Episode 5 | Stuart Grazier | 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:

Good morning guys is Dave here with From military to millionaire. I'm here with Stuart Grazier. He is an active duty Navy officer who has also been on BiggerPockets money show. So he is like myself, still active duty and has figured out some a lot of different ways actually to invest in real estate and mutual funds and still very well financially. And so we reached out on LinkedIn and decided we, you know, be really cool to have him on to talk to you guys and share how he did things right in a lot of ways. As opposed to how I did things wrong. A lot of ways. So, Stuart so you, what's your, what's your story?

Stuart:

Hey, thanks, man. David, this is awesome, appreciate you having me on. And it's great to connect. I love just, you know, talking and connecting with other military folks that are, in the investing in the real estate game. And, and you know, we all start somewhere and dude I haven't done it all right, I promise you there. There's been plenty of mistakes along my way. But maybe it's just dumb luck or just keep on pushing until you end up making it. So that might be a part of the story as well. Anyways, man, I appreciate you having me.

David:

Yeah, of course.

Stuart:

Yeah, so I guess just a little bit of background about me, kinda like you said, I'm still active duty. I've been in for about 16 and a half years now. And I have kind of been doing real estate, dabbling in different niches of real estate for about 10 to 11 years.

I have made quite a few mistakes along the way. I lost some money along the way, but have been successful in quite a few ways as well. And, you know, own rental properties have done private lending, done flipping, done mortgage notes, lease options, wholesaling. I've tried it all. I think the only thing I haven't tried yet is, is haven't really got into the commercial space, syndication space, but they got like two down the road. That's a little scary to me. But I think down the road, we'll get there.

So yeah, so I started a website about two years ago called military investor network. And that was kind of based off of me and another guy we had, were stationed together in Naples, Italy, and we kind of found out that we both like real estate investing in real estate and we're like, hey, let's just get together on a weekend, you know, and I will grab some coffee and some doughnuts and talk real estate. And that led to inviting a couple more. And then we're like, hey, let's let's do a monthly event. And that led to, you know, five people first than 10 people than 20. And got to be a pretty pretty good event. And then that also led to hey, let's let's turn this online. And let's see how many other people are doing it. Let's, you know, let's get some more discussions going and, and so my wife and I helped create the website. And it's kind of grown for a couple years now. And it's free for all military, free for veterans spouses. And it's just a place to connect, teach each other, and offer investment opportunities. And the goal is really just to teach active duty about real estate investing.

David:

Yeah, that's super cool. So on the syndication thing, I totally agree. I think that's like one of those like, okay, once you're finally done with real estate and want to be done, if you have a friend you trust, like your, take my investment and let me not do anything but receive the dividend. But it's scary even though I know some people I'm like, I don't know, like, I got a buddy of yours indicated like 14 or 1500 units and he's like my agent, like, that's killer dude. Someday, when you get to like, 3000 I'll give you some money. You know, it's like, I don't know, he's got hundreds of units more than I do, or thousands of units more than I do. And it's still iffy.

Stuart:

Yeah, so yeah, so I, I have been the impact I have been the passive investor on a few syndications. But you know, I'm investing with people that I truly trust and that I know really well and I know that have been successful.

05:00 - 10:00

Stuart:

Honestly, it's more scary for me to take on other people's money and do those big investments and knowing that I owe a lot of money back to people. However, we have started to do that on kind of a smaller scale.

We just started a business about six months ago doing turnkey investments, if you will, I don't really like the term of turnkey investments. But the idea behind it was really offering more investment opportunities to like minded folks like us, you know, military guys who want to get their foot in the door, who want to buy, you know, a single family rental property to get, you know, their feet wet into the investing space. And, you know, so we offer that to military guys, and not just military. It could be veterans or really anybody who just wants to get into the investing space.

So we're buying, rehabbing, putting renters and property management in place. And then selling you know, fully rehabbed fully rented, rented. properties to people that are wanting to buy.

We are taking money from investors, you know, so we're borrowing money, but you know, maybe like $50,000 instead of like 5 million, you know, so. Yeah. So kind of a lot different there, as far as you know, getting into the syndication space.

