Episode 137 | Hugh Carnahan | Military Millionaire Podcast

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Hugh Carnahan on The Military Millionaire Podcast

00:00 - 05:00

David:

What's up military millionaires? I'm your host, David Pere, and I'm here with my co host, Alex Felice, who sometimes just hosts and I get stuck in the back burner, but we'll see what happens this episode.

Hugh is our guest today Mr. Hugh Carnahan with a moustache that actually makes mine look kind of pathetic because he's got like the wax, you know, French twisty thing going on. But Hugh and I have been friends now for about a year, year and a half we met, I guess, Facebook, whatever. But he reached out, met at a coffee shop. He's kind of one of those stories. Alex always talks about people he met that turned out super, super, a good investment to talk to you.

I did not have time to meet Hugh on the day that he hit me up. And I was like, okay, man, if you can make it here between this time and this time, I got this like a 20 minute slot. And we hung out for like 20 minutes and we've been friends now for about a year, year and a half and probably gonna do some deals together.

We worked out of the same market and gone over to his house, got hammered drunk and hung out with him a few times. And what he did was the first deal that he ever did was 26 houses in a portfolio deal. And I remember thinking that this guy was nuts. And he turned around and did very well with it. And since then, he's bought a hotel, small apartment complex. I think there's a laundromat in there. He's done a little bit of everything.

And so this is cool, because, you know, now he's got like 30 doors. 14 months later, he's using other people's money, he's quit his w two, he's going full time. And he's doing that because he's got a lot of crazy systems and he's very, he does the two second lien thing is extremely well systemized. So this is gonna be a lot of fun.

So Hugh, welcome to the show.

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 guides along the most important mission, you'll ever embark on your finances. Vehicle one, you're clear to depart friendly lines. Roger Vic, one Oscar Mike.

Hugh:

I recommend. Don't buy 26 houses at once, if you don't know what you're doing. It's bad, can be bad.

David:

How did out of that first deal go for you?

Hugh:

In the end up, okay. The very beginning it was I studied, I read all the books, I listened to all the BiggerPockets podcasts. And my strategy was BRRRR. And then came across a portfolio loan and was like, Oh, can I actually do this? And I was like, well, it'd be kind of traditional, you put 20% down, maybe 25% down and buy everything at once? Well, the couple that I was like, oh, there's a nice couple retiring. I'll take over the loans, or I'll take over their portfolio. But really what happened was they're like, oh, we're really tired of all these garbage properties that are a huge pain, D properties and D areas. We're just elbowed off. And I was the dumb guy who bought them all so when traditional, and then figured out really quickly how to rehab houses and you know, dealing with property managers and people and all that good stuff.

Um, and then eventually, I was able to BRRRR out of them 10 months later, and got all my money back and did something different.

Alex:

Do you still have those properties now?

Hugh:

I still have all the properties.

Alex:

Yeah.

Do they run? Do they run better now than when you bought them?

Hugh:

1,000%.

So they're extremely deferred maintenance. When I picked them up, they're all crack houses basically. And going in, none of I still haven't had a bathroom. I didn't have to get the entire bathroom, saw floors, all that good stuff. But I've actually listened to your show, Alex, with going in targeting small to ones in my area, the numbers seem to work about the same to ones they're cheaper to work on, cheaper to flip brought up to market value, you know, bumped rent for like 400 bucks to 700 bucks and was able to eventually BRRRR back out of them. So.

Alex:

Let me ask a question when you bought that place that they didn't want. I'm glad you got out of it. Because sometimes people sell things that they don't want because they can't be turned around. Sometimes it's their fault. It sounds like they're their fault. And that's that's good, I'm damn happy for you.

But I want to ask you a question. Did you buy a? Was it a D class property when you bought it or was it a C minus because nobody claims they ever own a D class?

Hugh:

Oh, they're F properties in D neighborhoods or C neighbors. I definitely own. My nicest house was a C, C, solid C.

05:00 - 10:00

Alex:

So I bought my last 24 unit, it took me about a year, year and a little bit. I could do it faster now, but I didn't know what I was doing sounds familiar. I bought it with low quality tenants, and they had gotten away with too much ship too long. And so going in there and trying to like write the ship, what I realized is you got to get rid of them. And what you have to do is you have to change the culture of the neighborhood.

Hugh:

Yes.

Alex:

Is that something you experienced?

Hugh:

Yeah, so I actually have an interesting story with that first portfolio.

So all the tenants, the moment their lease was off, like it was done, like we would move them out and go in and try to rent over the place. And I was like cash flowing like a month, I tried to pay my contractor like selling guns and the light here out here said, Here's the money. Let's keep that going.

