Episode 2 | Alex Felice | Military Millionaire Podcast

00:00 - 05:00

Intro:

You're listening to the military millionaire podcast, a show about real estate investing for the working class. Stay tuned as we explore ways to help you improve your finances, build wealth through real estate and become a person that is worth knowing.

David:

Hey, what's going on everybody is David with From military to millionaire and I am here with Alex Felice. And he's gonna introduce himself so I will let you do that.

Alex:

Hey, yeah, I'm Alex. I am a long distance rental real estate investor. I do it. I live in Las Vegas but I invest in North Carolina. I I bought my first rental about two years ago. I just clipped my we just locked in our at my seventh one now. I have perfected the bur method that's by rent, buy rehab, rent, refinance, repeat. Like I said, I do a long distance. And now I have been helping people, other people do it, teaching them how to do it with my website brokeisachoice.com, and I've been doing a consulting business where I actually walked through people through the process. And we're getting ready to put offers on well midsize multifamily, and look enough to move on to the next thing.

Thanks for having me.

David:

Yeah, yeah. So Alex and I met at fincon, like, what, three weeks ago, which I'm still got like a whole pile of stuff back here that I have an intention of getting to and I've barely crossed the wave tops on it. And that's haven't even watched the virtual replays of the webinars or the classes yet, but when we met there we hung out. We got kicked out of the pool for drinking beer and that we didn't buy there. And you know, it was a good time. So we got along.
Alex was in the army right for four years?

Alex:

Yeah, four years in the army. I was in third. Third, the third group is at Fort Bragg.

David:

Yeah. Awesome. So and now he's doing big things in Vegas.

So well, I guess investing elsewhere but lives in Vegas. I guess my first question for you would be how did you? Were you investing in real estate in the military? Was that something you started doing prior to or down the road? How'd you get started?

Alex:

Now I was a travesty of a human being in the army.

You know, I was in a bad troop but I was very apathetic. I was apathetic in high school. I kind of want to join the army to get me some, you know, little to get a little ambition on me, a little self discipline and that's what it did. Although it took a long ramp up period because man I have a propensity for screwing things up.

And so look, I got to the army broke, I started selling cars. I did that for a long time. I was broke because I lived week to week and somewhere along the way, I kind of used my college degree. I got an associates degree in business. It didn't really help me that much, but they aren't paid for it.

Okay. And so I learned I got a sales background. ago, the army and the army taught me self discipline, but I didn't know anything about money until I made this. My poor decisions really started catching up with me around 2011. And then I really decided to get my life together. And then I learned personal finance. And from there, I went to real estate. And you know, there's a long ramp up period in real estate, I think, for education. And you know, you got to really wrap your mind around a complex process. But once you do, man, like I said, I bought my first rental, in 2016 and now I got seven. And we're looking to buy a 40 unit. real soon. I mean, it goes really quick.

David:

Yeah, absolutely. I agree. It's very scalable once you figure out the basics, because, you know, as I point out to people, a lot of times whether you buy a single family house, a four Plex or a 20 unit, it costs the same amount to fix the doorknob. So you might buy monster property, but your overall expenses may not change much.

Alex:

Well, yeah, your expenses are gonna be a percentage of gross well, that's the measuring rather and they should be a little bit higher on on a on a big complex, maybe a little over 50% whereas to be a little under 40% on a on a small unit, but what you're saying is right, because a lot of the problem with real estate is not the, it's not running the business, it's the transactional cost, both in resources and well, both in and in capital, but also, you know, people, human capital, people, resources and time.

And so if you're going to do one deal, you know, if you do one single family house, it takes about six people to do this. You need a realtor, a contractor, a property manager, an insurance agent, a lender, like a title, Attorney, all these people have to get together and work together to do one deal, whether it's 40 units or one unit. And so the transactional amount of resources it takes to do one big deal than it does one small deal is, like you said, it scales up or it scales down with, excuse me, it scales up with efficiency. So doing a 40 unit, it just makes more sense by buying one at a time gets old real quick. I bought seven and I'm already sick of it.

05:00 - 10:00

David:

Yeah, I concur. I did, somewhat somewhat similar, not a 40 but a 10. And then some other weird thing but um, yeah, it's just a natural progression.

