Episode 45 | Tony Michael | 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 up military millionaires today we have an exciting episode with Tony Michael as we talk about everything from flipping furniture to flipping mountain bikes to flipping houses, and then obviously your mentality and partnerships and the education that goes into that.

Tony is a Coast Guardsmen or Coastie who is just crushing it. So hey, if this is your first time listening, thanks for joining the community. If not welcome back. The show notes are found at Frommilitarytomillionaire.com/podcast. Now relax and enjoy the show.

Sponsor:

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David:

Hey, what's up everybody? It's Dave From military to millionaire. And I am here with Tony Michael who has been in the Coast Guard for seven years now. And he works in the search and rescue world, which is pretty cool. We were talking about that before the recording, we'll try not to deviate down that. I mean, we probably talked about that for like 30 minutes before we started recording.

And anyway, so he's gotten into real estate investing. He's actually been doing a lot of flipping of various things. And now he's in the real estate realm. And we wanted to talk a little bit about entrepreneurship and all that. So Tony, welcome to the show. And tell us a little bit about yourself.

Tony:

Thanks for having me, Dave, I appreciate the opportunity to be here. And I'm basically Tony Michael, I'm an aviation electrical technician in the United States Coast Guard, you search and rescue I work on helicopters, mainly, and other various things. But yeah, so I'm getting started.

Now I was when I was younger, my parents opened up a store. And I kind of got the entrepreneur bug. I didn't realize that at the time, but um, you opened up a furniture store and they were able to grow from basically nothing to a 300 to $500,000 business within a couple of years. And being young I saw it but I wasn't, I wasn't able to understand like what I was watching at the time until my dad was like, Hey, you want to buy a piece of furniture, you got $200 you'll sell it for 550 next week, and I'm like, No, I want to hang on to my money.

I didn't realize the return on the furniture side. And so I ended up doing it eventually. And I saw the return. And then I used whatever money I had to purchase a dirt bike because I was on a dirt bike at the time. And I bought a little Yamaha TTR 125 for 200 bucks, and rode it for a year and a half outgrew it. And then I sold it for I think 1550 or 1600 bucks, cash. And then I saw that I saw that growth again. And I'm like holy cow, like, this is cool. I want to keep doing this, I'm getting more money and I'm enjoying the things that I have. It's an asset, not a liability at that, you know, at that point, if you buy right, it's not considered a liability. It's an asset.

05:00 - 10:00

Tony:

And then a couple years later, you know I worked at Wendy's as a manager for a little while and I didn't really make good money actually have a pay stub that I keep with me to remind me of like, where I came from and where I'm going kind of thing just like oh I made $319 in two weeks, like, wow, that's nothing. I can't live off that. So um, I got into coast guard in 2012. I'm in for six years, the last probably three years I've been flipping high end mountain bikes like carbon fiber, like carbon components that crazy spec bikes, multi $1,000 bikes, I think the most expensive one I flipped was like 12 grand, which is absurd.

Yeah. Um, so I found a little niche in the market because I wanted to get into mountain biking, I used to race motocross. Um, obviously, I don't want to do that now considering my job is, you know, my income, basically. And I don't want to get hurt. So I kind of took the safer route of like, Oh, I ride their bikes or mountain bikes. And I was like, well, I wonder if I can flip mountain bikes, like I flipped furniture on my other, you know, motocross bike.

So I found a website called pink bike and got on there and started looking around. And would you believe that they actually have a Kelley Blue Book for high end mountain bikes. And I didn't know that. So I saw this bike. And I typed in the bike model, whatever it was, like $2500 new, the guy was only asking 1200 bucks, and it was that yours model. And I was like, okay, so offer him like 1000 because everything's negotiable, right there. So I offered him 1000. He took it. And I was researching, like, Hey, you know, the bike was in good condition, like, what do I sell this bike for. And I found the bicycle blue book. And instead, it was worth, you know, 1500 bucks in good condition. So cherish it, put it on Craigslist, sell the bike within a week, make, you know, 400 bucks, my wife wasn't my wife wasn't too happy that I took a quarter of our savings at the time and spent it on a mountain bike. She was like you better, you better make sure about this, like, so thanks to my wife for that on the way and I ended up flipping it. And then I kept rolling the profits and the money that I was using, because we got comfortable. Not having that money in our bank account is why we were just budgeting, we've always been pretty decent budgeting. But we were budgeting off with the money that we had in our savings. And it's just kind of like the investment money and kind of rolled it. I sold 13 mountain bikes and made 10 grand in two years, it was just like a little side hustle.

So going from that, um, I think we were on vacation in North Carolina. And we were actually mountain biking. And I was flipping a mountain bike, but I took it on vacation. That was another thing too. I have a mountain bike to go on vacation, write it and come back home and sell it to make money on it.

So I'm on the way back from vacation. I was talking to my wife and the car is like a seven hour drive radar driver or whatever. And I was like babe, you have a decent amount of savings. Like, I don't know whether I want to invest in the stock market or she's like, well, let's find a podcast. So BiggerPockets podcast, listen to it for nine hours or eight hours on the way like as soon as we like, as soon as we turn it on. I was like there were fireworks going off in my head. I'm like, What the heck, dude, this is crazy. I can't believe this isn't a thing. Like, I didn't even know about it. And it goes back to that saying like, you don't know what you don't know. Unless you find out about it. You know what I mean?