But at the end of one time, one of the houses This was probably like mid summer, like six months after I had them. I noticed that I ran comps for rent in the area, and comps an ARV. And I had four houses on the same streets. And I was my own comp. And I was like, Oh, I was my own comp three times. I was like, whoa, I'm coming as I bought this whole well, I wasn't the whole neighborhood. But I have a housing neighborhood. I own the nicest houses in the block. And it's right next to a school and the city. Like while they're there, they're hard to deal with anyways.

But they're also like, oh, but someone's coming in and cleaning up the neighborhood. So it was kind of cool to see that I just didn't expect it wasn't a plan. I was just like, Whoa, all my comps are me. And that was kind of cool. So I'll set my prices high for rent.

Alex:

That's the value of scale, right? If you own the whole neighborhood with you know, it's like now you set the market price.

Hugh:

Right, right. I had no idea and that was not planned. I was like, Whoa!

Alex:

How did you pay for it? This first 20 unit portfolio.

Hugh:

So when I was a dependo, I had a corporate america job. And part of the job was like, I got less salary, but they gave me stock options. And then I left that job when I got my divorce and moved. And I just had stock for this company that I just and then forget about it, but I never like invested in it. So I just left it alone.

And then one day I checked it out, like holy crap, I have like $221,000 worth of stuff, you know, because just because the stock went up. And I was like, Okay, I want to do something with it. But I set a limit order I sold. And I was like, Oh, now I owe taxes. So I only have $170,000 to do stuff with and also buy solar panels. And so the solar panel guy was like you should buy real estate, and have that pay for your electricity. So that's how I got started.

David:

So the solar guy taught you and do it.

Hugh:

The solar guy, he was a BiggerPockets member. He was like there's this thing called bigger pockets. And you shouldn't buy solar panels. You should buy real estate.

David:

Worst solar salesman ever.

Hugh:

It was like he's the owner of the company too.

Alex:

I can't believe how I can't believe how impressionable you are, you just one, dingdong, one vendor comes up to you. You know, a few years ago, I had a guy come fix my garage door and he told me to buy bitcoin and that's the point I knew not to buy bitcoin.

You. You're like, let me go get $170,000 worth of it.

David:

Can we just point out though, if you had bought Bitcoin a few years ago.

Hugh:

Yeah.

Alex:

He told me he was at 20. And then it crashed to $5,000.

David:

Okay, so yeah, maybe not. Maybe not the right time to probably not the right time to get into bitcoin.

Hugh:

No, it’s 50!

David:

Yeah.

And I wouldn't get in right now, either. And people are like, it's going to 400 and I’m like maybe, but maybe not.

Hugh:

Initial money that came from the stocks, I sold those I didn't know what to do. They literally just sat in the money market account, and I just didn't know what to do with it. And then I was looking for investments. And then I came across BP effectively. And when I bought, I bought traditional so it was the same thing, same concept as if a house was $100,000. And it was you know, I put $20,000 down, only I put like $200,000 down I bought some, I borrowed some money from family members to go in. And what made it appealing to me was despite not knowing anything, I listened to what Brandon Turner said, which was run numbers, run numbers, run numbers, and it was like a 1.58% rule. And I was like whoa, this doesn't make any sense. Like I've had, someone has to buy this. So she beat me. And then I just kind of tried it. We'll figure it out. Jump out of the hole and build a parachute.

10:00 - 15:00

Alex:

So from that lesson, have you? Going forward are you looking for more or less risky properties?

Hugh:

I'd say, had I not done that I wouldn't know what not to look for, or what to avoid. Because I didn't just didn't have enough experience, there are plenty of deals that houses I own just like it, that are they come up, that I can walk into a house and in like, 20 seconds be like, like, three, four minutes walking around, stopping on the windows, don't be like, this is a x dollar rental, it's gonna be it looks horrible. But it's actually super great.

Same thing, I go into a nice looking house and you're like, Whoa, like, joists are just, there's something funky going on, I would completely avoid it. I would not be where I am now without those lessons of dealing with 26 crack houses and trying to render them walking you through the corners.

Alex:

Right, but what you might okay, but what else? Would you? Are you looking for more crack houses? Are you looking for higher quality assets going forward?

Hugh:

Um, it just doesn't make any sense to not do the smaller houses in my market. And there's a section of town that's kind of sketchy. And everywhere else in town, you're really gonna be cash flowing. At the end of the day, if you BRRRR, if that's your strategy, you'll cash for like 50 bucks or 70 bucks. But in my part of town, I can cash flow for like 150 to 200 to 250 with an infinite cash on cash return with pulling out like 20 grand.

Alex:

Right, but you got to deal with but you got to deal with a more difficult tenant.

Hugh:

Well, after you rehab it and don't have to deal with a difficult tenant. It's just kind of a smaller community. So people will live kind of what I think our area doesn't really have like, machine gun fire and stuff. You know, it's not like gang activity. It's more like drug, meth, lots of meth.

