Episode 116 – Aaron Mazzrillo on The Military Millionaire Podcast

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Aaron Mazzrillo on The Military Millionaire Podcast

Episode 116 – Aaron Mazzrillo on The Military Millionaire Podcast

 

00:00 - 05:00

David:

Welcome to another incredible episode of the military millionaire podcast.

And today we have Aaron Mazzrillo on the show. Now, this is really, really cool because I actually realized as I was talking to him about being on the podcast that I had attended a North San Diego County, the real estate investor Association, meeting at NSD Rei that I go to when you know, pre COVID when we could meet in person, and he had left the room standing room over, we're talking over 100 people at this little meetup to come out to hear him talk.

So he is very successful. I had taken some notes on him, I really enjoyed what he had to say. And the name sounded super familiar. And the moment he got on the recording, I was like, Oh, it's you. And so it was really cool for me to get to do this, because I really enjoyed hearing him talk. He's got a ton of great information. This is an incredible episode. So be sure to listen to it, if you get something out of it, share it with your friends. And, as always, and I do not do a good enough job of doing this. Look, the content on these podcasts is free, we would really love it if you just subscribe and leave us a five star review if you got something out of it. Because that's really all we get out of this. I mean, this is podcasting. I mean, we get to network, it's fun, it's great as whatever, it takes a lot of time and it's completely free to you guys.

So definitely would love us to subscribe and, uh, you know, share in a five star review, or whatever, you know any of those. It would mean the world to us to show us that what we're doing actually matters and helps you guys so please do that. And I love you all have a great freaking day. But don't don't go anywhere till the end of this episode because it's really good.

Intro:

Welcome to the military millionaire podcast where we teach service members, veterans and their families how to build wealth through personal finance, entrepreneurship and real estate investing.

I'm your host, David Pere, and together with my co host, Alex Felice. We're here to be your no BS guys along the most important mission you'll ever embark on your finances.

Roger Vic one Oscar Mike.

Sponsor:

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So if you're looking to generate leads where somebody can find you when they type in, sell my house fast. Carrot does an incredible job. And I know a lot of wholesalers who do very, very good work, and they all love this website.

So I'm not going to do it justice. If I try to talk to you about it in Super detail. I'm fairly new to it. I love it. Love it, but I'm fairly new to it. But if you click the link that'll be in the description, you'll get a link to a free they've got like a free webinar, a free demo, whatever. You can check it out if you like it cool, if not whatever, but this is the sponsor for today's episode is carrot which I am a big fan of, and have a great day we're commencing now.

David:

What's up military millionaires. I am your host, David Pere. And I am here tonight with Aaron Mazzrillo, which is really exciting for me because a friend of mine, Mike introduced us and I was like, Man, that name sounds familiar. And I put it together when he got on the call today as I was doing homework that I've actually gotten to hear him speak before at the North San Diego County Ria that I'm a member of whenever we're allowed to meet in person. And it was awesome.

So it's really cool, because obviously he knows what he's doing. And I mean, he alluded to it, but he basically sold the venue out there standing room only in the building. And this is pre COVID. So you know, social distancing wasn't a thing.

But it was a ton of fun to hear. So Aaron did six years in the Navy, and he's done some landlording, some wholesaling and a little bit of everything up in the San Bernardino Riverside area. And it's just really fun to be able to have him on the show.

So Aaron, thanks for joining us today.

Aaron:

Thanks for having me, man.

A shameless plug is that okay?

David:

Absolutely.

Aaron:

NSDrei.org is a fantastic club. So if you're in the Southern California area or you're planning a trip to Southern California I'm not associated with the club at all in any way shape or form, but it's a legit nonprofit club. They just have the best speakers there's no selling there it's just phenomenal.
What is that

David:

I got guest passes so someone's San Diego...

Aaron:

There you go.

You're planning a trip to San Diego like a family outing just try to schedule it around Hey honey, I need to get away or you know that can go either way you know wife or husband get away and or you're just rolling solo. Try to get over there and check it out. Because it's a fantastic club. I really like that club. So whenever they asked me to speak, I'm like, clean the schedule off like I definitely got to do that. So..

David:

I agree. I’ve done quite a few meetups and they're by far the biggest one and definitely a lot of fun.

05:00 - 10:00

Aaron:

Great people. Very good people.

David:

So why don't you tell a little bit of your backstory and your story for the listeners?

Aaron:

Yeah, so I grew up in a small mountain town in the western part of Massachusetts and people like oh, Boston and like no hours from Boston, like the woods and sticks of Western Massachusetts. Just wanted to escape. It was in high school, I knew I wasn't going to college, my grades weren't very good. Just didn't have a lot of, you know, opportunities locally in the very small mill town that I lived in. So I actually joined the military. I joined the Navy on my 18th birthday.

So I joined and then that July, I joined some members in December and then July shipped off to boot camp and went to San Diego and I was doing push ups. I remember being on the grinder in San Diego and doing push ups and I was just like smiling. I'm like, man, I made the best decision of my life. I was like bliss palm trees. I liked the beautiful weather. Like, I could just stay here forever. It was so amazing.

I spent two years there doing all this training. And then they sent me to, I volunteered actually to go to Japan. These guys were just talking about how cool it was. I'm like, man, I joined the Navy to travel. I'm not going to go back to Virginia or you know, somewhere. You know, they're on the West Coast. And I want to go somewhere like I want to do something.

So I volunteered. I remember getting my physical to go overseas, and the doctors like so going to Japan. He's like, you know, like, yeah, this is like, may seem excited. I'm like, Yeah, I volunteer. He just looks at me like he's like nobody bought. Like, why not? It sounds cool, but I don't.

So I went over there. And I did two years on the USS stach. And I actually got on board the ship in the Gulf. And if you are a history buff at all, I was in boot camp in July of 1990. And they came in and woke us up and said Congratulations, ladies. Iraq has invaded Kuwait. This happened while I was in boot camp, so they should be in the Gulf Two years later, we're still involved in that fiasco, 92. I got on my ship. And we just did circles in the Gulf for a few months and left and went back again. And so I went there three times, actually. And then I I finished my tour on the stash. And they went across the pier to the Bunker Hill and I did two years on the Bunker Hill.

In moonlight as MWR I was working at the club that basically unlisted club bartending and DJing and I was just always a hustler, you know, trying to make money. And then I got out and I stayed in Japan for like a year, and was teaching English living near the base, felt like I was still kind of dependent on the base and just wanted to kind of break free from the military. So I went to Thailand, and I lived in Thailand for like, maybe five months, it was like five or six months, just like partied and hung out on this island and had a great time and then ended up in Bali. And I was like, man, I need to do something with my life.

So I had joined with this idea that I wanted to go to college, I knew that. So you know, I was really into the GI Bill. And I was like, man, now it's time to do that. I gotta go take advantage of this, this opportunity. So I went back to the States, I actually went back to my hometown of the State College, my hometown, and I was at my parents house because I was basically homeless, you know, and I had all this money that I'd saved up for me in the military. And I was just like, Man, what am I going to do, and my dad had an old car in a barn and I drug it up in the garage. I was working on that at night, just messing around. And I took one college class to see if I'd like it. And I did. And I was like, alright, so I just enrolled to use my GI Bill blast through college finished in three years. And I was just like, I just kept thinking in the back of my head about that, that moment in San Diego, and I was on the grinder doing those push ups and I was like, I promised myself I go back to California and had a couple yard sales, sold everything I owned the last yard sale, gave it all away, packed up a u haul, drove us Jeep Cherokee to Arizona, it broke down in Phoenix, basically hitchhiked to California and ended up living in a house with a couple other people. One of them was a guy that was on Bunker Hill who had also gotten out and gotten construction and started making good money actually, in construction. This is the early 2000s of now.

So I kind of had an income problem because I was making enough money in construction. And I had zero write offs. So it's been a lot of taxes. And I didn't like that I didn't like and I like being in the Gulf on the ship where you pay no taxes. That was great. So you know, I was like, man, can we go back to that time? Can I make the money I make now in the Gulf?

David:

Yeah, yeah exactly.

Aaron:

So it should be like a veteran's benefit. We just don't have to pay taxes. I forget. Like I like my Home Depot going on like that, that so they give me 10% off. I'm just like three taxes. No, I don't pay taxes. So, just reminisce.

David:

All the guy's reenlist while they're in a tax exempt zone. It's like..

10:00 - 15:00

Aaron:

Oh, fantastic. Yeah, brilliant.

So, yeah, you know, I come from a military family of five brothers and we were all sorry. There's the I have four brothers, but there are five of us and we're all in the Navy at one time.