So we stopped at a Panera Bread, we're talking about it, we're getting like a little game plan together, we were already looking on the MLS, like in our local area, like for homes to flip whatever, you know, getting home. And, um, I think that next week is transfer season. And my buddy that I had left, initially when I got to your station to Puerto Rico was short toward and then came back.

And I knew he was doing stuff in real estate before I left. And when he got back was like, he didn't even say hi, Dave. He's like, you've been flipping any homes? And I was like, No, I actually wanted to talk to you about this. So we ended up partnering on a deal. Um, I think it's probably like, six, six months later, we ended up partnering on a deal. I mean, that was like, the time that I was doing all my research, like, podcasts are good, but I wanted to read books, figure out how to budget, you know, what's the plan from start to finish? How do I get into this, you know, things to look for in a flip like, no bad foundation or you know, back like all the large capital expense items on so I build up my knowledge, you know, read books, or whatever. And then we partnered on a flip. And I was the gap funder slash I'm like a rehab money guy.

10:00 - 15:00

Tony:

So I provided the gap funding to close a hard money loan to purchase the home. And then whatever money was needed throughout the process I gave forth and we were 50-50. And thinking back on it now I probably shouldn't have been a 50-50 partner with them. Consider I didn't know anything. And I was literally just bringing the gap funding to close the loan. Like, Hey, I wasn't gonna argue with 50-50 um, versus the house or 150. But like, the finder's fee was like another seven grand. And then we put like 37,000 into it sort of for 260, like six days.

So two and a half week rehab, we had a really good crew, he has good systems in place, like, rock star, right?

David:

Yeah.

Tony:

So that sort of six days full asking Chad multiple offers on it, we were actually gonna start a bid war, but one of them backed out, whatever. So that was the that was the light switch, when I got that check, or that wire transfer to my savings account, plus my money that I had put in, I was like, holy cow, he's like, I can, I can do this, you know, three, four times a year, you know, with different projects, and basically supplement my salary that I'm making now doing something I'm super passionate about, and putting way less hours into.

So that got the wheels turning, um, I ended up buying this house that we were living in now with the VA loan, I'm sorry, Introduction over sorry. Actually..

David:

Keep going.

Tony:

I'm getting the wheels turning.

We actually bought the house that we're living in now, with the VA loan, it was a foreclosure. And I don't know about the military crowd out there. But you can buy a home with a VA loan. That's a foreclosure as long as it meets the VA inspection criteria.

So when I found that out, I was on that prowl. I was like, holy cow. We don't have to have any money down. Right? I can buy a flip live in it. And then when I leave in a year, I can make like 20 $30,000 I was like, this is a no brainer. So my wife and I close on a house. It was it. We're asking 24 nine I got and you can negotiate with the banks. A lot of people are like, Oh, don't even ask. They're not going to do it. Whatever. Everything's negotiable.

So I came in with a I think they were asking 2249, I came in at 249. I didn't hear back from them. It was like they ignored my offer. And I'm like, Really? So I overbid myself to 218. And they accepted that day. So we are 30 day close. Oh, and that was another thing. They were like, Hey, you gotta close in 30 days. So I mean never buying a house before conventionally. Only with a hard money lender, which is like a 10 day clothes, or whatever. This is easy. Now, it wasn't.

I was deployed, calling my wife every five minutes, like, hey, they asked for this document. Hey, didn't either W two’s, hey, I couldn't do anything I was deployed. And that's, that goes into the second time, or just, you know, second full time job being in the military investing and stuff like that.

So moving on a little bit. So we're still renovating it now. Um, we bought the house with about 40 grand in equity in it based on things like local comps. And by local comps are pulled from like local realtors and stuff like that. I don't, I don't really trust Zillow too much. It'll give you a general comp, like, what the average of the home prices should be.

But, I mean, if a home hasn't sold in five years, it's not going to update on Zillow because it wasn't recently sold. So you don't actually know what the neighborhood comps are. And so you see recently sold homes in your area. So I just check with realtors for that. Um, so we're thinking about the 265 areas where we're going to ask for our house.

Moving a little bit more forward. Um, I partnered with a private equity firm down in Miami, it's called the firm and I'm a lead generator. So this goes into, um, multiple revenue streams, multiple incomes, you know, expanding your knowledge, so I didn't really know that much about hard money and how it worked. And I was kind of intrigued about it. So we were going to buy a property down in Miami, and I, you know, searched hard money lender, like any normal person would do. And I called them up. And I was just talking on the phone like you and I are now. She wanted a little bit of background on me. So the lead generator for another Capital Group prior and she's like, Hey, you want to work for us? And I was like, Yeah, why not? is an extra, you know, if I can close a house, whatever that loan amount is, I'm getting .7% of that loan amount. We're bringing them to lead. That's a no brainer.

