner of Exit Realty Low Country Group, and I am your host. Hey, look here. Y’all know what this thing is over here. What our mission is, that is to empower our community through financial literacy and real estate education. I always got to give a shout out to those who listen to it faithfully. Jim Kellers out of Lincolnville, Pastor Vanderbilt Evans Sr., his wonderful bride, Miss Evans over there in West Ashley. We thank you. And I got to put that senior on that thing. Boy, he will jack me up. You know, my mom out there in Monkey’s Corner, y’all, and everybody back towards Hollywood, what you know no good. Thank y’all for listening. And I always got to give a shout out to my hometown, my home team, Mullins. Look here. Thank y’all guys for tuning in. Mullins and Marin. I really appreciate you guys tuning in and we’d love to know it. And I always work to make sure that we show it. So look, today I am super, super duper excited. We always make it a point to have the best guests, have the knowledge base and people that are doing things and helping people get better and greater things done. Right? So we have with us today, again, note again, you can go back and check out the first episode that we did with them. It’s a testament to what comes next. All right. Look, we’ve done this. We’re helping people do this, but we want to help people do more. So then what’s next? What are we doing? So I’m super excited to have this conversation today. We have none other than Mr. Mark Miller with us now. Mark, if some of you may remember him, but Mark is a CEO. I always say that is the boss, right? But the CEO of Hilton Tax And Wealth Advisors, he brings a depth of knowledge over 40 years of wealth strategy experience. He’s a trusted advisor to entrepreneurs, executives, and family legacy builders. Nationwide. He teaches the same wealth preservation strategies used by America’s most enduring dynasties. And for those of y’all who remember that TV show dynasty and Dallas back in the day. He definitely does that. He is here. He’s written a new book. So we’re going to talk about that as well. Hilton wealth, how to invest like an American dynasty. So I want y’all guys to give it up. I want you to be tuned in. I want you to get pen and paper. Or pencil and pad, whichever one it is. Cause y’all going to get some of these notes in some of this business today. Mark, thank y’all so much for being on the show with us today. How are you? I’m doing great. And thanks so much for having me again. Well, look, you’re quite welcome. So for our listeners, guys, look, this is what it is. Most people work hard to build wealth, but lose it within one generation. I’ll have that conversation all the time. What if you could build a family system where your children, grandchildren, and great grandchildren never have to start from zero again. So today, Mark is going to help us with that. He’s going to reveal how ordinary families can build, die, fantastic wealth that outlives them by design, not merely by love. So Mark, again, welcome to the show. Mark, give our listeners a high level overview of who you are and what you do. 

MARK:

Sure. Absolutely. So I’ve been in the business financial consulting business for almost 40 years. I came out of college, went into the financial planning industry with that small little company called American Express and did really well there. Into the nineties, I wrote some nationally published books. One was a bestselling book, part of the Idiot Series. I hope people don’t think I’m an idiot, but I did an Idiot Series book that people have probably seen on the bookshelves before on how to save and invest, then started my own business financial planning firms and just over time, kind of went from that retail side of the business, more kind of the brokerage stocks and bonds and mutual funds and started meeting a lot of higher level people in the industry. A lot of high net worth individuals eventually got hooked up with the Hilton family, been working with them for a long time and my main partner is Jay Bradley Hilton, who is the grandson of Conrad Hilton, who started Hilton Hotels and we’ve built several different financial services companies together. I am the manager of the Hilton family office and also the CEO of Hilton Tax and Wealth Advisors, which is basically a spinoff of the family office, kind of teaching people how to invest like the wealthiest of the wealthy, like the Hiltons, how they invest as opposed to how retail investors invest. And it is a totally different world. Been very fortunate to be hooked up with the Hilton family for a number of years and just excited about what the future has to bring for us at Hilton Tax and Wealth Advisors. 

CORWYN:

So Mark, I’m going to jump in here with the first question and this is, and just bear in mind that this is a conversation I’ve been having and I keep having, right? So the question for you to answer for our listeners, the first one is why do most families lose generational wealth? I mean, I literally just had this conversation recently within my own family that, Hey, look, everything that we had was gone before it was gone. Now, basically we got to start over and why? So why is it that you see or otherwise have experienced that most families lose the generational wealth by the second generation and how do families, people of means, wealth, rich, or you want to put on it, how do they prevent it? 

MARK:

Yeah. And how does that almost always happen? Well, because it has to do with striving. It has to do with building and that first generation that strives and builds has the most appreciation for the wealth. And as the generations go now, often those are the initial strivers will have offspring that they’ve taught really well, brought it into the business when there’s that still initial striving phase. And those individuals tend to kind of get it to understand and to want to preserve the wealth the best they can. You start getting into the third generation and they were not part of the original building, the original striving. And even though there might be some really good people in that generation, they don’t have that deep appreciation for what it took to build the dynasty or the legacy. Okay. So that’s kind of what happens when we work with kind of higher net worth individuals, that legacy tends to start to really dwindle in the third generation, just because it’s too far away from that first generation. So, you know, what I always tell everybody is the best thing to do with very large amounts of wealth is to build a trust system that is going to last generations that allows the money to kind of come out at set times over say a 50, 60, 70, 80, a hundred year period of time, as opposed to the money just dumping into each generation’s lap. The other problem is about education, about money, those first generation people, if they’re the ones that built the legacy and built the money, they generally are the smartest about keeping the money too, and it gets kind of lost in translation as the generations go on. So really what we try to do, we just try to build enduring trust systems that can last a long time to where there’s not a possibility that can be just blown by one generation in the process or kind of in that lineage. 

CORWYN:

Let’s take a short break. 

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CORWYN:

So I’m a come back on part of that, but I want to interject like something right here. So I want to, I guess, put a ramp, ramp in right here, right. And you know, the conversation, because again, I don’t exclude myself when I’m talking, so I’m literally right now, same thing. So trying to have the conversation with the generation coming behind. So for our listeners who are experiencing the same thing, maybe they came in, they inherited property or they’re trying to leave property and they don’t want the children, quote unquote, you know, I’m a firm believer in market. I’m going to say this real brief. And for our listeners, Hey, if each generation adds to, then each generation has, if you add, if you create wealth now and teach your children to add to it, not to just consume it, but add to it. And each generation does the same thing that continues to add. Then five generations down, there is a tremendous amount of wealth that has been created because everybody’s added to, but oftentimes we see people just consume, they take a property, you know, inherited property, move into it. They don’t keep it up. And next thing you know, they lose it all. So let me ask you this, Mark, how do people, normal everyday people have this conversation because we want to create. MARK:

Well, let me just give you my own personal example, because we’re building a legacy. My wife and I are, I’ve got two kids. They’re 21, 23, just getting out of college, just figuring it all out and everything, and they still don’t really 100% understand the value of a dollar. And my daughter who works in our business is probably going to hear this podcast, but she would probably agree that it’s a learning curve. They’ve got to get out in the world and they have to kind of figure things out. And so it’s about me kind of gradually teaching them. And when they were younger, we did teach them a lot about money with the different piggy banks and they’re put money away, they’re put money aside for charity, they’re put money aside for themselves and all that. We taught something. So they’ve got some basic ideas, but it’s not until they get out in the world where they start making their own money, where they can really start learning these things. So I think what it’s just incumbent upon us as parents to try to teach them as much as we possibly can, me impart as much wisdom as I can to then wisdom about saving and investing, setting money aside, doing all of those things to kind of, and here’s our goal. I don’t want our kids to think, and really the reality is I am not one of the Hiltons, although I work with the Hiltons, but I didn’t inherit a bunch of money. I want to teach my kids how to build their own networks because then they’re going to be more apt to when I don’t expect I’m ever going to die, but when I do, when mom and I die, I’m hoping that technology comes out and we can live forever, but I know that’s not how life works, but when we’re not here, they’ve already got a great foundation. They’ve already built a pretty good financial foundation and they understand money, so when they get that money, when it’s imparted to them, which it’ll still be in trust and we’ll set some of those boundaries and some of those guardrails in, but when they get it, they’ve got a foundation and they understand and even the money they get, they’re not going to just go out and blow because it seems like free month, so that’s part of building the dynasty, but it’s very important, I think for every generation to try to build and the Hilton’s have done that, frankly, a lot of people don’t know this, but Conrad Hilton gave almost all his money to the Hilton foundation, which people may have heard of that. It’s one of the biggest foundation gives away billions of dollars a year. Jay Bradley Hilton, who’s my partner is actually on that board and Jay Bradley has learned these things over time and Conrad did not take all his money and just give it to everyone, neither did Baron, who was the one that really built and especially launched Hilton hotels and did a lot of great things that Jay Bradley is actually head of it for Hilton hotels for a long time. He was very instrumental in building the very first online hotel reservation system, so he was in the business. He understands the business and he grew up with that and he kind of grew up with that kind of the mentality and guess what he’s had to make his own way. And it’s been great because he did and he’s been able to do amazing things in his life, but he’s also had his predecessors were smart enough not to go, Hey, here’s a billion dollars. Sure. Hope you don’t lose it. That type of thing. So, but we can all take lessons from that, that we need to impart wisdom onto our children and onto our heirs that may invest so they don’t go and just, Hey, thank you for money. I’m going to go out and buy a Lamborghini. Which is a lot more common than you think, because the strivers have been so, so involved in striving that they forgot or didn’t spend enough time, not totally forgot, but they didn’t spend enough time instilling that striving mentality and that legacy mentality into their children. 

CORWYN:

So let’s twist this. I want to kind of start bridging and getting into the book. So if you don’t mind, Mark, tell our listeners, you know, again, the title of the book, and then let’s get into some discussion there, but what I want to kind of touch on is talking about tax structures, our trust and all this other stuff, positioning and essentially not leaving a lump of cash, but leaving control over assets. So let’s talk about that. Let’s talk first about the book and then let’s get into that. 

MARK:

Sure. So Brad and I together wrote a book called Hilton wealth, how to invest like an American dynasty. And in it, we make the distinction between how more retail investors invest and the retail world of investing, which is a very big world. Fidelity’s built the big towers in wall street. They didn’t do that off of just taking a quarter percent from people. Okay. Teaching people that there’s lots of fees taken away from them on the retail side. So it can power the whole retail system. And there’s massive amounts of money that those institutions make from retail investors, big money, because in many cases, I don’t mean to say this in a negative fashion, but generally retail investors don’t know any better. They’re just like, Hey, I know I need to go to the fidelities of the world, the vanguards of the world, the T-Row prices, the swabs, the E-Trade, whatever. Go there. And I’m kind of at their mercy to invest. And those folks between market makers and mutual funds are a great example. People think they pay half a percent, 1%, but there’s actually internal fees inside where most mutual fund companies make anywhere from clarity work from three to 4% per year. And that comes directly off the top of your investments. People have no clue on that. And it’s in the law. They can do that. They’re not stealing your money. It’s all part of just how wall street and the regulators have been in bed together for decades and decades, really since the 1930s. So Hilton wealth talks about how you can get out of that world and get more into the world of the smart money, what we call the wholesale side, as opposed to the retail side, where you pay less fees, it’s safer to invest, meaning there’s less volatility. And because there’s less volatility, you’ll make more returns over time, which is how the smart money does it. And very fee averse on the smart money side, smart money folks will not pay fees on most of what they do because they already know the products that they’re buying, there’s fees built into them and the institutions or the issues are already making money. So we kind of educate people about that and how it’s a different and we believe better world. That’s what Brad and I created Hilton tax and wealth advisors for was to bring these kinds of more advanced strategies from the family office, more down to so people that have a quarter million, half a million, whatever can invest in these types of things and know how to, and then structure a portfolio like the wealthiest structure it so they can really build their wealth faster, just like the wealthiest of the wealthiest do every day. 

CORWYN:

Now you guys really talk about and teach diversification. Yes. What does that look like? 

MARK:

And so kind of what I was talking about was being able to kind of be more in the bucket concept that somebody like a Warren Buffett, the reason why he stays on the Forbes list at the top of that list is because 60% of his portfolio or more is in very safe, secure types of assets, and then he’s making money and continuing to grow his billions with on that other side, which has more equity exposure. He’s taking some more risk, but if something is just horrific happens in the economy, he’s not going to lose all his money. And that’s why you always see people that they don’t fall off of those lists. In other words, they’re not rolling the dice on one company that they’re invested in or something like that. They’re highly diversified. And we use that bucket concept to basically mimic how the wealthiest of the wealthiest invest. And that bucket concept gives us great diversification and allocation and helps us way on the side of safety and security, but still allows us to get and allows them to great returns long-term. 

CORWYN:

I know that is one of the principles that is key to building long-term. Obviously you don’t want to be risky. Obviously you want to take some chances, but you want to be strategic. And the chance is the risk, et cetera, that you take, but you also want to be able to teach this beyond. So Mark, I think is extremely important. And for our listeners, guys, I think it’s extremely important for you all to understand that if you’re not, quote unquote, if the car hadn’t already been started and you’re not just taking over and shifting the gear, so to speak, if you’ve got to start by easing the clutch out yourself, you need to understand that you got to teach somebody else how to drive this car. So you want to make sure that you have a thorough understanding. You want to make sure that not only do you have a thorough understanding that you leave specific instructions, because that is something that we see all the time, because as Mark, if you don’t mind, let’s touch on this briefly. But there’s a quote unquote, a theory of starting over curves. Like you see people, families, each generation has to start over. So do you guys in the book anywhere, or is there any example of that that you have maybe in the first book that you guys wrote that kind of touches on that? 

MARK:

We talk a little bit about legacy, but honestly, legacy is about preservation of assets. Okay. So like when we’re working with our really ultra wealthy people and the helping family office, what we’re really focused on is how can we build as much safety and security in the portfolio? So we know that we, it’s going to be there to pass on and then do some advanced trust structuring, and I’m not talking about doing a living trust in just a regular estate plan, but advanced structuring to where when you pass away, let’s say there’s this use example, million dollars there that it, again, it’s not just a lump sum dropped in someone’s lap that it can come in over a period of time to help them adjust and help them learn the things they need to learn to be able to manage that kind of money. In many cases, we even just have an outside trustee with Northern Trust or one of these big trust companies that’s there to guide those, those heirs. If let’s say the person that’s leaving the legacy was in the manufacturing business and they leave their money to someone that doesn’t know anything about the manufacturing business and more so maybe they don’t even know and don’t even understand how to accumulate wealth and how to keep wealth. So then if they don’t have any knowledge of how the money works, then there needs to be somebody there to help them. Now the trust structure in general will do that because again, it’s more of, it acts as kind of a little bit of a sieve of the money coming in. Okay. I think the key is obviously you need to build the money. But again, I go back to the fact that I think it’s important in our most successful folks that have left legacies and the way we’re going to do it is allow those individuals to have their own careers. If that person’s a doctor and they’re going to make money of their own, they have their own career, but then they have a giant chunk that drops into their lap. Well, doctors are a little infamous for not handling money very well. And they need, again, some education. They might need a trust structure to basically help them manage a large chunk of money that comes through. 

CORWYN:

Wow. Okay. All right, good. Cause we want to get that information out, you know, Mar to people from all walks from one end of the spectrum to the other, because some are just starting to have this thought and this conversation. Some of them are well into it. What does that look like? And I’m super excited. I’m after, give me a copy of the book. Cause again, you’re talking legacy dynasty, all that. That’s extremely important. I believe so. Mark, this is probably a great time to get your contact information out. Where can people connect with you? 

MARK:

Where can they go to our website? Real simple hiltonwealth.com. I invite everybody if they want to learn more about some of these advanced money strategies and again, how the wealthiest invest and how people, the more average investors can, they can order the book. We’ll send it to you. A complimentary Hilton wealth. We also have a book called the tax-free business owner. So if you’re a business owner looking to get yourself to a zero tax bracket, there’s a lot of strategies we have from the Hilton family office to be able to do those things too. Awesome. Awesome. 

CORWYN:

Well, so Mark, let me ask you this one. Well, it’s kind of that big mic drop or that hindsight, all that stuff. You’ve learned a tremendous amount in your years of providing wealth building and financial services, if you will. What do you believe? And obviously we’ve talked about a lot of things that are like mind blowing. And if I’d have known this, but what is that biggest, if I would have known this or in the beginning, I would have done for myself or I’ve had people doing day one. And I know you’re still getting exposed to things. So, but what’s kind of your largest, if you will, takeaway thus far that you can give somebody on this show for advice? 

MARK:

That is a great question. And I learned it because when I got out of college and I started going into the industry, I was what’s called the stock hawk. I was like, I love stocks. It’s exciting up, down, all this kind of stuff, sock socks. And I was like, why I’m meeting really wealthy people and they have all these bonds. Why do they want to be in bonds? They can make all this money in stocks and everything. So the biggest thing I learned when I started hanging out with wealthy people, ultra wealthy people was again, I go back to what I said earlier is about the level and degree of safety that they’re focused on. And here’s a great example. And just, I’ll kind of leave you with this. Like, and when we do things at Hilton wealth, generally the Hilton’s are very risk averse. So often we’re going to figure out ways and we do figure out ways to do things that are maybe relatively like a private equity offering or something relatively risky. Maybe have a, if you looked from, if the risk level was from one to 100, maybe these have a risk level of 80 or even 90 and then structure into them, work with the issuers to get some backstop protection. So that just tells you a little bit about how the wealthiest or the wealthy do it. They’re first of all, going in, tell me my degree of safety. Sure. I know I’m going to make money there anyway. You’re great at what you’re doing. All that. Tell me what you’re going to do for me to make sure that I don’t lose big chunks of money. So that’s probably the biggest thing that I learned. And the biggest thing that I want to part on onto your listeners is that look at safety and security first. And then look at returns, not like you would with the mutual funds that are sold by one, three, five, 10 year performance. Don’t look at that. Okay. Look at your downside risks. What are my drawdowns? What’s the upside here first? What is my exposure here first and then go from there. So that’s the biggest lesson that I learned when I started transitioning and working with the wealthiest of the wealth. 

CORWYN:

Awesome. Awesome. Well, Mark, I want to thank you again for taking time out of your schedule to be on with us today. I really appreciate it. I got two takeaways and for our listeners, number one, I want you guys to get into this frame of mind. Wealth that ends with you is success, but wealth that outlives you is a legacy. So I want you to take that. And from what we’ve talked about today, Mark, a great takeaway, I believe is the goal isn’t just to make money for your family. It’s to build a system that keeps making money long after you’re gone. So Mark, again, I want to thank you for giving that wisdom to our listeners today for being on the show with us today. Thank you for being a part of the exit strategies radio show family. I really appreciate it. Well, thank you, Corn. It’s been a pleasure to be on. Awesome. So if our listeners one more time, look here, y’all know what it is. Y’all know how I feel. You know what I say? I always put the two of those things together and I give it to you this way, which is to tell you that I love you. I love you. And we’re going to see you guys out there in those streets. 

CORWYN:

Building a business is one thing, right? I mean, that’s what some of us, many of us are endeavoring, whether it be through real estate investing or whatever business it is, and y’all know some people out there, but exiting it successfully and turning it into a true legacy for your family, that’s a completely different matter.

And today’s guest helps business owners to unlock. Hidden value and navigate the emotional and financial side of selling.

CORWYN:

Good morning. Good morning and great morning guys. Welcome to another fabulous episode of Exit Strategies, right yo show. Look here. There’s a song that says the second time around, look here. Hey Cameron, know what I’m talking about. We gonna have a great time here today. Look, I gotta give a quick shout out to those who listen to us faithfully, all the way from Hollywood, which you know, no good all the way at the monkey corner. Y’all know my mama live out there. Y’all also Pastor Vanderbilt Evans Senior and his wonderful Rod Elder Evans. And look, I get tickled ’cause the two of them to me are like priceless. I love spending time with them. They’re amazing people. So if you know ’em, you know what I’m talking about. If you don’t, then you need to.

Let’s get at it. Look here. So we gonna jump straight into today’s episode and you know, obviously we always gotta let you know what we’re doing here. Y’all know it. If you’ve been listening, if you’re not, then hey, I need y’all to get on the bandwagon and let’s tell it like it is. Look here, this is what we doing around here.

We’re legacy building. Our mission being as simple as it is to empower. Our community through financial literacy and real estate education, we’re legacy building. Again, that is what we’re doing. So I gotta give you quote unquote what that text is for today. And I’m doing something a little new now, so I need y’all to keep up with me.

Y’all know what I’m talking about. Look here. So I text today, maximizing business value for a lasting legacy. What goes on beyond? I’m very honored today to have as a guest, Mr. Cameron Bishop, y’all call it that last name so y’all know right here today. So he’s the managing director and partner for RainCatcher.

Now we wanna get into a little bit of that, but. Building a business is one thing, right? I mean, that’s what some of us, many of us are endeavoring, whether it be through real estate investing or whatever business it is, and y’all know some people out there. I know a young lady that I’m watching on Facebook, and she’s out here killing with her Geechee crab.

Do y’all know what I’m talking about? So y’all can holler at her, let her know this episode she needs to tune in for, but exiting it successfully and turning it into a true legacy for your family. That’s a completely different matter. And today’s guest, Cameron Bishop, helps business owners to unlock hidden value and navigate the emotional and financial side of selling.

Now he’s got a long resume. He’s, again, the managing director and partner, a rain catcher firm that specializes in helping entrepreneurs maximize business value before sale. He brings decades of experience advising leaders on strategy growth and transition planning, and he’s known for guiding owners. The technical and the emotion because we have emotion about our baby, right? Challenges preparing for a successful exit. Y’all gotta pardon that point because I meant to put that drum roll in there because you know, we around here about exit strategies, about getting on to that next thing and getting quote unquote to our own personal promise land. So I want to take this time right now to introduce an amazing guest.