David:

Yeah, more affordable market. So kind of doing like a burst strategy. And then instead of refinancing, you're helping out other guys get their feet wet in Turkey.

So is that through the military investor network? Or do you have a separate website for that one?

Stuart:

So it is not through the military Messer network, we do offer the properties on the website. But the company itself is called storehouse 310 Ventures. And it is we're still new at it that we haven't even had the chance to make a website yet.

I actually don't even have a logo yet. But I guess that's a good thing because our business has grown fully off of you know, referrals and word of mouth every single one of our buyers has has come through referrals and word of mouth or just people that we already knew within our network and same with on the lending side you know we're borrowing money as we're borrowing money from people that we know and that we trust and they trust us you know with with the money so we'll get there we'll probably make a website and my wife has been working on a logo for a while but yeah, we haven't really needed to so far.

David:

Yeah, I mean, if you're doing it all with that much you know that low of an overhead why justify spending the additional expenses when it's working? And then you have proof source for when you do you know, scale it's it's easy to say like, hey, we've got these 15 happy customers rather than jumping the gun and you know, posting the ad on Facebook that says like, the billionaire real estate mogul coach guy who, you know, anyway, yeah. The Guru, that dreaded word.

Yeah, that's super cool. And then I listened to your podcast. So I know you. Sounds like you did some similar things, like I did way early on as far as vehicles and toys. And then you had Financial Peace University. Right, you went through Dave Ramsey, and then kind of came through. So I think I am actually your kind of coach now. Right?

Stuart:

I do. Yeah. And, you know, there are some things that I don't completely 100 percent agree with, as far as, you know, what Dave Ramsey talks about and more so just on like, using leverage and using good debt for real estate investing.

But, you know, if you're kind of talking to, you know, a young, you know, e one, e two, I think it's super powerful to just really understand, you know, finance in general, and creating a budget and no where your money is going. Have an idea and put your money to work instead of just, you know, frivolously just spending whatever you want on, on beer and on super expensive cars. And you know if you can get an 18-19 year old..

David:

My envelope, so.

Stuart:

Yeah, man.

David:

I mean, my new budget.

Stuart:

Nice! I, you know, I just think it's super powerful to teach, you know, an 18-19 year old about how to handle their money, because it's not really taught anywhere.

David:

Yeah, so I have liked my whole website about, you know, military service members working class like real estate investing.

But as I've progressed with that, it's become more about finance and real estate investing because I'm learning as I'm talking to people as more and more people are reaching out and we're starting to have these discussions like having the money to invest is always the biggest question. And you know, you start talking about seller financing and there's all these ways I mean, I've I've somebody managed to never pay more than 6% down on a house or property. And that's including two commercial units.

10:00 - 15:00

David:

So I've managed to finagle my way into some awesome amounts of leverage. That being said, these people, you know, that's a great concept. If you have money set aside to, you know, cover the negative, I just got an email saying that one of my tenants is not going to be one of my tenants. And that's a fairly large lease that I know, a commercial lease that I just lost, and I'm like, well, that's gonna hurt. But you know, we can survive that.

So getting the finances in order, and I realized that that's not something anyone's ever really taught. I mean, we talked about, like, at entry level recruit training, they say, like, you know, hey, get a tsp. That's it. It's like, I remember I mean, my money set in the G fund for like, six years before someone told me you're an idiot. And I never increased my allotment by like, I think it was like 5% normal and here I am, you know, been deployed. And I could have maxed it out if I'd maxed it out for the first four years, and had it all in the C fund with a lifecycle fund like I could have. I could stop contributing now. And I would have enough in there to retire and I could put all of that into investments. Instead, I'm trying to play catch up because I thought I was doing good with my budget, and I wasn't terrible, but I definitely wasn't what I should be. Way too many tattoos and I think, actually just survey the other day. I think booze was the number one regret that service members have in their first like four terms. And I definitely fell prey to that living in Japan. I don't know where my money went. And I'm sure that's it.

So that's something Harley that I totaled So yeah, I think I agree like Financial Peace University. That's, that's super cool. Because it's a great platform to like, get you out of debt and set yourself up. And then I think I'm on the same page as far as leverage. I don't have to buy a house in cash.