David:

Meth is a good word to describe the part of town you're talking about.

Hugh:

So, like normal people, blue collar folks live in those areas. And as long as the product you provide is nice and safe, don't don't charge market rents, because market rents have gone up pretty much everywhere. So that you can price out the tenants even though people are willing to live in those no D class neighborhoods. Because there's not very much neighborhoods to live in. If you want to be in town, you can go out of town and get all kinds of big stuff, you know, land and whatever. But then you're driving into work. No one around here wants to do that.

David:

I liked the whole owning four houses on one street, right? And I haven't, I bought houses in similar neighborhoods, but not necessarily owned houses on a street. But it's kind of cool when you think of people always wanting to try to get in on a neighborhood gentrifying right. But I mean, if you had the scalability to do it, you could theoretically gentrify your own neighborhood, if you were just focusing on a small area.

And there's, I mean, I know, I've got friends who have 100-200 properties. And they'll keyhole in on one zip code. And then it's like, yeah, okay, your first few deals might not be as good as the next few going forward. But you're building your own, like comps, your own rentals, your own culture in that area, is easier said than done, right.

But I mean, it's kind of like the guys who it was Detroit, where people were going in, and they were literally just buying entire city blocks at one point, and then they would just renovate the entire city block. It's like, you know, at some point, like, you could turn a crappy neighborhood around very quickly, if you own the whole thing.

Just an interesting concept. A lot of people don't think of it because they think of like one house at a time, which is great. But if you can kind of scale that in your area, you're able to exponentially increase your returns, or you get like Alex's neighborhood where the entire market just decides like the entire country's like, you know what, we're gonna invest there. And then Alex, like, great, I'm glad I was holding these properties, because the market renovated under me.

Hugh:

And he was like, you know what my strategy is this, and this is exactly where I'm at. And people came and did that.

Alex:

Yeah, people came in 2017 to fail and drove the prices up and then kind of really knocked me out because I'm not willing to pay some. I mean, I call it right now you to buy my market to compete with stupid and God forbid you win. And then it says a 19. I think the bubble started for everywhere, everybody. I think now, definitely. Prices are all not all money. I'm still buying deals, but being very, very cautious.

And to be fair, after I did that interview, I told everybody to come to Fayetteville. I changed my strategies. I haven't bought a single family rental since 2019.

Hugh:

Oh, well. So for me, going through all the things to kind of answer your question is, if I'm going to be in the single family space, I'm going to target the small properties sounds like similar to yours, right? Because the numbers just made sense.

15:00 - 20:00

Hugh:

Um, but it was so much work that if it's like just, it's the same work to do a commercial property or something, and you get so much bigger return. And then the other thing that I like is you control that if you have systems that they're valued off of cap rates, which is the cash flow that it generates. It's like a little business. So if you can make the business run better, then the property is worth more, as opposed to single families like, Oh, you put it all you put in the granite countertops and the new bathrooms, but every other house in your neighborhood was $50,000. So your house is 55,000. Congratulations.

So I'm trying to shift towards that, because it seems easier. And there's more control over how you're valued. Because in the brrrr strategy, right. I like to go in and try to force appreciation. I don't like I don't like gambling on appreciation, I try to buy somewhere where I can make I can do something to it to make it worth more.

Alex:

Yeah. 100%.

David:

Alright, next crazy investment.

Alex:

Say again.

David:

No, you're good.

Alex:

No, you go.

David:

Oh.

I just said, All right, next crazy investment, because I know he jumped into another wild one right after that.

No theory.

Hugh:

I brrrr out and had the cash flow on the side. And about that time, I have a policy that anyone who interacts with me and does business with me, I have a very big abundance mindset, everyone wins, I get referrals, I, you know, if they're out of my core for like, I'm gonna do everything I can to get them business, even though like I'm just starting out, like, I'm just some new guy. And then like, go and help them out with their businesses and try to make them run efficient.

So my broker approached me and was like, hey, there's this apartment complex coming up for sale, it's, you should check it out. And then ended up being a motel, a gas station and a commercial unit, like a nine unit commercial warehouse space. And so I didn't know I was gonna take that down. So I approached a few folks and got OPM and bought in bought everything took everything down, it was basically they were selling it for the cost of the land, but it was cash flowing like $24,000 a month, and being run really poorly, while it was cash flowing that much, or sorry, not cash, I'm sorry, generating $24,000 a month income from the property.

So based off of that, they were already selling it under the 1% rule for commercial property. And they're the sellers expectation was whoever buys this is gonna tear it down. And you know, build a Wendy's on it or something like that.

So we took it down, and I've just turned then was in charge of operations. So I get a 50-50 split cash flow. And I get a 25% equity with 0% down on my part. That was and it came with a laundromat. I was like, Oh, yeah, coin laundry, it also apparently, so we had to figure that out, which was expensive.