How to strategize for our future as we enter into our next season and leave our legacy for those who are behind. So Cameron, how you doing today?

CAMERON:

I’m doing fantastic. I like myself even better. Now after your set up there,

CORWYN:

Well look, we do good front. We do what we can and apparently we had a practice run at it. So look here. I love it. I love it, I love it. So if you don’t mind listeners high level about you, rain catching what you guys do.

CAMERON:

Well, first I have to say, Corwyn, I’m really grateful that you have me on your show today because this, my message today is a true personal passion because I’ve spent my whole career primarily buying small companies, and I’ve seen all the mistakes those business owners make.

So I’m trying to help them to prepare when it’s time for them to exit. So for myself. I’m, uh, born and raised Kansas City guy. Today I’m an investment banker, uh, with a firm called RainCatcher out of Denver, Colorado. We help business owners when it’s time to sell their company, but for 35 plus years, I was on the other side of the table.

I was a buyer. So I was supported by private equity firms and I spent about a little over a half a billion dollars and did about 50 plus transactions buying small businesses, and I saw all the mistakes those business owners make. Where they literally walked away and left money on the table. Some of them, because of the things they either did or didn’t do, made their companies unsellable.

CORWYN:

Wow. Wow.

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CORWYN:

So one of the things, we talked about it, our listeners know, look, I’m a business owner, right? So I’m the great grandson of a carpenter side hustler, made wine and barbecued hugs and stuff for people and always tell people all that work that he did on houses, all of that work he did, making wine, all this stuff that he did over the years that I gotta spend with him, which was my upbringing up until his demise.

I gleaned it, but didn’t document what it is that he left or had left there for me. I didn’t understand it. Now, then I have a much better understanding now and I realize it as a missed opportunity. And then here I have children who have no interest in the business that I’m in, that I’m doing, they’re not there yet.

If they get there, great, but if they don’t, what happens? So that’s a conversation that I like to start with. How do you advise people? ’cause you know, I mean, you know in your mind, Hey, I’m gonna take it as far as I can and I’m gonna give it to my children. They gonna go down the road with and take as far as they can and they gonna leave it to their children, so forth and so on. We think that is our legacy. How do you have that conversation with people and what do you see happening in that arena? In space? That’s a whole lot.

CAMERON:

Sure. Great question. That’s the beginning of the process, but first I have to go off track for a second. You mentioned that your great grandfather liked to barbecue hogs a lot in Kansas City.

That’s, we argue in Kansas City. That is the Mecca Barbecue. So you already got my attention, but beyond that, you mentioned that your great-grandfather was a carpenter. Brilliant trade, highly talented. But he is the definition of what is called a lifestyle business. So he doesn’t have a business that he could sell.

The business was his because of his talent. So I spent five years as a consultant and a small firm, and I couldn’t sell that business because I was the business people bought my services and it’s amazing how many people today Corwyn who can make tons of money, or at least a very good lifestyle for themselves, but they don’t have anything they can sell because the whole reason they’re making money is dependent on them.

So that’s the first thing that people need to understand. We have a lot of people who contact us at Raincatcher who wanna sell a business. You know, they might be a writer, for example, or an independent lawyer, or an independent doctor. Any profession that is totally dependent on their personal skills is not sellable in almost all cases.

There are exceptions, of course, but in most cases it’s just not, and they can. I’ve seen businesses where these folks are making seven figures, but they don’t have anything they can pass on to anybody else.

CORWYN:

And that’s interesting. I talk about it all the time when we, you know, bring agents on it into our company. We’re trying to define business. There’s self-employment and there’s business and most people don’t know where to distinguish. Is where the definition changes. We sometimes start, as you said, and we say we’re on the other side of the line. And I’m a firm believer in speaking those things as if they are.

I’m definitely a firm believer in that, but nonetheless, sometimes we are actually truly only resting on the self-employed side and never make it over. So your process, what does that look like? And somebody who is structuring or structured so that they have a truly defined business. What does that look like for you as far as the analysis or the initial phases and stages of what it is that you guys do?

CAMERON:

Yeah, so the simple test is if you have a business, again, can become very successful financially as well as personally rewarding. But the old is, if you got hit by a bus and couldn’t work, would that business survive? And when we have business owners call us, one of the questions we ask them is crazy enough, do you take a vacation? Because many business owners say, well, I could never take a vacation because if I did, my business would crash. That’s not a good sign for a business. It’s not the end of the world, mind you, but in most cases, if business owners can go away for a week or two weeks, or even three weeks and their business continues on and operates normally, that’s a very attractive sign to be able to sell the company ’cause buyers will look at that and know that the business is not totally dependent on that business owner.

CORWYN:

That’s one of the things that’s interesting you say that. I’ve just got, I’ve gotten recently in recent years to where I do and can vacation. It used to be that it would literally gimme heart palpitations, so to speak. Oh, it’s somewhere like, wait a minute, wait a minute. But now it’s like, all right, look, y’all got it. I empower myself, the people around me and trust them. So I empower them to be able to work through and handle those things that need to be worked through and handled. So the reasoning behind this transition oftentimes, again, is you don’t have anyone succession wise to move you forward.

So let’s talk about the emotional challenges, like what are those sticking points that you have to help people navigate? Emotionally, because if you can’t get your mind and your heart and alignment to explore this, then truth told you’ll never do it. Does that sound like a fair assessment?

CAMERON:

Yeah, that’s very true. And you mentioned children, and that’s part of the emotional dynamic because the fact is that a vast number of American companies. Are owned by baby boomer generation business owners. I think the statistic is that 10,000 baby boomers turn age 65 every single day, and their companies are by and large, their primary source of future wealth or hopefully generational wealth.  And in bygone days there, one or more of their children transitioned into the company and took over the business. Today we hear very few people who own a company. Who have children that want to move into the business, so what else are they gonna do? They have to sell the company because they have eventually wanna retire some sooner, some later.

So the fact that their children don’t want to come into the business or other family members for that matter, there’s an emotional dynamic there as well. And for most business owners, they eat, sleep, and breathe their company. It’s their baby. It’s their beings of social validation. It’s an ego driven, it’s their social structure, either talking to employees or their vendors or other people in the same field, and they’re gonna leave that business.

And it’s a challenging dynamic for many of them, even if they make tons of money. So in my world, when we’re helping a business owner sell their company. That’s actually part of what we tried to help prepare them for. That’s not normal for an investment banker. Most people think investment bankers just wanna do hard charging negotiations and dollars and percentages and contract terms, and that is certainly true, but I would say on most of the deals I do representing independent business owners about literally about 50% of the work I do. Is what I call Dr Fill. It’s helping those business owners to navigate a very emotional rollercoaster ride because. It takes nine to 10 months to sell a company. That’s a national statistic, regardless of what industry or type of business it is.

CORWYN:

So two things. So I’m gonna start picking up on something you just may mention of, again, obviously it’s a misnomer, misinformation that when people are for what you do, that people are coming in with this aggressive tone, with these aggressive tactics, if you will, in order to get.

People, if you will, out of their business, if that makes any sense. But what I just heard you say is that you guys have a completely different approach as far as how you wanna have understanding. You wanna work to make sure that you are advising the person, assisting, nurturing, all those things so they can come to the decision that works better and best for them.

But my second part, if you’ll as a kind of a segue from that, if that makes sense. What are those mistakes that many people oftentimes make that. To them seeking to sell the business. What are those normally?

CAMERON:

Yeah. Thank you for asking that question because that’s the key. It’s so sad, cor, because so many people call us and wanna sell, and then when I start going through the question, well, the first question I ask them is, okay.

Why are you thinking about selling? Because we try to tailor a process if they’re sellable company, to achieve their personal objectives and their objectives are oftentimes not mine, but we try to help them achieve their goal. But if they’re not sellable, there’s, depending on the business and the industry, there can be a whole myriad of things that can be factor. But the five key things we see are number one, first and foremost, either no. Accounting are really bad accounting, and no buyer is gonna buy a business if the books aren’t accurate and complete. And if they do have accurate books, they’re normally on a what’s called a cash basis as opposed to a gap based basis where the expenses line up with the revenue so that you can track what the gross profits are in the company.

That’s an accrual based accounting method. Almost all buyers borrow money from banks or other lending sources. When they buy a business, they put their own equity in, they often ask for the owner to carry back a loan. As part of that, banks only wanna work on a gap accrual basis, so a lot of our clients have to go back and spend a ton of time and money to restate their financials.

So account number one. Number two, is what we call owner dependency. So we talked earlier about if you got hit by the proverbial bus, would the business survive? Well, if that’s what buyers wanna know, how dependent is the business on that owner? So if all the clients or customers call that owner, that’s not a good sign because buyers are taking a huge risk at spending a lot of money.

And if that owner walks away or transition out over time, then they have risk. So number three, so normally that means they need to have a succession plan in place, which requires time and money well in advance of selling a company. The third thing we see is what’s called customer dependency. So if they have one client that is represents 20% or more of their business. That’s usually a red flag for buyers. In fact, if they have a  big enough company that private equity firms or family offices, which are super high, wealthy, net worth people who have so much money, they have a team that buys and makes investments for them.

There’s a crazy number of ’em in this country. I gotta tell you, Corwyn, they almost always check out if you have more than 20% of your business is dependent on one customer. The fourth thing is if you have extreme dependency. One vendor provides raw goods for your business. And a client in, believe it or not, Canada, who had an amazing business. This guy was printing money. It was so profitable, but he relied on one very specialized material. It was made by one other company in Canada. And if he lost that agreement with that other company, which was a family owned business, let’s say hypothetically that other company went bankrupt, wouldn’t be likely.

But if they did, buyer is in deep trouble. So buyers of businesses look at what your vendor structure is. The fifth thing is, and this varies by industry, is what your gross profit margins are. So if you’re a distributor, for example, normally those are about 25, 30% gross profit and 10% and net income or ebitda.

But different businesses like a SaaS platform, software company. Super high gross profits. So buyers look at what your gross profits are and measure it against the industry norms for that particular industry. And if you’re below that, it’s at least a yellow flag and oftentimes a red flag for buyers. So those, I could probably name over 30 other factors that could come into play.

In different scenarios, but those are the five keys when we’re marketing a business and they call a buyer say, Hey, I’m interested in this company. Those are the five questions they ask first.

CORWYN:

That’s huge and very useful. I get that. So for our listeners, guys, you gotta be thinking about this from the big picture. You gotta think about it from the perspective of if you got a contract to whatever it is, let’s say you have a lawn care business or what have you, and you got a single large contract that represents 50% of your income that I know Cameron is like, uh, because if you lose that contract. Somebody buys a business, they lose that contract then. Then what? Because we know that in these changes of ownership with businesses, there’s going to be some customers or clients that may shed, if you will, in that process. Does that sound about right Cameron?

CAMERON: 

Wow. You’re a spot on that Corwyn. So a classic example, what? I first joined RainCatcher almost five years ago. My first client was an amazingly talented gentleman who was a creative marketing guy, and he did premiums and incentives. You’re like, did you want t-shirts with your logo on ’em, or pens or coffee cups, et cetera. He did that and one of his clients was a large client with multiple locations. All of those locations combined represented about 55% of his business. And because he was an extremely creative guy, he, I don’t even, I can’t even count the number of rewards he’d won for creativity. Well, we brought six buyers to the table for that deal, but in his case, because of those two factors and his profits were well above the industry, nor for that kind of a business.

So that was a good thing, but no one would pay him any cash upfront on closing the deal. Because the risk of what would happen when he ultimately left and what would happen if they lost that huge client, then I think they had like, I dunno, 25 or 30 locations, and his argument was, well, I called every one of those locations well because we couldn’t get any cash and it was all, they were gonna give him a job for two years. And he could hit some targets over three years and he would get close to what he hoped to get for the business.

Well, he said, Hey, heck with this, I’m just not gonna sell. And six months after we canceled the whole process, which again went for nine months, he lost that large client because they brought in a new senior level executive at the corporate level, and he negotiated a new contract with somebody else. That guy’s contract or that guy’s business was no longer sellable at all.

CORWYN:

Ah, that sounds, yeah. And those are the things that we have to think about. But you touched on something, this process. Sometimes people think that when I sell is final. Right. So there’s a couple times throughout our conversation, Cameron, you’ve touched on different situations.

So you know, you can sell part of the business and retain some interest in ownership. But if you don’t mind, throw out a couple of different scenarios that you’ve worked on where it wasn’t a full transfer of ownership and essentially a full cash out, but maybe essentially some equity brought in and there’s still some involvement of the current owner, if that makes any sense.

So give us some situation, scenarios where that’s happened.

CAMERON: 

That’s another huge factor in selling a company because everybody just think, oh, I’m gonna sell my business. It’s gonna be worth X, and I’m gonna get a check or a wire transfer into my bank account and I’m gonna walk away. It rarely happens.

There are certain cases where it can, uh, especially in this day and age. If a business has any real meaningful value, let’s say it’s gonna sell for a million dollars or more, just as Hypothe could be less, could be more the buyers for that business. If it’s a under, let’s say, five to $7 million business, they’re gonna take out an SBA loan and the small business administration.

Them to put, generally, I think it’s about 10% of their money into the business, and the SBA is gonna loan a big chunk of the money, but then they’re going to ask the owner of the business to carry back what’s called a seller note, which is basically loaning the buyer part of the purchase price. Those loan terms can be good.

If the seller has a good representative broker, investment banker representing them, they can negotiate a pretty good deal where they can get better money. Well, of course the stock market is going crazy good right now, but it’s not always the case. Those loans are generally three to five years. The interest rates are negotiated.

Generally at or slightly above what the market rates are, but sometimes there are no payments against that loan for a year or two years. And maybe it’s just interest for a certain period of time. And then there’s what’s called a balloon payment at the end where they get the full remaining payoff at the end of the period, which is generally three to five years.

Some will occasionally stretch to seven years. Also part of the purchase price paid on an earnout. So the example I gave you a minute ago where the marketing guy couldn’t get his company sold for cash, any cash upfront, all six of the buyers of that deal were gonna pay him out over a  two or a three year period based on hitting certain financial milestones in the company because that reduced their risk.

CORWYN:

That’s huge. So that’s proof that there’s quote unquote more than one way to skin a cat. So Cameron, let’s get your contact information out. How can people reach you, get in contact with you?

CAMERON:

I’m happy to help any of your listeners at any time. No cost, no obligation, no sales pitch. Again, I’m Cameron Bishop. My email address is cameronBishop@raincatcher.com. Our corporate website is www.raincatcher.com or look me up on LinkedIn. You can find me there as well, and send me a chat message. Happy to schedule time to chat with you just to answer questions if it’ll help you.

CORWYN:

Awesome. Awesome, Cameron, I greatly appreciate that. So I wanna thank you again for being on the show with us today. I really appreciate it. Quote from the bottom of my heart, man. I really thank you for taking the time. For our listeners, guys, look, let me give you these to-dos the things that you should be taking action on. So if you’re a business owner, don’t wait until you’re ready to sell, if that makes any sense.

Start planning now. What is your pardon the pun? What is your exit strategy? How is this gonna look? How do you want it to look? Right? So let’s start having these conversations early. My takeaway, Cameron, from what you’ve said today, is that a well-planned exit, and y’all got to excuse that pun, isn’t just a transaction, is the opportunity to turn your hard work into a lasting legacy.

And guys, y’all know how we are here about, if you will, our legacy. So Cameron, again, thank you for being with us today. I really, again, appreciate it.

CAMERON:

Amen. Hoping I was helpful for your listeners.

CORWYN:

Awesome. So guys, our listeners, Hey y’all know how I feel. You know what I say, you know, always put the two of those things together and I give it to you this way, which is to tell you that I love you I love you and we gonna see you guys out there in those streets.

CORWYN:

Don’t let fear or limited knowledge stop you. Multifamily is more accessible than you think, guys, and it can transform your family’s future. 

Good morning, good morning, guys, and great morning. Welcome to another fabulous episode of Exit Strategies Radio Show. Hey, if you don’t know who I am, I’m about to tell you. I’m your host, Corwyn J. Melette, broker and owner of Exit Realty Low Country Group and beautiful North Charleston, South Carolina. If this is your first time listening to this show, you, sir or ma’am, are in for a treat because our mission here is very simple. That is to empower our community through financial literacy and real estate education, guys, real legacy building. That’s what we do. Gotta give a shout always faithfully to our listeners. Gotta thank Elder Pastor Evans, Vanderbilt Evans Sr. Because that guy will jack me up. He will snatch me up like I’m nothing if I don’t get that senior on that name. So I appreciate you. You know, I love you guys immensely. My mom out there in Monkey’s Corner, y’all, and everybody back to Hollywood was no good. And even my folks in the MnM, Mary Mullins, guys, I love you and appreciate you so much for tuning in. So look, today’s show, you get the opportunity on occasion, right? They say that when you get to sit at the teacher’s feet and get to take in everything that they pour into you, but you also get to experience everything that they take in as well. That is what true learning is. And I’m very fortunate today to have someone who is a leader and we’re gonna call him a teacher today in this space about multifamily. He is a real estate entrepreneur and the entrepreneur thing sometimes will get the best of you, but he is yet holding on with over 30 years in the business, licensed broker and investor with over 300 units managed across multiple states. He is known for teaching investors how to overcome fear, raise capital and confidently move transition, if you will, into multifamily deals. So I don’t wanna do a drum roll. We got a platinum carpet in the back. So we’re gonna go ahead and grab that and make sure we get that out as we introduce none other than Mr. Ashley Garner. He is the founder of ABG Multifamily. That is what he does. So Ashley, thank you so much for taking time out to be on the show with us today, man. How are you? 

ASHLEY:

Hey, Corwyn, I’m great. And I must tell you that that is my all-time favorite introduction that I’ve ever had. I appreciate that. 

CORWYN:

Well, look, we appreciate that. Just so you know, I’m available for hire. If you ever need me to jump to the stage or something. Yeah, I like it. Yeah, I like it. Good. So look, let me set the hook right here, Ashley, and just kind of get into this conversation. For our listeners, guys, too many aspiring investors stop short of multifamily because they think it’s out of reach. And it’s funny, I just talked about this yesterday. Ashley, you’re going to show us today how to break through those barriers and start where you are and build a legacy, if you will, one deal at a time. If you don’t mind, let’s talk about it. Give our listeners a high-level overview, Ashley, of who you are and what you do. Man, you got it. 

ASHLEY:

So first of all, thanks for this opportunity. I love the mission that you have with the financial literacy and educating others and legacy building. That’s close to my personal heart. And so I love the chance to be here. I grew up kind of in this business, but in a very mom-and-pop fashion. So when I was in junior high and high school, my dad started buying large houses near the campus of West Virginia University, and then we would internally subdivide them into apartment units and then rent them out to students. And we actually still own lots of those places today. Unfortunately, my dad is not well. He’s still with us, but he’s pretty far down the road of Alzheimer’s and not down to take a detour, but he bought those houses, you know, was that 35-some years ago? And now those houses are paying for his care. We wouldn’t be able to afford to care for him if it wasn’t for that. So it’s just one of the many, many reasons to pursue investing in real estate because it really can change your life. So I grew up in that literally with a hammer in my hand, and I was doing the stuff, the plumbing, the construction, the renovation, all of it. And it went then to the financing and the acquisition and the management and all those types of things. So then when I got on my own career, you know, when I got to be adult age, if you will, and I got my broker’s license back in 1994, I’ve always been in the real estate industry in one form or fashion. Like when I was in college, I drew floor plans for a real estate appraiser. I’ve always been in that arena. So I got my career going with residential brokerage, kind of like you. I have a small team of people that works for me on a small scale. And it is a wonderful career. It was a fabulous opportunity. I loved every day of it. But I still realized that even though it wasn’t like a W-2 job where I had to go clock in, that if I didn’t show up, take a shower, comb my hair, make my phone calls, write my handwritten notes, do my open houses, then I didn’t make any money. It’s still a job. And what happened to me was I started buying single family rentals, duplexes and triplexes and in pursuit of that financial freedom. And it was working. I read all the books. I studied this stuff like crazy. And it’s working. So I’m thinking now like, all right, I like this stuff. I want to do more of it. And so my financial freedom goal kind of increased. I said, well, if I want to live the lifestyle I want to live without having to clock in, if you will, then I need more units. So I’m going to have to somehow get bigger. So I bought my first one, which was a 10 unit apartment building. And that was in 2013. And in 2013, when I bought that building, that might as well have been a New York City skyscraper to me because it was such a big difference from what I had ever done before. And I remember being scared to death. And so I got that one and then things went real well. And I didn’t buy one for a while. I was kind of still doing my brokerage business. And then in 2017, I guess God had a different plan because I had Monday morning on August 14th, I had a heart attack and cardiac arrest. They had to shock me back five different times that day. And I guess I wasn’t ready to go. I wasn’t finished yet. And it’s because I’m still here. But here’s where the reason I tell you that is because it was at that time when I was kind of in my mental and physical recovery for a couple months that I realized that my real estate investments were that’s what my family was living on. And had it not been for that, I wasn’t making any money. I wasn’t selling any houses. And that’s what kept me going. So it really then proved to me the power of having this, the income from the rentals. And that’s when I decided to try to take it a little bit bigger, even. 

CORWYN:

Let’s take a short break. 