Stuart:

Yeah, no, I mean, you know, we talked about a lot on the BiggerPockets money podcast, Mindy Jensen product kind of a good point, as she's like, Dave Ramsey is a great tool to get from a negative net worth to a zero net worth. And then getting from a zero net worth to like, you know, really high net worth. That's kind of a different strategy. And that's where, you know, teaching that 18-19 year old about just just kind of straight up budgeting, knowing where your money's going. And and, you know, getting out of that negative net worth. It's a super solid starting point. And then once you get past that, that zero net worth, you know, trying to get into increasing your wealth. I think you need to start looking more at the Robert Kiyosaki type of thinking. And that's where like, you know, that book Rich Dad Poor Dad, as cliche as it is just just the mindset there is so powerful, and you know, teaching guys it's such a younger age, that mindset is huge.

David:

I always like to hold that book up because everybody in their mother has said that's the book. But I realized that it's gotten to the point where that book is never in my house because the moment it's in my hand, I'm like, here we go read this, read this.

Stuart:

Yeah. Absolutely.

David:

It's a mindset thing. And I think that's, I think that's what Dave Ramsey gets, right is the fact that, like, you know, because I disagree on some of how you pay back debt, but that's because I'm a very numbers oriented, emotionless jerk of a marine. I say emotionless, that's obviously not true, but I'm pretty good at saying like, no, this is what's gonna happen. But for you know, that's like in return in terms of like the high interest paid down first vice like the smallest debt, but, but the reality is that most people need those wins. And so he does a good job of understanding how people work. I think that's what he got. Right? And that's why he's so successful at helping people. So.

Stuart:

Yeah man, agree.

David:

Emotions play a big role.

Alright, so, if an E one e two, or somebody walked up to you and asked you for your advice, you only had a few minutes, right? What would you tell them about finance? We might have covered that already.

Stuart:

Yeah had kind of been talking about it. I mean, don't spend your money on dumb stuff, you know? Like, I mean, if it's a quick, you know, quick point, you know, create a budget, know where your money's going and you know, put your money to work and you know, I would tell them to read Rich Dad Poor Dad, to kind of start getting that mindset. And then you know, once they're finished there, I would probably tell them to read that book Set for Life, from Scott trench and other it's a bigger pockets book. But actually just the idea of, again, like decreasing your expenses, you know, minimizing your, your big three living expenses, to be able to start saving money and have that money to start investing. You know, I think that's just super solid advice.

15:00 - 20:00

David:

Yeah, except for like, actually also lent out right now. Those are probably the first two books that I will hand anybody. I say that I just ordered Brandon Joshua's new like start here real estate book.

Stuart:

Okay.

David:

Because I realized that those are both great mindset books but as far as helping someone with real estate, you know, they're more finance oriented stuff like stocks real estate. So um, hopefully that book is as good a guide as they say, and I can start planning that one out too is like oh, your finances are in order here read this. We shall we shall see.

Stuart:

Yeah.

David:

yeah, no get your finances or and the funny thing is, and you being military, you understand this and like, there's really I can't think of a better place to start financially as far as coming out of high school. And people get so wrapped around this. We don't have enough money in the military. And it's totally self inflicted because the reality is like my first four years I bought like a truck that currently sits in my in laws like three cars that are gone a race car that I finally just sold a Harley, I totaled a gun, I can't take any of my duty stations, you know, a bunch of other guns, a bunch of tattoos that don't bring me any money because I'm not a model. And it's like, all these things that I blew all this money on. And if I had if I'd been smart enough to max my tsp and put even 5% away and savings so that first four year and then put all my money away when I was deployed. I mean, I would, I don't know. It's scary to think how much money I would have been able to leave after four years with you're not gonna find a job with full benefits and paid vacation and I mean.

Stuart:

Don't don't spend money on dumb stuff. There you go.

David:

Expenses, expenses, expenses.

Stuart:

Yeah, absolutely.