So I guess, next question for you, since we do kind of cater towards people who sound kinda like what you did. And then definitely what I did as people here we talk about it where we join the military to get something out of it. And that's great, but we may not necessarily be the best with our finances. And then we, I personally know that I have said that, you know, oh, I don't make any money in the military. And then I turn back now and I'm like, no, I made plenty of money. I just was an idiot.

Is there anything you wish the military had taught you as far as real estate investing or that somebody had tried to teach you at a young age?

Alex:

Yeah, I mean, look, you can look back and wish somebody could help you take better responsibility for your life. But that's really what it comes down to is if you're broke, and you live in America, it's probably your fault. Maybe not. But if you're listening to this right now, and you continue broke, then it's definitely a fault because if you have a cell phone, and you have some resources, and you have some semblance of the understanding that you can take control of the economic problem, then once you know once you believe that you can fix it, then it becomes really easy to fix.

So I don't blame the army for not teaching me real estate or finance. That's not the responsibility. Their responsibility was to still well, the responsibilities manifold but with the best thing the military does is teach you self responsibility.

It doesn't always It teaches you self reliance, not self responsibility, because it actually is the opposite. The military kind of hinders you in a way because it babysits you too much. You don't really have to be good with money in the army, because they're gonna pay you every two weeks no matter what. In 2008, you know, there was a global financial collapse, but no, no military troops lost a job.

So I don't wish the military taught me any better. I mean, I wish that I had gotten my head out of my ass sooner, and you can't blame. You can't blame that anybody but yourself.

David:

I would concur with that, yeah, I wish somebody had handed me I wish, I guess I don't necessarily wish that somebody had handed me I wish that I had been open my too I spent probably until I was like 22 saying I don't read reading is dumb. And then here I am, someone handing me Rich Dad Poor Dad, I gave him the same excuse and they were like assholes. Like go download it on Audible and listen to it while you drive and my whole world changed. Yeah.

Alex:

I caught Rich Dad Poor Dad, I was house sitting for a guy who isn't five. I just got back from South Korea. And I caught this book and I was not a reader. Same as you. I liked reading. I'm smart. What do I need books for? Typical 25-27 year old kind of arrogance.

And so I picked this book up and I read it and it didn't. It meant a lot to me. But I didn't apply anything. But I'll tell you what, you read that book and it's six here. And I knew going forward. I read the book and oh five and I didn't buy my first house which isn't 15 I'm just about 2015. So it was 10 years stirring in my brain where I was like, I didn't know what to do with this information. But I knew you needed passive income. I knew passive income was the most efficient way to go forward. And so when I finally got sick of being broke, I looked to the world and said, what can I do that it has to be passive because I know that is the answer.

And I extrapolated and I got that from information that was festering in my brain for nine years. So, you know, reading has a compounding effect that is incredibly undervalued in the society. Well, look, I read 40 books this year, and I'm gonna click 50 next year, and I read all nonfiction, and it's the best thing that I've ever done as the highest return on investment of anything I've ever done. And so, the earlier you can beat into your brain, reading as a habit, the more successful you'll be for the long haul, guaranteed.

David:

Yeah, absolutely. I 100% agree. And the thing that a lot of people, you know, it comes out of time, right? Some people don't have time to read, I don't have time to well, if you have a commute, you can listen to it on Audible. If you run you can listen to it on Audible. If you go to the gym. You want to walk. I mean, there's there's..

Alex:

You take a shower in the morning cuz that's when I listen to mine. There. I got an $8 speaker, a Bluetooth speaker off Amazon. I played in the shower. I played on the way to work. I had the luxury of listening to it a little bit at work. So I'll crank out 30 minutes here at work sometimes I'm doing something else. I do it at the gym. I do it the way home. I do it. Dude, if you don't have time, if you don't have time to listen to Audible, you better not have a Netflix subscription.

David:

Agreed?

Alex:

Get ya shit together, son.

David:

Absolutely, absolutely. So, okay, so tell us a little bit about your website, broke is a choice and what are you doing there?