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CORWYN:

So Ashley, thank you for sharing that because you just touched on a number of things that, again, I just had this conversation yesterday with a very close friend of mine, I consider him to be my brother, and just, hey, what’s the plan? How are we going to do this? How you need to get this done? Down the road, he’s a little bit younger than me, but getting to that, I’m going to say this, I’ve not said this on air before, but I’m going to say this because I’ve been internally having this 20 by 10 conversation. 20 new doors over the next 10 years, producing a minimum cash flow per door, if you will. The short of it is getting to where you’re, what you’re talking about, which is that when you age out or aging out or whatever, that you’ve set yourself so that this industry and as an entrepreneur doesn’t give you retirement. You got to build it. That’s right. I don’t want to go too far into the weeds, but because we, I want to make sure we keep this relevant with our audience. So if our audience, please bear with us. But one of the things that I imagine, you said this, so let’s start with a fear. Let’s start with a fear. Okay. How did you overcome it? And what do you tell people that, let’s say they’re mom and pop, onesie, twosie, you know, they got one or two doors, single family houses, townhouse, condo, whatever that may be, scattered site, whatever. And now it’s time, look, for us to really look at transitioning. How do you tell them over? What do you suggest? Let’s go. Gotcha. 

ASHLEY:

Well, I sometimes take for granted that everybody knows real estate as well as I do because it’s all I’ve ever done, right? I think to myself, well, why don’t you just do more of that? But then when you talk, you realize, well, people think that there’s a difference between a duplex and a single family, or it’s more complicated now because we call it commercial real estate or because I can’t go get a regular mortgage from a mortgage banker. I got to go to a local bank or something or start an LLC. So in other words, it adds this layer of complexity, I think, but what it really is just more of the same thing you’re already doing. If you have a onesie or a twosie, a threesie or a foursie is no different except it has four doors instead of two. And that’s what I try to help people understand that it’s the same closing worksheet that when you buy it, it’s the same attorney. You could sit right in the same seat in the same attorney’s office and buy that four-unit property the same way you could buy that one-unit property. And so, yes, there are differences, of course, the different terminology are slightly different when you borrow money or whatever, but it’s all basically the same. And at some point, you can read all the books, you can watch all the podcasts, but at some point, you just got to take the step and give it a go. And if your numbers, I know that you help people understand the math of it all. If the math works, then give it a go. At some point, it’s just taking a dive off the high dive. You got to hold your nose and go or you never get there. 

CORWYN:

Yeah, you ain’t swimming on land. Right. If you’re going to swim, that means eventually you got to get in the water. So you touched on something else in there that just I think makes sense. We overcomplicate it. So we make it more complicated because what I heard you say, you sign the same docs to buy four as you do to buy one. Ain’t like you got to sign four times. You’re going to get writer’s cramp from, if you will. No, it’s the same thing. Yeah. So let’s talk about how you get in. So you made mention of the doors and the industry. Thank you for that point. We sometimes everybody thinks and understands it like we do. What are some options for people to get in? Because people looking at, OK, well, look, I can come up with a loan for to buy this, but getting to this is way more expensive. And how do I get there? So what are some ways and strategies that you would either used or otherwise advise people on how to get that done? 

ASHLEY:

Yeah, well, I’ll tell you that when you’re a hustler, when you’re like, you go out and find a deal and create an opportunity, other people want to be a part of that. And what I mean is this. It took me a long time between my one like duplexes and triplexes to get that 10 unit property. And I look back and I wish it hadn’t taken me so long. And I say, well, why did it take me so long? And I feel like there’s two reasons. One was that fear that I had. I just was it took me a while to convince myself to do it. But the other one was the money. And I thought I had to save up all the money all by myself. And it was not just saving enough, but it was saving enough that if I lost it all, I wouldn’t put my family out on the street. And so those two things took me a long time. Now, since then, I have realized that it didn’t have to be that way, that other people would join in with me and take advantage of my hard work. And what I mean by that is this. The next unit I bought after the 10 unit place was a 32 unit place. So it wasn’t three times as big. And it was about five years after that. But I got it. I found it. I got it under contract. And then I went to the bank and said, all right, how much money can I borrow? And they said, all right, you can borrow this. Turns out I needed $350,000 to buy it. Well, I mean, it might as well have been $350 billion because I didn’t have it. And to me, that sounded like more money than I could ever imagine. And so I called one of my friends, somebody I had known a long time ago, and life has been good to him. And I said, hey, I found this property. Would you like to invest in it with me? You go in with me. Initially set out to do is like, all right, I’m going to raise $50,000 from seven different people. And now I got my $350,000. When I called him and told him about this deal and shared the numbers, he’s like, yeah, I think I’d be interested in that. And I said, okay, well, how much do you think you would like to put in? He said, well, if we did it, I think we just would do it all. And I was like, whoa, what? I make one phone call and now I got all the money. And what I’ve come to realize then is not that he wasn’t doing me a favor. He wasn’t trying to help me out of a tight spot. I was trying to, I was presenting him with an opportunity that was good for him. And now we all win. 

CORWYN:

I love it. So, so that that’s the thing. Cause you’re looking at our approach sometimes in that situation, what I just heard, and I’m going to echo it because I get it. You’re thinking, well, I need help with this. But really and truly what you’re doing is offering opportunity to somebody else. So, hey, look, you gonna make some money. I’m gonna make some money and, and we’ll keep doing this and continue to make more. So that brings me to the cap stack. So what you talked about a syndicate, syndicating or getting either one or two or however many more people to bring money in to show you up. So then you can either, either you can leverage it with the bank for the balance and, or you can bring all the cash in necessary to put the whole deal together. What strategies do you normally employ? I mean, you guys look at, or do you kind of employ them all? We’ve talked about Burr here on the show. The cap stack is important. And if you’re going to do a Burr method, getting in, stabilizing the property, refinancing the cash back out and going somewhere else with it. That’s huge. So what does that normally look like for you as far as trying to put together, if you will, the cap stack? 

ASHLEY:

Well, one of my favorite things about this business is, you can make it look however you want. And there’s no, like in residential, there’s a standard form for everything. And this kind of stuff, you just create your own way. And so I’ve done a lot of them. The Burr method is one of my favorites. In fact, that 10 unit place I told you about, I think I’ve cashed out, refinanced that thing three times now. And that, the money, the equity that I have taken out of that place has bought me millions of dollars of real estate that I’ve used that cash to go as the down payment on something else. And I’ve owned that, then I’ve sold that and bought something else with it. And it just keeps going. And that’s, when you get into that, that’s really where it’s mind-blowing, the power of this real estate investment. It really is a special, powerful tool. So I like the Burr method. I’ve got, then I’ve just got straight partnerships, kind of 50-50 partnerships where I found the deal and the other person put in the money and we go half. I’ve done the syndication model where I’ve been the general partner and I own a smaller percentage of, in this case, 40%. And then the limited partner investors own 60%. I’ve done syndication that on a bigger scale that was where the general partners own 20% and the limited partners own 80%. I’ve kind of done it in all kinds of different ways. 

CORWYN:

I love that because what you said in there is oftentimes we find limitation where opportunity exists. So what you literally have done is you get the first deal done and then from that point on, technically you’re playing with house money, so to speak. There you go. You get your, however you do when you’re playing and sitting with house money. And sometimes we as investors, new investors, we miss that because in our mind it is, the objective is to pay off the debt, right? But if you leverage the debt into additional property, then for an investor, oftentimes it’s about cashflow. So if I can leverage the debt and get into more properties, more doors, if one, I’m lowering my risk by going to more doors because if I got one door and it goes vacant, I’m toast, right? If I got 50 doors and one goes vacant, we got 49 more. So how do you have this conversation? Because I mean this, you talked about it in the beginning, your dad, prayers for him, you and the family because I can’t imagine what you guys going through. But dad had the vision early and looked down the road. So how do you have these conversations or this conversation with other potential investors about, hey, this side of this thing works, this is why you should do it. This was because you just shared your experience, your dad, as well as your own personal, how they can structure this for the long term, essentially our legacy piece. What does that look like? 

ASHLEY:

I think that’s a tough conversation because everybody has that desire to be safe and secure and to leave something for the future and know that their finances are going to be okay no matter what happens. But sometimes it seems like it’s such a big mountain to climb. Where do I even start, man? I can’t, I buy one little house, what’s that going to do for me? And you buy one house and you rent it out and maybe you make $200 a month cash flow from it. And that’s a lot of money, but it’s not going to leave a legacy for your kids, right? But what the real power of it is, is that you get in and that you can do it and that it does work and then you get interested in it and you learn more and more and then you start hanging around people like Corwyn and you talk real estate and shop and then it just grows from there. To me, that’s the real power of it is to get started. And once you get started and you start hearing more people like me and you talking all the time and hearing our experiences, then that’s how you get to that next level. I don’t know. See, I’m not even close to being the smartest person in the room and I know I’m not the smartest person on this radio podcast right now. But what I realized also is I see other people out there doing this and being successful. And I’m like, man, that guy, I’m not ripping on him, but I know he’s not that much smarter than me. And if he can do it, I know I can do it. And so it’s more it’s the action that separates most people. It’s taking the action that it is having the knowledge. Most people have more knowledge than they’ll let themselves believe. It’s just that you got to walk in in that day and say, all right, I’m going to do this and not give up. Time goes fast, man. Five years goes by in the blink of an eye. And if you’ve owned a rental property, for five years and you look back and now it’s double in value, that’s pretty powerful. But if you don’t do it at all, five years goes by and you’re right back where you started. 

CORWYN:

It makes perfect sense. So what you hovered on right there was mindset. And we talk about that on the show a lot, Ashley, about people and their mindset. How do they do things and their motivation and their commitment, level of commitment. But one of the other things that goes with that is you talk about the room. As I framed it yesterday, and you’ve heard this, your circle is either a circle or a cage. The people that are in it and the people that you spend your time with and that you glean and lean to and from is either a circle or a cage. And you’ve got to make sure that you focus on that. So education. And let’s kind of get to the wrap on this piece. Education. When I say that word to you in this field, in this space that you operate in, what does that resound for you? What does that mean for you? 

ASHLEY:

Well, I think it’s easier. You know, it used to mean when I was starting out, it used to mean reading a lot of books. And I would read whatever book I could get my hands on and learn the math and the terminology and things like that. So I felt comfortable. So I didn’t feel like I was sounding stupid in front of people talking about it or asking questions. And then nowadays, it’s so much easier to educate yourself, which you can go on YouTube and basically take a whole college course on real estate finance and multifamily or whatever, just right on YouTube. But I listen to a lot of podcasts like yours and other people’s. I do a lot of, you know, I’m always running a spreadsheet or looking online how to run, how to calculate this or try to learn about the 1% rule or all these other things that investors will learn about. So I think education is easier now than it’s ever been. I also have been participant in local real estate investment associations through my being a broker. I was kind of always around the real estate, but by the way, on that one, I know a lot of brokers because that’s what I do, right? So I spend a lot of time educating residential brokers on how, because like you said before, as entrepreneurs, we don’t have a retirement, a 401k. There’s none of that. And I was like, look, guys, when you hang up your real estate license one day, either because you got sick or you just didn’t want to work anymore, I said, you stop selling houses, then guess what? You make zero more money. And so you need to do something like this to take care of yourself and your family. And even people that are in the business of real estate think that have a hard time making that transfer into owning an investment for yourself. When we help other people all the time with their closing statements and their inspections and all these things, and it is exactly the same to buy an investment property as it is to help a client buy a residential house. 

CORWYN:

So let me ask you this, and I’m going to ask this as, one, let me get your information out. So as our listeners reach out to you, quote unquote, to come subscribe to sit at the feet of the teacher. 

ASHLEY:

Yeah, I think the easiest way is just to go to our website, which is abgmultifamily.com. And once you get on there, you can find phone numbers and emails and LinkedIn and Instagram and all that stuff. But it’s abgmultifamily.com. 

CORWYN:

Awesome. Awesome. I sometimes like to frame this as that hindsight question, which is if you had to do this thing all over again, knowing what you know now, I’m pretty sure I know what your response might be. But if you had to do this thing over, what would you have done differently? 

ASHLEY:

I would realize that I didn’t have to do it all by myself. Growing up in this business, like I said, a very mom and pop hands on. My dad was like, look, if we need to paint the house, then grab a paintbrush. If you need to type up a lease, then grab your typewriter. So I got that mindset of doing everything myself. I carried that on to thinking that I had to raise all the money by myself and I had to do the whole transaction all by myself. And that kept me smaller than I could have been had I said, hey, Corwyn, I found a property. Would you like to go in half with me? I don’t have all the money, but I found it. It’s a good deal. Would you like to be a partner? And had I done that sooner, I feel like I could have gotten farther down the road sooner. 

CORWYN:

I like that. I like it. That’s real, Ashley. That’s real. So I want to thank you for taking time out today to be on the show with us, man. And most importantly, for your insights and for telling the story, man, because it’s a very common story. I know you see it because you’ve lived it. I know you see it repeatedly as you seek to educate others on how they too can transform their lives. So I appreciate you taking time. 

ASHLEY:

Yes, sir. It’s a great opportunity. I appreciate it. Keep doing what you’re doing. Thank you. Thank you. 

CORWYN:

Now for our listeners, guys, look here, let me give you your action item. You’ll take away what you can go do outside or going outside just to play. Guys, look here. Don’t let fear or limited knowledge stop you. Multifamily is more accessible than you think, guys, and it can transform your family’s future. So I want you guys to take that with you and do something with it. Don’t let it fall, quote unquote, as a pastor will say at times, not let it fall on deaf ears. Let it be heard. Let it be worked upon. Guys, you know how I feel. You know what I say. You know, I always put the two of those things that I give it to you this way, which is to tell you that I love you. I love you. And we got to see you guys out there in those streets. 

CORWYN:

Our show is about solutions. We got questions, but we need answers. So today we have the answer to this particular dilemma. So let’s say you spent years building well, either through real estate or your business or combinations thereof. And in that scenario, you don’t want to leave your legacy just a chance, whether you own a single business rental or properties or portfolio businesses, what happens next should not be by, or is oftentimes not by design, it’s by default. And we want to fix that. So today’s episode is all about protecting what you built and ensuring it benefits the next generation on your turn. 

Good morning. Great morning guys. Welcome to another fabulous episode of the Exit Strategies Radio Show. Hey, I’m your host. Corwy J Melette, broker and owner of Exit Realty Low Country Group in beautiful North Charleston, South Carolina. Yeah, that’s where we at. We down here in this crock pot. If y’all know what I’m talking about, we down here cooking, but look here guys, we’re off to an amazing start today to a fabulous episode, and I cannot stress to you enough guys, make sure you’re buckled in strap and that you tie yourself down. Cause there’s going to be a lot of great information going by you today. And we want you in a position that you’re able to gravitate, that you’re able to grab on to it and hold on to it because it’s going to be relevant to you and your future endeavors. Guys, we want you in place. We don’t want you to get away. I want you to fly away. We want you to get this information. So for our listeners that listen to it faithfully guys, you know what our mission here is about is to empower our community through financial literacy and real estate education. Shout out to those who listened to us all the way from muddy Mullins, all the way back down to Hollywood, what you know, no good. I’m mom in between there y’all and monkey’s corner and elder and pastor Evans that listened to us faithfully. You guys rock. I really appreciate you. And y’all know that I love you. So look here, I’m going to pose this because our show is about solutions. We got questions, but we need answers. So today we have the answer to this particular dilemma. So let’s say you spent years building well, either through real estate or your business or combinations thereof. And in that scenario, you don’t want to leave your legacy. Just a chance, whether you own a single business rental or properties or portfolio businesses, what happens next should not be by, or is oftentimes not by designers by default. We’re going to fix that. So today’s episode is all about protecting what you built and ensuring it benefits the next generation on your turn. So the answer to that is none other than Kevon Sabre. Now Kevon is like the guy, right? Cause he is a co-founder. That means he was there at the beginning of legacy outcomes. So Kevon, welcome to the show. Corwyn, so glad to be here. Thank you for having me. Well, you’re quite welcome. Quite welcome. Now look here, I’m a big fan advocate of people, you know, telling their own story, their own narrative. I may have my version, but look at your version is best because you know it better than anyone. So if you don’t mind Kevon, give us that high level overview of who you are and what you do. 

KEVON:

Absolutely. So Corwyn, I’m 45. When I was about 20, I went through a really powerful spiritual transformation that made me ask a question. The question was, how do I make the biggest possible difference with all of the blessings that I’ve had in this life? And I thought it would be entrepreneurship because as an entrepreneur, I could create, I could influence people, I could generate wealth that I can use to help the least of these, right? I can affect a culture inside of a company. I can make an impact on customers. Solving whatever problem I think needs to be solved, whatever problem I don’t think other people are solving. And so I built and scaled and sometimes sold businesses and it’s 2017. So I guess that’s seven years ago. I had an opportunity to restart a medical technology company that was the first low cost method to catch vision diseases in children. Vision diseases affect one in five kids in the US. It’s the most common disabling condition. And if you’re not seeing well, you’re not learning well. If you’re not learning well, it affects your whole life, including your income, right? And so I did that for five years and it was absolutely motivating, fulfilling to get these calls from moms and dads and doctors saying you saved my kid’s sight, or in some cases you saved his life because eye cancer will spread from the eye to the brain, right? I did that for five years. It was incredibly fulfilling. Like I said, and one thing was really obvious. My health was negatively being affected. My marriage was going the wrong direction and I just wasn’t as close to my kids as I wanted to. So I took a sabbatical and just spent the next six months reading, reflecting, working on those three areas, health, marriage, and my family, my kids. And then I decided, well, I don’t really know yet what I want to do. I haven’t found that next big challenge, that next big hill I want to climb. And so I began just investing, sitting on boards of businesses and nonprofits. I’m on the board still of a glazing company in Southern California called Denali, like the mountain D-E-N-A-L-I. When one of the other board members said, Kevon, I know what you should do with your professional life. There’s a joke that God loves us all, but someone else has a plan for us. My friend said, Hey, I got a plan for you. Why don’t you dedicate your professional career from this point forward to helping business owners exit their businesses without regrets? And as he explained to me how, depending on which study you look at, 70 to 90% of business owners have regrets over how they sold and how most business owners bring assumptions that are not founded on reality and how most representatives, the brokers and other M&A firms out there are not doing the business owners and their legacies justice. And then ultimately how the buyers are pros, 4.7 trillion of private equity in the U.S. is buying businesses. They buy businesses all the time. When someone’s selling their business for the first time, they’re not prepared. They don’t have the same level of expertise. Well, I left money on the table twice when selling my companies. So I recognized that the market was rigged against midsize business owners. When I say midsize, I’m focused on businesses that are in the 20 to 90 million in enterprise value range. But this market being rigged against business owners also applies to smaller businesses. And so after reflecting and realizing how many regrets I had over how I sold my companies, I decided to join this other board member in taking the 30 years of refined process that he had created after borrowing an initial playbook from Goldman Sachs, JP Morgan, Lazard, and adjusting it for the lower middle market and middle market so that ultimately we could protect the legacies of business owners across the U.S. in a much bigger way than he was already doing. 

CORWYN:

So Kevon, thank you for that. So I want you to get back to just a basic, but then accelerate this conversation very quickly, because I want you to emanate. Some people know what it is, some people don’t, but if you could define that and then let’s go much quicker, further along to discuss how that plays out in today’s world. 

KEVON:

Yeah. So mergers and acquisitions, right, is simply the market of buying and selling companies. Of course, there are family offices that are buying companies, private equity firms, strategic buyers, or corporations that are going to buy a company that has some sort of synergy with their existing business. If the businesses are about equal in size, whether that’s enterprise value or revenue or employees, we’re more likely to call it a merger. Where one company is a lot bigger than the other, we’re typically going to call it an acquisition. So mergers and acquisitions are basically the changing of ownership of at least one, if not multiple companies. 

CORWYN:

So why should someone start planning this now? Oftentimes people start a particular endeavor and they don’t think about what they want it to end, what do they want this to look like, et cetera. So why should people start early in that process? 

KEVON:

Well, you want to start early because you don’t have time, right, to start late. If you try to do it at the last minute, you end up suffering. Either your valuation suffers, your terms suffer, your sanity suffers, or your team or culture suffer. Usually most of those will suffer if you wait till the last minute. At the end of the day, right, most of the same investments that are going to make your business successful before you sell it. I’m talking about an A-plus management team, very clear and defined responsibilities, documented processes, high margins, repeatable revenue from customers that can’t imagine either living if they’re people or doing business if they’re companies operating without your solution. Those are the same things that a buyer cares about when they’re buying your company, but they’re also the same things that make your business an enjoyable experience for you and your team and ultimately enables your business to grow at the rate you want it to grow. So I’d say the first reason is you don’t have time to do it at the last minute. The second is you’re going to suffer if you don’t start early. And the third is you’re going to have a much better experience that fulfills your reasons for starting the business if you start early. 

CORWYN:

Let’s take a short break. 

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CORWYN:

So you kind of touched on this earlier when you made a statement that the system quote unquote is rigged or potentially, I’ll say potentially, but if you don’t mind, let’s go deeper into that. I mean, do you feel, believe, and what supports that belief if it is or isn’t that it’s rigged against smaller business owners or midsize business owners? 