David:

So I asked this one and I know that is sort of the preface because almost everyone says I don't think it's the job of the military. So I understand this is that this is not the military's job. However, they do a very good job of teaching us like everything else about life. And I found that the financial advice is good and I'm a command financial specialist now but you know, it comes to too little too late. I think it's great information, but it's not as early on as it should be. So what do you think or wish the military taught you about finances or investing at an earlier age? If there's any?

Stuart:

Yeah, you know, I think kind of going back to the the Robert Kiyosaki deal if you look at that, the cashflow quadrant, if you will, you know, the you have the the four the four different workers, you know, you have the the the employee, the self employed, the business owner and then the investor and if I'd have really kind of Grasp those concepts a lot earlier on in, in my my career of the idea of, you know, moving out of that left hand side of the quadrant from from an employee or self or self employed and trying to move over to the business owner and investor really, you know, we want to be in that bottom fourth quadrant of an investor and the idea of passive income and how you can have passive income and be an investor or a business owner, all while still being active duty military, if I'd kind of just grasp that concept a lot earlier on in my military career, I think I would be at a way different level than I am now.

You know, just just the power of the passive income and, and use your money to create more money. Yeah.

David:

Yeah, it's, it's nuts to think. I mean, then you get tax, tax benefits and we as the military are already in incredibly low tax brackets for what we bring in. That's another point people don't seem to understand is that only like this much of your income is actually taxed. But then if you factor in like real estate and things and you make it even smaller, I mean, you're not going to get into a lower tax bracket, I don't think then being military unless you're, I mean, unless you're someone who's got like a CPA working hand in hand to really plan out your taxes, you can do pretty well.

Passive incomes, huge, and yet even even small amounts. I mean, if you think about, you know, that the TSP, I was earning 1 or 2% for like, seven years had I put that into the account that is 10%, it would have doubled in that time. Instead, it went up like 50 bucks. So.

Stuart:

Right.

David:

And that's what I've been doing literally nothing other than one time going into the website and clicking change the allocation. Yeah, right. I'd have twice as much cash right now in my retirement account.

20:00 - 25:00

Stuart:

Yeah. Yeah, I think I mean, I think it's incredibly powerful that that you know, you can have a steady paycheck the first and the 15th of every month. And if you're smart about it, you can still, you know, get into that business owner and investor, you know, side of the quadrant, all while still being an employee through the military and having all the benefits of activity. So you kind of get the best of all worlds. You know what I mean?

David:

Wait. Can you do things outside of the military in your free time? Like, run up..

Stuart:

Crazy, right?

David:

Yeah. I think we are to some people, I would definitely say crazy is the right word to describe those nut jobs of us who think waking up at four in the morning to work on side things is normal. In fact, even in the Marine Corps, all my friends think I'm psychotic. And they make fun of me when I'm not up at midnight when they're texting about stuff and then I'm up at four like, why are you guys still bombs?

Stuart:

Right.

David:

So yeah, but it definitely can be done. And I think that's it. Improve source that you're, you've got a business going on the side right now as a, you know, 16 year veteran commissioned officer in the Navy. And that's awesome. So.

Stuart:

Yeah, man. Yeah.

David:

So, and you've mentioned a million different things, but I like to ask this question. So what makes this Stuart Gra is it? Am I saying it right? Grazier?

Stuart:

Yeah. You got it.

David:

Okay, cool. So then what, what makes the Stuart Grazier method of investing in real estate or whatever, successful and unique or unique?

Stuart:

Yeah, you know, I don't know if it is unique. There's nothing really unique about what I'm doing. I mean, honestly, like, it's a copy and paste, right. I mean, and that's, that's another beautiful thing about it is you find techniques from people that have done it, who you want to emulate, and then you just you just follow their path.

Now, you know, I've absolutely made some mistakes. And I've actually, you know, I've jumped in headfirst on some things, wherever probably should have kind of taken a step back and thought about it more. But I think at least I took some action, which is a lot more than then quite a few people will ever do. I think, as far as success goes, you know, two things, I think one is really just, just being absolutely passionate about it. And, you know, there's been some obstacles along the way, but I have never given up, you know, I've, you know, I've failed and I've learned from those failures, and I picked myself back up and kept on going.