So I didn't want to make a career out of it. I enjoyed it, but I just wanted to do other things. And so I was in college, I was in California working construction and started making money. And I was asking my, I'm like, Man, what do I do? You know, he's like, Well, you know, not much, you know, you're you're an estimator for a construction company, which is basically I was putting together the bids on job proposals. And I would make 5% of whatever the total, the total sales package was.

And they, he's like, you have no write offs, you know, like, he can run a car or lease a car for a great 300 bucks a month. Like, that doesn't help. So I asked, well, what are your other clients doing in my situation? He's like, yeah, they buy real estate. Like, I'm gonna go buy some real estate then.

So I went and bought a, I started going on the MLS, like looking online, you know, searching in magazines and trying to find properties. And I contacted a couple agents and an agent said, hey, I got this house. It's in pre foreclosure, which means these people are losing the property foreclosure. You want to go look at it. And I was like, yeah, so I drove out to Riverside, I was living in Irvine and I drove to Riverside and Irvine's Orange County, very high end, very nice, you know, kind of luxurious lifestyle.

Not New Port luxurious, but it's nice. Yeah. And I drove out to Riverside, I was like, man, what's going on out here, this is like the Wild West. But I struck a deal. And I bought the house for like, it's probably worth 250. And I bought it, it was a listed property. No, nothing. I didn't do any special marketing, I just reached out to agents and agents are a great source for deals.

So I got the house, made an offer. Got it. I spent the next probably five months coming out here every weekend to Riverside and working on the house myself, which there's benefits and trade offs to that I learned a ton. But I wasted a lot of time, right.

So if you want to win a gas station, you don't need to learn to pump gas, right, you can hire somebody who already has a skill. But I felt like I really wanted to learn everything about this business. And I was in construction. Although I was doing estimating I had to go on the field a lot. And they would meet people. So I could hire a guy like, hey, I need to dry waller and I find a guy doing drywall, like, Hey, I'll pay 150 bucks to come out to my house. And again, it sat here vacant for five months while I was you know, trying to learn how to rehab an entire house. But we repurposed it and put it into air conditioning, you know, redid everything, all new windows, redid parts of the roof. So I learned so much about the business.

And my reason for that was if I learn how to do it, then I'll know whether I'm getting screwed later on or not when I hire people to do it, right. And I never wanted to be the guy who has 20 employees. And although I have close to that now, I never wanted to be that guy. I just wanted to make enough money to be able to wake up any day and do whatever I wanted that day, right? Just wake up and enjoy my day. That's what I wanted. That was my goal.

So we worked on the house, I finally got it rented out, I was like that was pretty fun, I want to buy another one. And I just kept buying them out of the MLS and getting bank loans and this was early 2000. So it was really easy to get bank loans, not like it is now it's very difficult. Even if you're well qualified, it's very difficult to get a loan, which kind of also leads me to believe that you know, this big recession thing that people who's coming in the housing market is in a bubble. Everybody has equity when in 2007 nobody had equity and everybody had really bad bad loans five year interest only 10 year interest only or whatever balloons I mean, really bad. They were all these arms. Nobody everybody has a 30 year fixed rate under like 5% and they all have equity. So..

David:

Under three now for two and a quarter?

Aaron:

Yeah, two and a quarter two I mean it’s crazy.

So it's gonna be hard. And if they lose out as a foreclosure, they have to come rent for me and pay more rent than it would have been, you know, so it's kind of hard to figure out, you know, what's really going to happen? And I don't know, I'm not an economist, so don't call me about the show. But what do you think is gonna happen? Like, I have no idea. I'm just gonna keep buying.

So yeah, I just started buying houses. And then at some point, I realized man, I really liked this better than the job that I had. And the job that I had, I was making a very good six figure income and just decided that you know what, it wasn't about the money like I think there's this false perception and you always hear money's not happiness, but when you start making good money if you're not happy, it's it doesn't help you at all. And there's a to back that point of there's plenty of extremely wealthy wealthy people who commit suicide, unfortunately, because they're extremely unhappy.

So money is not going to change your life and make you a more happy person. Yeah, it'll solve some problems. But you know, with money comes other problems, right.

So I enjoyed being in real estate way more than I enjoyed in the construction business as an estimator. So on like, I found myself Friday sneaking off to go to these landlord breakfasts and I'd go and hang out there for three or four hours, you know, and it would stay longer and longer. The first was like, I'd go for a half hour come back to the office and you know, be a good employee and work and I was there for 45 minutes and an hour and the two hours, three hours next, you know, I'm coming back after lunch, you know, it's like, it just some I just walked in, obviously, you know what, man, I'm just not having fun here anymore. And now, so I finished up, it took me probably a year to kind of finish up the projects we have, I wasn't going to leave the guy, you know, dry.

So I finished all the projects, and then I just transitioned full time in real estate after that, and here I am today.

15:00 - 20:00

David:

Man so much of that story is awesome, though.

I mean, for one, like, the whole living in Japan, living in Thailand, living in Bali, like that alone is really cool, because a lot of people talk about traveling their whole life and never get around to it. So I like the fact that you had the opportunity. I love Japan. I love you know, I'd love to go spend some time in Thailand Bali.

Aaron:

That was Japan pre Fukushima. So it was really cool. You can drink the water and you know.

David:

That’s true yeah, very, very good point.

Yeah, and then hitchhiked with a charity that broke down all the way up to San Diego. So like, a lot of a...

Aaron:

I’m a very goal oriented, goal focused person.

David:

A lot of that story doesn't sound like the makings of success, right. Like there were so many opportunities there to be like, yeah, screw this. And you didn't because you knew what you wanted to do. You wanted to make it to San Diego, you made San Diego and you made it work, right.

But just really cool. A lot of that I love the fact that you're like, your problem was an income problem. paying too much taxes. And that's what led you into real estate, right? Like a lot of people get into real estate is like, oh, man, I need to make more money. So let me buy real estate. But I think it's..

Aaron:

They're trying to make an income problem.

David:

Yeah. Which is fine. Like, I get that a lot.

Yeah, I'm starting to get to that point where I'm having to get really creative with my taxes, because it's like, oh, my gosh, what am I gonna do? Like, I'm looking at checks and like, the other day, I got this check, and I'm like, I can't believe I'm like, upset about it was like one of those first times I'm looking at it and like, you know, calling my CPA is just funny.

But um, anyways, all that to say, I love that that's what drove you into real estate is your CPA was like, Oh, yeah, they buy houses you like, Oh, well, I'm gonna buy a house. And then you did. And you just kept doing it.

But, like, at what point? I mean, you went full time. But how did that morph into a full business, right? Like, obviously, like 20 employees now like, there's quite a long way from like, yeah, I'll buy this foreclosed property to 20 employees, what has been kind of your niche through the years to get you there?

Aaron:

So in the beginning, like I said, I didn't have income, I had a couple of rental houses, I didn't really have income. And for that year, I was tapering off the commission checks going down every month, they're getting smaller and smaller.

So I was living in the property that I had in Irvine and bought a house in Irvine to live in. Well, we eventually moved into that first foreclosed rental property that I bought on Riverside. So we moved into there, we rented out the house in Irvine, we started buying some other houses over the years. And then when I quit the job that last year, I really didn't do a lot of work, I did a lot of studying. So I really wanted to focus on my education and learning. And then I just looked for where other investors go and hang out. And it was a little bit hard today because they're all on zoom. But eventually this will pass and you'll be able to go back to meetings. I just went to a lot of meetings. And I mean by a lot. I don't think a week went by where I didn't drive somewhere to a meeting and I was going to LA San Diego, that's an hour and a half one way San Diego for a three hour meetup on a Tuesday night.

So I'm driving to San Diego and La in Orange County. And this is every week I was going to meet after meeting after meeting. And I was looking for like the most respected educators in the industry. Now don't mean like the guys that are advertising on Instagram or Facebook, like the guys who weren't advertising but they were they had a big following.

So guys like Peter Fortunato, John Sharp, Jack Miller, Jack's no longer with us, but paetynn, jack or john still teach. So those three guys, Doug's Waterford kind, are really old goal real estate education crew.

So I started flying all over the country yet went to Florida and Chicago and Reno a bunch of times in San Francisco, trying to learn what these guys are doing. And during that time, I was also partnering up with investors, I would find another investor at my skill level that maybe had a deal and didn't really know, like, he wanted to rehab it and have an idea and I would partner with him. And we would do the deal together. And I did that a bunch of different times. So I'm learning I'm getting involved in a deal here or there. And it's funny because at some point, I got involved in so many, there was a weekly luncheon that I would go to every Tuesday and there were a bunch of investors that would show up to that. And I was a little bit involved in deals with all of them at some point. And one of the guys in the meetings like hey, there's a Pete's gonna be speaking in Salt Lake City. You want to do a road trip and drive up there. I was like, Man, that sounds really cool, man. I love bro trips. So all right, we'll do that.

