Episode 61 | Vince Gethings | Military Millionaire

00:00 - 05:00

David:

Hey, what's up everybody! Today's episode is I say they're all exciting, but I'm happy about this one is with Vince Gethings, Duc Ong and Matthew Callihan of the tri city equity group.

Now, I have known Vince and Duc for years. In fact, they were some of the first people I met on Oahu, Vince and I used to hang out all the time. We met at meetups, we went to the beach, we'd hang out there, we'd get some drinks there, we talked about real estate, real estate, real estate. And I remember telling them like, man, you've got some solid systems, you're gonna be really, really good at this real estate thing. And now he's got 72 units, just with his JV not good and the rest of the units he owns on his own.

And so today's episode is really cool because for one, I relationship with all these guys, but for two, we get to talk through partnering, why you should partner why you when you shouldn't partner, and how to scale using a partnership and really more importantly, how to pick the right people to be in your team.

So if you thought about partnering or you don't have money to invest in real estate or you don't have time or you don't have knowledge or whatever, whatever your excuses. This episode will probably show you how partnership can help mitigate some of those excuses so buckle your seats. The show notes are found at Frommilitarytomillionaire.com/podcast and relax and enjoy the show.

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.

Sponsor:

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Now! Without further ado, enjoy the episode.

David:

Hey, what's up everybody? It's Dave from military to millionaire and I'm here with Vince, Duc Matt and myself with the Tri City Equity group. These are all except for Matt guys that I know from Hawaii and all except for Duc military guys.

So we got like a lot of random groups going on here. We got the Air Force, Army myself and then an agent out in Hawaii that I actually did some work with and almost bought a house with him once we went and looked at a couple and just never worked out for me.

So anyway, so that's a little bit about how I'm connected to all these guys. But they formed a partnership and they've been crushing it in the multifamily game. So I thought it'd be fun to bring them on and we can talk a little bit about multifamily and a little bit of partnerships. So I'm gonna let them introduce themselves. Let's just go around the clock as I see it.

So Vince, I'll let you lead it out.

Vincent:

All right.

Hey, yeah, I'm active duty Air Force, then in about 13 years, have 20 units on my own. I started investing in like 2017, 2016 timeframe, up to about 20 units. And we'll get into a little bit later where I had kind of hit a plateau and then start a partnership. And now we're at 72 units with the partnership. And a little under two years, three years, something like that. Yeah, out here in Hawaii.

David:

Right on.

Duc?

Duc:

So I’m an investor, I'm a partner in 684 units in six states. Limited partner side in 114 unit deal in Atlanta, a three to 10 unit in a Pasal and 190 unit in Longview, and then on the active side on a single family rental in Anaheim 50 units with one partnership in Pittsburgh and then 52 with a tri city group in Saginaw.

I'm also an investor in pre construction in Oahu, on a contract on Ali, which is supposed to be built in 2021 and as far as an agent has over 16 million in career sales and I specialize in working with investors.

David:

Yeah, no big deal.

Are those LPs are with Lane?

Duc:

Two of them and then one is with Kenny Wolf.

David:

Nice!

Yeah, they take people.

He's one of the few that I think I'd like jumping to deal with.

Matt!

05:00 - 10:00

Matt:

Hey, Matt Callihan, also currently in Oahu, in the army for about 12 years now with little break in service when I switched from enlisted to officer, I started in kind of a live-in flip short sale really focused towards like single family looking to get into that until I met Ben. So we started this partnership and he's kind of convinced me otherwise, you know it's multifamily from here on out.

David:

Right on.

Well, that was short and sweet. I like it. That's cool.

Man, that's a lot of sales, good on you.

Alright, so I guess I'm trying to think where we should start this off. I guess the first thing we should probably talk about is like when you decided that you wanted to form a JV and what caused that and we can kind of talk through your first deal and go on from there.

Vincent:

Yeah, um, I guess I was kind of like the catalyst for joining or starting the JV. I know, we have another partner, Steve. He wasn't able to make it today. But all through networking, going to meetups around Oahu.

Duc is actually my realtor. That's how I met him for my house I bought here on Island. But what I said in my intro, right, so I had about 20 units, I did the small multifamily deals, the duplexes fourplexes, that this is small, multi family for financial freedom. And then after a while you kind of hit a plateau, you realize that when you run out of money, too, you run out of bandwidth. And three, once you get a little bit more educated, your comfort zone expands so fast that you start looking into commercial big deals, 20 unit 50 unit apartment buildings, unit apartment buildings and realize it's not that much harder to do one of those than it is to do a four unit or a duplex.