So I just, you know, I do a little arm advertising campaign on Facebook and Craigslist and stuff like that to generate leads, and I just send them her way. And it's been good. It's been really good. And she actually gave me an employee discount on hard money loans. So I get eight and a half percent and two points on our money loans up to, you know, $20 million, or whatever the hell the cap is.

15:00 - 20:00

Tony:

So yeah, so right there. their normal hard money loan rates are like 9%, nine to 10%. And like 10, or two to three points based on your experience, stuff like that. So just right there, I've already saved myself half a percent of whatever my loan amount would be on our current flip.

So we use them for our flip. Um, which goes into my next story. Um, because I was a lead generator for a Capital Group, I felt like I could partner with other people that were doing flips and bring them the hard money loan for, you know, an equity stirred an equity stake in profits. So I found this guy down in Clearwater, St. Petersburg Clearwater area. And, um, I was like, Hey, I have the money. I have a couple deals under my belt. Let's partner up. What do you think? And he actually posted a thing on a Facebook page I'm a part of, and I've reached out to him, we got on a call, actually flew down there and met him looked at his system, it's kind of, you know, vetted him a little bit, make sure you're the real deal is, yes, it is done like 150 flips, the last three years. And basically our terms are I bring the money 35% my return 65% he finds a property, rehabs it and sells it So that's where I'm at now.

David:

That's awesome.

Tony:

Long introduction. I'm sorry.

David:

No, no, that's, that's super cool.

So you got and I mean, there's just a lot to unpack there from flipping furniture, to dirt bikes to mountain bikes to houses and then the loan piece, I really like that. That's really smart. You found a way you get a discount on hard money loans, and you have enough money to front the downpayment for it, and you're like, Hey, I can bring the money. And I can bring it cheaper than what it would be if you were to bring the money.

Tony:

Exactly.

David:

And then I just want a piece. And, and that's cool. Because if you were I mean, you're essentially you're almost acting like a private lender. I mean, there's hard money involved, but they're not needing to do anything with it. So it's essentially like your private lender for the deal, and at more affordable rates than what they would get elsewhere.

Tony:

So basically, that I'm sure the crowd is thinking like, what the hell? What? What's this guy thinking? Like, why would he bring? Why didn't they just get his own hard money? He's done 150 flips, why didn't he get his own money?

Well, believe it or not, there are some people that want to give back to the community. And when I saw is, he sent me a joint venture agreement, and it's basically like, dirty, you know, it's a contract between him. And when I saw the 35% return, I kind of retracted myself a little bit. And I'm like, something about this doesn't seem right. I want to trust this individual. But why is he giving me so much money? So, I was just upfront with him. I said, Hey, Neil, Why me? Why are you giving me an opportunity to make an absorbent amount of money for doing basically nothing. And he's like, Look, when I was your age, someone gave me a shot. And I took that shot. And I grew with it. And now I have, you know, my multimillion dollar flipping company. He has a wholesale company, he has a car line on like, one of the busiest streets in Clearwater. Um, that's another thing.

But, uh, it kind of resonated with me, I was like, Damn, I was like, that's really cool. So that giving back mentality kind of sparked my mind. And that's why I'm on this podcast, I want to, I want to give my story and see if there's anybody out there if I could just change one person's mentality to make, you know, take that first step and do it safely in the right way. Um, that's worth it for me, man. So I've kind of adjusted my Instagram, from personal to more business oriented.

So personal finance, real estate, investing tips and stuff like that, um, which goes into, like, the last government shutdown we had, I know, it didn't affect the armed forces, but it affects, you know, affected the Coast Guard. And we weren't getting paychecks for a while. And at my job, a lot of people were running around like chickens with their head cut, like, oh, what am I gonna do? Like, I can't afford to buy groceries this month, and I can't afford my rent. And I'm like, wait, you have a problem here?

David:

Yeah.

I made a video about that trying to go by. It’s like a shutdown as you're worried you're a socialist that is basically saying like, you rely on the government, whether you think you're socialists or not, stand on your own two feet.

Tony:

Exactly.

So, um, I got with my command after. And, um, it was, it was really weird. Having people come up to me and ask for advice. Because I, when they're in that position, I want to lend them a hand. It's our you know, that's our that's our family. Like, Hey, what do you need help with? Like, how can I help you? Like, Oh, I just need budgeting like I need to learn how to budget better, like I need to learn how to save money, but stuff like that, went to the command and got the Dave Ramsey finance course put in place for active duty military on my unit.

20:00 - 25:00

Tony:

Um, yeah, man. So I kind of like the light switch, you know, went off of my brain and I kind of pivoted to more of a helping hand rather than, you know, just keeping it on myself, I don’t want to be greedy. It's not who I am.

David:

I like it.

You know, I want to point out something that you did, and you didn't say it this way. Which makes me wonder if it was intentional or not, but no, no, no, this is good. This is what you did. And you did something very right that most people don't do. And I want to highlight it for those out there because I, I so I get as the platform grows, right, I get tons of requests for mentor or information or help or guidance. And, you know, I love helping, I love you know, whatever. But it, man, as we were talking before, there's only so much time in it. And I can't physically keep up if I try to help everyone who's reaching out. And so what I'll do now is like, hey, check out this video, and whatever gets back to it, you know, and we'll see if they even get back.