KEVON:

Yeah, I’ll give you a few different angles on that. The first one is the stat I mentioned earlier, depending on which study you look at, 70 to 90% of business owners have regrets over how they sold. And so if the proportion of business owners who are unhappy about how they sold is that high, that tells you there’s something that is not serving them in the market. When you look at every hundred business owners who try to sell, 60 don’t even get an offer, right? 40 will get an offer. And the number is going to vary a little bit if we’re talking about a $15 million enterprise value business versus a $40 million enterprise value business versus a $90 million enterprise value. But I want to average out the numbers just to keep it simple. So for every hundred business owners that don’t sell, 60 don’t get an offer, 40 get an offer, but only 19 of those will actually close. Meaning about half of the signed letters of intent that sellers sign don’t actually materialize into a deal that has cash go in the bank. There’s a lot of reasons for that. We can cover them if you want to. Of those 19 businesses who actually do transact, out of the hundred, depending on which part of the market you’re talking about, one, two, or three will sell at the high end of the valuation. So 19 will sell, some of those at the midpoint, and only one to three of those at the high end. I don’t know about you, but I don’t like leaving money on the table. And when the stats are that bad, I think it’s fair to say that it’s rigged. It ultimately comes down though to those three things I mentioned earlier. Sellers have untested assumptions. Their representation, usually brokers or M&A firms, are bringing knives to gunfights with the buyers. And thirdly, buyers have an incredible set of tactics and maneuvers to outsmart the sellers who are doing this for the first time. 

CORWYN:

So thank you for that, because that definitely gave some insight and leads me to probably a few other questions. Because ultimately what I’m seeing is or hearing is that because it wasn’t planned far enough in advance, now at the critical moment of we need to do something, we have a situation scenario which is, well, if you need to do something that desperately, then I’m going to give you this low ball off and they’re kind of stuck or caught with that. Now, you also mentioned in there the difference between, well, you said they’re bringing a knife to a gunfight, which I appreciate that analogy. So question for you, the advantage of bringing someone to the table early. So your company, what you guys do, you operate as a team versus a single person. You guys are a team that has this. So how does that allow your outcomes to differ? And that’s a good play on your company name, Legacy Outcomes. How does that allow the outcomes to differ for those business owners? 

KEVON:

Yeah, you nailed it, Corwyn. Let’s talk about that specific example you gave, a single business broker compared to a full M&A team. A solo practitioner is going to be juggling valuation, forecasting, buyer outreach, negotiation, diligence. I don’t know about you, but most football players cannot be a great running back, quarterback, wide receiver, offensive lineman, hunter, et cetera. So when one person tries to do everything, they’re going to have a bunch of blind spots, usually going to have a bunch of cookie cutter documents. And that’s not how you win championships. The buyers are fielding full M&A teams across the deal. So the sellers need a robust M&A team that is going to be a specialist at every position. A transaction architect is like the quarterback and the coach, looking at your objectives as a business owner and then creating the strategy, the plan, and adjusting the playbook to get that championship. Think about, we have buyer experts that are specifically looking at earnings calls, the annual reports, the communications between PE general partners and their limited partner investors, and then finding the small handful of unicorn buyers who will pay the most for your business because it’s a transformational and indispensable part of their strategy. We have valuation specialists that are looking at the strategic, operational, and financial building blocks of your business to see the positioning opportunities that those unicorns, again, can’t imagine operating without. And so specialization sharpens every play, driving the peak outcome that you deserve as a business owner. 

CORWYN:

So you guys have built out like this entire platform. That’s the best word I got for right this moment. 

KEVON:

That’s very accurate. 

CORWYN:

Okay, perfect. So you guys have built out this platform to kind of guide people through. So essentially, oh, we got you on deck and we want to get you across and we want to raise you kind of like Panama Canal, going to kind of raise you and get you the way you need to be. That’s all the material you can use that wherever you want to, Kevon. But this platform that you guys have built, please give our listeners the name of, and let’s talk about when is it right or when is it not right for a particular business? 

KEVON:

Absolutely. So I would say our firm, as you know, is Legacy Outcomes. And what is really unique about what we do for these mid-sized businesses is take them through a methodical process to go from, hey, I’m thinking about selling or I have a first offer to sell my business to Legacy, to them being able to lift that championship trophy above their head and say, I have no regrets. This was a perfect capstone to the years or decades or even generations of hard work, the sweat and the tears and the sleepless nights and the stress and the risks they took in building their company to that point. So first we prepare, right? We’re looking at their objectives. We have 15 different objectives. We literally lay out these 15 cards on a table and we say, all right, let’s sort these cards into high, medium and low priority. Because again, that transition architect is going to create the strategy and the plan. They’re going to refine that playbook to meet your objectives. Then we go to the next part of our preparation phase. You used that word earlier, Corwyn, and it’s the perfect word for it. Preparation is looking at the objectives. It’s doing a bulletproof forensic valuation. Again, identifying those building blocks of value that a buyer will care about. We’re recasting the financials so that they’re assembled through the buyer’s lens. If you’ve been purchasing boats and Ferraris and extra real estate through your business, that’s okay, right? There’s nothing that we’re going to say about that, except those are extra expenses that a buyer’s not going to have. We’re going to add those expenses back and therefore your EBIT dollar net income is going to grow, which means your valuation is going to be higher, right? This is all part of our prepare phase. After the prepare phase, we’re going to go to create. That’s where we’re building specific narratives. We’re doing storytelling that are for different buyer types that are the right fit for your business. We’re selling a medical distributor right now and we are creating one story for search funds, one story for private equity buyers and one story for strategic buyers. Each buyer cares about something different, so the storytelling and the financials, the assumptions in those financials are going to be different, right? We want them to look at it and say, wow, this is exactly what we need or wow, we don’t have to do a lot more work because the legacy team already did so much, not, oh my gosh, I don’t see how this is relevant. Delete that email, right? The buyers are going to build their own story if you don’t give them one, so let’s give them a good one. The other thing I say about this is we don’t just present the business, right? We craft what it could be in the hands of the buyer. The next stage is attract. This is where our positioning specialists are taking those building blocks that were already identified that are uniquely positioned for each of the buyers and describing to the buyer in a summary form, this is why you should look deeper at the business. This business that you could buy unlocks massive value for you. I already talked about looking at the annual reports and earnings calls, so that’s where this comes in handy. The next stage is, wow, we have all these offers. So we sold a company recently, we had 36 offers, 23 of them conformed to the original objectives of the seller. We need to evaluate those, all the terms, and then what is the probability that each of these buyers is going to actually close? What is their track record? Do they end up retrading the sellers halfway through the transaction? For example, hey, we’re going to offer you $35 million, but after we got you into a contract where you’re not going to be talking to any of their buyers, we’re going to discount that by 30%. I went through that, Corwyn. It’s painful. That’s why we do diligence to make sure we’re not talking to buyers who have a history of doing that. We also make sure that the buyer’s not pushing unfair liability on the sellers post-closing. When you sign that paperwork and that money hits the bank account, you want to think about, okay, how do I now shift from the financial piece of my business legacy to my family’s legacy, to the generations and generations and generations after me, right? How do I impact the charities that I care most about? Which ones do I want to prioritize? You don’t want to be thinking about liability and having trouble sleeping over that. After the evaluate phase, obviously we are down to a few offers and now we’re driving each of those offers higher. We’re trading them up while pushing the weak ones aside. We’re driving the pace. We’re holding the line. We’re ultimately keeping the buyers competing, like you said earlier, on the terms of the seller. That’s where all the plays, all the planning, all of the work thus far is culminating in a negotiation with multiple buyers that ultimately leads to legacy, which is our last stage. Financially, you feel great about the outcome. You feel great about the custodian or steward of your business that are now taking care of your employees and the career ladders that they have. And you feel great about your reputation because you know that that buyer is not going to do something that’s going to hurt the customers or anybody else.

CORWYN:

So you touched on something in there. So, you know, family, how important is it? I mean, I have an idea, but how would you say important is it for people, business owners to have the family, if you will, engaged in the conversation early? 

KEVON:

You know, it really depends on a few factors. The first one is how mature are each of the family members? Okay. We have relatives that are mature and I have relatives that are not mature and I don’t need any clowns in this parade. And so the second question is what role do these family members have in the business? Are they co-owners? Are they employees? Or are they just people who might get a check someday because my wealth is no longer totally locked up or mostly locked up in the business. And now it’s actually in my bank account available for real estate investing or donations or otherwise. And so if you have family members who are owners, let’s say that, let me give you an example. You got a husband and wife who are co-owners. They’ve been building this thing for 30 years. You know what? We’re going to sit them both down in separate rooms and ask them about their objectives. And in all of our key meetings after that, we’re going to have both of them. So it really depends on the situation. 

CORWYN:

Okay. That makes perfect sense. And for our listeners, guys, as part of this conversation, Kevon, just so you know, we talk about generations yet to come. We talk a lot about this on the show. And oftentimes when we’re building things, we think we’ll build it as far as we can. Then we’ll leave it for our children for them to build it further. But the reality is, and I’m very open and honest about this. My children told me repeatedly, they don’t want to do this. I got one that might. So we got a little bit longer before. But after that, I got to figure out the way out. I got to have that exit strategy to get out. So short version is for those who may have similar, maybe you don’t know what you’re building. You have that in your mind. This is the conversation to be having. And you want to be having this conversation with Kevon because, hey, this is what he does on a day to day. So how often does it just go completely wrong? 

KEVON:

If you take this discipline process, it starts with preparation. It doesn’t go wrong because we mitigate let’s define wrong. First of all, because there’s different kinds of wrong, right? There’s the kind of wrong where the buyer gets one over or multiple ones over on the seller. There’s the kind of wrong where the seller doesn’t really know what their objectives are, and therefore they can’t decide between the various offers. And eventually the buyers will walk, right? There’s a kind of wrong where your competition finds out that you’re selling and they come in and steal your customers, poach your employees, talk to your vendors who end up tightening terms on you. Those are common ways that it goes wrong when you don’t take a discipline process. So with our discipline process, we’ve never had it go wrong. 97% of the companies that we’ve tried to sell, we’ve sold. There are some times where things were out of our control, such as when those kids ended up fighting over the business and dad didn’t have the heart to step in and say, no, y’all can’t handle this. I’m selling. Well, in that case, in that particular case, the business went from $24 million in enterprise value down to $7 million in enterprise value over the next few years. So you can be sure that everybody had regrets in that situation. So yeah, it doesn’t go wrong on the things you can control. If you take the discipline process, we’ve refined this process over 30 years to mitigate the different risks. Now, if you don’t take a discipline process, depending on how large your business is, you have a 70 to 90% probability things are going to go wrong because your assumptions are not validated and those buyers are fierce. 

CORWYN:

That’s interesting. And I literally had the vision of how the disputes, because we see that in other areas in real estate where the inner family dispute ruins a situation or what have you. Kevon, I want to take this as an opportunity here. Where can people reach you? Where can people find out more about your company? Where can people connect to ask questions and those who are so inclined with it, can they connect with you so you can help? 

KEVON:

Thank you so much, Corwyn. legacyoutcomes.com is our website. There they can find various field notes on everything we’ve talked about today. What are the different seller objectives? What are those deadly seller assumptions? What is the path to regrets actually look like? How do I avoid that? What is the seller’s power path? How do I think about M&A team selection, like an individual broker versus a whole M&A team? So we have a field note on all those topics and many more. I’m also on Twitter at Kevon Saber and on LinkedIn at Kevon Saber as well. K-E-V-O-N, like Kevin with a note. Saber, like Sabercat. 

CORWYN:

I love it. So for our listeners, guys, look, our question really for today was what do I want to be remembered for and how do I protect that now? And Kevonsaber, Legacy Outcomes, their solution, their answer to that question. So Kevon, in closing, what advice do you have for all of our listeners today? 

KEVON:

Do you want me to stick to M&A or do you want me to go broader than that? Go broader than that. All right. So what I’d say is that we all have one life to live. We only get to trade our hours for something, right? Life is sort of like a buffet table. Our stomach can only fit so much. And so I would just say be intentional. What do you really want? And go after that. 

CORWYN:

Wow. I like that. That’s profound. So Kevon, thank you so much for being on the show with us today. I appreciate you taking time out of your business schedule to be a part of the Exit Strategies Radio Show family. Really appreciate it. 

KEVON:

Thanks for having me. And thanks for all the ways that you support entrepreneurs and investors across the country. 

CORWYN:

Well, thank you. So for our listeners, guys, look, y’all know what it is. Y’all know how I feel. Y’all know what I say. You know, I put the two of those things together and I give it to you this way, which is to tell you that I love you. I love you. I love you. And we’re going to see you guys out there in those streets. 

SPEAKER 3:

Welcome back to part two of our 2026 kickoff with Gary Harper. In the first half we built the framework, now we’re tackling the heart. We’re diving into the paralyzing power of fear, the three pillars of purpose, and what to do when your season of success is stuck on wait. If you’re ready to lead yourself first so you can lead your legacy, stay tuned. The conclusion starts right now. 

CORWYN:

Good morning and welcome to another episode of Exit Strategies Radio Show. I am your host, Corwyn J. Melette, broker and owner of Exit Realty Low Country Group in beautiful North Charleston, South Carolina. If this is your first time listening to this show, you sir or ma’am are in for a treat because our mission here is very simple. That is to empower our community through financial literacy and real estate education. We’re legacy building. That is what we do. So if you’re out there making things happen with your family, for the generations yet to come, our word teaches us to leave a legacy, to leave an inheritance for our children, our children’s children and so forth and so on. We want you to put a hashtag on that thing that says that you are legacy building because that is what you are doing. You can find us on Facebook, YouTube, Anchor FM. You can also find us on Instagram, at our website, exitstrategiesradioshow.com. You can catch us in a number of different places on your favorite podcast applications. We appreciate you listening. Please share this content with your friends, your family, your coworkers, even those in your groups, your church groups, et cetera, guys, because sometimes the message and the word that we are speaking here today is for you. Sometimes it is for someone else that you know. Again, we appreciate you listening. Let’s get started. So along that, because again, as you may mention up, Gary, all of this is interchangeable. People oftentimes want to make this thing, this and this thing that, but when you look at it as a whole, the commonalities are equal among all. You want to do something or fulfill some personal goal. You want to fulfill some business goal or whatever it may be. They all work the same. If you do this, this, this, this, then you will achieve it. So let’s put the spin on it a little bit, but let’s talk about the mistakes because the mistakes are common. The mistakes that people make in either facet, whether it’s their personal, hey, I want to have a family, I want to this, or hey, I want to build this business. What have you, what are the common mistakes and pitfalls? And what are some of the methods that people can employ to avoid them? 

GARY:

Well, I mean, I think probably the biggest reason why I don’t think people accomplish their vision and goals is fear. They lay out the mistake of fear to show what’s ugly. The Bible says, do not fear over 300 times in the Bible. I think I was told one time off. It’s true, but they said it’s 365 times. Well, that makes a lot of sense if that’s true, because that’s how many days are in a year, right? So God’s trying to give us a little bit of a hint here of like, fear is not, Bible says, he’s not the author of fear or confusion, right? And so if he’s not the author of fear and confusion, then who is, and then why do we allow it to affect us so much? But I will tell you, I mean, I find fear is probably one of the biggest things. Like people have fear. And so like the way to overcome fear, because I have a lot of fears, right? I have my biggest fear in the world is flying, but I’ll be doing it today at one o’clock. You know, I fly five times a week. How did I overcome that? How do you overcome your fear? Well, I always tell people overcome fear with knowledge. The Bible talks about God being the author of knowledge, not confusion. So we always have to overcome fear with knowledge. One of the reasons I’m on your podcast today, and one of the reasons why it’s so popular is you do a phenomenal job, Corwyn, of what? Delivering knowledge. And what does that give people? It gives people the ability to overcome fear. And so fear has to replace with knowledge and sustain with faith. That’s what we have to have. You know, I talk about when I’m using this analogy, I think it resonates most with people. I say, you know, in 2020 COVID hit this world in a big way and people had a lot of fear. We shut down baseball, we shut down, let’s stay home in 14 days of slow spread and all the other, and even some of it nonsense that’s, you know, was driven out of fear. But today I’ll get on a plane and there’s nobody wearing a mask. And, you know, you think about it and you’re like, I would have been ridiculed if I got on a plane, maybe even kicked off the plane four years ago if I got on without a mask. Why? Well, because people have fear. And today we have knowledge of the virus. So we’ve overcome the fear, right? And then we have faith that if we do get COVID, it’s not going to be so bad. And so that’s how the approach we have to take in making mistakes and how we overcome. First of all, it’s don’t let fear stop you. You got to keep going. Number two, I always tell people is mindset. One of the biggest reasons why we make mistakes and things hold us back, not only in life, but in business, is people make statements, Corwyn. They make statements that stop them. They stop their mind. And I always tell people, when you make a statement, you close the mind. You’ve resolved to the statement versus, and I’ll tell you, some of the most intelligent people I’ve ever met are people who run podcasts. And the reason why is because you spend your day doing what? Asking questions. And when you make a statement, you close the mind. But when you ask questions, you open the mind. And opening the mind allows you to receive and be a conduit of information that allows you to enhance your abilities to grow. And so I always warn people, if you’re held back, if you’re struggling, you’re not moving forward, you’re stuck where you are, then start asking questions because questions open the mind. And what we find, Corwyn, is people don’t. They make statements. They go, I can’t do this. He did it, but I can’t. If I got out and run a 5K today, I’d have a heart attack. Well, is that true? I mean, maybe it is. If you believe it is, play it. I mean, it probably is. I mean, you can manifest. My mommy used to tell me all the time, Gary, be careful what you say. It might just happen. We grew up in the South and my mom had the sweetest disposition. She’s like, boy, you better be careful what you say. It might just happen. And I thought about that for years, but my mom was using it in a way of not being negative. But that resonated with me. I’ll tell you what happened one day, Corwyn. I woke up and I’m like, what happens if I say it and I want it to happen? So maybe I should start saying things I want to happen. And maybe I should start asking questions about the things I don’t think can. And that changed the mindset, opened me up to more possibilities. Listen, man, there ain’t no reason in the world a ninth grade dropout GED high school graduate should have built over 10 businesses, written six books, helped over 5,000 businesses around the world in nine countries. Ain’t no reason at all for me to be executed by the age of 22. There ain’t no reason for that success other than I didn’t let stuff stop me and I asked questions. 

CORWYN:

Let’s take a short break. 

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CORWYN:

But God, nothing but, because it doesn’t fit the traditional paradigm, norms that man has established that we oftentimes establish. That’s where our fallacy is right there. That’s what hinders us because as you made mention of earlier about people pursuing somebody else’s vision. That’s not your vision. God didn’t give that one to you or you didn’t bring it to him and say, Lord, look here, what can I do with this? Help me. You just, okay, what they had, they doing this. Let me try to do this too. 

GARY:

Yeah, a hundred percent. I think it goes back to that. It goes back to our purpose. I feel God gives us purpose through our life. Life comes from three categories of life. It comes from your past. God’s giving you a love for something based on an experience you had. He’s giving you a future. The first area of our purpose comes from your past, which is what we love to do. The second area comes from your future, which is what do we want to be remembered for. When it’s all said and done, you know, Corwyn, at some point in your life, someone’s going to write your eulogy speech. Someone’s going to rock by your coffin for the final time. And they’re going to hope, and you’re going to hope that they look down and say, I’m sure glad that man lived his life. Because this is the change, the impact he made in mind. And so what do you want them to say? Because you have the opportunity to write that speech for them. There’s nothing sadder than going to a funeral and somebody saying, hey, does anybody know him? Anybody have anything they want to say? Nobody says anything, right? Well, I’ve been to funerals on the other side of that where people have a thousand things to say. Why? Because somebody chose to write the speech for them. And then the third area of our life that we give to our purpose is the present. So the past is what we love. The future is what we want to be remembered for. But today, the present comes from what gifts we have that we can give back to the world. And when we answer those three questions, what do we love to do? What do we want to be remembered for? And what gifts we have, we can give back to the world. That’s our purpose. And that should be the thing that spokes the vision or sparks the vision for our future. And that’s what we have to live intentionally for and create accountability around to make sure we fulfill it. Because I’ll tell you one thing, man, there’s nothing more disheartening than sitting in front of a doctor at the age of 35 and not know what your life’s purpose is. And to think to yourself, oh, dear God, what did I do with my life? Did I fulfill my purpose? We have to live life with intentionality that allows us to fulfill that purpose so we feel fulfilled when life’s end comes our way. And that’s a beautiful part. I mean, you think about Moses in the Bible, what did he have? He had a purpose, he had a vision, he had a path, he had a goal. And, you know, it started off, it didn’t start off with leading the Israelites out of Egypt, but it started off with building cities for Pharaoh. And it wasn’t until God came to him and he says, hey, listen, Moses, I need you to lead the Israelites out of Egypt. And he says, I ain’t your guy. And just like me, Corwyn, I didn’t feel like I was qualified to be where I am today, but God is glorified in our weakness, not our strength. And that’s what happened for me, same thing happened with Moses. Moses said, hey, what am I going to do? I’m not your guy, I don’t have the tongue, I’m not a leader. The guy says, I’m going to give you a new gift. And that’s when our purposes shift, right? Because he still had a love, he still wanted to be remembered, but the new gift came in and shifted his purpose. And I’ll leave this with your listeners and for you today too. At any point in your life, you feel downtrodden, you feel downhearted, you feel like life’s not where you want it to be. Take a long, deep look at your purpose, your past, what do you love to do? Your future, what do you want to be remembered for? But more importantly, has God given you new gifts? That’s changing your path. Because if he has, and you’re still chasing the old vision or somebody else’s vision, you’re never going to feel more despondent than you do in that moment. 

CORWYN:

Wow, Gary, man, that was profound. This show kind of reminds me of when you sitting in church and the pastor gets up and they got their sermon ready. And next thing you know, they off script and somebody from the congregation holler, let them use you. Look here, there’s all fire from there. So Gary, my man, thank you for that. I want to share this with you because you are talking to me. My spirit has been worn, has been weak. Let me phrase that. I ain’t going to call it weak. It has been worn and weary because sometimes the statements that you hear are contrary to the desired outcome or what is greater, right? And that wears on you when you are someone who you speak life, but every time they open, somebody else opened a mouth, it sounds like they talking from the graveyard or something, right? And it wears on you. You know it. I know you know it. And sometimes you got to get a reset. You got to get back into that space. And when people who fundamentally get it and understand everything that you just said, which is we have the power of life and death of success and failure and of everything in not only our tongue, but in our faith and our belief and our actions that all coincide, you align all that together and you’ll see a life beyond measure. But thank you so much for what you shared so far today. 