So we're driving and my phone's ringing. You know, I'm talking to one investor and then a phone rings, I talk to another investor. And this is like, it's a long drive from Southern California to Salt Lake City.

20:00 - 25:00

Aaron:

So he looks at me, he's like, Man, you got your arms. And everybody likes an octopus you like, and everybody's deals are like, I'm trying to make money on how to make my own deals. So, when I would get a partner like a partner, no, but a guy, you can ask questions. And if you ask the right questions, you get good answers, right? And so yeah, there's no such thing as a stupid question. But there's definitely such a thing as a better question, right? So I would ask those like, hey, how did you find it? How did you fund it? What's your exit strategy? What happens? If that doesn't work out? What would you do? So I'm getting all these boots on the ground, you know, in the trenches training by asking all these questions consistently over and over again, like, where are you getting to?

So you start to kind of build up a deal flow, and I started to figure out that I can do direct mail, and I could get deals that way. Now, that's no longer as profitable here in my market. I'm sure it works great in other markets. And there are people here that do it. But I can remember one time sending maybe 2000 postcards and being overwhelmed with phone calls for two, maybe two, three days, like so many calls, you would answer the phone and the phone would be ringing while I'm on the phone with another person calling saying, Hey, what's this all about? And now it's just like you send 5000 postcards, you're lucky if you get two people calling me and telling you to stop mailing you. It's just that it's changed. It's all texting and cold calling and ringless voicemail, it's, it's completely changed industry. And there's a lot of buyers in here too now.

So I went from being one of the bigger mailers in Southern California to now like the one of the guys who buys off other wholesalers, I bought a lot I bought yesterday was a Tuesday, since Friday, but two houses off other wholesalers.

So you know, now I'm always looking at and that's if you go on Instagram and see I'm always like, Hey, I look for houses also as hit me up. I'm like, trying to get wholesalers the same as the deals, and I buy a lot of crap that people don't the other wholesalers or other retailers will pass on. Because I really know how to retail a house now I become very good at figuring out floor plans and knowing what drives the market in desirability for a house and what attracts people to a house. And I'll put a house on the market on Thursday.

And by Monday, I typically have multiple offers over asking even in a down market, when things aren't going well. Like it was pretty flat October, November, December of 2019. A lot of people are like, Oh, the bubbles are bursting. I just didn't feel that way like now I don't think so I'm gonna keep buying and I was buying a ton of houses back then. And I kept getting multiple offers on all my, all my properties. So it just became very good at designing a house that is very desirable for my specialty. FHA first time homebuyers, right.

So they don't have a lot of expectations. They're not like fake rich people who are buying in my market, that would be like 750 to 250,000 or me Sorry, seven or 50 to 1.2 5 million, right. So 1,250,000, those of you who have a good income, but they're not rich, right, so you've got a million dollar house in Southern California. Yeah, you make a lot of money, but you're not a rich person, right.

So rich person's buying the 2 million and up house. So I don't care about the fake rich people, they have too many expectations, too many demands, they're too picky. And they really don't deserve any of that. I like the under $500,000 price point. Those people just love a really nice, good clean house where everything's modern and working properly.

And then we get the Home Inspections done, we fix everything on the Home Inspection, I have a verbal warranty where I stand behind my house, my product, I call it my product, because that's what we're pumping out, right? I stand behind it if they have a problem with them, call your agent, don't call your, your insurance, your what I know it's such a scam this was this insurance thing I can think of...

David:

Home warranties or whatever?

Aaron:

Yeah home warranty, don't call those clowns are not going to give you any money anyways, just call me we'll send the contractor back, we'll fix whatever the issue is. And I've gone back and put in new roofs. I've gone and put new air conditioning in whatever it takes, I want these people to be extremely happy. Because I kind of know that in this market with these prices, even though interest rates are low, they're really going all in to buy this product, and they don't have any money and a hot water heater that goes bad three months after they buy a house could cause them to miss the next mortgage payment. And so I just say no, even though for me, I mean 25,000, 30,000, 50,000 on the house, a hot water heater is a grand Why would I not go put that back in to have a solid reputation with these people.

So I just write the check, we fix the problem. And I've done that consistently since I've been in this business. And it's helped me to create a great reputation with the products that I sell.

David:

I think that's really cool.

And I think that kind of touches on like the idea of, you know, how can I serve more people and how can I serve them better and that's like, there's all these different philosophies on income right and everybody talks about whatever but I can't remember for the life of me who says it by you don't get paid, you get paid in direct proportion of the problems you solve, right. And I think that all ties into like income, like the people who are trying to scrape every dollar out of a house, they might make the money on that. But I think long term the money is in being a good person having a good reputation. And ultimately, being able to sleep at night, knowing that you're doing the right thing.

25:00 - 30:00

David:

I think that's really cool, especially in California, where I love California, but they're not everybody is quite as generous. And so I think having a reputation that you can stand behind on something like that speaks volumes about you. And that's really cool. And the other thing that you said that I love is the amount of meetups you're going to and I mean for, for one, like some of those guys you mentioned or you know, stand up, I got to hear Pete talk it also at NSDREI for the first time, and he's phenomenal. And some of these guys are, you know, brilliant investors, but good educators, good teachers. But I think the fact that you were literally just going out of your way every week to meet with people in different markets striving all over the place to network, network, network, and learn and get with these people. And that's really cool. And it just goes to show how powerful being around the right people can be for you in your business.

So yeah, that's awesome.

Aaron:

So I knew early on the type of house that I wanted to rent, and that made a good rental. And if you think about it, like a two to three bedroom, four bedrooms, kind of pushing it, that's a lot of people running around doing a lot of damage to your property, two to three bedroom, one to two bath, single storey with a garage, preferably detached in case they burned down, you know, middle distri on a lot that's similar to all the neighborhoods. So here in California, we're lucky that we have lots and lots of track housing, right? So you can have a house that looks like basically 500 other houses, right? So it's easy to cop out, when you get into that. And most of them are built like after 1950s 1950s to 1970s you know that. I mean, there's still doesn't track houses today, but they're all like McMansions or 3000 square feet and two storeys tall. I mean, those would be great to have as rentals. But I like single storey less problems, cheaper to fix the roofs.

So if you look at that product in my market here, our market in Southern California, it's, it's easy to buy. Everything in the house can be bought at Home Depot to repair right and there's no specialty granite, there's no nothing right. You don't need special windows or Andersen windows or they're $1,000. Everything can be bought off the shelf at Home Depot. You can rent them, you can sell them. You can wholesale them. I've wholesale rental houses I've owned just because I was tired of owning them, right? Like, I don't want to deal with it. I don't want to deal with a tenant. I call one of my investor buddies is like, write me a check, dude, what? Tell me tell me what works for you. And I bought it at a wholesale price. Because I'm a wholesale buyer, I'm not no longer buying out of the MLS at the listed price.

So there was always room in there. But my philosophy has always been to leave a little meat on the bone to the next guy. And if you do that, you're never gonna have to look over your shoulder, nobody's ever going to be stalking you or coming back and saying, hey, you screwed me. And that's just what I want. I want a nice, easy life and make a ton of rental income now I have lots of dozens and dozens of tenants all here in Southern California. So and you know, you look at the median price point of a house, you know, I own lots of them. And it's just been and I like small apartment buildings to two to four units. They're great, you get multiple incomes off one property. I'm not a big fan of the ADU’s. I think they're cool in certain markets like LA, and probably Riverside. But when I'm buying 400, 500,000 houses in Riverside, the idea of trying to convince this person is going to rent me a $2,000 rent check that they can't use the garage because somebody's living in it. And it's another house and maybe you have to park on the street sometimes it just doesn't fly like you know, and I don't want to deal with the headaches and there's noise complaints and all stuff I just want I don't know and at some point in the future, there's a bunch of ad use. Maybe my house even has more value because I don't have somebody living in the garage, right.

So you know in LA where people are used to that high density living that's probably a great product there. But I can't imagine being in Irvine and putting an ADU and telling you fievel Yeah, I don't know where you gonna put your you know, your toys because the garage is you know, got some dude living in it. So it's just, I'm not sold on it yet.