The way to get in on that. So I have a virtual assistant, we’ll use her, for example, she may even see this, I don't know if she knows that I'm on to her. But she was one of my beta testers for my coaching her and her husband. And they were great. And you know, that'll launch eventually I kind of tweaked some stuff based on the feedback. And afterwards, she was like, Hey, I know you said you're struggling with this system this time. I can do copyright SEO editing this, that's the other for you. And I'd love to work for you as a VA. And you know, she's not free, but she's affordable. And she's skilled. And she's good. And what it allows us to do is like the other day, we had an hour and a half long call on the phone, talking about everything from buying a limited flip to how we can help grow the community. But it's because she came to me and said, This is what I can do for you. I'd like to work. I'd like to help you.

And so what you did with the guy down in Clearwater, wherever it is, is you said, Hey, I can bring all of this money to the deal for you. And I can do it at a discounted rate. And I'd love to help you out. And then all of a sudden, now you've got this guy being generous and saying, hey, yeah, I'll help you. Someone gave me a shot, you know, whatever. And you've essentially got a business partner. Yes. But you've essentially got a mentor with someone who's doing buku flips.

Tony:

Exactly.

David:

And you did it because you added value didn't go and say, oh, man, you're doing all these flips. That's great. Teach me. Show me your ways, like no, you said, hey, look, this is what I can do. And I think that this will help you, if you like the idea. Great. And that's the way you know, people get so wrapped up in finding a mentor that they forget that that guy's got too much like, like, realistically the guys that you are wanting to mentor you, they have, you have no business being mentored by half of them, because they don't have time to mentor you. And you're not bringing anything to the table.

So if you find something to bring to the table, and that can bring in money, that can be another good one that a lot of people I know do and I actually this was someone that is fine to deal with. I found a deal like, you normally give a pretty good fee. And I didn't, I did not get that huge fee, but I was a partner on the deal and got to learn from it. And more.

So anyway, I wanted to point that out. Because you like you mentioned it you kind of skip past it. I was like No, no, that's a key point for people looking to get started is whether you did it intentionally or not. You found a way to add value to someone and that got you into a situation where you're going to learn.

Tony:

Yeah, which brings me into my next topic, I wanted to talk about is relationship building.

David:

Yup!

Tony:

I think relationships in this business are 100% if you do have relationships, and that's, that's base, that's what the business based off is relationships. This guy knows this guy that can bring this value, and this guy can do this. And this, you know what I mean?

So if you don't have that, if you don't have that, that skill, or you're not seeking to build relationships, you're kind of retracting yourself and you want to, you know, just do it all on your own. Well, it's gonna, it's gonna be hard to get started. And I believe that relationships are an amazing tool for anybody to use on getting started, because like you said, now I have a mentor. That's paying me to be with him on the deal.

David:

Yeah.

Tony:

It's like finding that…

David:

That’s the wrong way to do it. You are supposed to pay him.

Tony:

Yeah. Yeah, exactly. And I'm like, like it's kind of resonated with me again. I'm just like, Wow, I can't believe actually, like, did that. But like you said, I saw it. I brought value. I asked them, I didn't even ask them. I told him, I said, Hey, I can bring all the money to the deal. Done.

He didn't even he didn't even he didn't even ask me to partner with them. I just came in and said, hey, look, I can do this. And he's like, well, like, and then we got on the phone. He told him a little bit about my story, and how Military and using the military to your advantage, like helping out military members really, um, it's their way of giving back to someone that they necessarily can't get back to, besides donating, you know what I mean?

25:00 - 30:00

Tony:

So he's giving back to what he thinks is a good cause because he's helping a military family expand their company. And he, he always says this, he's like, man, he's like, I gotta tell you, you remind me a lot of you. And I was a used car salesman. So Mike, well, I don't know if that's a good thing or a bad thing. But I guess it is a good thing.

Yeah, but uh, yeah, relationship building. Number one, I would say knowledge and relationship building are the keys to starting things.

David:

So while we're on that subject, I'm going to put a shameless plug out there.

Tony:

Okay.

David:

That I just like, just this morning, I created another t-shirt on my website, because I don't know if you know who Jay Holmes is. But he has a T-shirt that just says like, earn, invest, repeat.

Tony:

Ih, yeah, I've seen that.

David:

Yeah. And I liked the shirt. But I was like, Man, you know, that's cool. But that's not my mantra. So I created a T-shirt. On the back. It still says in bold letters. It says military millionaire, because I want that to be the piece that like if you're wearing the shirt, it's like, it's I'm going to be a military millionaire.

Tony:

That’s your brand.

David:

But the front just says learn network and take action. And that's it. That's my like, that's all you need. If you learn the piece, you find the people and then you go.

Tony:

It's funny how we have the same perspective on how to start.

David:

Well, here we are both wearing Hawaiian shirts.

Tony:

And we are both wearing very classy Hawaiian shirts. I didn't buy this for the podcast, by the way, it was in mycloset.