David:

Yeah. And then you turn to the operations as a hotel around though. And so now he's got this thing that he's effectively doubled in value, if not more, actually. I'm curious, just like how you go from a single family portfolio, like, what were some of the things that you realize needed to change to operate, essentially a hotel and a laundromat.

Hugh:

So my background is in manufacturing. So I have lean manufacturing, as a background skillset. And lean is the art of processes and you know, all kinds of, you know, making things efficient, but none of that matters. I subscribe to something called two second lean, which doesn't focus on process, it focuses on developing people, training people, well, giving them the tools they need, empowering them to make the change and doing that.

So when we bought the motel it came with, you know, two or three employees, the two employees that used to run the old operation and I was able to come in, step in and just start doing Intel gathering like how rent is collected, like all these things, and to try to figure it out.

For residential, I had my property manager you know, do everything you know, I have a core four and I basically said follow the long distance real estate investing and basically didn't do anything myself.

Well, this I stepped in and said as far as the hotel operations go, which I know nothing about. And I also didn't really study much about us, go in and do simple stuff. Like hey, you shouldn't have trash all over the parking lot, you know, or simple things like that, turning things around fast on the internet. And running it efficiently is really double that because it's valued at the cap rate.

20:00 - 25:00

Hugh:

So we bought it for 2.6 million. And then we turn we increase the revenue, and drop the expenses per month. Because of that, that cap rate turned around, and was made like a $6.2 million property. After operating for three months, and expenses we got rid of were permanent. And we gave everyone a raise and brought in another employee. So we increased our expenses, but decreased them majorly. The people felt appreciated, and they ran it for me, which is kind of similar to the core four strategy, right? You have the people that are specialists do it. In this case, I'm just training them by setting guidelines and saying operate within these parameters. Go.

Alex:

How do you pay for that building?

Hugh:

Which one?

Alex:

3.2 million. So you needed to come up with what one and a half?

Hugh:

It was 2.6 when we bought it.

Alex:

2.6 okay.

Hugh:

And I got 100% OPM.

Alex:

Oh, Cheesus.

Hugh:

So if someone saw me, it was like, what did this guy do? He's gonna lose his ass. He just bought 26 houses and doesn't know what he's doing. And then like, stumbled through that, but it looks good on the outside, and then got all my money back out and was ready to go into the deal with it. And they're like, you know what? Don't even worry about it. We'll go and we'll see what, what you what, well, let's see what you got, basically.

So I negotiated 25% of them for them, they didn't care. They were someone who buys land all the time. And so they're like, Okay, well, the worst case would tear all the buildings down, and I'll have the land to, you know, sell to Wendy's and future or Home Depot or something. But that was basically, OPM came in.

Alex:

So basically saying is you have no good advice for our listeners just get lucky?

Hugh:

I don't know anyone that would just trust people with that. I think it's trying things.

Alex:

I like to just try things.

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Hugh:

When people see you put your money where your mouth is, you know, and go after and do things. Instead of just like keyboard commands doing it going out turning stuff, we need to have in depth conversations about things and you can run numbers and show what is possible. It is good. I mean, get lucky. It could be that absolutely luck certainly is a part of it. But you know, luck is when preparation meets opportunity. So if you're always prepared, when opportunity comes up, jump on it.

Alex:

I’m just just fucking with you. You know that right?

David:

I think I think the piece here that sticks out for listeners, and I'm not going to tell them to go and buy what you bought in either case, because that's a ridiculously crazy first first deal that paid off very well. But, you know, risk risk, but I think the idea that I would try to impart with listeners from this is to understand that. It's like what I was talking about the other day like going all in, right? Like if you had gone into that 26 unit portfolio, gotten, you know, sick, like cold feet halfway through it or realized where you got into and started trying to sell houses off as junk as you went in. I would have had nowhere you're the success that you've had now.

25:00 - 30:00

David:

And honestly, like, if you didn't have some kind of go all in mentality, you wouldn't have ever pulled the trigger on it in the first place. It's kind of like the mentality of like people trying to, you know, in like a cartoon or whatever, trying to jump over a cliff, like jumping a gap. And it's, it's like the only person who ever makes it, the person who gives it 100%, right, the person who hesitates or holds back or whatever.

So I don't know if I'm trying to like, really circle the wagons here to make this make this point. But in essence, just the thing that like on both of these, you went all in 100%, you trusted what you knew, and you asked questions about what you could have done. And you figure it out. And a lot of people would have just never even, like, neither of those is the deal that's like, Oh, yeah, this is perfect. Let's go for it. They take guts, but you went through you pulled you pulled through on it, because you stuck with it?

Hugh:

Well, I think actually.