So that was a little bit of education, a little bit of coaching on my part and realize that I'm not gonna I'm done with the small multifamily, the residential, multifamily. And I'm going to do a bigger deal. At that point was when I was like, Okay, I need to loosen up that control, loosen up the reins and partner with other people. We can grow just through economies of scale, not with just property, but with resources, personal resources and skills that each of us have. So look at people, find people from networking and through your groups that have similar goals, timelines, you know, values, ethics, stuff like that work ethic that you have, and bring them together.

That's how I found Matt and Duc and Steve, got everybody together in this group, and started tackling and looking at bigger units. So I guess that's the short of how we started the group there.

Matt:

Yeah, I mentioned in my bio, or my intro, up until the point that I had met Vince, you know, I was super hardcore, single family, I'm going to do some flips, I'm going to get the requisite skills. All the education I had paid for was geared towards wholesaling, fix and flips. And then I met Vince at one of our meetups and just kind of talked to him, you know, he was explaining, you know, if we have 50 tenants and one moves out, it's okay. But if we have one single family property and the tenant moves out for three months, we can't get it rented, and we're only making 300 bucks a month.

Yeah, there's a year as a cash flow out the door. Replacing one roof for 50 people, it just, it really became a no brainer for me at that point that that multifamily was the way to go. And yeah, have a look back.

Duc:

Yeah, I mean, I guess for me, I was already a JV partner in the Pittsburgh deals. So it's not too much of a stretch to get into another JV partnership that's out of state. So kind of used to doing business on the east coast. So it's just adding on to that portfolio.

David:

As I say, it sounds like you've basically been like the long distance partnership guy for as long as I didn't realize that you've been that busy on the partnership side. That's cool.

Alright, so we've covered that. So you guys want to walk us through your first deal together and how all that went down?

Vincet:

Yep!

Yeah. One of our main markets is called Tri City, Michigan, right. So it's Midland Bay City, Saginaw, one of our brokers to our relationships there, sent us this 52 unit deal. It's a 32, a 12, and 8, three different properties located in the same town, so his portfolio and just send it to us figured the raise was about a $300,000 raise. And that was at the time early early this year, so January, February timeframe, 2019 was when I was starting to form this JV or have those conversations individually, Duc, Matt and Steve, and then this deal came along and was like, Okay, now I have something to bring to these guys. As a deal and we can walk through it together under right together and go from there, we actually did something really cool with this one.

10:00 - 15:00

Vincent:

So we bought the 8 unit. And I said three parcels, three properties, we bought the 8 unit and 100% cash with our JV money. While we were doing the due diligence and underwriting on the rest of the 44 units, the 32 and the 12. And when we were doing the underwriting and closing on that one, going through the process, we ended up cross collateralizing the eight unit with the bank as the down payment for the rest of the 44 units.

So we close on a portfolio of about 1.4 million portfolio. At the second closing, we did a double closing and we ended up coming out of pocket. And it was like 12 grand at the end of that because we had bought that first property 100% cash, and got the local lender to cross collateralize.

So that wouldn't have happened, like, like I was saying before, doing small residential properties, where you're going to gain conventional loans, you know, putting 20% down getting a 30 year mortgage, they're pretty cookie cutter, and you're not going to find lenders that are often very creative on stuff like that, once you break into that commercial space, you can get extremely creative on the way you structure deals and the financing through either seller, seller carries, mezzanine financing, bridge financing, long term debt with hard money combos and stuff like that.

So that's how we ended up closing that first 52. We're going through, starting phase two of the acquisition right now. So we took it over, got all of our leases and everything audited, and brought all of our systems online. And now we're getting to that point where we're coming out of the high turnover from acquisition and getting stabilized going into the winter here.

David:

That's really cool. Cross collateralized. So I know guys who do a lot of cross collateralization for down payments and stuff. In fact, I know a guy who's like 160 units, and I don't think he's partnered with anyone. And that's kind of his thing is just rolling and cross collateralizing. But I don't know that I've ever heard of somebody doing it in that way where you literally buy a portion of the purchase in cash just to cross collateralize it against the rest. Like that's really cool.