David:

Mine's legit. And I tell people this all the time is a real Hawaiian shirt is brighter on the inside. It's like they intentionally faded.

Tony:

This means I'm not real Dave.

David:

Oh, no.

So no, this is actually funny because this is like a polo. But this is a super high end like probably $100 shirt that I got at a while out garage sale flipping as we were talking about what we were talking about earlier.

Tony:

Yeah!

David:

I got it for like $1 and I was looking at the tag and I was like, Huh, that's real. Yep. I'm grabbing that.

Tony:

Nana Republic what?

David:

Some local, like, handmade companies with like, well, this one doesn't have it. But there was another shirt, same company. And it's actually like a coconut button.

Tony:

Okay. Okay.

David:

Super classy shirt.

Tony:

Yeah so networking relationships and knowledge, I do believe that. And we can go into grasping at opportunities. So I believe that in order to understand, when an opportunity presents itself too.

If you don't have the knowledge to understand what's being presented to you and how to take advantage of it, then you're not ready, you haven't taken that first step, which is building a knowledge base, I do believe that if you don't have the knowledge, you can't, you can't see opportunities, it's going to come in front of you and blow right past you.

So, um, that goes back into six to eight months of research and building my knowledge on what action I wanted to take in real estate investing. And that led to my partnership with this kneel down in Clearwater. And, you know, this is the first of many the guy slips like 50-60 homes a year. And he's like, Look, I'll grow as fast as you want to, like after this one, we can do two or three at a time. And I want to say that this is my ticket out of the Coast Guard. And you'll have three years left to build a very solid foundation for my business and my wife and stuff. And we're gonna have kids soon. So I want to make sure what I'm doing is the right thing. And I don't want to, I don't want to leave the military if I'm not 100%...

But yeah. So knowledge and in taking advantage of any opportunities that present themselves. So.

David:

What is it they say? luck. Luck is when opportunity meets hard work, something like that. I don't know. I don't remember the quote. People always say, Oh, you got lucky. No, no, no, no.

Tony:

Yeah.

David:

It's like, you know, I'm in a mastermind group right now. And the guy who runs the mastermind was talking the other day, and I can't remember what it's called, Reticular Activation System or something. Anyway, we were talking and he said something and it's very true. So have you ever noticed like you? What kind of car do you drive?

Tony:

GMC Sierra? No.

David:

Probably GMC Sierra. All right.

Tony:

Yeah.

David:

Okay, so when you first bought your GMC Sierra, did you notice all of a sudden that there's GMC Sierra all over the place?

Tony:

I noticed them everywhere.

David:

And you hadn't before because you weren't paying attention. But now the old one. It's like holy smokes. You buy a Harley, there's Harley's everywhere you buy. I bought a diesel Jetta station wagon thing. And now I see Jetta station wagons everywhere. And I've never even noticed it before.

30:00 - 35:00

David:

It's in your head right, like now that your brain is paying attention to the fact that you see it everywhere in the midst of all the other cars. And that was a really great example that he gave for that's exactly what your mind does. So when you're thinking about and learning about, networking about, you're flipping a house, when the house that needs to be flipped crosses your view, you're like, there you go.

Tony:

Yep. I wanna take advantage of that.

David:

That's the opportunity. That's the luck is that you knew what you were looking for. And you found it.

Tony:

Yeah.

And Brandon Turner, and then they talk about how they buy houses, just based off of like address and a couple pictures now. It's because they've developed that skill set to know, A, the numbers work, the numbers will never lie. There's unseen factors when you're doing a flip like foundation issues, like in your case, I'm sorry, I keep putting out a spotlight that one, I mean, we had foundation issues on our first flip, I didn't talk about that.

So we had, we had so much money budgeted for the home, we went, instead of doing like a medium trim level, we went a little bit higher end, we did like white quartz and stainless steel and all that stuff. And that was just to build the property up for the prospective buyer, obviously. But we had foundation issues for the crawlspace. It was a concrete block. And it was an unforeseen cost, it costs us $3500 to dig up an L shape around the front of the house down to the base, basically. And then what we had to do is hire a contractor to come in, and basically hot tar the foundation and wrap it to make sure no water would be insured anymore, because we're getting water in our crawl space that was never going to pass inspection.

And we didn't see it initially. Because when we want when we saw the property, it wasn't raining, and there was no snow on the ground. But when we actually closed on a property went over that day, and it was literally like someone had a hose on half, you know, half open just right into the rent into the crawlspace where the heater was, and I’m like, that's the problem. That's an extra 3$3500 that we didn't, we didn't foresee, you know, we're replacing the roof on the roof initially and it looked fine. And our contractor got up there and everything was fine. Where he didn't see was the ridge line wasn't sealed properly from whoever built the house prior. And when it rained, it came through, we had to replace the roof. That was seven grand unforeseen costs.