So I decided to do it. So I took action, you know what they're always saying, making a decision is more important than what decision you make, which is mostly correct. And that's not always the case. But to Alex's point, a big one was I jumped in not knowing what I'm doing. But I did it. And I heavily leveraged the experience of, you know, my core four people who have been there and done that before. We're veterans, I'd say it's no different than let's say, a butter bar coming in, jumping in and having a bunch of seniors and CEOs that are like, hey, we've been here for 20 years, like you can kind of make high level decisions. And we've got the experience when you have to fill in the gaps when you have no idea what you're talking about.

And so I think that's a, you know, I just tried something, I tried it and leveraged other people, I couldn't do it myself, I still can't do it myself, I'll continue to not do it myself. And I prefer it that way because I'm lazy.

So going in and you know, being hungry, showing that you know, are giving value to them. Whoever may be taking the business card, you know, passing it around, doing email introductions, you know, hey, I've got a lender, I'm putting you in touch, you know, this guy's a rockstar, you know, whatever it is, building those relationships, and then leaning on them, you know? Who knows who will come out of the woodwork to say, Oh, hey, you know, I am an electrician, and this other guy's house I'm doing they're trying to get rid of it. They might bring that to you, you know, you want to try to you know, have that mentality and go out there and do it. But also, like, be humble. Try to try to figure out from other folks what's going on.

Alex:

Some of those podcasts and they're gonna be like, Oh, I can't wait to give this guy money.

David:

He's gonna raise all this money.

What are some lean type principles? If you could, like just a few things that you think like, for a basic rental, like a landlord like what are some things you would look at? Say you're buying like a single family house right now? Or, you know, a small portfolio, like, obviously, like a hotel is a great example, but not super relevant to or maybe maybe 100% of our audience.

You know, 99 point, whatever. But what would you say for a normal landlord like what are some things you think like right off the top of your head that you're like, Oh, I would totally look for this or use this to help me out?

Hugh:

This is extremely a... I definitely go to real estate meetups. I mean, we didn't have one here and actually no, it was David It was your bigger pockets one where the like I was too lazy to drive across the island. So I created one of my side of the island and I was like there are no real estate bigger pockets here so I just created it. Here.

David:

I like the island in the middle of Missouri?

Hugh:

But definitely real estate meetups where you just go interact with people and you can learn so much. You know, that's very actionable. As far as lean stuff goes, like, why reinvent the wheel or learn everything you might bump into someone that could be a friend or mentor, like I didn't know anything. When I talked to you at all. I was like, I've been running deals. What do you think? And you're like, yeah, that seems overwhelming. Yes. Good luck. But, you know..

David:

I tried to be encouraging but I remember I was like, this is the first deal you're gonna tackle like, I mean, the numbers weren't man, but Oh, holy crap.

Hugh:

Well, and then you end up hooking me up with the property manager. And so not trying to do it yourself. If you're scared. You don't know what's going on. There's a friend out there. There's someone who's done it before. There's bigger pockets. There's all of the content, there's military to millionaire, you know, you can get on it. Ask questions just like so many of your audience already does to help you out.

So definitely leverage other people's experience. That's definitely a lean one, don't try to do it yourself.

30:00 - 35:00

Hugh:

I ended up helping a buddy, you know, he moved here on a Monday. And then we found him a house in a duplex with a VA loan. And he closed on a Thursday, like Thursday, I've been here for days, and he just used my core four I just plugged into my process, he trusted me. And then I was like, Hey, here's what's going on. Here's why. And then they just kind of went down through that, I did that, because I knew him before, and helped him out. But there's, I mean, I feel like the real estate community specifically is like, a lot of people are pretty open to helping because they remember what it was like, or it's relationship based. You never know, if the guy on the other side of the table, you know, might have a deal, you know, five years from now or something like that.

You know, people remember the way you feel. So it'd be really nice and kind. Sounds very Missouri.

Alex:

I'm not nice, it works for me.

But I do like that idea. A lot of people, myself included, try to do things too much by themselves. Asking for help. Asking for help goes a long way. And if people want to help you, then that's probably because you're being a douchebag. Or you're asking more than you're worth, which is a problem that a lot of people have, which what you're saying is like, hey, look, be a good investment. And then people will invest in you.

Hugh:

Right, right, lead with value. So I didn't know anything, but I knew I could bring my skills from manufacturing to be like, Hey, did you know if you moved that coffee maker to the center of your office, the 11 people in your office would walk 160 miles less a year?

Now, calculate the minimum wage that you would have paid all those people. You're welcome. And they'd be like, what? Like completable lambs, like, Oh, don't get me started on email. So I like to try to help people. And yeah, like, I don't know, anything. I'm here telling you guys.