Vincent:

Yeah. It’s one of those things like, ignorance is bliss. Like I didn't know we couldn't do that, right? If you ask anybody else. They're like, Oh, you can't do that. And we're like, well, we're gonna do it until they tell us no, right? It's kind of how a win and end up everything all together. Took a while. But everything fell together. We closed around July, and it's been crushing ever since we've been grinding that property out.

David:

Yeah, you guys either you got anything to add on what Vince said anything. It seemed different from your end was was just like dragging you along. And you're like, whoa.

Matt:

Well, yeah, Vince definitely leads the charge. He's, he's kind of the one that's embedded in that market and brought us into it with his relationships that were already there.

But now that's I mean, that's pretty much it. I think. The reason we did it that way, right? Vince, correct me if I'm wrong, but we just agreed to terms on the eight unit first seller and didn't want to wait to close so we said yeah, we'll pay all cash for this. Talk to the bank Brian and and that's kind of how we came up with that process. It was really just fulfilling a need that we didn't know we had.

David:

That's cool.

Duc:

Yeah, doing the due diligence. We're all working together on the underwriting and..

Vince:

Yeah, exactly.

Duc:

I'm verifying everything so I mean, we're working together like well before the close.

Vince:

Yeah.

David:

I think that's probably one of my favorite things with the partnership.

You know, Brandon Turner talked about it in his podcast on partnership like earlier this week, but the fact that you've got, not only someone to double check your work, right, because we all make mistakes, but somebody to just sit there and enjoy the process with you. Like I love analyzing properties, but I find that there are times where I'll analyze a property and I'm all stoked and then I'm like nobody cares. All right, great, you know, but it's cool that you guys can like you know in my mind and like a perfect world you guys are like sitting around drinking a beer and running through properties together. Yes, that just sounds like my kind of party so.

Vincet:

Yeah, definitely then there's also the transparency of like you said, having somebody to double check your work. So I can run a spreadsheet and there's been for this deal numerous nights so we were up till you know well past midnight you know, on a zoom call running through the numbers on steel like me and Duc and stuff and just, you know, when some person gets tired, they might be able to go miss something the other person immediately catches it, or on the what I personally like is playing devil's advocate right is running these numbers. I put out this you know, awesome proforma of how this is going to this property is going to perform for us. And then the other person on the team can just poke holes through it and be like, well, this is why it's not going to work, and then so you're forcing yourself to go back and double double check everything to think of contingencies and levy expectations and stuff like that and think of different ways different exit strategies for all these different processes. And that's one of the biggest things that I gained out of doing a JV doing a partnership is having those other people there to be that action set of eyes.

15:00 - 20:00

Vincet:

It is from their perspective, their unique perspective, right, because we all have different strengths and weaknesses. And one of the things you want on your team is people that complement your weaknesses, like saying the military, building military teams a lot, right? It's going to be like, we don't want 20 people that think and talk and act like me, because 19 of us aren't required at that point, right? So you want to build a team, that each person has their own perspective and own way of problem solving and think looking at problems through their lens or aperture, whatever terminology you want to use that way, but the end result is so much better. We use that. What is it? Synergistic, right? That's a military term, right? But it absolutely absolutely is true. In every aspect, not just military teams, but real estate partnerships and JV’s as well.

David:

So each one of you brings to the table.

I'm sorry, Matt, I cut you off, feel free to go.

Matt:

No, I just want to say, sit around drink a beer, just as an example on this property. Specifically, the entire partnership flew out to Michigan. And as you know, in the Marines, say, right, you're like a four day pass. When we can't put in lead making a face like maybe not, but...

David:

I'm just not going to incriminate myself.

Matt:

So we flew out there to check this property out. I think we got in like late Friday night, Saturday morning, Vince had arranged that the entire team was there, right brokers, property management.

Vincent:

Even the handyman.

Matt:

Yeah, it was all hands on deck. So we showed up Saturday morning, and we toured the property. We broke for lunch with the property management, and then we kind of got back to where we were staying. And as a team, we sat down and built a checklist, you know, just test speaking to the advantages of partnership, you know, went down the list of everything we needed to get done, how many people can we actually meet face to face and it was just ready, break, you know, start calling vendors and getting quotes. You know, everybody had a piece to it.

So that was fun, we kind of came back together and shared all that. But you know what, at best, you know, an astronomical amount of work for one person. So something else that we were able to do and it was a fun trip.