So when people say oh, you know, you don't, you don't need money to get to real estate. That's kind of like a thin line. Because if you don't have that budget in your hard money loan, and that's why I do a 10 to 15% cushion on my on my hard money loans for my next couple flips on is because you do have those unforeseen costs that you you know, even the most experienced investors are going to a house and be like, Yeah, it looks good to me, well, the age back shot, you didn't know it, it was it was a winner. And now it's summer, and I retract those work. So that's, you know, 10-15 grand, depending on where you live, but that wasn't incorporated into the hard money loan. And now somebody's got to pay for it. So it's gonna be you, if you're, if your sole proprietor is your sole owner, and it is you, you have to come out of pocket? Or what do you do? Take out a private loan in the bank, and, you know, we're put on a credit card rather. So, um, I don't know where I was going with that I just lost my jacket.

But, uh, yeah, well, I guess we'll go into credit cards. So I really do think that credit cards are an amazing tool, um, for flipping and just everyday financing, like you have to have, it's unfortunate, but you have to have credit to be considered anything, you can't get a loan, you can't get a car with a decent interest rate, you can't buy a house, you can't do a lot of things. And as the flipping space grows, and people are getting into the flipping game more, and you have all these like, you know, private money and hard money lenders popping up there because they're becoming a lot more strict with who they take.

So I know this last hard money loan, if I wasn't a partner with them. Um, I've only done three flips, or three flips now my fourth one in Clearwater, but I'm a work in it, they weren't going to give me a good rate unless I had five flips. And five flips is a lot, especially for military members that if you don't have a partner, that's a civilian that can be a project manager for flip, where you work maybe three hours a day in the military, which is unheard of. You can't manage that project yourself. There's no way it's impossible.

So you almost have to do a partnership. I mean, I'm not gonna say it's impossible, but I'm sure there's people that do it all the time. From my perspective, the market that I'm in, in New Jersey is pretty covered up because we have big money from New York and Philly and the EC area that is buying everything up.

35:00 - 40:00

Tony:

I mean, when you go to the share sale, there's 70 people there, outbidding each other. And then you got this one group that has, you know, a couple million dollars buying up everything, you can't compete with that. So I was like, You know what, I gotta find a different market. And, you know, it, I came with the partnership as well, Clearwater. And so I kind of killed two birds with one stone there and got a different market that's doing well, and a partner, and a mentor. So yeah, it all worked out for me, man. But like I said, if you never, if you never adjust your mindset to look for opportunity like that, and never get it, it'll never happen. So.

David

That's it.

Tony:

So just for military members exclusively, um, there's a couple credit cards out there that have insane points or cashback that you can take advantage of right now. Um, they waive their annual fee. So I got a American Express Platinum card. And I think it's $500 a year to have, it's waived for the military, and my wife and I fly for free now is every expense that I have, minus my mortgage, when she can't pay with a credit card, I was pretty mad about that.

Um, I put on the card, and then I pay it off every month, that's important, you're gonna use credit cards.

David:

You have to pay off.

Tony:

You have to pay it off. If you don't, you're just gonna pay an exorbitant amount of interest and whenever you get behind it, whatever.

Um, but yeah, my wife and I fly for free now and it saves us even more money actually put a post up the other day, every time we go to the airport to fly out either Philly or New York, they have a centurion lounge there, which is free top shelf alcohol and, and free food. So now I'm not buying drinks on the aircraft. And I'm paying for food inside the airport.

David:

Yep.

Tony:

I'm saving even more money now on top of the freedom, it's just a win, win win. So I really do. I'm a really big proponent of using credit cards, man, as long as you can. Just don't swipe, Amazon makes it too easy. You put something in your cart, and you Place Order and it's at your door in five minutes. It's insane. And they want it to be like that, but you have to get behind it and just be like, Look, I know, you know, June 1, I gotta pay this card off, we have to set aside enough money to make sure that we, you know, pay this card off. And that leads me into saving money. Um, my wife and I got really good at not spending money.

I think we eat out maybe once or twice a month, we cook all our home or our meals and at home. She coupons like crazy. I don't know how she does it. But I kind of got her mindset to pay for everything. You know why? Why spend $5 more on this item. When we can buy this one, it's the same and maybe an off brand, but who the hell cares is doing the same thing anyways, you know, and then coupon the hell out everything and military discounts and pretty much everything as a military discount attached to it.

David:

Yeah, absolutely.

Tony:

Yeah! Absolutely! Yep.

And I would say we're doing some families, I'm, I'm lucky because I don't have kids yet. Um, so my wife and I, she's, she's a teacher. Um, and in New Jersey, teachers make really good money. So we've basically been able to modify or adjust our living to live off of 40% of our income and save the other.

So that brings me you know, that guy gives me a lot more money to invest in real estate and build my portfolio and stuff like that. So budgeting is huge. budgeting is very big. And I wrote a post the other day, I wouldn't start investing unless you have a nice six month cushion. Just in case anything happens. Your wife lost her job. You get a car expense, come on, you're not scrambling like oh, I gotta run right now you're running your credit card for something you can't pay for. And I do believe like a six month reserve is a really good thing to have on before you start investing and looking for other opportunities. So.