So I think that's one one part of it, that just, you just have to continue pushing through when stuff you know gets challenging and gets in the way. I think the other one is, is really just having that network and that that, you know, tribe, if you will have people to one invest with, you know, invest in and then you know, include that tribe in your investing. I've found that, you know, over the last 10-11 years, anything where I invested kind of outside of my network or just kind of randomly decided to jump into, it hasn't worked out the way I wanted it to.

And, you know, now looking at the businesses I've created recently, it's with people that that I've had in my network for a long time, people that I love and trust, you know, my, our turnkey business in Wisconsin, it's me and my absolute best friend, my college roommate for four years. You know, we're like brothers, and we talk every single day. And it is fun. And, you know, like it is successful because of the network that we've created in the team that we've built. So I think that's a huge part of success.

David:

Yeah, that's super cool. And I would agree on most of that, I mean, taking action, networking. When people ask me, I would say like, you know, learn, network and then go do it like so. It's all in all of us who have made it work I don't know why I keep doing the quotes in the screen so I tell myself that I'm gonna edit that out and it's gonna make it on YouTube and check it out but it just so yeah I the modeling successful people in businesses and that's something that has not been said to my knowledge yet on my I should probably like memorize all my chat so that I remember if it's been said, but I don't think that's been set.

That's huge because that's what reality is like, that's why we say read a book, right? Somebody has done something, it may not be the same thing, right? There's always that one trendsetter, but somebody has done something, right. And it's very similar to whatever you want to do. And if you follow their model, especially in a business like real estate, where you're not competing with other people, you know, you're just you're in competition with yourself. Trying to be as successful as you can be, and the cool thing is that all these guys that we look up to, you know, I mean, you think of, I mean, I don't want to push the BiggerPockets thing too much, but I'm a huge fan.

25:00 - 30:00

David:

They, every single one of them, if you get one on one with them, or email or whatever, they're all willing to help you in any way. They're like, the coolest group of people in the world as far as, like, hey, I saw you did x, how did you do that? Oh, here you go, oh, this is more information than I know what to do with it and people get overwhelmed there and then they don't go do it. But asking the questions and being networking and being around people that have done stuff like that. All you gotta do is know, be be be a decent enough person that people are willing to help you and then ask the right questions. It's amazing what will happen.

Stuart:

Yeah, man, I mean, it's, it's not it's not hard. It's not rocket science. You know, it's the, you know. Find a mentor. Find someone who's been doing it and that and just, you know, do what they're doing.

.

David:

I mean the running joke is that a marine is that I spend more time trying to not eat the crayons than actually designing things. So if I can figure it out, someone else can probably do it.

Have you read the obstacles away?

Stuart:

I haven't.

David:

Oh, you should, since you mentioned the in your thing about obstacles. He wrote, Ryan Holiday, I believe he wrote ego as the enemy as well. He, I mean, it's a stoicism type book, but it's pretty cool. As far as like the mindset of how to go around obstacles rather than letting him stop you or whatever pretty solid book.

Stuart:

Okay, I’ll check it out.

David:

On that note, I guess we've already mentioned several books but so I normally asked what is the one resource you know, book, course whatever that you would recommend. So I say that we can avoid the three that we've already talked about. Yet another solid recommendation. So.

Stuart:

This is going to be a little bit of a plug. Not for me but for people in my network from friends of mine, they actually just came out with a book. I'm gonna put it up right here. It's called Military House Hacking.

David:

I've been meaning to hunt that down.

Stuart:

And it's from some Marines and some Navy guys. They have a company called active duty passive income. So it's activedutypassiveincome.com. And, you know, they're friends of mine. And they have a great platform to teach people about, you know, just starting doing real estate investing, and they just published this book, I think it's out for like a week now. And I ordered it and you know, it's such a solid, strong strategy to do the military house hacking, you know, using your VA loan benefit. Buying a house, and if you're single, you should be renting out every single other room in that house. Or if you have a family with kids maybe get a duplex or a triplex and rent out the other units. So you're not, you know, you're at least sharing walls not sharing space, but super solid strategy it's a short book I highly recommend getting. I think it's like 3 bucks on Amazon, so check it out.