Duc:

Strength in numbers too, I mean, you want to divide up the work as, like Matt said, it's a lot of work for one person, so it helps to have multiple people especially like walk into properties to like, you can split it up. So it's not like we're on, you know, walking the same properties.

Matt:

Yeah.

David:

And yes, it's definitely, definitely time consuming to try to tackle something like that on your own. And especially if you've got a full time job as all of us do. So.

Yeah, that's a huge advantage.

So what uh, like, who does? Who does what in your JV? Who's the analytical guy? Sho's the dreamer? Like, how did you guys get up?

Vincent:

Yeah, so um, just because I had the competitive advantage in the market, I was already embedded for my other 20 units in my other company. I already knew a lot of the players. A lot of contractors, so um, my role is the operator. So I manage the managers I manage all the teams in Michigan there, though, kind of set up the systems of how we're going to operate. That's pretty much what I do is to manage the managers as the operator.

Matt:

Yeah, so I do a little bit of a new market lead generation in Michigan, it’s a far trip. It's called, we're looking to expand some different markets. So I'll shoot out emails or call brokers and just try to look at some of their deals. And then as a team, I'll pass them to do conveyancing and they underwrite some of their deals, and we communicate back this is what we like, this is what we didn't like, just so that they know that we're serious, and we know what we're looking at, and they'll start sending us some of their better listings.

Duc:

And I help with the operations also like also managing the managers. That's Monday morning calls and finance side like the accounting, bookkeeping and marketing so building out a website and eventually launching a podcast.

David:

Ooooh.

Vincent:

Yeah, we're talking about strengths and weaknesses. So I'm pretty good at underwriting. I'm pretty good at operating. I don't know the first thing about marketing at all. So when Duc, like I got this new website, or these new ads, it's gonna help us. So I'm like, okay, like, I trust you, I don't I don't, I'm not even smart enough to have educated, you know, choice in this topic. So whatever you say, I'm good. That's one of the things you want to go to your team members to compliment, you know where you're lacking.

20:00 - 25:00

Duc:

And speaking of marketing, Steve, he's not here. He's also part of the marketing team. So Steven and I have been working on the leasing portion of the 50 unit portfolio. And, yeah, I think we've found something that's a little bit more innovative than the typical way that people manage these properties, which is in leasing, just let the pm run the leasing. But we found that we want more than that, like, so we ended up running Facebook ads, or the leasing listings, and we had them professionally photographed. And then we have virtual staging, which is kind of new for this segment of the market. Because nobody does that for like, C class, you know, apartment building. Super cool.

Vincent:

Yes, yes, it is.

Duc:

Yeah, like we got like our listings build pretty quickly from that the majority of them came from Facebook. So.

David:

That's cool. And Facebook ads are cheap. So that's awesome.

Matt:

Yeah, that was pretty cool.

I've never done anything like that. But, you know, getting into the analytics and Duc boost up those ads, when we see that the most most traction is getting getting had on those those ads and something with this deal is kind of during the underwriting we had planned for, you know, X amount of turnovers in the first year what those happened for us in the first month.

So Duc kind of marketing strategy has been, it's been awesome, really, because we're just about 100% occupancy, pretty quickly.

David:

It's funny how you'll go months with nothing. And then all of a sudden, there's like, like, I've had one of those months over the last month where I just, I mean, I literally had someone die and like no one knew that he was dead for like weeks. So I bring in like an environmental cleaner for like $5,000 to get rid of the carpet. Like, you know this. So it's like, I had like nothing this whole year for this property that I was at. It's like boop, boop, boop, boop, like thing after thing, everything and then we'll go back down. Probably won't have anything for the rest of the year. But I've already got that whole budget spent. So.

Vincent:

And in that lens into exactly why multifamily is so much better, right. So if you had, I know you got like that 10 units, right?

Yeah. So if that was a you know, if you had two duplexus, you did a $5,000 expense. You're done. Like your whole year shot up, right. And for me with my other, my other 20 units, I did add like three water heaters and something else happened like a case like bed bugs or something or something that needs to be remediated in September. And normally that would have if I stayed small, that would have crushed me. That would have been a whole year, you know, because we're talking 6 or $7,000 in expenses in one month.

David:

Yeah.

Vincent:

So if I was doing just this small, single family houses or duplexes, fourplexes, that would have been a whole year's worth, even with the reserves, like a whole year's worth of, or at least a whole quarter's worth of cash flow gone.

David:

Yep.