I barely know what I'm doing. And I just figure it out as I go along. But I'm not afraid because there's a lot of other people out there that are willing to help. And when people ask me for help, you know, as long as they haven't burned a bridge, then I'm going to help them out as best I can. Because I know I have a huge abundance mindset to try to help out anyone within this connection, or a referral or passing ideal or helping them work the numbers teaching, teach them envision sort of give them a fish, hey, here's how you analyze deals, I wouldn't go there because of this thing.

David:

So that's why Hugh and I get along because I don't know what I'm doing. And I just kind of fumble through things because I know people so you know.

Hugh:

Become the connector.

David:

Was kind of a joke. But Alex is not even going to pretend to smile or screw with me because he's just gonna, like sit there and own it and make me think like, Okay, fine. It's not true, Alex, me. But no, I think that's a, that's a really good point, right? Like, when you're starting out the real estate community, people will help you out if you just spend time getting to know people and focusing on how you can help them. And honestly, I think that's probably one of the best hacks you can utilize while getting into the real estate game.

That's huge.

Hugh:

Right.

Alex was saying you look at the military to millionaire page, and like 40% of the pages like I'm getting out in three months, what should I do? And they're asking the same thing over and over while providing no value. And not even going back and looking at all the other content that you have his answer to that question 1000 times, and you have the ability to go in and you know, pick people's brains, I reached out to you okay, Can I do anything for you? Is there anything I can do? I think I talked to you the first time about lean, how I could help even though I didn't know how it helped you to be able to ask for help. It is a huge one, I think.

Alex:

Yeah, yeah, ask for help. And then, um, and like you said, You know, I have people who will ask me for stuff, you know, and I love helping people. I love it. But what they'll do is they'll find me along the way somewhere. And then they'll just go off and ask that question, which is, which is good and what's your current, you know what you're encouraging. It's like, hey, look, go ask for help. But I will say like, especially for me, but pull up content, like Dude, David has so much content. Odds are he's already answered your question.

Hugh:

Right. Like, do some research first.

Alex:

Yeah, like here, like I put content out. So that said, I can help people, you know, without having to compensate. So I can touch people from more than one at one at a time. And so, um, so if you're going to ask me for help, it's like, first make sure they haven't already answered it. And if they have, and you still have a question, when you ask a more specific question, say, Hey, I wanted to ask you this, I looked this article here. I'm still not sure about this. Then somebody's like, Dude, that guy took the time to look me up and like, look at my content. Let me give them a moment.

35:00 - 40:00

Alex:

So even just like, before you go ask just like, um, or if you get some information from somebody, just be like, hey, look, you help me out. Thanks. Anything. do for you, like open up lines of communication on terms that are not just extractive.

Even if you really can't add so much value, it's like at least showing that you're trying. You know that dude, Hugh has a beer delivery robot at his house.

David:

If you're watching the video, he has a buddy sitting on the couch that you get out a frame eating popcorn, Hugh finishes the beer, and the moment the beer disappears, a full beer just appears handed over.

Hugh:

All about efficiency.

David:

If this isn't a lean system? Just roll it all up into one. It's like, I've got this guy who's just I paid this guy to sit here and hit me up your mind empty. Maybe not paid. But actually, if you guys watch the YouTube channel, you met Dan last week when he was on the they both sat on the couch and hung out with me.

Hugh:

Um, I think.. Who was it? It was some someone's podcast, and they were talking about, Hey, I you know, or Alex, are you Hey, Broke is a choice. You know, I read this article, I saw this thing. And I had a question for you about this specific thing. And I try to ask other people, you're just going to respond to that, hey, this guy likes you said they took the time they read my stuff. And they have a question further about, you know, something that I already wrote or you wrote? You know, that's just, that's, it shows that you did the basic respects.

David:

Yeah that's huge.

Hugh:

Show that you put the effort first and I think..

Alex:

Yeah, I have a life rule that I said all the time, nobody's gonna care more about you than you. Nobody's gonna care more about your success. Nobody's sitting around going, how can I make you more successful than me? Hey, let me call him to make sure he's doing his thing, because he might not do it. Nobody cares about your success more than you. So when I run into people that care about their success, less than they need to, and they want me to care more. I refuse. And so I'm like, Look, if you have this question, you should find the answer. Oh, you didn't Google it. You didn't look for it. You didn't go, you just took somebody else's time to answer for you. It's like, you want me to care more than you? I got you. I refuse.

Hugh:

Right.

Oh, here's one for the lien stuff, right? Here's the way I basically got all my education. I went to bigger pockets, Episode One, listened at 2x speed, three hours a day, crushed six podcasts a day for like three months, was everything. And then went on to the next one, and then found the other thing and then reached out and consumed all this content. And then you know, a lot of the really successful people out there would say the same thing, which is, you don't just don't just be like, hey, you want to drive two hours and meet me for coffee? And like, ask me a question.
Going out of the way instead of being like..

David:

You would be amazed.