David:

Well, I can speak to that in the fact that, so I didn't buy when I moved here when I landed in San Diego the VA loans still had the limit and so I was like nothing I really wanted. I wanted to do like a duplex triplex and they were just all out of the price range that I could get with the VA loan that would qualify for the VA loan and also, you know, would actually be something like a house hack.

So I found a place that I could rent and I convinced the landlord to let me sublet and I was like awesome. This is great. So I got a little four bedroom home and a newer neighborhood. I've got an office, I've got a master and then I rent two bedrooms. And it's been great. I live for basically free in San Diego County Oceanside like it's Wonderful, but I can absolutely attest you like, I don't even have an ad you I just have two bedrooms that I Airbnb and I park you know, 150 yards down the street most of the time..

30:00 - 35:00

Aaron:

But when it does rain, that's a miserable walk.

David:

Yeah. So it's like, you know, I'm the guy paying the lease on this. And this stinks like, thank goodness, it's not someone who's renting from me because that wouldn't they would just be done like that. Yeah. And then the other thing is that you mentioned you know, you kind of alluded to, like you own a lot of houses in, you know, Riverside or whatever. But, I mean, the Riverside and San Bernardino area, like the market there for the last few years has been, I don't know if nuts is the right word, because to a lot of the listeners anywhere in California would be considered nuts for appreciation. But, man, that markets come up a ton. So.

Aaron:

I have a house that I just bought, it's in San Bernardino that I'm going to retail for 400 grand, and the idea that somebody's gonna pay almost half a million dollars to live in San Francisco just blows my mind.

David:

Yeah.

Aaron:

It's half a million dollars and I mean, it hasn't been ours isn't worth what it used to be anymore. If you're gonna pay that much money to live in San Francisco. That's, that's amazing. Like, I was shocked when they're paying a quarter million a living separately. Like that's a rough area, you know, like, you should..

David:

Ocean front?

Aaron:

Yeah.

David:

Ocean front, three hours West is actually not that far.

Aaron:

It’s brutal out there.

David:

Yeah. Oh, man. That's awesome.

So you've got you said close to 20 employees now is that, like contractor property management all in house? Did you go kind of vertical with everything?

Aaron:

So I have one assistant, I have an acquisition person. And I have a marketing guy.

So those people are around me all the time. But the acquisitions guy and the marketing guy, we, the acquisition guy used to come to the office every day, but with COVID he's, you know, he came in today, he's gonna come in tomorrow, but he's been coming a lot less, which is fine. He can work remotely.

The marketing guy comes in once a week. And then yeah, so I have a full time maintenance guy, just I mean, he works almost seven days a week just to deal with property maintenance because of property that it takes a full time guy.

David:

Yeah.

Aaron:

And then he has an assistant that helps him and then there's two licensed general construction companies that primarily just do my stuff, my rehabs, so they do some other stuff once in a while. And you know, they're trying to clean up some other deals that they had that are still ongoing since before they started working with me, but primarily, they just rehab my houses because I have enough inventory and we're constantly buying what I can do at any given time. I like to be rehabbing about 10 houses here.

David:

Yep, that's a lot of inventory. That's a lot of houses to be...

Aaron:

And that's not 10 a month you know, I mean, it would be like we'll sell this month, but we'll pick up and ask for them to sell but I just bought two more.

So I just try to keep it at around 10 more than that it just gets really hectic. I would need to hire another assistant probably and I just don't want to get probably much bigger than that. I really like the level that I'm at right now. It's very like a nice pair of walking shoes very comfortable. Not too fancy. Is it you know not open toed are they were like too laid back but yeah, so it just is very comfortable. The income is really good. So I like being at about 10 flips at a time not per month at a time.

David:

Yeah, reasonable.

What is what's next for you? Do you know if you plan to retire you still do? Is it like a lot of people I interview where real estate has almost become a hobby as well and you just enjoy doing it? Or is it a means to an end?

Aaron:

I think retiring is like this whole idea of quitting. Yeah, if you have a job you can retire from because you want to quit right? You just don't want to be there anymore. Like so I can like you're in the Navy for 20 years I can understand like, dude, I don't want to go to sea again. I want to retire. I want to quit, they won't give me shore duty for another 20 years. I'm out.

But you know, like I go on vacation and I think about man, how many deals am I missing out on right now me five you know five figure deals am I missing? Because I'm you know here messing around and I'll talk to my friends like that because this house a wholesaler and 50,000 I was like oh man what like in Riverside I man I know that house I looked at my list like I was marketing to that I they might have called me you know so yeah, you could definitely become a deal junkie. And it's fun though. It's a lot of fun because you know, it doesn't take a ton of time to get a cold seller. Somebody calls me on the phone like it's a cold lead they just know inbound is not technically cold, you know, they're calling isn't marketed to them but I don't know anything about them and then they call me and I can have an offer to them within 10 minutes over the phone. So you know, I just need to screen so I can kind of look at comps and all that and I'm a licensed real estate broker.

So I have control of my own access to the MLS which is extremely important. I'm not looking on Zillow or Redfin trying to guess what the value of this houses I can get the best data right I can go into the MLS, I can see what the houses that sold for within a half mile within the last hundred 80 days that are within 20% square foot range, right?

35:00 - 40:00

Aaron:

So I'm, I have absolute control over my, my data, right? And it's a data driven business. It's absolutely data driven, does anybody says, well, you know, look at Facebook, they sell nothing, they're just they know everything about everybody. They're a data provider to all these marketing companies, and that's why they're worth billions and billions of dollars. We're in a data driven world. So you have to have clean, reliable data. And if you have clean reliable data, you can do a lot of business with that.

So Amy from building marketing lists to acquiring deals, you know, evaluating deals, estimating rehab, he's really needed to have the best date out there. So..

David:

Yeah, that's really cool. I know a lot of people get their real estate license because they want to, you know, maybe save some money on commission, but I think that's, I mean, that makes sense. That's cool.

Aaron:

Give the money away, give the money away on a commission let somebody else go do that. Selling so I sell right and I save 10s of thousand dollars a year because I sell my own houses. But I timed myself one day like you know, I'll have I'll go and take the pictures because I want to do a final walkthrough.

Rob my contractor took the pictures, and then I put it in MLS. It takes minutes to put a property in the MLS and write some cool copy like Wow, amazing. Check this out. Like, you can go to my properties. You guys want to check it out, go to red fin and put an 847. I think it's East Hoffer, H O FF E R, I don't know what it is abstract or something. 847 nice offer in banning, this is one that is in escrow right now that I just finished. I paid. I remember, like 125 or something for I don't remember, we paid for it, selling it for 237. I listed it at 220 we're selling it for 237 what a little praise for I don't know, but you can look at the pictures of it. And the description, there should be a description there. I took those photos, I'm not a professional photographer, he uses an iPhone, he just takes good photos, like you know, like, kind of stand back and raise it up high and you know, getting views like that. And it's so easy to do this stuff. And right like, imagine you're trying to sell a house for, you know, 50,000 or check, you're gonna write a good copy, you're just like, honey, stop the car. They're just nonsense. And it really they need to update that to honey stop scrolling, right. And they still see that honey stops kind of wanting to punch these peels like it's not 1990 anymore, honey, stop scrolling, they're looking online. Let's give it, you know, the 2000s.

So I put it in the MLS. It takes minutes to do this. And then I'll pay you know, two, two and a half 3% Commission. And then when they send an offer over we'll review the offers and the acquisitions guy will review them together. He's a licensed agent. We'll review the offers together, and we pick out the best one. Again, you would have to do that anyway, if you're gonna put it off on a disposition person, which is a complete waste of money in your office. You should not have a disposition. They do nothing and they get paid way too much money for it, right?

Yeah, I know people like Agha disposition person and my wholesale deals like what are you talking about? You send an email. That's how you sell a wholesale house. But you don't need a distance. Make your acquisition guy do it. You can do both. Like it's crazy, right? So make it like well who follows up on the paperwork, that's escrow's problem. Make them do that you're paying them like 1500 bucks let them deal with that stuff, though.

David:

Absolutely.

Aaron:

So the offer comes in and then disclosures I sat down in time myself and if there's any state worse than human for disclosure, there's got to be California.

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Aaron:

And we literally have a market conditions advisory. Like we have to tell you that we don't know if the market is going to tank tomorrow. It's insane here, right?

David:

It's nuts sometimes, yeah.

Aaron:

All these disclosures, I have them in it. There's this thing called zip forms that comes with your real estate agents license if you become a member of the California Association, realtors.