Alex:

Yeah. Um, so yeah, like you said, we met a fin con and fin con has a business model that I, uh, I reject, kind of, where I don't profit off my website directly.

I'm not. I don't consider myself a content creator. I like real estate. I like the business of real estate. And I like building systems and I just like building businesses. I like to enjoy myself. I should say that I have enjoyed building my business.

But when it comes to a website, I don't like creating content. I don't have a YouTube or I might think about doing a podcast, but it's never been natural to me. And for the first time when I first started writing, it was incredibly cringy. I still don't listen to my own content. I can't do it. I can't listen to it, read it myself, my podcast guest appearances are nothing I just.

10:00 - 15:00

Alex:

But about a year ago, I said, look, I got this knowledge and I have enjoyed sharing it . I spend a lot of time in bigger pockets. So I've been sharing it there. And so I said to myself, let me just write, I have these brilliant thoughts in my head and the world needs to know. So let me get some of these pop blogs out. And you know, that was not even a year ago that I started that blog. And people really look, I've got a lot of good responses from it. And it's made me a bunch of money. I had a podcast interview, which got me a guy who redesigned my website, which, you know, has now when you go there, it's a great looking website. I'm very fortunate that it came out so well and people respond well to it. And it's brought an actual investor now.

And so, you know, what I tell people is if you're on the fence about if you're not sure what to do with your time, you should have a blog to get your juicer exposure out there. Everybody needs a digital resume and you don't want to put everything on Facebook because you're on somebody else's. You're on somebody else's dollar when you're when you're doing just Facebook or just YouTube or just Twitter. So you need to have your own, you need to have your own space. You need to look professional and you need to do as fast as possible so that the effects of your content creation can compound over time.

David:

Absolutely, yeah. Especially, I mean, I've heard a lot of people talk about, you know, Facebook, Instagram is great, but ultimately owning your own email list is probably the most powerful aspect because Facebook could just block you. And there you go. Now what?

Alex:

Yeah, I don't collect email on my website at all. It's a really personal website. Like I said, it's not the fin con model, the fin con model is collecting emails, you know, affiliates do some advertising maybe it's it's, it's fit the fincon model I consider his direct monetization of the website and it's just not what I do.

I do the website so that if you stumble across me again, I'm missing out on the marketing side of it, but if you stumble across me you're gonna come there to my site, I got all the skin in the game. I owe nobody any content created, like, there's nothing on there that I don't you know, everything's mine. So I don't owe anybody I don't I can say what I want the way I want it, and it comes off very personable the way I write. And so people really like it and they gain a lot of trust and they really understand what I'm doing. And it brings investors in and I like that I could be a little more efficient but um, so some people start websites to do purely marketing, I started a website just to share my personal thoughts, and it's worked out really well for me.

David:

Yeah, I have yet to even think about the idea of monetizing my website at all. Like you, I am probably more on the consulting side of things because I started the website with the intent of, I would like to write a book, I would like to do this. I would like to do this. I don't know what I'm going to do. So how about I just go somewhere for me..

Alex:

Practice!

David:

Learn how to write and maybe people will like it enough that when I do figure out what I'm going to do, I'll have some people to say, hey, look, I wrote a book rather than you know, post it on Facebook and hope someone looks at it.

Alex:

Yeah, it's practice.

David:

Yeah, it's fun. And it's a way to tell stories. And then meet guys like you and whatever.

So I am touched that we mentioned it earlier. So if you don't mind we, I saw a controversial so to speak VA loan post that you made earlier today and has people riled up.

So I figured I would ask you about it because that's way more fun than just tagging you and Facebook and letting people go. Oh, oh. So if you don't mind, could we get your two cents on the VA loan and why it is not the best strategy to utilize?

Alex:

Yeah, look, it's not that look, that article is only controversial if you disagree with me, which would make you wrong anyway. So I don't think it's controversial at all.

David:

I like it.

Alex:

Look, the point of the article that I wrote was the article was the reason that the VA loan is a trap for new rental real estate investors. And that's true because the VA loan is a great program for a guy who wants to buy his first primary residence with no money down.