David:

Yeah, I meant to order that the other day and check it out and I and since we mentioned the house hack I know your first house was a house hack with renters in a very expensive area my first house was a duplex that I didn't use a VA loan because my knucklehead of a lender didn't talk me out of it didn't understand it and I kick myself every day cuz I'm paying principal, you know, PMI mortgage insurance for those who don't know. But yeah, I totally agree. I didn't like itching to leave Hawaii not because I want to leave Hawaii it's amazing though because I can afford VA you know, fourPlex or whatever, basically anywhere else I get station but.

Stuart:

Yeah.

David:

You're, I mean, I was at a triplex yesterday open house trying to help a buddy out as a agent and yeah, like $1.59 million home and it's like triplex that I mean, honestly, it was a killer price point for the building, but you know, even then it's like Well if I bought this in cash, I might make like $500 a month in cash flow. And I’m like, I bought a $1.5 million apartment complex in Missouri I'd make like $10,000 cash.

Stuart:

Right. Yeah, there are definitely some markets where it's probably still not viable to do but you know it depends on again though it depends on on your situation you know, if you're if you're like a National Guard guy or a reservists and you know, you're never leaving, you know, if you're always going to be at, you know, this unit in the military and, you know, you know, example here at Denver, Colorado where I am similar not not Hawaii, but you know, a duplex or triplex is gonna cost you 800,000 to a million dollars and but if you're never leaving, and you're going to pay for a house anyways, and rent is probably going to be just as much as a mortgage on that. Why not, you know, why not? Buy a duplex and, you know, have a rental paying some of your mortgage if you're never leaving, so that's a super solid concept.

30:00 - 33:03

David:

Yep the numbers it's all about the numbers. In fact, there's a guy I don't know if I'll ever get him on here because he said he's not much for the camera. But there's a guy out here, who we call it the monster house. And he uses a VA loan. He bought up. It's like two buildings. And it's basically a hotel like he has his VA loan. It's weird. Somehow he got it's a home with now six Airbnb units built into the second building. And it's all automated, like he's got someone who cleans it. He's got like key locks, you can log in online and like everything. This guy's just absolutely just blowing everyone out of the water as far as how much he's bringing in an income on this thing. I don't know how he ever got it approved by a VA loan. But he did. And he's got this thing and he's like, yeah, we're just gonna retire out here now because this makes enough money for us to do that and like holy crap, and that's, you know, in in Hawaii, where the house are probably some of the most expensive in the country so totally doable. It's just a Rich Dad Poor Dad question, right? I can't do it, but how can I do it? That's Yeah, it's insane.

Stuart:

Yeah, man it's good stuff to do.

David:

So yeah, I'll check that book out. I guess before we wrap up, is there anything you'd like to add parting advice, big ideas?

Stuart:

Uh, you know, I think I've probably said everything that I wanted to say, you know, I think the biggest thing is just like you talked about just educating yourself and getting out there and taking action.

You know, if it's just, if it's just buying one house and doing the house hacking thing that is way more than than so many people will ever do. Or just creating a budget figuring out where your money is going start saving to put a down payment for a single family rental property. It's way more than Most Americans will ever do. And there's so many benefits that we have in the military. And I think if you don't take advantage of it, it's you're not you're not giving yourself the justice that you deserve.

David:

Yeah, absolutely. Well, Stuart. So normally I asked, you know, where can people get a hold of you? But I'm gonna go ahead and plug the military net investor network for you. And then I'm going to let you wherever else you'd like them to find you. But definitely go check out the military investor network as well.

Stuart:

Yeah, thanks, man. Yeah, just there's there. We have, you know, we have our Facebook page, we have the Instagram page, you can email me Stuart@militaryinvestornetwork.com. That's STUART, I try to reply as much as I can. Anyone who ever has any questions, I love helping people love talking real estate. And so if I can fit in, I definitely will. So appreciate you.

David:

Awesome. Well, Stuart, thank you again for taking some time out of your day to come and the chats have been swell. Look forward to staying in touch.

Stuart:

Yeah man. Absolutely, appreciate you having me.

David:

Definitely