So you can have them all saved, and I haven't saved and I just go in and I timed myself from going in and filling out the property address and it cascades through all the forms property address the name of the buyer, the name of the seller, which my company and it's already in there because it's saved. I just got to change some dates, and then put in the selling agent. The listing agent is the person who puts it on the market. The selling agent is the person who brings the buyer. You have to put the selling agents office information in there and then download these as a PDF.

There's probably an easier way to do this but I'm not tech savvy, I upload them to DocuSign and I go through and I click all the boxes 20 minutes, then people are paying agents two and a half percent on you know, on a $500,000 house that is $12,500 for 20 minutes of work. Why would you do that? No I'm gonna I'm gonna do that myself that job I don't mind having..

40:00 - 45:00

David:

37 five an hour what a steal.

Aaron:

Yeah you killing it right and all agents have the put prey method put us on the front lawn, put an MLS prey some other agent brings a buyer along right so I and we don't even put signs on our properties anymore because those are the ones getting vandalized and broken into.

David:

You don't even have to pray right now you just gotta put it on the MLS and wait like 48 hours.

Aaron:

Not even that day people were calling you the market so hot that day people are calling you hey, we're gonna show it tomorrow. Is that okay? Like go for it. Yeah so.

David:

I remember six months ago, people say and like you said, that's probably closer to a year ago now everybody was worried the bubble was gonna pop and California was gonna tank and the market slowing.

I remember sitting in the same real estate meetup where they do the monthly market updates, and they talking about the market and he was like, I don't think so I think we're gonna be good. And then this happens. And it's like, Holy smokes California just jumped like not...

Aaron:

Yeah, I never expected that. I actually thought COVID would be a killer, right? It would be like, wipe everybody out. But now everybody's like, vacating the cities and like I need a yard. I'm tired of sitting in my luxury apartment and having no yard and the pools closed and the gyms closed and I can't do anything. And so now everybody's vacating the cities and coming out and buying houses with a backyard.

So it's been phenomenal for flippers, I don't know, anyways, not making money that they're flipping houses. They're all they're all just like, all of us, man. I wish I had more inventory.

I do know people that are now starting to slow down. Because the elections are a little bit scary. No not gonna happen, you know, we don't know, it's gonna be crazy. And I think that the election is also going to have an effect on all these foreclosures. And are they going to have this drawn out longer. I mean, we just don't know. We don't know.

David:

I agree.

Aaron:

A lot of unknowns out there. So I think I just want to go back to kind of like it started talking about earlier, but I jumped away from it. It's all about intention and focus, right. So I told you the type of houses I'm looking to buy.

So I have a couple that I'm doing that are in that five to $600,000 range, I don't like to do those. Because I don't want to be stuck with a $550,000 fully rehabbed rental house, right? Or have to sell it at a significant discount to get rid of it and not have to make the payments every month, right?

So if you're in a cash flow position where, you know, cash flow, it goes both ways, right? It's positive and negative. So if you're in a neutral or negative cash flow situation, and you have this very expensive rehab that the only exit strategy was to retail it, and the market starts slowing down, and prices are dropping, and you got to be the new next low calm, that can be financial that one deal could be financially devastating, right.

But if you're buying in if your intent is like, and my intent always was, I want to be a landlord, I want to own a lot of rental properties. So the properties and buying and flipping fit that model, right? I'm always looking for that property. That's what I want to buy. That's when markets ring, it's what I want to buy, even though I have no idea what the address is, because I'm targeting that property, right, I'm looking for that two to four bedroom 800 to 1600 square foot single story. I don't want a swimming pool. I don't want solar panels. I mean, you can't search for that. I don't want stuff in senior communities. I want residential tract housing, so I'm targeting that product.

So if the market tanked, like just full on deflated, just gonna rent the house out, and somebody will rent it. Because it's in a good school district or it's affordable, it's better than the apartment they're living in. They got that other kid on the way and they need to get out of the apartment that wants to get out of mom and dad's house. Whatever it is. There's always a demand. It's the most highly desirable piece of real estate in the world, right.

Three bedroom, one bath, three bedroom, two bath single story track house. There's nothing that is more desirable than that. I mean, yeah, there's, you know, the 50,000 square foot luxury mentioned highly desirable, but totally unattainable and unaffordable for 99.9% of the world. So it's not even a consideration. That is the most in demand product that single storey track outs right and two stories are cool, but I hate walking upstairs. I'm pretty lazy. So I'm gonna workout but I just don't want to do extra stuff, right?

David:

Sometimes after my workouts, there's the last thing I want to do.

Aaron:

Yeah.

David:

So it's interesting you say this, and I meant to talk about it earlier, but because it is it is a very, very, very smart thing, right to know exactly what you want. So Warren Buffett talks about a strike zone, and he's got like this whole article about I love it. He's like, Look, Major League pitchers or major league batters, like, they don't necessarily know, every time like where the pitcher is going to be. They can't like, you know, people think they can read everything. But the reality is they have a strike zone. They have an area and they know if it looks like it's gonna be in that area. I'm swinging the bat like, yep, they hit may miss, but if it's in that area, that's basically what you've done. You've said, hey, look, these are my parameters. If it's in here, I'll strike if it's not it could be the best thing in the world.

Aaron:

Probably going to bat.

45:00 - 50:00

David:

Doesn't fit in my box, right. And I think that's really smart. I think a lot of investors and I'm guilty too, like I like, buy and hold. And I've dabbled in things that I probably didn't need to because some of them worked out fine, right? But because they were shiny object syndrome where they were a decent deal, but when you set like, this is exactly what I want, like this zip code this you know, dahhh, it's amazing how much more successful you can be because you know what you're getting and you have an exit strategy you have, like, everything's lined up and you've got different options. You're not throwing curveballs at yourself. So I think that's really smart. Really good advice for people.

Aaron:

There's riches in niches, not niches, there's not riches in niches, there's riches and niches, okay?

So if you looked at my rental portfolio, it would be like looking at the same house. I mean, it's not exactly like, single story, track out single story, drag that over and over and over and over again. I mean, that's just it. That's what I like. And every time I got one, I hated to sell it. But sometimes, you know, you gotta eat right? So I will buy them. But if they're in a market that I don't want to own rentals in, then they're automatically going to the flip pile, like, nope, that's a flip property. I don't have any rentals in that city. I don't want to start now. I This city is where I buy my rentals, and I want to keep it and I have a lot of stuff in good neighborhoods, I also have a lot of stuff in really, really bad DNF neighborhoods, right, but they fit that model still, it's the single family on a tract in a similar lifetime neighborhood.

So I know that I can find good people who just can't afford to live anywhere else. And I bought it at such a wholesale smokin price, I can still keep it as a rental and make money on it. And those properties do go up in value. They don't accelerate as fast as other properties. But you can get good long term tenants. I mean, like 10 to 15 year tenants who move into there and raise their kids. I have a property now that's not in the best neighborhood . The family moved out their son who moved in as a child is now 18. And he's renting the property from me. And zero days turnover zero, right. And I'm now going to the second generation of tenants in the same house.

David:

That’s awesome.

Aaron:

So that's as far as I look for the strike zone. I had a guy show you my phone and had a guy text me today's like, Hey, I got this house is kind of weird. I don't know if you're into it. But check it out. It's a circular house. It's in the neighborhood of track houses. But it's a circular house. It's really cool. It was like really neat looking beautiful ceilings, you know, but I was like, Man, it's probably not for me. And he's like, why would you flip it? I was like, that is though, if I get stuck with it, what I do with it. I want to run out of circular houses. I don't want to deal with that right now for me. He's like, well, what would make you interested? I'm like, Oh, no, like zero percent seller financing, you know? And he's like, Alright, let me see what I can do. And I'm like, you know, there's a delay and I was like, texting back. I'm like, Yeah, I just that's not my deal that I'm out. I'm not interested. I'm like mid shot here in Joshua Tree, where I can Airbnb, the circle house near the park, maybe Yeah, there's a niche there. And but I'd probably still packaged up and wholesale to somebody else, because it's just not my thing.

It doesn't fit in my you know, circles, circles and pegs and circle holes, square peg, it just doesn't fit in there. It's a circle peg and I like square holes, right. So I just square pegs in square holes, I just want, I want that product. I'm hyper focused on it, I flip flip a lot of stuff that is in the world of that product. But if they're in markets outside of my primary market, they're absolutely on the flip pile, and I'm not going to keep them.

So the idea is to start Riverside and grow my equity up, start in San Bernardino, grow my equity up, migrate to Riverside, keep growing equity, migrate closer to the coast, and then maybe eventually have like five free and clear houses within a couple bucks on the beach or something, right.