Now there are instances where doing a buying house with no money down is a good idea if it's your primary residence and you're in a high appreciation market, like I came to Las Vegas, I knew it was gonna explode a boutique just under two years ago, I knew it's gonna explode. If you looked at Las Vegas two years ago, it was on the rise. But if you looked at it, and you decided, and you and you looked at some of the things that are gonna happen, you would do no good. I didn't use my VA loan to move here when I moved here. But if but I, I would have if, if the circumstances made it a little more beneficial than it was.

So if you're going to come to an area where you can do zero down, you can make, you know, I'll make $100,000 in two years on equity in this house, and then you can get out, that's a great way to use the VA loan. But that's not a rental investment. And that's hardly repeatable, and it's very speculative. So that is no way to look at that. And that's the best case scenario for a VA loan. So that's no great way to look at an investment strategy. So I call it a trap because people don't, that's not a great rental strategy. And people only do it because they have no money and that is no way to design a real business model, I don't have any money. So let me do whatever I can at the expense of good decisions just to get in.

15:00 - 20:00

Alex:

And I don't believe that that's, that's it, that's it. I don't believe that's a correct incentive for being a rental real estate investor. And that's what a lot of people do, because the only avenue that they know and they you hinder yourself because being able to raise money in being able to save money, it are two incredibly valuable talents that are much more effective to work on those than to just buy a house with no money down because you have no money. And then you have a lousy rental. And you know, no equity and high overhead.

Yeah, I mean, and you're buying a retail house. You know, I bought all my houses, you know, I bought a house $65,000 all in and it's worth 100 I got a 45% equity stake. You buy a house with zero down you have a negative equity stake because you're going to finance your taxes and closing costs anyways. So dude that's no way to invest.

David:

Yeah, I think that's the biggest benefit there is the buying a discount because it's darn near impossible to buy a fixer or any property that needs any work at all with the VA inspection because it's very stringent, they want to move in ready. And so your thought on that opportunity, I think there's probably some instances like a four Plex, househack where it could work if you're willing to put up with all of the chaos that comes with being a landlord in the building. And..

Alex:

Yeah, and I put that on the article too. By the way, you can do a four Plex This is a good yeah. So people said it's controversial. It's like, well, the title is controversial, and people don't like to hear it.

So, so yeah, it's clickbait. Oh, no, no, it's reasonable. It's reasonable. Well, and I know people go I know, you know, people like to say that I'm controversial, but what I think is people like to be outraged.

And I love to play into their, you know, their ridiculousness. And so you know, that, you know, if you look at that, the comments section of that thread, the people who are most adamant against it, we're realtors who sell VA loans. Well, they're salty, because I'm saying that their one gimmick is not as great as they wish it could be. And so yeah, they're salty, but they're biased.

David:

Well, it's just like the business, the business model of buy a house every time you change station in the military, which I would very adamantly tell you that if you buy a house as a rental property that might work out for you, but people will just buy a house that oh, I can afford the VA loan. Let me buy right here. Maybe the market will go up and then yeah, maybe and maybe you become a millionaire or maybe become homeless.

Alex:

Yeah, maybe you just become a guy with a bunch of debt and no cash flow.

David:

Exactly. It's all situational.

Alex:

Yeah, no, that's probably with that strategy, which is a common one. Buy it at every duty station, you get the you know, the, you know, the biggest benefit in growing businesses. It's economies of scale. And so when I have one property management to deal with 30 properties, I only have economies of scale in my time because I want to deal with one guy, one rule relationship, one contractor, one lender, did you all the same thing as soon as I got five houses in five different areas I got five contractors to deal with and let me tell you something finding one good contractor is hard enough finding one good property manager you want to do a find these people on margin on slim margin deals and even if those either of those places go up in value over time, that's an equity play. That's not gonna you're still gonna be cashflow strapped and if you buy a nice building like you said, because you got to buy a retail building so fine you buy this house and you do zero percent and you know eight years goes by and you've had no problem because the houses near well, eight years goes by but when 12 years comes along, you're gonna start having problems well you still not gonna have any equity or you're still not gonna be cash flow because you it's just not enough time and you did it and it's and those small margins are getting tighter and tighter as you know as you buy more and more of these so it might work out that plan by one at every decision but you lose a lot of benefit.