GARY:

Well, let me share this with you real quick because this is something you were saying this and it came down and I actually didn’t even remember this until right now. And this is something I wrote in my notes on my phone in 2011 when I got bit by a tick and I wrote the verse from Galatians 6, 9 it says, Let us not be weary in well-doing, for in due season we shall reap if we faint not. I said, I wrote this, I said, God knows weariness comes in our life even when we do the right thing. It could be in finances, relationships, my case health, or anything else that we’re praying that haven’t seen an answer to yet, right? And I think, so here’s what I wrote. I wrote five things. One is the Bible says don’t grow weary in well-doing. Number one, we have to do the well-doing. We have to keep going. We have to do that, which is right, even when we’re weary. Number two, we might be doing the right things and don’t see the results, but our due season is coming. Number three, don’t let the devil pull you away from the right thing with temptation. It’s a trick to wear you down. It’s kind of like a bullfighter. When a bullfighter is fighting a bull, he drops darts in the back of the bull just to drain him slowly until he falls. Number four, I find myself at my weakest point physically when I’m not doing the right things. And number five, last, we have to wait. We have to wait on the Lord. And I always say God answers prayers in three ways, Corwyn. Number one, yes. We all love that answer. Bring it on, bring it on. Like Oprah, you get a yes. You get a yes, right? Everyone wants a yes. Number two, no. The answer’s no. We don’t like that one. I don’t know about you, but I don’t like being told no. But you know the hardest answer that I have found in that time in my life when I was the sickest that I’d ever been was when he looks at you and says, wait. Because you know, yes, gratification immediately. No, disappointment immediately, but it’s still an answer. Whoa, wait, what, wait? You want me to wait? 

CORWYN:

Look here, then we want a question. How long? How long do I got to do this? You got to do it until I tell you to stop. 

GARY:

But you got to continue to do the right things while you’re waiting. And that’s the same thing in business, man. That’s what the Rise Business Framework’s all about. It’s doing the right way to build a business. Everybody always says they grew too fast. That’s why they failed. Ain’t no such thing as growing too fast. It’s growing wrong. Doing it wrong, that’s what creates failure. Doing it the right way, that’s what creates success. 

CORWYN:

So Gary, where can our listeners go to connect? I mean, the fact that you are connected this way, which tells me fundamentally, automatically, that this is how you structure, how you advise, how you counsel. Because I mean, look here, from the abundance of the heart, the mouth speaks. This is you. This is who you are. So where can our listeners go to get more information about you, about the Rise Framework, anything about Sharper Business Solutions, what it is that you do, your company? Where can people connect with you at? 

GARY:

Well, I mean, our website is sharperbusiness.com. We are on TikTok. I’m on Instagram. I’m on YouTube. I’m on multiple platforms, X, all those. So we put out a lot of content. I put out about two, three videos a day, typically, on those multiple platforms. But then you can find me there under official Gary Harper, our business. Platforms are Sharper Business on those platforms as well. But Sharper Business is kind of a centralized hub. If you want to get a copy of our books, you can go to Amazon. I have three books on Amazon. I have the Rise Business Framework, which is a curriculum book. It’s a tactical, take these steps to reach where you need to be. Then we have the Purpose to Rise, which is a fable about a real estate entrepreneur that uses the Rise Business Framework to reach success. On there, I also have, Is Your Business Sick? And so I told you my story of how I got sick. And the book there talks about parasites in life or parasites in your business. Because we have parasites in our business that hold us back. Sometimes we’re the parasite in our own business, by the way. So we can be that. And then I have a really fun book here. It’s right there. It’s called The Penny, the Purposeful Panda. It’s a children’s book on how finding your purpose. And I always think it’s so important to give even our kids purpose in life. Because without it, Bible says, where there’s no vision, the people perish. And I think we all need hope. 

CORWYN:

Gary, Gary, Gary, Gary, look here, my man, you have blown me out of my socks today. Oh, I appreciate that. You probably left them standing in the corner somewhere now because I’m over here and they gone. They gone. This has been an amazing conversation. I want to thank you for not only your time, but your gift, because the time Lord will give it back to you. But there’s no way in the world I could repay you for your gift. I appreciate that. So again, thank you. Thank you so much. So look here, Gary, I’m going to ask you this one, if you could just drop what we would consider to be a takeaway on our listeners today. Because from a legacy perspective, you focus on building, you focus on investing, and you focus on leading. And all those are designed to carry out the purpose. But for our listeners, drop that, if you could, that one takeaway for them for today’s show that they should take with them and carry that into and manifest that into what God has for them, their life, their business, their family, or wherever they wish to apply it. 

GARY:

Yeah, I would say that a lot of people that I work with and a lot of listeners, I think listening to these shows, they’re trying to figure out life in general. And I say, you got to first focus on you and you got to first focus on making sure you’re healthy and that your mind is healthy and your spirit is healthy and where you’re going is healthy. You have no right to lead other people until you’ve led yourself first. And so I think the listeners need to walk away with what they need to do to work on themselves today. And then if they work on themselves and become the proper leaders of their companies, the business will follow, the relationships will follow, the success will follow. But you got to be willing to work on yourself first. And that’s one of the hardest things to do of everything, right? Like people will call me and say, hey, Gary, I’ll pay you $20,000 a day to come in and help my business. If you come to my event, if you could do this, we do that. But I’ll tell you what, Corwyn, as soon as I say, hey, I’m going to have a self-accountability seminar or workshop and I don’t even charge for it. It’s crickets, people don’t want to show up for. And so I think we got to remind people today that it starts with you. Now I’m reminded every time I get on a plane and the stewardess says, hey, listen, if we have turbulence and we lose cabin pressure and the mask is going to drop it and they remind us to put our mask on first. You know why? Because we have no right or ability to help other people if we’re not healthy ourselves. So today I challenge you to refocus, refocus on you, lead you first, the rest will follow. 

CORWYN:

That is powerful. So Gary, again, thank you so much for being on with us today. I really appreciate it. For our listeners, my God, you’ve gotten a playbook. If you do nothing else, I need you to make sure you got your notes and keep them handy, right? Stick them on your mirror, put them on a dash in the car, put them on your cubicle at work. If you’ve got, matter of fact, get your oil and keep your oil with you too and make everything around you greasy. That way nothing bad sticks to you and you are nurtured and taken care of and protected by it. And y’all know what I mean. So thank you so much again, Gary, for our listeners. Look guys, you know how I feel. You know what I say. I always put the two of those things together. You have the two of them things and I give it to you this way, which is to tell you that I love you. I love you. And we’re going to see you guys out there in those streets. 

CORWYN:

Our question for today that we hope And we expect so how about this? We’re going to operate today in expectation Y’all feel me on that what we are going to have what we are going to receive So what if the key to building generational wealth isn’t just what you invest in? But how you run your business? 

So Good morning. Good morning. Great morning guys. Welcome to another fabulous episode of Exit Strategies Radio Show. Hey, y’all know who I am, but i’ma tell you anyhow Corwyn J Melette, broker and owner of Exit Realty Lowcountry Group in beautiful North Charleston, South Carolina, quick shout out to those who listen to us faithfully to tune in got to give a quick shout to my guy Burt McQueen for tuning in. Thank you, my guy for for tuning in and listening to this show Elder Pastor Evans. Y’all folks out there in Muddy Mullins, but all the way back through mont’s corner all the way through over to hollywood what you know, no good guys Thank y’all so much for tuning in So our question for today that we hope Then we expect so how about this? We’re going to operate today in expectation Y’all feel me on that. We’re going to operate today in Expectation what we are going to have what we are going to receive So what if the key? to building generational wealth Isn’t just what you invest in But how you run your business, so i’m super excited because today our guest today using this mantra Transformed his life now. He helps others By doing the same with the framework that builds more than just profit So let’s talk today about legacy driven leadership Our guest today is none other than Mr. Gary Harper. Gary is the ceo Y’all know what I say about that. That mean he the boss y’all. The CEO of Sharper Business Solutions, the creator. He builds he puts something together right there the creator of the Rise Business Framework, he’s a real estate investor, but most importantly he’s a business strategist, you all please give him a warm welcome to this show on today. Gary. How are you doing? 

GARY:

Great, Corwyn? Thanks for having me on today. What a great introduction good energy. I’m feeling it man. I’m feeling I love what you bring  

CORWYN:

Well, look here. That’s what I try to do. So just so you know, i’m always available for hire, all right for those keynotes. 

GARY:

So when you get that next keynote I want you to call me and I will make sure we fire him up Well, i’ve been on stage in caesar’s palace before and not been introduced with that level of tenacity and energy. 

CORWYN:

That’s good stuff But look here, please pass me around treat me like halloween can Give me out So gary look, thank you so much for taking time out of your business schedule to be on the show with us today If you don’t mind for our listeners, we always ask our guests to give their own high level who they are and what you do So if you could please do that, that would be amazing. 

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GARY:

Yeah, so my journey started as a troubled youth. I mean, I got kicked out of schools. I had really hard time Growing up. My dad was in military 21 years spent a lot of time Away and I think with all young men and their dads being gone for an extended period of time you tend to find yourself In trouble a little bit. I had a phenomenal parents amazing parents But still when you’re left to the town times you find trouble So I did and I was in my teenage years. I was in virginia and found myself getting in trouble I ended up being mom and dad just hey, you gotta get out You gotta go out and do your own thing and at 17 years old I left and moved to chicago And I met my brother-in-law and my sister was up here and they really they kept me busy and he got me started in real estate and helped me I was living in his rentals and fixing them up and flipping them and During the day i’d sleep in them. It’s funny He put me in a house in geary indiana and said hey, I got a glock nine millimeter a 38 special and he’s I need you to keep people from breaking in and stealing the copper but you can stay here for free if you do That and i’m like Okay, and I did so during the day i’d rehab the house and at night I Protected and I slept on a bed on the floor walked to the mission for lunch ate ramen noodles as crackers You know from the dollar store and kind of made my way I think for me it started to shift when I got into corporate america. I I started working in corporate in 1997 I got married that year and found myself needing to take care of my my future my generational Legacy, and so I started having kids and I went from 7 15 an hour Buying books in a copy center to becoming an executive And I worked my way up to executive. My title was national manager of business initiatives and development And I was only 22 years old. I was young And i’m not even really sure why I got the opportunity other than I just grinded worked hard and delivered results And you know, they look past the inexperience. They look past the lack of education. I just grinded I worked hard and I think sometimes hard work and heart gets you performance more than knowledge And that’s where it led me So I wasn’t born with a silver spoon in my mouth or gold spoon in my mouth I was born working hard with a military family. It moved a lot My dad worked hard and my mom worked three jobs take care of us and just I was taught to work hard And I believed in myself. I believed in myself when other people didn’t and so I worked my way up to that corporate executive level and I stayed there till probably 35 years old and During that time I started making decent amount of money. I had read some books from Robert kiyosaki and carlton sheets that kind of dates me a little bit Most of your listeners may not know carlton sheets, but I listened to carlton sheets and he’s now passed but Learned a lot of things and then obviously being around my brother-in-law and him fixing flipping houses Just got the itch and I started buying rentals and I started holding on to him started a property management company as well And you know, I don’t know about you man, but 2008 to 2010 was not very kind to me It was not a good year for me good years Corporate america perfect did great one executive of the year ate out 10 years Found myself winning all these awards behind my head here and man and just life was good other than the investing side and I don’t assure that I was very Intelligent on how to invest just felt like it was important to do and create passive income. That’s what I’ve been taught But 2010, 2011 came along man, and I found myself on the wrong side of that investments and they reassessed taxes in northwest indiana I found myself way over in payments and under rents And you know leveraged way too deep along the value the property values dropped and I filed bankruptcy. I didn’t have any other way out but erwin that year was tough for me because not only did I lose my wealth that year and all my savings and everything else and Other investors were pocketing the rents and not paying their mortgage, man I I had to pay and I felt like the bible says You know a good name is better to be chosen than great riches and i’m like this is an integrity thing Yeah, I gotta pay my bills all the savings. I had built at that point was gone You know, it’s all gone. And even the lender was like you probably should just file bankruptcy at this point. 

CORWYN:

I don’t know what to tell you Well, at least they gave you a way out right so at least they gave you some advice some counsel or direction Or gave you an idea maybe you didn’t have and that you weren’t willing to cover So so gary, let me jump right here with the question. You have a mission if you will to create and help people to create Vision driven real estate businesses and I kind of gleaned from what you said here a moment ago When you gave reference to scripture that you help people to incorporate that Into the overall vision and the direction they go. Is that correct? 

GARY:

Yeah, I mean the Bible says where there’s no vision of people perish And without vision we lose hope. Oh Man, look here. 

CORWYN:

So I have a client and she’s listening this morning She just heard that and that probably just fired her up right there because she tells me all the time Corwyn the people like Vision will say that to me all the time. So how do you work with people? With that, how do you work with them? Because I mean people have an idea But oftentimes to be and this is just my observation gary, please correct me or disagree if you do But people have like this idea But they don’t have vision which is where you see it through where you see what happens once you cast it it’s like you throw the like you’re willing to you out there fishing you You cast your reel right and cast your bait into the water, but you can’t envision It getting the fish and coming out. All you just see is yourself throwing it out there So, how do you deal with people with that? 

GARY:

Well, I mean, I think a lot of times what happens in this world is people think they’re shooting after vision But they’re trying to fulfill somebody else’s And I think that’s where we missed the mark is that we’re not casting in our own lines We’re not creating our own vision We’re just we’re taking somebody else’s or mirroring somebody else’s and calling it our own and then there’s no passion and I always tell people like Vision creates purpose, purpose creates passion, passion drives obsession, obsession creates focus and focus gets success and so if it’s not our Vision then we’re never going to chase the purpose And if we don’t chase the purpose and we have a way to measure saying chasing that purpose Then we’re not going to get passionate about it And if we don’t get passionate about it We can’t expect our people that we lead to get passionate about it And I think it’s really important that our passion and our purpose support each other And support our vision but like chasing somebody else’s vision is never going to get you anywhere 

CORWYN:

so Man looking anybody who’s watching this y’all just saw me over here about that I feel like I was about to have a you know as old folks say a fit Yeah, because what you just touched on is some of the stuff that I talk about And that we conversate about on this show, but also outside of this All the time because people don’t care. They’re not passionate about anything other than themselves You see what i’m saying So but gary look so you really focus in this process on systems and scaling But one word and i’ma drop this word and let you pick up whichever one you want to start with But also because we don’t like this word accountability Made my back shiver 

GARY:

You know, I was gonna say Corwyn there a minute ago when I was talking about passion I thought this was gonna turn into a pentecostal podcast, you know what I mean? I thought we were coming out speaking in thousands I said he’s starting to come out of the chair a little bit like you’re on a roller coaster or something I don’t know. I know what’s about that I love it. 

CORWYN:

I love it. But gary that word accountability man, it slays people, you know it because we want to do what we want To do but don’t want to be responsible for making sure that we’ve done what we’re supposed to do. 

GARY:

Yeah, yeah, 100 I mean, I think accountability is the key to getting results and without accountability And self-accountability we can pay people we can hire people We can push other people our spouses loved ones things like that to hold us accountable without self-accountability There’s no commitment. And so first of all, we got to start with a vision, right? We got to figure out where we want to go and self-accountability Is clear and easy when you want to go and when you want to get there and that’s why vision is so important And here’s the thing without the right vision you’re going to struggle you’re going to hit hard times and when that times happen You know, it’s like me for example Corwyn in 2011. Not only did I file bankruptcy I got bit by a tick that year. I came down with lying’s disease Oh, wow, and I went back to a five-year-old mental state for a year I was told by a doctor that I was probably not going to live past That age of 35 because of where it bit me it bit me on my back of my neck went into my brain And to get through that time like I had to be very purposeful in how getting through that I had to envision Myself getting healthy. I had to create a vision That’s honestly when I sat across from that doctor with my head in my hands and the tears running down my forearms I thought to myself. Oh dear god. What did I do with my life? And I said god, what’s my purpose? What’s my purpose? What’s the vision? Where do you have planned for me? And I sat there thinking to myself. Oh dear god, if you give me my life back I’ll give it back to helping other people and that’s when it was born for me And here’s the thing when that kicked in and that passion showed up I become obsessed. I become obsessed in a good way I think obsession can be good and bad But in a good way because the obsession was driving me towards my purpose because of that I got laser focus and that’s when what’s when accountability shows up and not just in business Accountability expands all aspects of our lives, right? And so not too long ago. I lost both my dad my mom and my dad’s little final words He says gary this covid stuff, you know It’s not gonna be kind to you if you get it and he said he says listen I need you to make me a promise. You need to lose some weight in the time girl when I was 320 pounds I was a big boy and i’m only five foot seven So you imagine how many I was pretty good boy, and I was not in good shape and he’s scary I need your promise me being in the military 21 years. He was like you need to take care of yourself And part of the framework that I created for rise with rise kind of came from that Vision of how do I lose weight and here i’ll give you an example So in systems of rise because rise stands for resources inspiration systems and engagement in the system aspect That’s where we create sustainability and accountability Right, and one of the ways we create accountability is in results in metrics metrics. Tell us a story I always say numbers don’t lie people do And so like numbers tell us a story. I went to my doctor and I said, hey i’m losing weight. I’m feeling good I’m doing better and he says oh good. Let’s see what the scale says. So you lost no weight. I’m like, oh, okay Well, I was an accountability moment He said well, let’s get your blood work done. Maybe you’re doing a little better there Maybe the weight’s not coming off yet, but i’m doing better got my blood work done came in a couple days later He says here. Why are you lying to me? I said what are you talking about? He says you should be eating better I said i’m eating better He says your a1c is 7.4 Ain’t no way you’re eating better because that a1c would be in under the six and I was like, all right Well, I mean numbers don’t lie and I don’t that what was that? It was accountability So i’m like, all right. Well, these are results Of my efforts. So what do I need to change? I need to change my purpose I need to change my vision like I need to be more intentional here about achieving this weight loss goal And so what I created was the first kpi which is called what I call my key purpose indicator It’s like how do I measure my purpose my purpose of getting healthy living a long time longevity? Well, the only way to do that is to live a long healthy life, right? So then I created my profit indicators my profit indicators were my gain What do I need to gain to live a long life to fulfill my purpose? Well, I need to gain healthy blood work. I need to gain my numbers and my blood work need to show that i’m gaining health Then I built down to my performance indicators, right? My performance indicators the scales got to come down the weights lifting weights got to go up I got to get the results which is performance But then I built down and what I figured out was probably the most critical kpi to accountability And it’s called the process indicator every day. We perform and do things we conduct processes every day whether it’s taking a bath or walking or drinking water or whatever and those processes Drive us to the performance that gets us the profit the gain that gives us our purpose And so I built down properly from purpose the gain profits down to performance down to process And so every day I had to eat 180 grams of protein I’d have 100 carbs grams of carbs. I have 75 grams of fat and I had to have you know A gallon of water or more I had to have 100 ounces of water I also needed to walk 10 000 steps a day. These are daily tactical process indicators And here’s the thing if I don’t do those every day, then I know that i’m not creating accountability Your business is no different Corwyn. It’s the same thing. You have a purpose for why you started Every business starts with what I call a three piece. You have a passion You have a product that makes profits. Those are your three piece every business, but from that you got a purpose You know, what is our purpose? What are we trying to accomplish in this business? And maybe that purpose early on is just making you some money man, so you can stop working that job And that’s okay. I always say there’s two purposes for our business. It’s either leave a legacy or to make money That’s the only two reasons why people start a company But that purpose has to be defined and then we have to measure it When I first started my investment and looking for that exit strategy for myself in life. I needed to be at 4955 a month in passive income. That was a long time ago, by the way And it’s probably a little higher these days, right But it was a while ago, right? And so I needed to be at that to create freedom now that number is higher now But I had my I had my freedom mark then I had my twelve thousand dollar healthy mark And I had my abundant mark which was twenty thousand dollars a month in past And that abundant mark allowed me to live abundantly and give back abundantly and give up my life and I always tell people life It’s an acronym. It stands for labor influence finances and experience. I want to give up my life to help others My labor my influence my finance and my experience and so that’s what my purpose indicator was And so your listeners today they need to have that mark They need to have that thing they’re driving towards that fulfills life purpose That’s the vision, but we ain’t gonna get there without the accountability of it So now we have to have a game we have to have profits How much money do I need to make in order to cash flow four thousand nine hundred some dollars a month? To give me my purpose and then from that I had to look at performance How many properties do I need to own to create the cash flow three hundred dollars a door that gave me my gain? That gave me my purpose But then down the process, what do I have to do every single day? To fulfill my performance to give me my gain To give me my purpose and part of that was every day It was like how many properties do I need to look at every single day? How many properties do I need to put on contract every single week to give my performance? How many profit per door do I need to have in order to give me my cash flow? And can I hit my purpose indicator of five thousand dollars a month and once I figured out that equation? Accountability became something and I think that’s the key it starts with the vision to create passion Create a session to drive focus to get the success But then you have to build down to that accountability And then you have to want it bad enough to hold yourself accountable to getting it You know, i’ve already run a 5k this morning before we talk, you know, I got out ran why? Because I gotta fulfill my purpose 

CORWYN:

I love it, man. I love it 

Speaker 3

Don’t touch that dial. In the second half of our conversation gary gets real about the paralyzing power of fear and how to replace it with knowledge. He’ll break down his three pillars of purpose to help you find your true calling and explain the oxygen mask principle. Why you have no right to lead others until you’ve mastered leading yourself 

CORWYN:

Guys, that was a great show today and we thank you so much for taking the time to listen to Exit Strategies Radio Show. My name is Corwyn J Melette. Yes, that is me And I thank you from the bottom of my heart for tuning in for today’s episode Exit Strategies is my baby. It is how I give back to our community. It is how I foster goodwill spread good news and trustfully help you get great results. Guys, as I always say to you as I always say to you I love you. I love you. I love you and we’re gonna see you guys. I’ll be in them streets 

CORWYN:

Retirement shouldn’t wait till old age. We ain’t gotta wait till we old When you structure the financials and the financing and the money and all that stuff Early using smart tools protection education. You take control of the legacy And you give your family a chance to thrive well beyond your years 

Good morning, good morning guys and welcome to another fabulous episode of Exit Strategies Radio Show Hey, I’m your host Corwyn J Melette, broker and owner of Exit Realty Lowcountry Group in beautiful North Charleston, South Carolina. Hey, if this is your first time listening to this show you a sir or ma’am or in for a treat because our mission is very simple here that is to empower our community through financial literacy and real estate education The legacy building that’s what we do That’s what we encourage you to make sure that you are focused on and quote unquote your day-to-day activities and so forth and so on So look here We got to give a quick shout out as always to our listeners those who i’m tuning faithfully Got to give a shout out and I saw this go by me not too long ago But a shout out to mac and flo mckellar on their anniversary saw that go by wonderful couple great people Pastor vanderbilt evans senior always have to get that senior on that god name But that dude will jack me up if I don’t and his beautiful bride sandy evans and also my mama Y’all know out there monkeys corner, but all the way back to hollywood what you know, no good and my folks that listen tune in In mullins and mary in south carolina. Thank y’all so much Got to give a shout out to my guy eric troy up there who’s always empowering and making a difference in the community there Keep doing what you’re doing brother. We love you. So look today. Whoo. Yes Now look here. I always tell y’all to get your pen pad paper, whatever it is ready I would be remiss if I said today not to do the same Because we have someone here today who is a phenomenal human being Now we don’t always get to say that about people, but they are a phenomenal human being They’re really focused on doing the work within the community to really help and empower people financially So i’m very excited today to have none other than miss Shateka Husser. She is the founder she started this thing guys and Ceo she is the boss of hustler financial solutions. She is mission driven Determined to help people achieve tax-free Lifetime income. I love those words together I love the free after the tax though. Not before in financial security and early retirement Summarizing her slogan that she goes by which is to retire before you expire. I love that. She’s the number one International worldwide guys best-selling author Certified professional coach holds an mba with a business management background But here’s the thing. I really want you guys to take away. She is a veteran She started by serving people and has continued yet over to serve more She brings corporate discipline to personal finance and wealth building with experience in investing and insurance retirement planning and creating frameworks for people guys Framework for us to be able to get out again to retire before we aspire. So tika, how are you doing today? And welcome to the Exit Strategies  

SHATEKA:

Amazing. Thank you so much for having me. I’m excited to be here. I appreciate the opportunity 

CORWYN:

Now look here I don’t told them people what you do But I want you to tell them too So you tell them what it is that you and you frame it your way because I done gave mine 

SHATEKA:

Okay, so I like to introduce myself as Shateka Husser, you know founder of Hustle Financial Solutions will be help you retire before you expire. So if that’s what you desire what you aspire We are the ones you hire Our goal is always to get your bank account or fire with a whole lot of lifetime tax-free retirement income that you will not outlive Listen, I understand we got a lot going on but at the end of the day we have got to get these finances, right? So born into poverty I say I might not have been born into a family of wealth But a family of wealth will come from me and that may not necessarily be for me personally But I want to have an impact and influence in my city country nationwide We’re actually in 21 states right now And so we’re just looking to help people level up in the space of positioning for retirement because most people know the traditional methods For retiring, but they don’t understand that there’s actually some non-traditional Unconventional wisdom that it could possibly follow so that they can have not only just retirement accounts but also have income and benefits and Definitely all these different types I didn’t understand what I did not know making all the money that I made in corporate Having made a couple pivots from army officer as you can see back behind me on the wall To a corporate high level leader to now entrepreneur business owner Now I realized that it’s all about how much money you can keep It’s all about making money while you sleep passive income And so I love what you do corn because you know, I was a real estate investor for quite some time I bought you know half a dozen properties But at the end of the day, I didn’t understand what I did not know as it relates to money And so my goal is to just to help empower people that make a lot of money But just like my gosh i’m paying people salary and taxes How can I get around that when it comes to income and retirement because at the end of the day? That’s eating it into my retirement account. And so that’s where I come in at and I just help educate people around that Let’s take a short break. 

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CORWYN:

So look here i’m gonna have you start like we talk a lot on this show about mindset like Legitimately if you don’t get this piece here, right? Then nothing else follows correctly after that I mean it was like quote unquote marching into the water before moses said hey, let there be land You know i’m saying like serious all you’re doing is just going where you shouldn’t be going So let’s start this from i’ma say a fundamental I want you to kind of walk us through if you don’t mind you talk to a client but to perspective client Someone reaches out to you says hey Look, I need to get my stuff together because it’s all over the place and it don’t look like it’s supposed to look At least not in my eyes. What’s the first thing that you do? 

SHATEKA:

First thing i’m going to do is have them to fill out what’s called a needs analysis I need to understand their financial situation what they have going on. What are their liabilities? What are their assets? What is their vision? What are they trying to accomplish? How much income do they want to have? There’s a lot of questions So i’m just deep diving into who they are and what their desires are And then we’re going to rule map around that to figure out what’s the best course of action in terms of how we’re going to Get them there. 

CORWYN:

So a lot of people depend on or me phrase that well No, i’ma say depend on let’s be transparent and real a lot of people in our community. We depend on social security, right? We look at social security as being the end all be all we look at as being our retirement Tell people what they need to know because I know you’ve got a lot to say about that. 

SHATEKA:

Let’s go That’s such a myth. We were just talking about that again Is this so much out there in terms of what’s going to happen with social security? No one really understands and knows for sure Economists have been saying for years that it wouldn’t be around between 2025 and 2034 2035 and so we don’t know what’s going to happen with social security But should something happen with social security you need to have a plan in place You need to have a supplemental plan in place and that’s where we come in at to help you understand What it is that you need to do backward planning So we know that the average person if they are w-2 not someone that’s a business owner an investor Someone that’s a w-2 the average person is going to have a 60 percent decrease in their income when they retire They’re going to work 40 years of their life for 40 hours a week to retire on only 40 percent of their income So a 60 percent gap. So how do we close that gap? That’s what we backward plan. Okay, and to understand Okay This is how much money we have got to put into something To try to see a certain amount of income to come out of that now. It just depends on people’s risk tolerance There’s a myriad of different sequence returns that can happen as you well know 2008 the housing crash 2020 with the pandemic things can happen. So we base it based off of historical Outcomes and in terms of how the money has been growing in different accounts and we structure it based on that But really it’s about what do I need to do? How much money am I going to need in order to supplement social security if it’s still around? And it’s looking at the last 10 years that you’ve been working And what you paid into it So if you didn’t put anything into it, of course, you don’t really have one And so that may look different for a business owner They have to totally do something different because they have nothing paid into it and so that’s the reason why we’re saying that so security’s probably not going to be here because more and more people are leaving w2 they Are pivoting and becoming business owners because they’re becoming wiser because they read the book rich dad poor dad where rock talks about the four quadrants the cash flow quadrant and how it is that 95% of people are on the wrong side of money only 5% of people Understand how money works in terms of investing and taxation and things of that nature And that is your business owner and your investor. That’s the 5% the other 95% They are paying too much in taxes because w2 is the highest tax bracket In other words, they pay the most amount of taxes. The tax code is not written for the w2 employer, right? So let’s look at that everything that starts with a four everything full 1k 403b 457 Tsp ira, they all are tax codes. You’re going to pay taxes So what if we could find figure out a way to get around like the wealthy do and learn irs code? 7702 irs code 7702 tells us I’m, just going to put it out there, please. Let’s go the elephant in the room a permanent cash value policies A permanent cash value. Listen, everybody’s not able some people don’t have the health things of that nature You might have to go a different route, but we have all types of strategies for people whether it’s real estate, whatever But at the end of the day Stocks, whatever you can figure out a way to not have to go into your account All right and take your money out and now you’re depleting it. You need to be able to borrow against it So the wealthy are borrowing against it because they realize that because they have something like a permanent cash value policy They can dig into their account put their hand in a cookie jar eat up all the cookies And it’s still be growing and counterpounding while they sleep even though they already took the cookies out Where do they do that at only in a permanent cash value policy, right? It doesn’t matter what type It just has to be a permanent cash value policy. It could be a whole life. It could be an iul We’re not gonna dig into the weeds, but it’s end of the day Where else could you have your money grow for you while you’re sleeping? So you have the money on another whole asset Like a business like a car that you put on toro like a home that you’re putting on airbnb the list goes on So your money is compounding inside your permanent cash value policy and it’s over here on an asset not a liability We don’t want to listen We don’t want to flog them just buy cars that look good It need to be a car that you put on toro and make some money with okay But at the end of the day you got another stream of income from your asset You got another stream of income coming in the future from what? Your permanent cash value policy if you have it in a 401k 4-3b 457 all these other things, right? All the traditional ones that they taught us That we thought was okay that we didn’t understand because we thought to your point was a catch-all be-all social security Those things fail us, right? I have a case study that I talk about all the time in my master class with Brother a brother b brother a ends up going back to work and his 70s like most people do I mean, that’s the reason why I go hard because I need people to understand that money’s going to run out All you have is all you have and you have no leverage If all you have is some type of traditional employer plan that starts with a four or an ira people They oh i’ll get it in the roth ira You think that’s a plan but a roth you can still lose money in you can still lose money in the market with a roth Ira, you cannot lose any money in an index type of account. So an index annuity an index universal life policy Something that’s indexed this gives you the best of both worlds You can gain when the market goes up. It will count upon and make interest for you But when the market crash you can sleep at night Rest assured you’re not going to lose a penny in the market And so at the end of the day some people they don’t want the rest, but they want the gain So an index would work for them some people like might be a little bit like me I’m, very aggressive when I put my money personally and if you’re aggressive, then you might want to be okay with that But at the end of the day, I tell people do not invest what you cannot afford to lose If you can’t afford to lose it, you should not be investing and you should not be investing anything Until you have your what emergency plan in place You don’t have an emergency plan, but you’re investing. Come on now We cannot do money that way and I know people are out here doing it. So i’m going to Look at you. 

CORWYN:

You’re putting it on the carpet I love it There’s levels to this so you touched on the infinite banking concept, which I’m three with it. Love it I’ve read the book or several books, right? A number of times so let’s delve into that because that is just a strategy That works so I never thought about what you just said Which is all the things with force because Roth and traditional one you pay taxes on the money before it goes in The other you pay taxes when it come out I mean, so you’re gonna wait and tax me on the money I make Off of it and the other one I got to pay the tax on the money I would have made to put in there to start with regardless you’re still getting taxed on it period So this concept how often do you advise people to pursue this? And especially younger folks. I mean our listenership is very broad. So let’s get into that What does that look like and how can people make a difference in their financial future? 

SHATEKA:

Yeah, absolutely So I often tell people I need to understand what’s your budget? That’s the first place we’re going to start and that is the reason why we start with the needs analysis Somebody’s selling you something without a needs analysis. They’re a salesperson. I’m not a salesperson I educate like I just did that’s why I can just rattle it off because i’m always having these concepts that we’re talking about At the end of the day i’m going to push for that because I realize that people need leverage Whether they understand leverage or not And so i’m always going to advocate for the infinite banking concept You don’t need too much insurance because you need to understand the dime method and that’s how much insurance you need to have and nothing More nothing less but at the end of the day when you come to me and you say well I want to do something with retirement I’m going to find out like I said before what is your goals and then we’re going to back with plan But at the end of the day, I want to make sure that you understand The products that are at hand. So if you have a whole lot of debt You don’t need say for example an iul It’s not going to work for you because you can’t access your money for 10 to 13 years Depending on what carrier you work You need something like a whole life because you need to have access to your money right now Because you want to basically use a whole life to funnel your money through the policy In other words, you’re not necessarily putting too much more than what you’ve already been putting in terms of paying into something You’re putting it into your whole life But you’re going right back and taking like 80 percent of it back out to pay off your bills So it’s kind of like getting a term policy, but do a whole life policy if that makes sense So because for example quick math say six hundred dollars, okay, that’s what you’re putting in it every month You’re going to go back and get four hundred and eighty dollars back out of it Right because that’s eighty percent of it and you’re going to put that four hundred and eighty dollars on your bill While the other amount of money is keeping the policy alive until you can do better later on in life What you’re doing is locking in your insurability at your youngest age possible and at your best health possible We don’t want you to get diabetes dementia heart attack cancer these types of things because now You may not be insurable if very high insurance or very low insurance in other words You might only be qualifying for a final expense type because that’s all you can get because you have these chronic critical internal illnesses That has now caused you to not even be eligible for an insurance. So we want you to get that beforehand So the first thing I want to do is make sure do you have that already inside of your portfolio? Because there’s steps to freedom financial we talk about financial freedom financial freedom. But what is financial freedom? What are the steps the steps making sure that you have cash flow making sure that you have an emergency fund Making sure that you pay off your debt making sure that you have protection against the market volatility protection against taxation protection of lawsuits Making sure that you have a legacy in place. There is no other financial asset out here Nothing else out here that will give you all steps to financial freedom except for a permanent cash value policy You look at stocks you look at crypto you look at real estate you look at eft all these other things They don’t give you all the steps the only one the only product It’s going to give you all steps to financial freedom You got to have as your foundation is a permanent cash value policy and that’s why i’m so passionate about it And that’s why I want to make sure that when I talk to somebody to your point your question Is this something that’s already inside your portfolio? And if it’s not let’s start there first because that is the foundation for your freedom 

CORWYN:

so it’s something for our listeners and i’m definitely gonna Sometimes we think about financial freedom as the freedom to spend Freely if that makes sense and a lot of people focus on spending freely versus Building what you’re talking about what we’re talking about which is making sure that you not only have Emergency funds but also get into how can I strategize so, you know I’ve seen this concept And action at play where people take money out and go buy they got a you know car they essentially borrow from themselves So instead of borrowing from the bank and paying interest to them I take the money off go buy the car cash and make the payment back to my policy which continues to build a cash value I get to recycle the money over and over and over again. Yes, that’s a win right there and people in business in the business realm Do that to buy equipment and to grow and build their businesses. So let’s get past Well, let’s go to next step is one of the things again. I’m how to retire before you aspire. I love that There’s a story behind that. Well, let’s go. Let’s what’s the story? 

SHATEKA:

So in 2018, I had a couple of my friends imagine your two closest friends right now Who are your two closest friends? You have to say it but imagine both of them passing away within four days Suddenly and unexpectedly that’s what happened to me in 2018 So that’s a real thing for me. The one friend was 50 years old The other one was 46 years old had just flown from baltimore to atlanta to visit the one for her 50th birthday Drove from atlanta to charleston to see the other one because she got diagnosed with cancer a month later They both passed away from what they said was the flu, but it probably was good that nobody knew about So that’s what happened. So when I say retire before you expire I lost my two closest friends in that season while living in baltimore because they Had the flu and so they never really lives what I like to say in terms of having that lifestyle of freedom And because they had been working one was an entrepreneur The other one was an executive that works downtown here in charleston for hr and but at the end of the day I want to make sure that people can live more of their life and not have to work all of their life because they have A plan in place. They should have options if you want to work because you love the work That’s one thing But if that’s not your calling and you’re just in a career and that’s not your calling And you’re trying to pivot until you’re calling and let’s get you into a position to where you can now have enough money So that you can do what you need to do and go ahead and pivot sooner than later these young people They want to retire at 25 and 35. They’re not trying to wait to 65. Let’s just be clear A gen z is not waiting to 65 all day. I got to get a quick plan for them. But yes, let’s talk about it.

CORWYN:

Wow, so that’s heavy But that also gives like some background as to the foundation if you will of the ministry if you will in the work that you do So getting back and coming back around the mindset a lot of this stuff Shateka is it’s high level. I’m not going to say it’s over anybody’s head It’s very attainable understandable at least in my opinion But what fears what objections what things that do you work to overcome with clients? What have you encountered in trying to get them to understand these concepts and seek to move forward? 

SHATEKA:

Yeah, so most people get it by the time they watch my video the master class and everything they get it they understand the Situations and where they are currently and where they’re trying to go because I talk about the traditional accounts and how they fail people Because they just don’t have the long-term care. I think that’s something I look at the hit list and people need to understand that with their retirement the hit h i t h health care I inflation t taxes if your retirement account does not have a strong hit component to it Then you need to relook at it, right? and so 75 percent of people will not be able to use all of their money for retirement because they’ll end up having some type of challenge Medically and so they gotta have long-term care and so people overlook that but that’s like the number one termite in retirement that people overlook So it’s like paying all your money into a medical bill or to a facility because you’ve been hit with health challenges And so the main thing I want to do is when they come to me I want to back our plan that too because some of them have families with different types of medical history And unless their health is where it needs to be They need to start looking at that as well. That needs to be a part of the plan So health care inflation does your account grow and compound while you sleep and do you have if you say for example annuity Does it have a cost of living allowance for rider attached to it? That’s going to continue to grow no matter what because of the economy because we know year over year is about three percent Okay, we need to factor that in and so when I meet with people and they come to me I think the biggest thing for them is do they have the finances? A lot of people come to me and they say oh, I don’t i’m not even right. I haven’t made it right now I’m not ready and i’m 40 years old these people come and they’re not they don’t have anything sometimes And so as a matter of discipline, how do I discipline? Where can I and it’s on me to help them find the money because like you have all of this You have your money going to this and this if you restructure that you can do this So basically understanding again going back to that needs analysis That’s why I can’t just sell you something I need to see what you have going on and see how we can leverage what you already have Because at the end of day it’s really about structuring. How do we structure your policy? How do we structure how your finances are coming out? What’s going to hit what first? And then be able to give you the output that you’re looking for ideally But if you say that okay, I need to have long-term care Then that’s going to be something that needs to be a component instead of an iul You need to add that to your whole life For example, if that’s something that you need to have if you don’t already have that already I just want to put that plug in there because people a lot of times overlook that and then you know You’re aging parents Do you have it on them? So that your retirement isn’t trying to help them because you still got to work But now you got to pay into a facility to keep the care because you can’t care for them, but you got to work So these are some of the conversations that i’m having with people some of the challenges that they are having But at the end of the day We got to find the money and we got to figure out some passive income strategies for you And I actually just started helping partnering with an organization to help people with understanding how they can use AI And other types of wealth building strategies by doing a course in this community this community that I have that’s a part of I should say to just to help people that are Did I realize that i’m called to the wealthy as well as to those that are disadvantaged? I’m, not just called to just the wealthy or just a disadvantage. I can’t don’t put me in a box That’s all i’m saying because i’m multi-dimensional I can work with both of them, but I have products for those that are disadvantaged that need the extra help How do I get more passive income please? What could I do? There’s so many different ways that you can make money today If you’re not making money online What is wrong with you like for real like and so that’s where that community comes in at because it has different opportunities of passive income plays So that they can now have another stream of income that they can now put towards their retirement because they realize okay I need to do drop shipping or I need to be doing trading or whatever. I’ve done it all you listen. I’m like a johnny So I help you understand what you need to do passive income wise So now you have these other options that you can tap into now. You just gotta do the work And then also funding we started adding that on to our business as a not a new our newest service is funding Helping people that have personal or business loan challenges getting them to funding or they may not even have challenges It’s need funding and they want to do a new startup a new business because we realize that business Is how you get around paying taxes, right? That’s what the i’m just gonna put it out there It’s a legal way of getting away getting around paying taxes. Okay Because if you understand that you’re going to have a business if you make six figures I’m going to use that business for leverage. You want to make sure that you tap into what was before the pandemic 495 deductions, but after the pandemic 675 Deductions you’re going to tap into that So make sure you get your piece of the pie like everybody else and make sure that money that you’re able to keep is Going to be now be used for your retirement 

CORWYN:

Makes perfect sense makes perfect sense So Shateka, I want to make sure we get your where can people reach you because 

SHATEKA:

Shateka.com Simple my name is right there. It’s spelled properly Shateka.com. Everything is there for you I have my business card on there for you Listen everything even the communities a little inexpensive community that’s on that AI and wealth community the top one the top two links on there when you go into it’s like a link tree different links to be able to See what I have to offer. I work primarily with executive military and Federal employees, but I work with business owners truck driver I work with a lot of different types of people but that’s primarily who I work with 

CORWYN:

So, you know, I appreciate what it is that you do. I mean I see you doing it and I appreciate That you see the serve first you speak So passionately about the things in this financial realm and about helping people to create financial security And retirement freedom that whole retire before you aspire thing that’s embedded for me right now And it’s not just about the income. It’s about protection. It’s about peace of mind It’s about those things that are intangible Which is the ability to be able to rest at night and not have this fear this worry or whatever it is that exists So if you don’t mind as it relates to how you assist and help people We talk a lot about legacy on this show again What we’re trying to do is get people educated and help them to establish So that the generation that they leave behind them is educated And in turn can do the same and so forth and so on that we’re adding to and not just consuming and taking away because we see people try to take care of their parents because they don’t want to place them and they Deplenish anything that mom or dad may or whoever may have everything is consuming versus adding to so Your strategy is what you advise. How does that play out into helping people establish and build their legacy? 