David:

Yeah, I put 500 paycheck and I call it my emergency fund, but it's my travel fund too. So you know, it's like oh, but then I end up buying a flight and just not even needing to tap into it.
So I got a couple $1,000 chillin in there for the what ifs which is which is nice because the waters rise.

I'm going to shamelessly plug if you want more info on the Amex Platinum or some other cards, I have an article and video you should go check them out I went like because I have the Amex platinum and I love it.

Tony:

Yeah!

David:

I've also had other cards that I was not as smart with but the Amex You know, there's some really good cards out there. So I talked about a few of them. Feel free to check it out.

Tony, we've been recording for like 45 minutes. So I got some of these. I gotta hit some of these questions that I normally roll into.

So I guess the first one would be just if an E one, E two, you know 18-19 year old kid was to walk up to you and ask you for advice. You had a moment. Give me one tip, what would it be?

40:00 - 45:00

Tony:

Don't buy that car. You don't need it. I'm telling you man find a nice used vehicle. There's like a calculation I forget what it is. So if you finance something for four years you can't.. The car payment should be a 10% or, or yeah 10% or less than what your net income is for that month.

So if you buy I think 10% of 4000 hopefully I'm doing a bath rate is 400 bucks that's that should be your that would be your car payment. Let's do mean I see these non rates and I'm an E 4 hopefully make any five soon but they're coming to work with these brand new Camaros in like these Ford f3 and like what are you hauling dude? What do you haul? You don't you, don't haul anything? Why do you need this truck?

David:

My Favorites when the tow mirrors are out and they don't know...

Tony:

Yes, 60 $70,000 vehicle I know his car payments on lease 700 a month. And I know he didn't put any money down because he..

David:

And instead he got four year.

Tony:

It's the longest term you can get. Or whatever the hell it is.

David:

Sometimes 8 in some cases, yeah.

Tony:

And then you have and then you have that credit history, which they don't have. So they're paying an, you know, crazy interest rate until they can, you know, establish a payment history and refinance out of the vehicle. But don't buy that car, man. And then it's saved. Like, just save. That's it, like come up with a budget for yourself. Um, my wife, my wife, and I look at our budget, I'd say every three months. And you know whether it changes or not, we still go through the budget. Because at the end of the day, if I'm if money is disappearing, I'm supposed to be saving three grand a month, and I'm only saving 2200 well, where's this other $800 going? What did we do, What did we do this month? That was different than last month? And why haven't we saved that money?

I go through my budget every three months. And I came up with a system that doesn't put me over that 40% living cost. So yeah, budget and don't don't buy a car. Don't buy that, you know, buy that brand new car.

David:

Yeah, I saw someone post the other day in that video or the financial hype thing that I was talking about. He made some valid points. It was like under 100,000 miles around eight to 10 years old, under $10,000. Like something like that. I was like, I mean, I spent a little more than the guy who bought this car for 10 9, but it's a 2013 so six years old. And it only had 24,000 miles or 23,000 miles on it. And it's a diesel. So I was like for one blue book for 4000 more than I paid for it. I bought it and then for two is a diesel little run for a quarter million miles and I got 24,000 on it so.

Tony:

And you get stupid gas mileage, I'm assuming.

David:

Oh yeah, yeah, even in California traffic. I'm getting 35 on the open highway 45.

Tony:

That's better than most.

David:

For a diesel. It's not bad.

Tony:

Yeah.

David:

Well, as I said, it's a nice car with Bluetooth and all that. So it's you know, I still get to have a nice thing but it was for affordable. My payments are like 201 I think. So.

Tony:

So I see that not because I don't I just don't want you to make that mistake because I made it right. I was an E 4. I didn't know what I know now. And back then. I saw that.. I kind of had no other choice. I had a nice truck. I had a 2006 dodge Cummins turbo diesel. Hmm, it was a nice man who had a lift kit on it. You know, I'm from Murphy, North Carolina originally. So that was kind of like the southern thing like, Hey, I just lifted the truck.

That truck started having like electrical issues, and I couldn't figure it out. So I needed to have a reliable vehicle. And I only thing I could go But well, not the only you could definitely have gotten something cheaper, but I saw the truck and I wanted it. I felt like I earned it. But I put $15,000 down on it like an idiot and I'm thinking back now I'm like what could I have done with 15 grand if I have a hard money loan out right now and I only have 20 grand into it. Right? And that $20,000 is gonna make me $28,000 I just made over 100% return on a little like you know an amount of money.

I could use that 15 grand and probably grown into 30 $40,000 and then you know it's just little things like that you don't you know your minds that tune to think about money that way you're just doesn't really matter to you and that's why I'm still paying off I have a $400 a month car payment and I have a year left on I thank God chunk will be paid off but now that my with me at making E 5 and then losing that $400 a month car payment. I have another $1,000 a month, respectively, that I can save. That'll go towards real estate. So.

David:

That’s huge.

Alright, so what is one resource, book, course, website, whatever you would recommend to anyone getting started in real estate?

Tony:

This is so cliche.

45:00 - 50:00

David:

I know.

Tony:

And you know what I'm gonna say? I hate it, but in the same breath.

David:

Okay, you can say a second one afterwards.