So I just knew I didn't want to keep a bunch of low end rental houses in bad neighborhoods. But surprisingly, they've treated me very, very well. And I take really good care of the houses. So it makes it very difficult for the tenant to move out. They've had nothing but bad landlord experiences their entire career as tenants, they move into one of my houses like we fix everything all the time and put new roofs on we put nice windows in we put air conditioning in, we take care of the houses, they just stay in pay. And that's all I want. I want to stay and refer that's my business model. Stay, pay and refer. Stay, and tell your friends when your friends are looking to come talk to you. You're texting me right away, hey, do you have anything else? They can have a friend. No, I'll go look for something, you know, maybe I'll find out.

David:

Somebody listening to this probably just like screams internally, when they heard you turn down a potential zero percent seller financing deal. But that speaks to your niche. And that's spot on, right.

And that's not to say that a single family track house is everybody's niche, right. Obviously people have different niches, it's different for different people for goals, whatever. But there is definitely power in becoming an expert in what you know, and sticking to it and just knowing you know, hey, like, this is what I do. Maybe that deals great for someone else, but it's not my thing.

50:00 - 55:00

Aaron:

Yeah, not not for me. It's probably a great deal, but it just doesn't. It's far away. It's in a city where I own no rental properties. And I don't want to have to go out there one the one time I have to go out there for whatever reason, I'm going to be cursing myself the entire way going plus, why did I keep this stupid house? What was I thinking, right? And then I'm just going to call one of my friends and try to offload. Like get it out of my life. I just don't want to deal with it anymore. I'm gonna wholesale it right.

So if you're hyperfocus you know exactly what you're going after. You know, I'm a huge fisherman and I love to fish like, addicted to say that right? Yeah, I'm addicted to fishing. Real estate is a lot like fishing. If I called you up and said, hey, let's go fishing, right? From what I mean, do I need to bring rubber boots, waiters, you know, sleeping bags, are we going over? We go into hiking in the outback, you know, the backcountry? Are we going to the ocean? I mean, right? You should know what you're going out. What are you targeting? Like, what's your bait? What are you targeting? What's your exit strategy? Or is it catch and release? Are we going to fillet these bad boys and eat them? And we're going after Carbonell a river? I mean, what do we do here, right?

So think of it in terms of that, right? Like, you're gonna go out into real estate, what you really want to do. And if you really want to do something, then focus on that and don't be distracted. I actually got into a single family by accident. I wanted to be in a multifamily. But at the time I got into real estate, there wasn't a whole lot of multifamily information. I mean, Facebook wasn't the thing in the early 2000s, right. There was no social media in the early 2000s, which seems crazy. But it wasn't that long ago, there was no social media, right?

I remember, I went to work at a company. Yeah, I went to work at this company in 2002. That's this, you know, century and they had nothing but fax, nobody was just I bought the domain name for the guy for his birthday. Because I was tired of sending faxes. I'm like, dude, we got to send an email. This is insane, right? That wasn't that long ago, that was this century, right.

So you know, I wanted to do multifamily, but there was nobody teaching multifamily. There's a couple guys out there. But nobody that liked was really excessively into flying, and went to seminars. And I just like, man, like research and properties. It just wasn't a lot of ability to get that information unless you were traveling and going to look at cities and stuff. And they want to do that.

So single family was so easy to get into that I ended up getting sucked into that single family investing strategy. And it's easy to surround yourself with dozens and dozens of amazing single family educators and other events. And one day, it wasn't that long ago, maybe a year ago. I might be sorry, my daughter's, um, this is being recorded. Please go. My daughter just got a shower. And she's four. So we don't want her on the video. So I'm sorry.

So I lost my focus, because it was so easy to get, you can have fun I know a guy. Actually, we're doing a deal right now. And he's got one thing his net worth is like $1.4 billion. He lives in Southern California and he owns like 16,000 units like you can make a fortune and single family housing.

You can make a fortune in single family housing. But I wanted to do multifamily. So I kind of had this awakening like man, what am I doing like I want to do multifamily. This is crazy. So I started to focus back on that again this year. And so I got my eight unit apartment building. And I'm doing and I think and I'm building them so I'm not I'm not buying existing stuff I'm so redevelopment and that's what I like to do.

So I have in the works to do a 10 unit not far from my house where I have a three unit now that I'm going to bulldoze and build a 10 unit. So I'm moving back into what I originally wanted to do in the first place.

David:

That's cool. I like that you're able to do that. I just think that's kind of a path of progress. But I mean, you found something, you stuck to it, and it worked. And now you're continuing to grow and continue to enjoy your life. And that's huge. So that's incredible.

All right, so I got a few questions that I always ask every guest right, two or three questions. Fairly easy ones.

Aaron:

I don't know what they are. So they're not rehearsed. So I don't know.

David:

Exactly. I kind of like that. They're there.

Aaron:

Don't ask me what kind of tree I want to be or something stupid like that, I don’t know.

David:

The first ones uh, you know, what, if an E one, E two or a 19 year old was to walk up to you just asking for advice, whether that's for getting started in real estate or just life advice in general, like, what's the one thing that you would tell them that you kind of wish you'd known when you were that age?

Aaron:

There's a period of sacrifice, and we're all going to pay it. We're all going to go through it. You can decide to do it now when you're young. And it's not so difficult. Or you can do it when you're old. But at some point, you're going to go through that period of sacrifice. And I highly recommend you do it now while you're young and it's much easier you might miss out on some of the social aspects of it. But I can assure you that you know, the partying and all that stuff. It's just as fun when you're in your you know, 40s and 50s is when you're in your late teens and 20s it's just as fun right? But it's fun on a better level because you know, now I can go back to my thousand dollar room hotel. I go back to my suite and crashy room service and not care what the bill is not looking at prices. So it's a lot more fun at this age when you have money than it is when you're 18 and broke. And you got to ride back home from Vegas at three in the morning because you couldn't afford a hotel.

55:00 - 1:00:00

Aaron:

So there's a period of sacrifice, right? If you're, if you're looking to get into this business, really like get some financial education, learn about a financial calculator, the 10v2 right the Hewlett Packard 10 v2, there's an app you can get there's a book, invest in debt, by Jimmy Napier, get the book, get the app, I got mine from in a day development, it's on my iPhone, learn how to use a financial calculator, it'd be one of the most powerful tools in in real estate and in managing your money that you've ever used before. It just teaches you about the time value of money.

So learn about money learn that money is not just for trading for entertainment, or goods and services. There's so much more to that. I was talking to one of my private lenders today. And I have like millions of dollars of this guy's money and I'm not even around a million dollars in money. And he's like, hey, I got 300 grand you have home for like, I'll find a home for it. So I found a deal that's actually paying 325. So he calls me. He's like, hey, let's do this deal, I lend you know, 270,000 I'm like, great. You know, sounds like you got the best job ever. He's like, what's that I'm like, you just all your employees are dollar bills, and you just $100 bills, you just send them the work and they come back. They never complain, they don't need health insurance. And they always bring back friends, right? They always bring back more employees to work for you. It is the best job ever.

So your money can make you a lot of money. And you can have a fabulous life. Just managing your money, right? And, and that it's a full time job when you have no money. You know, it's like, you hear people bragging about, Oh, I got an 18% return or a 30% return. So I always ask, well, how much did you invest? And you know, the amount is under six figures, I'm probably not interested because I'm not impressed by an 18% return on five grand. Like, that's easy. That's easy. I can do that every day all day long. That's easy.

Get an 18% return on 18 million or 10 million, right? You'll be the richest guy in the world. Right? But Bernie Madoff, he only promised 8%. And they gave him billions of dollars like this. Take it I don't know. 8%. That's phenomenal, right? It's so difficult and time consuming to manage large volumes of money.

So if you learn about money, people will pay you phenomenally well. So I pay 10%. So I have a million dollars of money from a friend of mine. And he makes 10% interest with only no points on his money doing business with me. I'm essentially his money manager, even though I'm not mad, I just put it into deals, I pay him interest. And then I flip the deal when I make a profit.

And and the other thing is, you know, when you're first starting out, and you get and going into real estate, a lot of people will like they'll want to lend you money and they'll pay you like, yeah, I'll give you the money and you know, give me 50% or something. And my response always was money makes interest knowledge earns profits, right?