Hugh:

So like, Hey, I brought you this thing I noticed in this book, you wrote this thing. And I was wondering, why didn't you do this other thing? What made you make that choice? That kind of question and be like, hey, Alex, on this property on your 24 units? Why did you get this color paint? Or why don't you go with tankless water heaters? And you'd be like, Oh, shit, like this guy? Did his research care enough to try. And you know, at least it's like, actually, let us know you. And also if you're going to be that guy to ask for help. Do the research first. Don't be the guy who says is the quickest way to just get completely ignored.

Alex:

Yeah, if I have a piece of content, if I've written a piece of content that you're asking a question about? And it's like, You're asking me again, it's just one of the things that's like, dude, I want to help you. But again, like I can't, you have to, I want to see that you're trying. And so again, it comes back to like, not that nobody wants to help you. It's that they want to see that you're a good person to invest their time and do. And so if you're proactive, and you look up these things, and you try, and you're like, I really, I looked around, I couldn't find the answer can help me out. Send me the link. Whatever the case, that's, you know, sure.

But yeah, people that are just like, I didn't think about any of that. I didn't look, I didn't know you had a website, Alex, I just, I just ran to the email and took up your time, and especially when I got some of these. And I'm like, I'm like, dude. I mean, I love you. But come on.

Hugh:

Well, I think Dave, early on, I had a question about the VA loan. And I was like, Dave, I already watched your video that you have here. Is there another article you can send me or other resources that you know about? I can go read up on this stuff.

David:

Yeah.

Hugh:

I don't know about because I go into the looking that's probably be well, more responsive for you guys to help people out.

Alex:

I can also totally understand that you would read one of Dave's articles and still need further. That I get I totally get that.

David:

Thanks. Thanks, Alex. I appreciate you.

I mean, well, let's let's flip it right the first time we ever hung out I gave you like a 20 minute block. Because I was like, I don't know who this guy is sure I'll meet you. You know, whatever. I mean, you heard we had talked but I was like, super busy. And I was like, Yes, we're just gonna fit in exactly at this time at this place.

40:00 - 45:32

Hugh:

I'll be here already.

Other guy?

David:

Yeah, that's that's true. You did. You did sit down with the wrong person. But you sat down. We had a talk, we talked whatever we left on good terms, you know, whatever. And then we stayed in touch now we're friends we hang out, right. So like, that's totally different than like a lot of people if I'd been like, yo, I'd love to the only thing I got this 20 minute block at this coffee shop at this time, and they would have been like, Oh, well, he doesn't have time for me like, never would have never started a relationship, So, Alright, what Yeah, all right.

You know, I mean, and I was on like a one week vacation home so didn't have any time anyway, but alright, you I got two questions I asked every guest.

Hugh:

Okay.

David:

First one is an 18-19 year old who asked you for advice. What would be the one thing that you feel like they need to know?

Hugh:

Is going to be military specific or?

David:

Whatever your life advices

Hugh:

go by the book by Scott trench set for life and read that. Follow close second by getting a prenup. Red flags before you get married, there will be when it's getting married. I can help. So that was three pieces of advice. But yes, maybe the first one.

David:

No, but I love that because no one ever says that. And honestly prenup and or red flags before marriage are probably two of the most relevant things you could tell a young veteran audience.

Hugh:

You're gonna have a lot of people yeah. Describe the first one which yes, go read set for life. But definitely for sure. If there are red flags before you get married, don't get married, they're gonna still be there, or we're working out first work it out first.

Alex:

I'd also put the heavy out there that um, don't take relationship advice for somebody who's just got through an obviously bitter divorce

Hugh:

Wasn't just.

Alex:

What was that?

David:

So question number two you might have already answered is what's one resource you recommend anyone getting started in real estate or business or life in general? You said set for life. So what's another resource that you would give to anyone?

Hugh:

I would 1,000% if you have a business mindset or anything, if you're looking to invest in real estate, which a lot of your audience is, you are running a business, you're not owning a passive asset.

I mean, you can get it there but you need to think of it like you're running a business. What got me all my automation and all my whatever fancy pants like it's easy doing business was a book called two second lean by Paul Akers. And that book right there, literally one at the trajectory of my entire existence. And it was as fundamental to how to do anything. As let's say, you know, a lot of your listeners will understand Rich Dad, Poor Dad re arranges the way your mind thinks about like, you know, owning assets versus liabilities. Like that's a pretty big shift in thinking for most people when they read it. I'd say it's that way for how to do business or anything. So that's, that's a huge one there.

David:

I like it. It's actually on my reading list for sure.

All right, where can people get a hold of you? If they want to reach out, ask questions or you know, be the OPM for your next?

Hugh:

555.

No. So I have a YouTube channel. And it's called Hugh Carnahan. And I teach lean, which sounds extremely boring, but it's super fun. I try to make it silly, and I'm trying to do like a real estate finance focus.