Tony:

Rich Dad Poor Dad, Rich Dad Poor Dad.

David:

I don't know why I don't just hold it up like when I asked that question like..

Tony:

Oh, it's in my it's in my overnight bag and my DD bag because actually, this is my second time. I read it now.

David:

I'm sitting on my bookshelf right now.

Tony:

Yeah, I'm Rich Dad, Poor Dad, man, it really, like I had to read the book twice. Because it was so many good, like tidbits and information inside the book that I didn't understand at the time and, and, you know, it kind of explains it a little bit. The book progresses nicely. So it gives you an overall concept of what he's trying to explain. And then it starts breaking down each individual detail as you get further into the book.

And the mind set change that that book creates for you to start thinking about money in a different way. Have money, make money for you. That's it. That's I mean, if I could sum the book and that sentence, it shows you how to have money make money for you. That's it.

Yeah, really good book. And I'm actually gonna plug a flipper. Um, flip your future. Oh, yeah, absolutely great book for people starting out, um, easy read, you could probably read it in two days, um, basically breaks down the flipping system for you. And it's okay to make mistakes because the only way to learn is to make mistakes.

Um, my wife and I got into a bad investment I didn't really want to share with the podcast but whatever. Um, this hopefully this is a good little tidbit for people. People make mistakes. I lost $6,000 on an investment with a gentleman that I was doing a lease to buy option with out of Raleigh, North Carolina. Payday comes. I had a promissory note, I thought I was doing everything properly. Payday comes. That guy ghost me. I haven't heard from him in probably 17 days. I can't go after him. I could, but it would cost me more in legal fees than what I lost. So why would I lose more money.

And I'm glad I'm glad in a way that I only lost six grand because I've talked to some other really big investors on Instagram and through blogs and stuff. And they're like, dude, I lost like my partner, Neil. He had a 40 unit apartment complex, or section eight, in Clearwater. Well 2008 happened. Government Law Section A funding, guess what happened? He foreclosed on a $1.3 million property. Done. I lost six grand, this guy lost 1.3 million and shot his credit. So just when you think you have a bad somebody always has it worse.

David:

Definitely a..

Tony:

Good learning point.

So this time with my partnership with him. Um, I, I did everything right. Don't be cheap, pay for legal fees, it's 100% worth it at the end of the day, you're protecting your investment if it costs you a couple $100 to not lose 10s of 1000s of dollars. 100% worth it. So I secured the hell.

I'm on the deed of the home. I'm on the contract. He's just all he has with me is a joint venture agreement. And that's because I'm not going to screw him over. Obviously, you could take me to court with the joint venture agreement. So um, yeah, protect yourself. Definitely.

David:

Awesome.

All right. Before we wrap this up, Tony, is there anything you'd like to add any parting thoughts or big advice?

Tony:

No, I really appreciate your time. Dave, I appreciate the invite on the podcast, hopefully. I know I'm not the most knowledgeable person because I'm still pretty young in my investing career. But I hope I could shed some light on some newbies, or some people that want to get started in real estate investing or saving money, you know, leverage credit cards, try to save 40% of your paycheck. Don't buy that car. That's it. Yeah.

David:

Well, just so you know, the goal of this podcast is not to showcase all the Grant Cardones and Donald well, the goal of this podcast is to showcase how the everyday service member can build wealth through real estate and finance. You know, you are the perfect person to have on the show.

Tony:

One last thing

David:

Yeah!

Tony:

Don't give up.

If you're if you're getting into it. And easy money is bad money. There is no easy money. Everything that I've built in how far I've come and how much time I've put into building my knowledge and relationships. It's taken me seven months to build a relationship with somebody that I can actually make money with, right?

50:00 - 51:47

Tony:

So everything that I've done on my own has just been me taking that initial step to, you know, leveraging the VA loan to buy a foreclosure that I know I have equity in or using another military member, use your military members. If you have somebody that's like minded with you that you work with, talk to him, you know, I don't know how the how the other branches are, I'm assuming there's like a couple 1000 people to a shop, but we have 200 people, my air station, everyone knows everyone on the first name basis, talk to people, it like minded people with you.

You probably have sub climates and big, um, you know, Air Force and Marines or whatever, you guys probably had like little sub climates of people that are like minded. Get with them, see if you can do a deal together. See how much they know. You know, it's better taking risks with a partner. It is by yourself, because then you mitigate some of your loss.

Yeah, that's it for me, man.

David:

Absolutely. That's huge.

Hey, Tony. Thank you very much.

Where can people get a hold of you if they want to reach out, what’s your Instagram and whatever else?

Tony:

Yeah. So Instagram is Tony_themilitaryinvestor. And you can DM me, I'll answer questions, the best of my knowledge. Um, I don't have a website yet. I don't have a YouTube channel. Like I said, I'm just getting started with the influencer type deal on Instagram. So if you want some personal finance tips or you want to track my progress through my real estate investing my idea would probably be the best spot to find me at.

David:

Alright.

Well, Tony, thank you very much for joining us today.

Tony:

I appreciate it, brother. You have a good rest of the day.

David:

You too.

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.

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