So look, you want to put money in a deal is great, but it's my deal, I'll pay you interest, I'll pay some points if I have to. And that's the end of it, right? We're gonna go in knowing what you're going to get up front, I'm not going to give you a cut of the backside, if you got no deal. A slice of pie isn't better than no pie, right? But as you start to accumulate knowledge and deal flow, you need to get those people out of your life because they're just too greedy. There's plenty of people out there with tons of money, who will do business with you. If you can just show them, Hey, your money is going to be secure, it's going to be safe, we're going to do it through escrow is never going to touch my hands, and I'm going to take care of you and they're not lending your deal money, they're lending you money, right? You're the you're the asset, it's not the house, It's you It's your personality, it's your ability to perform, and keep your word.

And above everything, I'm a man of my word. So if I say I'm going to do something, I do it but I do it when I say I'm going to do it right. So that's to me the most important thing is you do what you say you're going to do and you do it when you say you're going to do it so there's a lot there I'll have you know a lot of a lot of things going on there but...

David:

A lot of really good things going on, that was solid.
Aaron:

Yeah, it's learn a lot about money like get out there and just just study what it does and what it can do for you and it's not about just trading it for good Yeah, you can you know, you can go get watches and cars and all that crap right but that stuff doesn't improve the quality of your life and going back to I said earlier, it's not going to make you any happier. Not, like so.

You know, what makes me happy. I live in a 1200 square foot track house. I can easily afford a much better house easily and it will not cause me any financial distress. But I'm not. I don't want to impress other people that suits my needs. But I'm working, I drive, I drive my daughter to school. I work a couple hours. I go and pick her up. I take her to sports every day. She's four. I figured karate or private horse riding lessons Jen do groups of ballet lessons and I'm involved in all that stuff everyday to me, how you put a price on that. And she's going to classes at like three o'clock. I dropped her off at nine. I go to my office. I have a little small Office admin assistant in there banging out some deals. Cajones paperwork, I don't pick my daughter up, I leave at 2:30. So my hours every day like, well, four days a week or 9 to 2:30.

1:00:00 - 1:05:00

Aaron:

And then on Fridays I go meet my buddy who's got a very expensive boat parked in the harbor. And we go out fishing every Friday. And we go after, you know, bluefin tuna and yellowfin tuna. And we do this constantly. And it's all about experiences, because that's just what you take with you. If you give me $100 is she gonna remember that you gave her $100? Or she can remember that you took her to Disneyland that day, and you went in on all these rides? What are you going to remember? Like I don't, I mowed lots of lawns. When I was a kid, I can't remember a single dollar that I ever had from my mom. I can't remember. But I remember that I saved enough money that I flew myself to Florida when I was in middle school, and went to Disneyland, right? I remember that experience. Right? So what it's about, it's about banking experiences. And you can have a lot more experiences when you don't have to get up and chase dollars.

David:

Man I love all of that.

The experiences. I'm a huge believer in that period of sacrifice. I don't know that I'd heard it put quite that way before and I love it. I yeah, a lot of people get washed out with I kind of joke with the BMW phase below minimum wage when you're hustling away.

Aaron:

Never heard of before, that's great.

David:

I can't take credit for that. But I don't know.

Aaron:

When I pull up in San Bernardino. And I see a guy with a you know $80,000 car this thing, you got your priorities all mixed up, buddy. I want you as intended because you're never moving out.

David:

And I will plug that investing in debt is definitely a book worth reading for anyone, especially if you're interested in notes, but just in how mortgages and notes and lending and money works in general. So it's not necessarily the easiest book to get your hands on these days. It cost me like 40 bucks to get a hard copy of it. But..

Aaron:

No, no, no. Gary Johnston, I think Johnstonseminars.com I think that's the website. He bought the right style Jimmy Napier stuff, or he transferred all the rights to Jimmy Napier stuff before Jimmy passed away. And he sells the book. And you can get it from him for like, I think like 18 bucks.

Yeah. And it's updated, and it's updated, too. So it doesn't have this thing about, you know, adjusting for the interest rate, like the old book had yet to go in and divided by 12, or whatever.

So you can get an updated version of the book. It's like 100 pages. And you can teach yourself how to figure out an amortization schedule, you can teach yourself. And then Gary Johnson is a fantastic old school style educator, and he will teach you in seminars, he has a weekly, like weekly email, I think it's like Monday thoughts or something doesn't come out every Monday, but you can sign up on his email thing. And you can get this motivational email every Monday we just talked about looking at deals, I think he's out of Idaho. And he has fantastic class financial freedom, I think it's called where he just teaches you how to use a calculator.

And you know, again, it's COVID. And eventually it'll be over. And he'll go back to doing his in person seminars, and they're very affordable. And it's not an upsell to a bunch of garbage and coaching and all that stuff. He has the Jimmy Napier library that he sells at his events, but it's not pitched to you it's there on a table and you can buy it or don't buy it and he doesn't care. And he's a real estate guy, but he's a great educator. So I like that guy too.

David:

I'm taking a look at it right now. I'm probably gonna probably do that.

Aaron:

Is that Gary Johnston seminars?

David:

It is Yeah. GaryJohnston.com.

Yep. Gary Johnston.

Aaron:

Johnston with a T Johnston.com.

Great guy. Fantastic. And he actually was like one of the engineers that worked on the Hewlett Packard calculator or something worked for us, the engineer for Hewlett Packard. So that's kind of kind of a cool backstory.

David:

Yeah. Alright.

So the second question is, and I think we might have answered some of this already. And that is the what is one resource, whether that's a book, course, website, whatever that you recommend anyone looking to get started in real estate. We've already mentioned a few but are there any others that you think are a must?

Aaron:

You know, we didn't have YouTube when I was when I was getting started. That's phenomenal. like YouTube, you can learn I mean, you can learn brain surgery on YouTube. Like whatever you learn, you can learn it like that should be a university.

You can learn everything you want to know about anything for free on YouTube. You don't need to pay anybody anything. Everything's out there. There's a bunch of great videos, a bunch of great content, anything you want to learn about. It's there. Go and look at the spend you get off Netflix, period of sacrifice, get off Netflix, just cancel your subscription to get it away from you and spend that hour every night on the treadmill.

You know walk and you know take care of your health number one and watch YouTube videos right and learn about everything you ever want to know about any aspect. If you're just getting started BiggerPockets is great as your progress in the industry. I like bigger pockets and I want to prove them all but you can. You tend to see a lot of redundant questions asked again and again and again. And it can be a bit redundant. Eventually, you know, so I'm in a love hate relationship with BiggerPockets. I go there and I get away and it's free. You get a pro con if you want, but I go and I'll hang out for a while and then I get away from it for a while after seeing you know for the 50th time how to do this, like, as a search bar, just use that. No. And there's a lot of great groups on Facebook, you don't have to sit down and scroll through your newsfeed and read all the political garbage, you can jump into a group. And you know, there's a lot of great groups, you could jump into a group and just learn about the group and what they're teaching in there and ask people questions.

1:05:00 - 1:10:00

Aaron:

So there's, I mean, I can't even I can't fathom out different when I started out, it was Mr.landlord.com, was it there was nothing else online. And there were email newsletters, like you could email this entire chain of people. And and, you know, then people responded like, all day long emails coming in where there's like, 50 emailers. That was it. So it is crazy, right? So you know, when I learned how to be a landlord, Mr.Landlord.com reading this old school, you know, forums where it was like, the trees, right? So they have a question. They'll be like, 50 responses all cascaded out. So that's how I learned to be a landlord going to Mr.Landlord.com.

David:

Hey, that's still here, though. I just opened it up.

Aaron:

Yeah. And I'm sure he's got great resources and stuff is still out there. Probably updated probably looks a lot better than it was when I used it. But I started working on my lunch break, I just read Mr.Landlord.com and read the questions, and there's state specific stuff, you go and learn it. But you know, like, kind of Facebook is probably Trump a lot of that, but I'm sure there's a lot of people still watching that site. So a lot of good free resources online, tons of.

David:

Yeah, and I love that you said YouTube. And it's funny because you said it's almost universally I refer to it as YouTube University a lot. Because that's, essentially when I first decided to start kind of documenting my journey. It was like, every day, it was like, okay, I'm gonna learn how to do this. And I would like, play with it. And when I got stuck, I'd be like, Oh, let me go watch YouTube.

Aaron:

Yeah, podcasts. I mean, you turn the radio off enough for the radio, you're not a teenager anymore. You know, when you become an adult, when you start listening to talk radio more and then you realize only like, I only do is listen to talk radio, what happened to me.

David:

I used to make fun of my dad for the same crap.

Aaron:

Like now I get upset when the songs interrupt the talking like now we turn that crap off and get back to the talking. So, you know, shut the music off. It's enough already, right? Enough music. We're done with that phase going into podcasts or listening to in your car, right, listen to podcasts. There's a lot of great, you know, this is great. Listen, a lot of this stuff is tons everything you want to learn is for free. All it's out there for free now.