David:

So yeah, I'll make sure I tag that.

Alex:

And

he's wacky I watched a little bit of that youtube channel.

David:

It teaches YouTube in speedos and shit.

Hugh:

That's right, if anyone wants to laugh, and you know, there's one called..

David:

Oh the David green one?

Hugh:

Not the David Green gives an analogy. And I also have a.. I'm just making fun of the BP guys. Not Tal Yara takes you through crappy houses a playlist I have. And I just take you through crack houses in my area.

David:

It's entertaining to say that.

Hugh:

And he commented on one of my videos and was like you spelt my name wrong.

David:

Love it.

Alright, brother. Hey, this has been fun, always a pleasure. Looking forward to moving back and being able to hang out and I know we spoke about it. I'm getting numbers this week. So I may have something that we're going to end up working on together.

Yeah, there's the voice in the background about alcohol and hot tubs which is basically my love language, so you know.

Hugh:

Need to write the book.

David:

Yeah.

Hot tubs. drunken hot tubbing. Love language number six.

Alright, Dude, thank you so much for joining us tonight.

Hugh:

Thanks for having me on.

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.

Hugh Carnahan quote about luck

Episode: 137

Hugh Carnahan

Join your hosts, David Pere and Alex Felice, with their guest Hugh Carnahan as they talk about his crazy first deal, the 2-second lean method, experience increasing a hotel’s cap rate, and the overall mentality that has lead him to his many incredible successes with investing.

From Hugh’s first experience, he has gotten himself into fascinating situations with the properties he’s acquired. One of those is becoming his own competitor in a neighborhood wherein he owns multiple houses in a single street. This advantage gives him something that any investor looking to scale would want for themselves, the ability to reinvent your location’s value.

In this episode, we will hear Hugh’s whole experience on that and on how he leverages other people’s abilities. For anyone who is starting in real estate, Hugh emphasizes the importance of creating connections. As an investor who’s been there, for him, there is courage in knowing that you’re not alone in this community and that whatever you try, you have people who will have your back.

About Hugh Carnahan:

After serving for over five years in the Army, Darren has spent the last seventeen years buying and selling real estate around the country. His true passion is helping people with their homes no matter their situation and then helping the neighborhood by fixing up the homes he can buy.

His dedication to the credence that “Every Seller Must Benefit!” is the guiding force that has allowed “Sell My House to Smith” to grow into the premier home buyer in El Paso and Pueblo counties. Darren’s most significant achievement has been to surround himself with an incredible team of industry and military veterans who are every bit as passionate about helping people as he is, not doing it yourself, leverage other people’s experiences,

Outline of the episode:

  • [01:55] 26 houses for the 1st
  • [06:35] Rediscovering a stock investment placed in a company.
  • [09:33] The lessons of acquiring 26 houses.
  • [12:12] Scale and lock-in on every corner of the neighborhood.
  • [18:08] The 2-Second Lean Process.
  • [19:46] “Train them to be specialists and set guidelines.”
  • [21:57] What does preparation allow you to do?
  • [26:08] A lean principle for every real estate investor.
  • [32:07] Care about your success.
  • [40:40] Think of your investment as if you’re running a business.

Advice to an 18-20-year old:

Buy “Set For Life” by Scott Trench.

Get a Pre-nup, and don’t marry into red flags!

Recommended resource(s):

2 second lean!

Sponsor:

Learn how to invest in real estate with our affordable course: https://www.frommilitarytomillionaire.com/teachable-rei

 

Resources:

 YouTube: https://www.youtube.com/user/Carhug2012/featured

 

Need help in finding an investor-friendly realtor? Check out:

https://www.frommilitarytomillionaire.com/va-realtor/

 

Join The War Room Real Estate Mastermind Group:

https://www.frommilitarytomillionaire.com/start-here/

 

Set for Life Book by Scott Trench:

https://www.amazon.com/Set-Life-Dominate-American-Dream/dp/0997584718

 

2 Second Lean Book by Paul Akers:

https://paulakers.net/books/2-second-lean

 

Check out David Pere on Bigger Pockets:

https://www.biggerpockets.com/users/USMC3140

 

Bigger Pockets Podcasts:

https://www.biggerpockets.com/podcast

 

Follow our journey:

 

Blog:                      https://www.frommilitarytomillionaire.com/

YouTube:             https://www.youtube.com/c/Frommilitarytomillionaire/

Facebook:           https://www.facebook.com/groups/1735593999901619/

Instagram:          https://www.instagram.com/frommilitarytomillionaire/

 

Real Estate Investing Course: https://www.frommilitarytomillionaire.com/teachable-rei

Recommended books and tools: https://www.frommilitarytomillionaire.com/kit/

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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 helping service members, veterans, and their families learn how to build wealth through real estate investing, entrepreneurship, and personal finance!

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