SHATEKA:

Sure, so basically it’s going to be around making sure that they have that long-term care in place based on what you just said So they’re looking to have something that’s going to help them to be able to supplement their income or their aging parent That’s going to be something that they need to put in place now, right? Like already have a long-term care plan on them Some people that may look like an iul or somebody may look like that’s a supplemental plan or they might have say another Actual Long-term care plan in place so that they don’t have to dig into their wallets But also on them and their husband so that they don’t become a burden for their child Later on in life when something happens medically, so I hope i’m answering your question. No, you are okay. 

CORWYN:

So yeah, okay So Shateka we have quickly gotten to the end of today’s show. I look I definitely want to make arrangements to get you back in I can’t wait For our audience to get this information and reach out to you because that’s what they should be doing But I want you to do one more thing for you the master class. What is it? How can people get connected to it? 

SHATEKA:

Absolutely. So basically on that link they can number one i’m gonna add it on there again because I don’t have it all the time live So they can actually message me So they can message my team and I as staff at winning and wealth.org if they have any questions Or they want to get into the master class if they don’t see it on shateka.com But I am going to put it on it right after here. So they’re going to say master class basically they can sign up for that and that would be a great way for them to be able to to come on board because I Haven’t primarily like once a month live something like that But my goal is to make sure that they’re in that class because I always say that retirement is not an age Retirement is an income. It’s you having an income that is going to be able to sustain you Beyond your work as a w-2 or even as a business owner, right? So how have you structured income so that you can now alleviate having to work at the end of the day people jump off their jobs They say i’m stepping out on faith. I don’t I advise against that Make sure that your passive income is meeting where you are now before you just jump off on the job. I think there’s wisdom Because people are doing it wrong and they have no retirement and they have to work for the rest of their life Because they didn’t allow their job to be their sponsor for their business before their business blew up because the business doesn’t always take off That might look like one person But that might look good for you and your work habits and your knowledge level your skill sets and you know Just so much and so wait till you see that your business is at least doing half of what you’re doing In salary before you even start to think about leaving your job a full-time job is paying you Benefits and all these things right? I would just advise against it when it comes to that because you need to make sure that you have something for your older Self your older self is going to thank you take care of your older self At the end of the day, I mean you all you to make sure that you have enough money Don’t just look at what the joneses is doing. Oh, they did it. I can do it Yeah, you can do it. You’re gonna do it right on your job until you see that you’re doing it That’s what we’re going to do I just believe in using wisdom when it comes to money because even the bible says that a man and money money was a fool And money would soon part And so I don’t need you to part with your money i’m gonna need you to keep your money because you used wisdom and you went to the Whoever your creator is and you said do I need to jump off my job yet? Do I really need to move right now? Maybe that person might be your wife or your husband or your children. What’s your why why are you doing what you’re doing? Because if your wife’s not great enough, you know, it’s not going to sustain you Anyway, you can’t just social nothing is about money. It’s about impact. It’s about income. It’s about retirement It’s about really moving from career to calling What are you called to do and I want to help people from a career to calling and live their best life because you have A sense of fulfillment where you’re doing what you know, you’re called to do you can’t go and work Because you know, that’s not what you’re called to do. That’s why you hate That’s not what I was called.

This is not why I was created. This is not why god made me You know what? I mean? So no, that’s what we’re talking about today I love it.

CORWYN:

I love it. So Shateka, again Thank you for being on with us today. Take your time out of your busy schedule to be here now I’m gonna hit a couple of takeaways guys for our listeners. Let me start with legacy guys isn’t Built only on making money. I think you just said that it ain’t about the money It’s built by protecting planning and positioning that money wisely so future generations can benefit It’s about freedom security And attentionality guys, we got to do that got to do that and Shateka final takeaway I have from what i’ve overheard with you today Retirement shouldn’t wait till old age. We ain’t gotta wait till we old We don’t when you structure the financials and the financing and the money and all that stuff early using smart tools protection education You take control of the legacy And you give your family a chance to thrive well beyond your years Shateka. Thank you so much again for being part of the Exit Strategies Radio Show family and for being on the show with us today

SHATEKA:

Thank you for having me. I’m excited to see how we can work together some more.

CORWYN:

Awesome awesome so for our listeners guys, look y’all know how I feel, you know what I say You know, I always put the two of those things together and I give it to you this way Was to tell you that I love you. I love you and we’re gonna see you guys out there in those streets

CORWYN:

So I want you all to have a vision and a desire. I mean a hunk. I mean so much so in your gut that you have a desire for better I want y’all rights now to pay attention So we gonna be talking about real estate in the dominican republic I am like yes, let’s do it because you know that money is one of my languages Real estate is as a dialect and the islands is one of my tongues 

Good morning, good morning and great morning to you guys. Welcome to another fabulous episode of Exit Strategies Radio Show. Hey, I am your host Corwyn J Melette, broker and owner of Exit Realty Lowcountry Group in beautiful North Charleston, South Carolina. Hey, if this is your first time listening to this show You sir or ma’am are in for a treat because our mission is very simple that is to empower our community through financial literacy and real estate education guys with legacy building. That’s what we do I always got to give a shout out to those who listen to us faithfully from hollywood What you know, no good all the way up through monkey’s corner. My mama live out there y’all Elder pastor van a bit of a senior got to give them a shout out love them dearly You know, I just got to put that senior on that thing because those who know me well and any of you that know him Know that he will jack you up if you don’t put that senior on that thing. I love that guy for that Very pressable guy got to give a shout out those listen to us in muddy mullins, mary county guys Thank y’all so much for tuning in and those who tune in no matter where you are around the globe You guys are always blowing my mind while giving me heart palpitations Just how much love that you guys have for the content and for what we’re putting out here Now i’m super excited about today’s show if I was a little bit my worries kind of you know Start jumbling and going together and all that stuff. I just want y’all to know and see i’m over here already in my mind Like processing and like okay. I got a thousand questions and all this stuff. So I want you all To have a vision and a desire. I mean a hunger. I mean so much so in your gut That you have a desire for better I’d vote y’all rights now to pay attention So I am very very humble very honored That miss Kathy Colon took out time in her busy schedule to be here with us Now, let me tell you who Kathy is my Kathy is the founder and ceo Ceo, that means chief something right chief executive officer. Uh, Nova Lux DR Properties And we gonna be talking about real estate in the dominican republic I am like, yes, let’s do it because you know that money is one of my languages Real estate is as a dialect and the islands is one of my tongues. So let’s get it Kathy. How you doing today? 

KATHY:

We’re doing fine Corwyn. How are you? 

CORWYN:

I am phenomenal. So Kathy look I may have put too much on that bread I may have butted it up too much, but hopefully people don’t slide off the loaf All right, so look and tell our listeners who you are and what do you do at high level? 

KATHY:

Certainly. Well first and foremost, I love your enthusiasm. I cannot wait for the questions I am Kathy Colon the ceo and founder of Nova Lux. Nova Lux is a small boutique curated focusing on health and wellness With specific criteria to buying property and investing second home vacation homes if you want to move there in the dominican republic Yes All right. 

CORWYN:

So look first by the dr. So let’s start with that. Let’s make it simple because I mean sometimes people like well I want to vacation somewhere and this and that and blah blah blah blah 

KATHY:

But why the dr I have roots there i’ve been spent every single summer with my grandparents on a farm When my father decided to retire he bought a house in the city in santiago And we went to go live with him for I did a few years of high school there And so dr has been such a big piece of my life my family’s life. 

CORWYN:

I vacationed there going to love the island And yeah, okay So the dominican republic is I mean, obviously it’s in the caribbean. So it’s a small island in the caribbean, right? So if you don’t mind geographically, so, you know So some people probably right now probably got their phones out and started looking And pulling up a map and trying to find exactly where it is But if you could give where is it located as it relates to that particular corridor? 

KATHY:

It’s located in the island of espanola, which is the spanish island right next to the right we have cuba And eight and puerto rico that we border with And so those are the four islands and jamaica not so far that are around us It’s so dominican republic is the second largest country in the caribbean The first one obviously being cuba and it’s substantially much larger. 

CORWYN:

I mean it’s in size in puerto rico and Uh-huh So what I just heard is y’all call like bab in the middle of it all is what I just heard I love it. I love it. So You focus again. You guys are a boutique firm and so for those who may not be overly familiar with them and all those things Understand that boutique firm is when we’re specialized We we’re niched in this particular category or corridor and we’re not a massive company that serves everybody and everything But we focus on this particular this lifestyle like as you mentioned a little earlier now you guys focus on like a wellness piece So let’s turn over a little bit of dirt right there What do you mean by that when you speak about wellness as far as homes that you sell on that? Let’s take a short break. 

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KATHY:

So Sure, so I think I should backtrack a little bit more just so the audience knows a little bit more about me So I am a public health professional i’ve been in health care for over 20 years And so I have an executive and masters of public health also an mba all specifically focused business in health care So I look at the world from a health care lens and so Why wellness because I was caring for a loved one and I was going between the dr and new york to care for this Loved one and so we started staying in a lot of different villas and we fell in love with the villas And so we were trying to figure out where to buy how to buy what to do but then I wanted to integrate the component of care of generational living as well as What are some of the things that you want beat someone’s life? So looking at it from a longevity perspective And an aging in place So that’s why the Nova Lux was created to solve these problems. How do you age in place? What are the criteria? What do I look for? And so I developed this checklist And I don’t take on any specific properties that don’t match the checklist 

CORWYN:

interesting so Someone looking you know over my years i’ve bumped into people or ran into or know people that have this desire To when I retire i’m going to move to the dominica republic i’ll move to Caribbean wherever it may be i’ll move here or what have you so I mean how often are you servicing people? That are just completely relocating. They’re like, okay. Look my i’ve retired from work I don’t want to live in the states anymore. I want to live in a different environment I don’t want to live in the city Whatever it may be that may decide that dominica republic is where they’re going to be as far as a home base How often do you run into that and then what does that look like like as far as a process of purchasing a property in the dominican republic Sure, so I have many different scenarios. 

KATHY:

I have people that are already retired, but their spouse is still working So they start to look I have people that are planning to kind of do it hybrid i’m retiring in five years. I want to build my booth now I’m gonna go down there and visit the other part of the time. I want to rent it out I also have like a million. Okay, i’m tired in 20 years and I want to buy this property and in the interim I’m gonna go there once a year for maybe two weeks at the top, but I want to have it rented out So there’s all different types of the spectrum I’m also finding that a lot of people are like sick of taxes And they want to find a better way that doesn’t like eat up all their cash And there’s so many different scenarios in between what’s the process like? The process when you haven’t been to vr or even if you have been like someone like myself It can be very daunting. Where do I go? Do I look you know, is this place trustworthy? Am I gonna find the right community? That’s right for me So what I do is I vet all of that out for you So by the time you come to me, I kind of want to gauge what you like what your interests are Do you like golf you’re at the beach? You’re at the mountains like civic living how often are you traveling like how important is community for you? Or do you not care just want to be a future? Do you want to like a more sustainable living? I gauge like timeline budget size all those different things and then I kind of narrow that’s why we’re boutique You have a curated selection I narrow it down and identify which projects will best fit this person and then I present them to the person Kind of a curated list and they’ll go through it and i’ll tell them all the reasons why I like this one for this reason and so They then do their own due diligence and research and Digest the information that I give them and they kind of come back to me with like I like these two Projects let’s dive deeper into this And so once they identify which one they want to go with if it’s already built we connect to the deposit connect with the lawyer And they need to do financing we get the bank involved and so that’s all available to you And a lot of people don’t know this 

CORWYN:

So, let me start with one of the things that you just put on the back end of this Because that’s something that oftentimes we don’t think about Like how do you transact and do the transaction there? Meaning is it finance, etc? So I want to put this kind of throw this out Let’s assume and just so you know Kathy i’m talking for me if I want a property down there close to the beach I mean beach ocean views Maybe there’s mountains or what? I don’t care but let’s say something either on the ocean or with very nice views Around about what should I expect? Let’s just pick a product condo Detached whatever but what is that going to look like financially as far as in u.s And then the second thing is how do you do a transaction there because i’m assuming the currency differs So how are you doing the transaction there to acquire properties such as that? 

KATHY:

Okay, so I can walk you through an example of a condo I’m gonna do different scenarios because different parts of the country depends where you buy too So if you go to punta cana, you’re going to pay premium price. It has the most developed infrastructure Everyone super high end. So that’s going to be a different price point than if we go to a different part of the country Okay, just as beautiful So a condo in punta cana right now. I have an amazing like ocean view fifth floor two beds two baths fully furnished You don’t have to pay taxes for 15 years with comfort toward tax exemption law for international buyers that buy over 200k And they you don’t have to pay the three percent transfer tax You don’t have to pay the one percent ep and then after the 15 year passes All you do pay one percent over anything that’s over 174 000. So it’s still minimal Your hoa fees will be two dollars per square meter which like on an 80 meter square Apartment unit will probably 160 While your apartment comes furnished end to end if you want it managed you have it managed something like that. It’s about 393 000 and by the time so this is a pre-construction example by the time it usually takes two to three years to build out This is pre-construction by the time it builds out. It is now increasing value between 30 to 40 percent although the Ocean view tends to do better like 50 but i’m conservative. So I’d rather say 35 So you have substantial equity. You could also rent it out. You have like a wingdom that manages it If you want to go visit and hang out and stay there for a month and a half You’re still going to do very well. So anywhere the roi will be anywhere between 60 12 Collectively from a pool of other people that are also buying and investing a villa Let’s just say just go to another part of the island go to the north coast A little there can make four beds four bathrooms 2500 square feet You’re looking at like 700 000 in an ocean in a gated community with everything like end to end that you can just walk with These like have your breakfast and coffee on the beach. You smell the ocean And the each oa sees they’re like three four hundred dollars and you ask about the transactions What is the transaction like all the currency is in dollars, but you take usb So there’s no exchange of money so they’re asking 300k it’s 300k and so the transactions are pretty I think you’re so funny. The transactions are pretty straightforward as I mentioned earlier You walk on your unit. There is a law firm Will be your contract due diligence make sure everything’s okay. They’ll do a title third you go through the bank the bank Usually takes there four to five months. It’s a super lengthy like our newest process. I like to work with scotia bank But you know that everything is going to be like 100% immaculate and same thing rates they fluctuate here. They fluctuate there They don’t do anything more than a five year Locked in interest rate after five years. They re-evaluate but the choice is entirely yours like for the condo The way that it works 5k to reserve 20% initially down then the 40% Like 259 000 will be paid out throughout the 36 months that your condo is being built and so The last 40 of them you owe can be financed or you can pay out of pocket so Let’s put this scenario in place. 

CORWYN:

So let’s say that You want a property there that you can rent? Obviously short-term rent for let’s say you want to be there maybe let’s say three to four months less than six months a year Is that I mean from where you guys are or dr weather is is good all year long, right? I mean if I recall correctly, so is people go travel there throughout the entire year So I see a demand my assumption is it’s probably a greater demand in this peak seasons Maybe summer parts of summer then also maybe certain holidays, etc So my question is along that vein of in that situation a scenario. How easy is it to maintain? That property as a short-term rental. Are you able to get great rates and you know all that because that actually can help Or either pay for it for somebody where technically you’re living for free when you go. Does that sound about right? 

KATHY:

100 yes, it all depends again what part of the country you buy in what your needs are what you like I’m going to use the condo example that we’ve been talking about so that one You don’t have to do anything like windom will handle it for you. You want to go there? Spend a month two months three months perfectly fine So what they essentially do is they put your apartment in a pool? So collectively however, the pool does Is your profit they also have a restaurant and a bar that if you’re a property owner you also make a profit from it’s like $285 a night they take care of everything from the cleaning if your furniture’s something happens to it So it essentially pays for itself as an example the windom roi for occupancy rate of like 45 Will guarantee like 23 000 for an occupancy of 65 will guarantee 9.2 Two percent roi which is like 36 000 and if they’re doing exceptionally well like 85 occupancy You can make like 50 000 over 12 percent roi 

CORWYN:

So and we’re talking I mean the numbers that you’re giving on an annual basis, correct? But I mean and granted obviously we like to see the greatest return So if we assume on the higher end on a unit, I mean and you said profit out of the pool So that means that windom is basically taking care of everything the maintenance the upkeep and all of that and that’s the return that you’re getting Yes, so it’s a no-brainer Exactly. 

KATHY:

So when investors call me they’re like I want to be Investing money. I don’t want to be involved. I have properties all over the world And i’m interested in the dr. I said I have the perfect Opportunity for you and this is what I present. 

CORWYN:

This one is a no-brainer That is like okay look at man, look at my i’m over in my mind about blown like for real Because i’m in my mind thinking about it My imagination says there’s a few banks that really specialize in this type of properties. So I mean are they Us based are they based in the dr? What does that look like? And who typically? Is the lender or lender type? That sees this and does well with these types of transactions 

KATHY:

So I mainly work with one bank And one bank only it’s scotia bank and they’re canadian based and they’re super strict Okay so now If you’re dominican citizen, or if you have like your social security number over there you can use any bank you fancy, but since I deal with a lot of United states buyers canadian buyers and like other parts of the world. This is the only bank that I use Makes sense because you fall in a relationship with them and it just works and can complete And I know it’s gonna go although they like want everything I’m doing this super due diligence. And so that makes me feel comfortable So someone who’s considering this right? 

CORWYN:

Obviously, there’s always the pitfalls and there’s also great opportunities What are the things that someone who’s looking at either relocating? Or again, we have part in the states or just investing at all What do people need to know about buying a property in the dominican republic in general? 

KATHY:

Kind of have to know what you like. Do you want to be close to an airport 12 minutes away? Do you not mind? Taking more of a drive like an hour and a half, but you’re going to be in someone that’s like completely it’s like Tulum or bali so knowing exactly what you like what your budget is and That can help me facilitate what to identify for you Just on what you love I had dad wants to relocate to the dominican republic and she’s moving by herself with her dog And she says I want nature. I want front row. I want our first floor I want to smell and hear the ocean when I wake up. I want to go to sleep because that’s what I have here So she’s very specific. So that will help me position like which property for her So knowing what you want what you like I can help gauge if like i’m a city person And I like nightlife and restaurants and I want to party. I know exactly where to put you to have that if you’re like I am like a ultra like executive and I want to be able to host and fly people in and have meetings here and have Retreats here exactly where to place you. 

CORWYN:

I love that I love the element that you just added in there because we sometimes we don’t think about That particular piece of it as you said someone who may own a corporation or whatever and this is a place they like to visit or otherwise to vacation to And to have a residence there that they can then bring Their team into and hey, we’re gonna do this and we’re gonna all blah blah blah That is so cool. So neat. I love that concept so What else and just from you’ve been doing this for a while you have really focused and dialed in Somebody wants a particular thing. Obviously, you know where to put them but let’s talk about Like your favorite place like what part of the country is like your favorite place For that kind of brings in everything that culture everything else that you are like, that’s my jam So what part of the country is that? 

KATHY:

Oh, that’s so hard. Oh, it’s so unfair. You can’t do that to me Okay. 

CORWYN:

Well, hold on. So here’s my disclaimer. My disclaimer is we won’t hold you to it Because sometimes you got a favorite today and sometimes tomorrow. I want to be somewhere different So give us the favorites about them. 

KATHY:

Okay You know, the beauty of dr is that it’s so different each town has like a different charm a different flair Like the food the people it has like a different magic. So I love santiago. I go to santiago I feel like I am home. However, since i’m a kid, I always go to the beach in the north coast so when I go to the beach in the north coast for me, it’s like A connection that’s very familiar and I love and it’s serene. It’s peaceful and each beach is so different So the north coast is absolutely stunningly gorgeous with white sand and the food is delicious I had not been to for Since it’s like six hours away from santiago five hours away from north coast But I started going more as I created noble locks because I needed to see the project feel the project beyond the ground Know what I was getting into meeting the developers I had a lot of time in punta cana and cap cana and to be completely honest with you steve. I am blown away I feel like the dr in cap cana It is like the best kept secret because if you see and you’re on the ground and you see what’s going on there You’re going to be like wow You have the most coveted names from europe That all are flocking down there. They want to build towers buildings And in the next five it’s growing so aggressively In the next five years the crown jewel of punta cana is cap cana It’s going to have 150 000 new units My inventory goes up every single month and i’m like, oh my god, not another price increase i’m negotiating something Here and my client’s gonna be like well tell them and so that puts me a little bit of a bind But what’s going on there growth beauty like the ioc the international olympics committee We hosted in punta cana for the first time ever So what’s nice is the united states has a good relationship with the dr Dr has a good relationship with the us. So that’s very helpful for the americans that want to feel comfortable going there I feel like it’s an extension punta cana and cap cana’s extension of like florida Right of what’s going on there? I mean not economically but I mean from a building perspective miami as such and then the other thing is Another best-kept secret is like last time that’s where I was talking about the 70 year old lady That’s is where alex rodriguez is investing a billion dollars And you have the saint regis the four seasons that just announced that they’re opening up So anyone that’s smart would buy in silver beach That is seven minutes away from where these things are being built and it’s an hour and a half from the airport So are you comfortable doing that some people like I don’t care simple like no way I would say those are my top four picks 

CORWYN:

So Kathy, we’re quickly getting to the end of today’s show So how can people get in contact with you and thank you for that nugget? So look, I don’t know if y’all caught that listeners But look here wherever the ritz and the four seasons is those places to help help you not only change your address But they’ll change your bank account So y’all want to get close to that? So you try to get to the full season looking you can get to the fifth season of quote-unquote financial wellness right then But Kathy, how can people get in contact with? 