You know, I'm so good at my you know, I could buy so fast in my area because I know the market like you wouldn't believe so for dealing with across my desk, I can make it, I can make a $60,000 decision in 10 seconds. And I'll commit to it. I know I can buy this house, I know that I have exit strategies, I know how to deal with an item because I know the market.

And I know that market because I've been dealing with it for so long, but if you got five houses or six houses, or God forbid, 10 house interpretive markets, I guarantee you don't know any of those markets, as well as I know, my one. And it's going to cost you in decision making speed and effectiveness. And it's gonna cost you other kinds of skills for management. And again, for what just to get the zero percent down VA loan, that's a terrible strategy to build around this one, seemingly better than it really is, benefit. Sorry to rant.

David:

No, no, I mean, you're right and knowing your market, and then having a team that you know, and trust. I mean, you can't, you can't beat that. So personally, right? Like my little personal example of this would be the fact that I bought this building on, we closed September 17. So in less than a month, it had a live-in property manager and I fired it yesterday.

20:00 - 23:17

So that was my first experience with bringing a second property manager in, I had my property manager oversee to help with the transition. And before the end of the first month, it was like, hey, do you mind taking over this building because I'm gonna fire that person.

And that was it. And I brought in my old property manager to manage it because it just worked better. And so I would hate for something like that to happen where you are now PCs from California to North Carolina, and you're going Oh, crap, I only have one property manager. She's terrible. I don't have someone to replace.

Alex:

Yeah, and the other thing is, it doesn't give you the confidence to move forward quickly. So like right now, I know that I can take out a bunch more houses because I know that if I call my property manager up and say I got more work, he's gonna be like, heck yes, let's go boy. Let's do it. He's excited. I know he's gonna get the job done. And so it gives me a ton of confidence when by properties 789 10 by this 40 Complex by 150 in a year, like I have the confidence that because I have good people, if you live in one area, or you live if you got properties in a bunch of areas. Look you It's just not that many good property managers run around that you're gonna get five of them, it's never going to happen. You're going to get one, maybe you marry that person forever.

And then the odds that you're going to have a great property manager contractor, look, I'm the only one that's why I'm so I've got so good, so long, my team, I'm so thankful for them. My realtor, my contractor, my property manager, insurance of lenders, I mean superstars all of them. And I'm, I'm incredibly grateful. That's what gives me the confidence to go so quick people go out, you're blowing up and I'm like, get good people. That's all you need to work on is get good people and sell them on your ideas and feed them business and the world in the world will workout.

David:

Overnight success.

Alex:

Yeah.

David:

I hate that term. So okay, I think that's most of my questions. But I would if you don't mind, I would like to know where can, I mean obviously your website but where can people reach out to you? Is that the best place as far as consulting? What kind of stuff are you offering? You know, what any closing comments I suppose on yourself.

Alex:

Look, I help people as best I can. I do it almost for free. There. I do want all for one product and right now I'm kind of maxed out I've been helping people to buy houses in my area not I'll help you to buy it in your area if you just want to talk but I have an actual program where I walk people through and help them buy houses kind of like turnkey but I do I teach them and I have a really good system where I don't even take any money from them until they actually purchase a building so it's worked out really good but you cannot take some of those clients with further, you know, you're maxed out so so aside from that if you're if you're listening and you want some help and you want to reach out I talk to people I do Skype interviews all the time for free no problem information is free.

My website I write my deals all out as transparently as possible. You can find me on bigger pockets, Alexander Felice, my website brokeisachoice.com I'm easy to get a hold of if you're looking.

David:

Awesome and you got gray hair so..

Alex:

True that, I will give you what I should do. I should do a blog on hair products, get around brush, blow dry that Joker and.

Yeah, you got blood right every day.

David:

That's the lay right that I use when I actually have enough hair for that stuff.

Alex:

I got like 10-10 to the stuff.

David:

All right, well hey Alex has been awesome.

Thank you for tagging along on this interview guys, check out his website. If you're interested in anything BUR related or long distance related. He's your guy. He's got some good knowledge. So hit him up.