David:

absolutely. Yeah, absolutely.

Aaron:

I made it, I made it. And I'm, you know, marginally intelligent. You know, like I said, I joined the military to escape a life of poverty in a small hillbilly town, you know, didn't do anything spectacular in my six years in the Navy, I made it to E5, you know, mostly out a lot. Six years, I mean, that's not that impressive.

And, well, to be fair, I did two years of education. So I got the E4 stamp for free. And then, you know, it took me another four years to make E5 do anything spectacular, I didn't have any hedge on anybody. I went to a state school, I used my GI bill to pay for that. So I left with no college debt. You know, but I didn't have any leg up on anybody that came in real estate family, nobody might have my house or my family have ever sold and bought real estate, they would have any, I just got into it because of an income problem. And I was always hyper focused, and I was really good at what I did. And I always try to systematize if I do something, I don't want to have to do it again and repeat all the processes.

So if there's a document that you use, I'm going to create that document and then save it and then I don't have to go and create the document again. So try to systematize things, right.

So you know, focus on building into business, you can run it as a hobby, that's fine. I kind of run mine as a hobby, if I did for years, and now it's more of a business, but you can run as a hobby, but you can still systematize things to make them much easier to do. So you don't have to do all that labor as a task over and over again. So maybe you have a way you want to rehab a house or a rental house and you just get your paints and your colors and all that and you just do that again and again and again. So you have to go and rethink this stuff every time. It's not like retailing where you got to go in and kind of figure out what's trendy and popular and what brings buyers and yeah, but even with our rehabs we you know we have a very systematized process right we do things in a standard fashion like we we we don't use the same materials every time but we do the same stuff like in every bedroom, every bathroom, we're putting in USB outlets we put undermount stainless steel sinks like so they're under the granite countertops, right?

So just these little extra things, attract people to my property over the one down the street because that guy didn't know to put those people in the bathroom. Like the number one I read a thing that said the videos what was it now the study it was when people are using the phone, the number one thing they do on their phone is watching videos with the volume off That's because they're in the bathroom, right at work or wherever. So they're, you know, taking it down, and they have the volume off. And they're just watching videos. And that's why if you're doing videos online you should be putting in, you should be putting in the words of the bottom you say, cache shift the captions, and because people are gonna sit there and read or write, so we started putting USB outlets next to the toilet, right? Who does recharge their phone. That's a selling point, like people see that in the bedroom. I like, Man, that's really convenient.

1:10:00 - 1:13:17

David:

Yeah, I like it.

Aaron:

I can show you a USB outlet in my bathroom, like reball my bedroom, I gotta have a USB all in here, man.

David:

I like that. That's simple. That's good.

All right. So Aaron, where can people get a hold of you? If they'd like to reach out.

Aaron:

I'm on Facebook. But if you go to Facebook, it's going to be less real estate and More talking. So I like to talk about a lot of jobs and I like to make fun of all kinds of stuff. I don't take a side in anything.

You know, I'm on Instagram and Instagram is very focused on kind of my mantra, health, wealth and stealth. So I'm talking about how to make money, how to stay rich, and it's all real estate related. So you know, be rich, stay rich, and you know, be healthy. So it just wants you to know, live a good life, be a great person to have a good life and you can do that.

I believe anybody can do that with real estate. No, maybe not in California much longer because it's becoming a little bit crazy for landlords but you're making a smart move and buying stuff out of state but he you know, I'm still having fabulous success here. We're you know, we're doing very well.

David:

It's all about figuring about the niche.

Aaron:

Instagram, Aaron, the house buyer, yeah. And on Facebook is just Aaron Mazzrillo. My name is spelled right there in the corner of the video, you can write it down. It's kind of a weird, weird name. So easy to find this only one easy to find. So.

David:

Awesome.

Well, Aaron, thank you so much for joining us today. This has been a really just really insightful episode. There's been a lot of really good stuff in here. And some stuff that I I mean, some of your quotes in here, like the period of sacrifice that you can do now or you can do when you're old. I mean, that's really well put together.

Aaron:

Not from me, I take no credit for anything I've told you. I take no credit for it. I've heard it all from other people. This is all plagiarized. It's just in my yard. And I'm regurgitating it right. So I'm just passing along what other people taught me.

David:

Fair enough. Well, nonetheless, it may be the first time some of the listeners have heard of it. It's all very, very good advice. So this has been a really good episode. And I'm super excited about it.

So thank you very much for joining me.

Aaron:

Thanks for having me, man. And thank you for your service. And all you in the military, thank you for your service too. I'm extremely appreciative of all of you that allow me to go do what I want to do every day, right?

And I'm not even every time I see a guy, the old dudes, the hatsan. I stop and thank them and you should do it because it's only because of them that we can do stuff like this.

End:

Thank you for listening to another episode about my journey From military to millionaire. If you liked it, be sure to visit Frommilitarytomillionaire.com/podcast to subscribe to future podcasts. While you're there, we'd love for you to rate the show. Give us a review on iTunes. Now get out there and take action.

Aaron Mazzrillo quote about banking experiences

Episode: 116

Aaron Mazzrillo

Join David Pere and Aaron Mazzrillo as they talk about becoming an expert in your niche and staying true to what you want as a real estate investor.

Aaron served in the US Navy for six years before exploring a career in the real estate space. While working as an estimator for a construction company, he bought a pre-foreclosure listed house and worked on rehabbing it himself. He decided to quit his day job and go full time on real estate investing. Aaron is a licensed real estate broker, doing his own deals and managing his own company. He owns several houses and apartment buildings in Southern California and has also wholesaled and flipped hundreds of houses. He remains focused on his niche and his goal of flipping ten houses at a time, which he considers the sweet spot to his business’s operation.

In this episode, Aaron shares some solid advice on single-family investing, getting clear with your goals, having the right mindset about wealth, and living a happy and contented life. Stay tuned!

Outline of the Episode:

  • [05:12] Entering the Navy to escape a life of poverty.
  • [07:13] Exploring his career options outside the military after six years of service.
  • [09:51] Getting into the real estate space and learning how to rehab an entire house.
  • [13:37] Leaving his day job and going full time into real estate
  • [17:25] Focusing on education and on building his network by attending various meetups.
  • [22:42] Sticking to his target market and creating a good reputation with his real estate products.
  • [26:11] The advantages of investing in single-storey properties.
  • [28:27] What are the challenges of investing in ADUs (Accessory Dwelling Units)?
  • [34:42] The importance of having control over your data. We’re in a data-driven world!
  • [39:03] Why you should consider being your own real estate agent?
  • [40:57] The increase in demand for houses with backyards because of the pandemic. It’s been phenomenal for flippers!
  • [41:46] Being clear with the direction you want for your real estate business. It’s all about intention and focus.
  • [43:39] What’s the most in-demand piece of real estate in the world?
  • [45:36] The riches are in niches!
  • [50:27] Why real estate is a lot like fishing?
  • [54:21] There’s a period of sacrifice, and we’re all going to pay it.
  • [57:36] Money makes interest. Knowledge earns profits.
  • [59:00] Banking experiences and staying true to what makes you happy.
  • [01:03:46] Get off of Netflix and learn everything you can from Youtube.

Advice to an 18-20-year old:

“You will have a period of sacrifice. You can do it now, or when you’re old.”

“Money makes interest, Knowledge makes profit!”

People are lending you money, not the asset…so learn about money!

Resources:

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My name is David Pere, I am an active duty Marine, and have realized that service members and the working class use the phrase “I don’t get paid enough” entirely too often. The reality is that most often our financial situation is self-inflicted. After having success with real estate investing, I started From Military to Millionaire to teach personal finance and real estate investing to service members and the working class. As a result, I have helped many of my readers increase their savings gap, and increase their chances of achieving financial freedom! – Click here to SUBSCRIBE: https://bit.ly/2Q3EvfE to the channel for more awesome videos!

THIS SITE IS INDEPENDENTLY OWNED AND OPERATED. ALL OPINIONS EXPRESSED HEREIN ARE MY OWN. THE VIEWS EXPRESSED ON THIS SITE ARE THOSE OF THE AUTHOR OR THE AUTHOR’S INVITED GUEST POSTERS, AND MAY NOT REFLECT THE VIEWS OF THE US GOVERNMENT, THE DEPARTMENT OF DEFENSE, OR THE UNITED STATES MARINE CORPS.

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David Pere

David Pere

David is an active duty Marine, who devotes his free time to teaching personal finance and real estate investing for service members, and the working class!

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