KATHY:

Sure, so I could be reached on if you want to take a look at the properties online www.novaluxdrproperties.com. I’m also very active on social media particularly on Instagram again. It my handle is novaluxdrproperties.com If you want to reach me directly 917-419-9090 if you want to email me Kathy at novaluxdrproperties.com. 

CORWYN:

I’m happy to connect So y’all need to hit the website because when she started talking about these houses, I went to her website So I was checking this stuff out and i’m over here like all right, look here. That’s what i’m talking about There’s some beautiful properties there with some Marvelous views. So look here. I’m over here with a strategy. Look here pinkie in the brain I’m trying to figure out we’re going to take over the world. So that’s what you know, and I love it I love it. So Kathy you’ve been doing this for a while So I want to ask you what I refer to is that mic drop question, which is you got into this This is something that you didn’t start doing day one. You got to this knowing what you know now What if anything would you have done differently in this process? 

KATHY:

I feel like I started late. I should have done it sooner I have fear and scared and I was doubtful that I can execute this and how would I be able to manage it? I wish I would have like had more courage to start sooner. 

CORWYN:

That’s real. That’s very real. So Kathy Thank you so much for that. Thank you for taking time out to be on with us today And most importantly, thank you for what you’re doing because you are connector and more importantly You are an amazing resource and in connecting people to that part of our world And i’m excited for the opportunities that guys y’all want to do some investing. Let’s start talking Let’s make some stuff happen. All right So guys look thank y’all so much for Kathy again Thank you so much for taking time out of being on with us today. 

KATHY:

It’s my pleasure Thank you so much for having me and this was a wonderful time. Thank you. Awesome. 

CORWYN:

So for our listeners guys, look at y’all got it. Y’all want to do something with it Y’all better holler at your boy. We’re gonna make some things happen because i’m loving this space that we’re in right now guys I really and truly am so for our listeners y’all know how I feel You know what I say, you know, I always put the two of those things together and I give it to you this way Which is I tell you that I love you, I love you and we’re gonna see you guys out there in those streets 

CORWYN:

We always talk on this show about strategies for long-term growth, for making money and all that stuff and creating and building wealth for our families for generations yet to come. That’s what this show is about. So we always talk about making money. What we don’t talk a lot about is tax strategies. And we do at times deal with, we do it sometimes bring in a little tip base, = but today is one of those shows where we have an expert, a guru. Now look here, he had to break that thing down to me. He had to tell me what C don’t mean. And he told me that means Swift. So, what I felt was the wind blow past me while he was swift to provide tax relief to people that need it. So if you make money, you got to pay some taxes. That’s what it is, right? 

CORWYN:

Good morning. Good morning.

Great morning, guys. Welcome to another fabulous episode of  Exit Strategies Radio Show. Hey, I am your host, Corwyn J. Melette, broker and owner of EXIT Realty Lowcountry Group in beautiful state of North Charleston, South Carolina. Hey, if this is your first time listening to this show, you sir, or ma’am are in for a treat. Coz, our mission here is very simple, it’s very simple guys, that is to empower our community through financial literacy and real estate education. Guys, we are legacy building. That’s what we do.

Guys want to give a shout out. So let’s shout out faithfully to Charleston Market, PD markets. Look, you guys rock from Hollywood.What you know, no good all the way through monkey’s corner. Y’all know my mama live out there. Y’all pastor Evans, Vanderbilt Senior, his beautiful wife, Elder Evans.Thank you all guys for tuning in also to the Q family and many others, countless others who tune in and listen to us guys. Thank you. When you bump into me and say, Hey, I heard you, you reach out. I really appreciate you. You guys are rocked and amazing. My folks  in muddy Mullins, Marin County guys. Thank y’all so much for tuning in guys. And trustfully y’all continue to take these tidbits and this knowledge and take it to the next level. So today we have a show for you.

 We always talk on this show about strategies for long-term growth, for making money and all that stuff. And creating, building wealth for our families for generations yet to come. That’s what this show is about. We’re trying to take people, you always remind people that the purpose of. exit strategies is that movement. Our word teaches and tells us about the exodus, moving people from one place to another. That’s early book in the Bible. Those who know where it is.

Second book, but it’s early short version is guys, we want people to move in a concerted manner. A better future. That’s what we want. So we always talk about making money. What we don’t talk a lot about is tax strategies. And we do at times deal with, we do it sometimes, bring in little tidbits.

But today is one of those shows where we have a expert, a guru, all right? So if you make money, you gotta pay some taxes. That’s what it is, right? So we have none other than Fabian Cruz. Now Fabian is the founder of Tax Relief. Now look here, he had to break that thing down to me. He had to tell me what, and he told me that means swift. So what I felt was the wind blow past me while he was swift to provide tax relief to people that needed. So I want you to give a warm welcome. I want you to put. spoon down. Let them percolate just a little bit more. Get a little bit thicker, add a little bit of cream to ’em. Let’s make some nighttime grits this morning, and I want you to give Fabian a warm welcome Fabian. How you doing today? 

FABIAN:

Hey, I am doing great Corwyn, and really appreciate the opportunity. I’ve been watching your show all your guests and they bring a wealth of information. So I’m gonna do my best today and try to make a very boring subject, not boring, which is facts and IRS. 

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CORWYN:

Well look here. I appreciate you doing so, and I know we’re gonna have a good time. ’cause what you’re gonna tell us today is how we can manage it better. That’s what you’re gonna tell us. So, Fabian, tell us how level, who you are, what you do, and let’s get into a conversation. 

FABIAN:

Okay, well  first and foremost, I’m a father, married my high school sweetheart, and have two little goofballs, seven and five years old. So before anything else I’m a father. And a number of years ago I started CDO Tax Resolution. We are a tax resolution firm and what we do is we help individuals. Who somehow have gotten in trouble with the IRS or their state tax authorities or state tax authority and we helped them get that mess cleared up so that way they can get their lives back and they can  get back to business, get back to what they need to do in order to make money.

CORWYN:

So, what was the catalyst for you on this? What caused you to say, Hey, this is an arena realm that I wanna work in, or where I believe I can be of assistance to others? 

FABIAN:

Well, sure. So I didn’t start out as an entrepreneur. I’d been praying about it for years, trying to come up with all kinds of ideas and this one’s kind of hit me close to home. I remember I got a call from my mom. And she was just really upset, and she went about telling me they just were notified by the IRS that she and my father had this very large tax debt and there was absolutely no way they were gonna be able to pay for this, they’re on a fixed income.

As we started to really dive in, we realized there. Tax preparer, they weren’t even an advisor. Gave them really bad advice and ended up having this huge tax bill. And so I started to work with my folks. We went out and we found a tax resolution company in order to help them out. And what I found Corwyn was it was just this painful working with that tax resolution company than it was working with IRS.

And here’s what I mean by that. Every time we would call in, we spoke to someone new. They had no call continuum, so they were telling us, Hey, all right we gotta research and get back to you. And then if we were lucky, we’d hear back in a day or two. Fortunately everything got worked out, my folks, we got it cleared up.

And as I was sitting there and, I’d been praying for,  well over a decade that I wanted to do something, that I owned it dawned on me I could do this better. With all my experience, like gaining corporate America, I could take all those skills and I can start a tax resolution company and have my clients have a better experience.

And so that’s actually the genesis of our company. And real quick, I always like to point out, my mother would always say, I just feel like life is on the hold. I just want my life back. And that’s actually inspired our tagline is, you deserve your life back. And so that’s the genesis of the company.

CORWYN:

That is Wow, man. That’s awesome. And I can imagine how good it felt to be able to help mom, and help your parents in dealing with this and you deserve your life back. I like that tagline. So, some people, understand some people don’t, the impact of these types of situations.

So you know, real estate investing, people are buying and selling properties. Oftentimes they’re, seeking to make money. And depending upon how they structure a transaction. ’cause we talk about finding all types of things on this show, 1031 where you can defer taxes. But, someone operates outside of a 1031, every time they sell a property have income that’s, untaxed income.

So they’re gonna have to report that. And if you let it accumulate, then it could, interfere with other things, kind of what you’re talking about. So What are the potential risk perils, if you will, of, let’s say that you operate outside of a 1031 that you’re making money, flipping properties or what have you,  accumulating properties, rentals, or whatever and that income hadn’t been fully reported or taxes hadn’t been filed on it. What is the potential risk there? 

FABIAN:

The first thing is that, if you don’t file your taxes, you’re gonna have a penalty of failure to file. And I took some notes ’cause I just wanna make sure I get all, ’cause there’s so much information and the IRS publication so that fee alone for failure to failure is 5% per month, up to 25% of what’s owed.

So I always tell everybody, if you file because if you can’t, at least, if you can’t pay that penalty is only 0.5% up to 25%. So literally it’s 10 times less. So that’s actually the first thing I always tell people, and that’s our first strategy is if somebody has unfiled tax returns, we get in there and we get those filed.

So that way we can stop a lot of the collections process. And then as far as long-term implications, I mean, you could easily end up in a situation where you have a lien and that’s where the IRS, that they’re gonna secure their interest in your property. And so they’re telling all the other creditors we’re first in line. And that’s gonna open up a world of trouble. First thing is it’s gonna impact your ability to borrow. Second thing is if you’re able to borrow, you are gonna pay a lot more. And I’m not a real estate guy, but I know part of the real estate plan is you borrow that money as cheap as possible. And if you’re paying above, what the current rate is, that’s gonna mess up your formula for profit. 

And then I know I’ve been listening to BiggerPockets, another podcast, and they always talk about the BURR method, and I had to write this down, and that’s buy, rehab, rent, refinance, and repeat. Well, here’s the thing. If you have a lien, you’re not gonna be able to refinance, period. And so that revenue source for you, if you wanna say it that way, it’s completely dried up. So you no longer have opportunity. And also too, something else that’s really big. I’m getting calls about this all the time, is people who are syndicating looking to raise money.

And I have some clients, that have come to me and they’re like, Hey, is this a good deal? I’m like, well, I’m not attached to resolution or I’m, excuse me, I’m not a real estate guy, but let give you my 2 cents. Do the numbers make sense? Yes. Okay. Who’s this that’s asking you for money? Have you asked them for three years as far as tax returns? Have you checked their credit? Yeah. Have you done a background check on them? And almost everyone I talked to always says no. And I’m like, well, okay. This guy just asked you for a chunk of money.

You’re only looking at one side of the coin. it’s gonna impact also too, for the sophisticated investors it’s gonna impact your credibility. It’s like, you can go on and on as far as how this would negatively impact you. And then also too, it becomes public notice. So your business is out there for everyone to see. 

CORWYN:

So Fabian, you kind of touched on a few things that kind of gets over into those strategies that you can employ to mitigate or otherwise limit your risk, right? Because again, and for our listeners guys, this is a conversation whether you are, an investor, this is a everyday folks conversation as well. So, please don’t tune out because, it may seem that it applies one place and doesn’t apply another but Fabian, where and what can people employ as strategies? So let’s kind of continue on that vein to try to mitigate a potential risk. 

FABIAN:

So  whenever people come across my desk. And they have issues with taxes and they’re business owners. And if you own real estate, you’re a business owner. That’s just how it is. Nine outta 10 times the issue I see is the improper setup of legal entities. That’s the first thing I see. Someone they buy a home and they may set up an LLC which is great. They don’t separate their finances.

So that’s the first thing you know if you have a business, it needs to have its own business checking account. Because the corporate veil could be pierced very easily. But also with that if you have multiple properties set up a holding company, put all , and then all your properties set them up into a single member LLCs that roll up into that holding company. And what that’s gonna allow you to do is it’s gonna make things a whole lot easier for you. Corwyn, I can’t tell you how many times. People say, well, I have this LLC I did online. I’m like, okay, cool. Let’s dig into it. Well, you don’t even have the property listed on here or if you do, you’re writing checks outta your personal checking account back and forth with it.

Like, that’s you’re not treating it as a business, you’re treating it as a hobby. So, people, we gotta clean up your situation.  One of the first things that we implement is let’s clean up that, well, let’s get your tax debt addressed and then let’s clean up the situation so that way moving forward you don’t have this red flag hanging over your head for the IRS, to zero in on.

CORWYN:

So, let’s kind of go on the other side of the coin. Okay. Okay. So let’s make an assumption that, we did not mitigate well, right. What does this look like? And if you could share some stories, insights, or otherwise experiences that you and your team have had as you’ve worked with people to try to help them,  get their life back.

FABIAN:

I want to use an example of a recent farmer we helped because. You did everything, right?

And unfortunately lemme go and lay the groundwork. People who are dealing with back taxes, they’re not these criminals in the alley. They’re not these shady people. They’re everyday Americans, taxpayers, something happened outta their control and they just ended up where they could not pay this debt. I’m gonna use this example of this farmer we had came to us owing $300,000. What had happened in his situation? He sold part of his farm in order to help pay for his wife’s cancer treatment. Unfortunately, she passed away. And as an insult to injury, he was hit with that $300,000 capital gains tax.

Now here’s the thing, he owns three businesses. He’s got this farm, he has a trucking company with 18 wheelers, and then he owns a harvesting company entwined. Yes, sir. Exactly. And he was sitting on a huge chunk of cash in the bank. And so, so what we had to do is we had to tell the IRS, well, hey, Oh. And then not to mention that money in the bank was in his personal checking account. So what we had to do is we had to explain the IRS, listen, look, this is money that’s directly going to the operations of his three businesses. And not to mention some of that money is SBA money. So what we were able to do is we were able to go in there and put him in what’s called a cannot collect situation.

So the IRS said, they’re like, okay, we’re not gonna try to collect from him whatsoever. Even though he had the money to pay this off, we’re able to show it was already allocated to his businesses. And so here’s the cool thing. And so we were able to get him in that situation. But what he did really well was, he filed his taxes every year. So that immediately starts the clock as far as how long the IRS can collect. Mm-hmm. So a third of that is gonna be gone next year, and the second third of that’s gonna be gone the year after. And then in 2027, that last third is gonna be wiped off ’cause it’s reached the statute of limitations as far as what the IRS can collect on.

So he was able to get past that $300,000, with nothing. Without having to pay the IRS anything. And you wanna talk, $300,000 is a lot of money. Yeah. And here’s the cool thing. So what we did was we were like, all right, we got you cleaned up. Now we’re gonna help you stay out of the cross IRS of the virus. We’re gonna get your LLC set up on each of those companies. And he doesn’t have any employees, they’re all independent contractors. For the season, we’re suddenly him up in S-corp. He’s gonna take a modest salary and then he’s gonna take a K one and just that alone is reducing his tax liability every year.

And then, not to mention, we put all of this into a revocable living trust. So he is older, so when he passes away, it’s gonna  bypass probate and it’s gonna go directly to his children without having to. Put it all in the courts and everything. So that’s I hope that was answering your question.

CORWYN:

Yeah. actually teed us up very, very well for the next question, which is Okay, as business owners and again, for a reminder, if you own rental property, you’re a business owner, okay? Absolutely. So, you said something in, that kind of tees up the next section of what I want to kind of talk about, which is that future planning.

So you said that you guys structure  not  a revocable living trust that allows him to pass this business onto his family without probate and the liabilities that come with that. Did I hear that correct? 

FABIAN:

That’s correct. So what happens is his businesses and all his assets are no longer in his name.

They’re in the name of the trust. And so in that revocable living trust, he’s got his children named as beneficiaries also on the trust. So when he passes away they own the trust too. So , there’s no fighting in the court saying, Hey, this is what dad wanted, or anything like that.

And you can still have a will that explains exactly how you want things laid out. ‘Cause that’s a piece of paper saying exactly that this is what I want done. The revocable living trust, that’s the vehicle to get it done. 

CORWYN:

I like that. So, yeah. What’s interesting and it’s been a little while, Fabian, but I’ve actually spoke and, did a workshop, if you will , in that particular arena about the living trust and how you can use that. ‘Cause oftentimes we get hung up on just the will and we ain’t gonna get into that ’cause this show isn’t about probate, it’s about the tax strategies you can employ in order to set your family up for. Better, greater, or, and obviously, less hassle. So again, this is that arena that you guys specialize in.

So our listeners, if you will, you just spoke of, you know how you brought someone back from the brink. But let’s say someone comes to you in the very beginning.  Before there’s any issues any troubles how do you advise them and if you have a scenario like that, how did you advise them so you are able to help them alleviate potential problems in, future?

FABIAN:

So, my company we just focus on tax resolution. When I have a client who comes across. Like this farmer, for example, where it makes sense to take the service one step further, we do that. And just to let you know, for here, in about a year, we’re launching a sister company that focuses on tax mitigation, asset protection, and generational wealth.

Through utilizing the entities that are out there all the different legal structures, S Corps, solo 4 0 1 Ks, self-directed IRAs. But here’s what I tell people because I’ve done it myself. As far as, because I understand you’re asking like the estate plan aspect. Yes.

Okay. The first thing you wanna do is you want to get everything that you can out of your name. Because  I’m not shared this with a lot with real estate agents, you’re one fender bender away from losing everything if you don’t have an estate set up correctly. So what we wanna do is like for our home or our rental properties, we want them in a revocable living trust now, or irrevocable. ‘Cause we still wanna maintain control of that trust. So that’s the first thing we do. And then if you look at your earned income versus like your passive income, if you think about it like, just two sides of the coin, all your businesses, you want to put those into an LLC.

I’m gonna use an example of a real estate agent because I’m actually writing a book for real estate agents. So what we wanna do is we, yeah, we wanna start an LLC and typically it’s a single member, LLC because most of these,they don’t have a team under them yet, or they’re not employing chief I should say.

So you wanna be an LLC, ’cause you want that limited liability that’s what an LLC is. It’s not tax savings it’s protection. And then from there, we want to go into an S Corp. Now the S Corp is what’s really important. Especially when you’re starting to make 50,000 or more a year, because that’s where the tax savings come in. And then from there, you’re able to really deploy like a self, like a solo 401 self-directed IRA.  What’s great about this is I like to call this the country club effect, because back in the day. The reason you wanted to be in the country club is that you had the attorneys,  had the doctors, had the physicians. All these people  who knew the game, knew the rules of the game that the rest of us didn’t know. And so, you want it set up this way. And then also like a, you want a health savings account because you can put I think, like 7,000 a year into that. Because that’s one of the number one reasons for bankruptcy is Healthcare cost. 

So that’s always my advice is, let’s set up a revocable living trust. That’s your filing cabinet, where you can put everything into, put your businesses into an LLC. Let’s have all those businesses run into an S Corp  so that S Corp collects all the money. And then that S Corp writes you a check. But here’s what’s cool. So with that S Corp, you can start putting money into a solo 401k. And you can also match it as an employer. So instead of putting in I think like it’s like 23,000 this year, 24,000, you can put up almost $70,000 a year as an individual. And Corwyn, there’s some real estate agents out there who, they’re making a lot of money, they’re looking for ways to invest their money.

And this is a really cool way because once you put that money in that solo 401k, you can do what’s called a backdoor Roth and you can move it from a traditional IRA into a Roth IRA.  Which is that’s like the gold and sweet spot. And here’s the cool thing about that you could invest in what you know best. You don’t have to invest in Wall Street. So like, if you know real estate and you got a buddy who’s doing some real estate development, you can write a check to that person and get a higher return than what you can in Wall Street.  

And so there’s so many cool things , that can be done. That, at least for me, being Hispanic, my family never had any access to. And so, that’s my personal mission is to change the narrative, for our community. When I say our community, I just mean all people, 

CORWYN:

So, Fabian, we’re quickly getting to to wrap up today’s show, but how can people get in contact with you guy? How can people reach you? Where can they find you? 

FABIAN:

Sure. So you can call me at 1 8 7 7 CITO tax. That’s CITO. You can go to my website, which is cito, citotax.com. And you can also do the same on Facebook. 

CORWYN:

All right? All right. so beautiful website by the way, guys. Look at you. This thing out, man. So, always ask if you’ve learned a lot, and always, this is a question I ask, most of my guests, right? What I realize and know is that if things didn’t happen as they did, you wouldn’t be where you are. But I’ll always ask or usually ask, if you knew what you’ve learned back then, what would you have done differently? So if I could ask that question of you, what would that answer be? 

FABIAN:

Oh man. back then, when I would’ve done, I’d have bought four Plexus. I’d have bought one. You know, I’d lived in one, rented out the others, and after a year, you can go to another one. You can do that again. That’s what I would’ve done. Hands down. Yeah.

CORWYN:

I love it. So what I heard you say is immediately, I’d have been more involved and engaged in the real estate world. 

FABIAN:

Absolute. Absolutely. Absolutely, bought a whole lot more property. Especially whether as cheap of money was back then.

CORWYN:

Exactly. Exactly. Well, Fabian, I wanna thank you my guy for being on today, for spending some time with us and taking time outta your busy schedule. Thank you for the work that you’re doing in the community, the impact. I wanna encourage you to continue along that vein. 

FABIAN:

Yeah. well thank you for having me on and if you need anything, you just reach out.

CORWYN:

Will do. So for our listeners, guys, look, y’all got some good useful information. If you got questions, know somebody, whatever it is, I want you to reach out to Fabian and his team. Let’s get you connected to the resource so that you’re not left. Laying on the wayside, guys, let’s not do that.

We have amazing connections and awesome people who are committed to not only just serving, but to serve you well. So please make sure you all engage for our listeners one more time. Y’all know how I feel, you know what I say. Always put the two of those things together and I give it to you this way, which is to tell you that I love you.

I love you, and we’ll see you guys out there in —those streets.