Vincent:

So, the security that you get from going bigger is awesome. Because we didn't even, we had we had I don't know how many turnover, probably 15 units turned over in the first month on a 52 unit, right, the first month of acquisition. And we've still paid the bills on time, and everything because our breakeven was at 67% occupancy so we had no problem keeping the lights on and everything. So this lens into why multifamily is so much better.

David:

Yaah absolutely like, exactly that.

Even a duplex. If you lose one side, you're still stuck for a little while. And it's not the end of the world, but it's not the same as note the scale.

Awesome!

So any just for a quick touch point. For one I'm going to explain because even though it's like 25 minutes into the show, 40 minutes into the show that JV means joint venture. I don't know why I never actually said that. I'm sorry. I just realized I was saying JV JV JV. So we're talking about joint ventures, those of you who are unfamiliar, but could you explain briefly what a because I'm trying to do a better job of not answering my own questions on the show.

What a JV is and why would you go with a JV as opposed to forming a full on corporation or however you would?

Vincent:

Like a syndication, do you want to take that one?

Duc:

Sure.

So the differences in JV all the partners need to be active. Whereas in a syndication model, you can have general partners who are active and then limited partners who are passive.

So in a JV legally, you can't really have passive investors. So that's how we structured this one.

25:00 - 30:00

Vincent:

Yep.

And this one since there's four of us it was an easy, easy split 25% everybody has equal equity in the company on that New Tri City Equity Group LLC that we formed. Every 25%. Everything's full transparency, every dollar that we retain over our reserve threshold is split into four ways. We do quarterly distributions, and annual filing, we'll do a K1 whenever we file and then everybody takes that K1 goes into their own CPA and also however they want.

Matt:

Here, I thought we were just the junior varsity waiting to get over 100 units. So we can make the varsity team.

Vincent:

Yeah.

Matt:

Joint venture.

David:

I mean, insert about Army versus the Marine Corps here.

Okay, so that was let's see, I had another question on here.

Oh, downsides, right? Everybody always gets all fearful about things. So obviously, there's downsides with doing a joint venture or going big. There's downsides to everything. What do you think would be some of the more common like traps to avoid? And what have you guys done to mitigate those when jumping into a partnership with people who? I mean, you know each other, right? But like, not for your entire life? Like there's all these things that, what if so.

Vincent:

Yeah, I got a perfect example.

Earlier in the call I was talking about definitely, when you're talking about joining these partnerships, you definitely it's not something you're jumping into, like you're getting into, like almost a marriage. So many meetings, many, you know, beers or dinners or something like that, before you get anywhere near signing a paper, you want to make sure that this person has similar goals and values, right that you do, similar work ethic.

Another important one is their timeline, right? If you're doing large buying whole multifamily, with a 7 to 10 year timeline, you don't want to partner up with somebody that wants 100% return on their money next year, right? That's used to wholesaling or flipping, right? It's not going to work, they're going to be very impatient. They're not going to understand why it's taking so long for stuff like that.

I already talked about different strengths and weaknesses. I think the biggest one, when I talk about the downside in my experience is definitely egos, is probably the biggest one people, their ego start bumping up together. And it's one of the things you just have to kind of look inwardly first, instead of pointing the finger at somebody else and get through that gives you that process and this is something that the military teaches very well with forming teams and you know, the different process the the forming the storming the, all those different team process that you can expect to happen when people's personalities kind of get comfortable and start clashing or their motives or whatever, and and how to work through it.

And a perfect example of this is me and Matt actually met somebody recently. And this guy bragged a lot about how much money he had and all this stuff. And after talking with him for 10 minutes, we were like, there's absolutely no way I'm working with that guy like he's so obnoxious and pretty much told us he was, you know, a micromanager from hell.

Matt:

Yeah.

Vincent:

it's not just about who's bringing the most money, like just because you find a man or woman that has like, Hey, I got $300,000, right, you go invest, let's go, like, be very hesitant to just see the dollar signs and see what they can bring to the table. Because Yeah, as soon as we got done talking to that guy, man, I was like, yeah, we're there's no way that we can work with that guy. How much money, how many millions of dollars he's bringing to the table.

So I think that's more important than just how much equity they're bringing to the table.

What do you guys got?

Matt:

Yeah, I think part of the way that we mitigate that, too, is just by defining roles, right?

So if a decision needs to be made obviously or be made, obviously, we look to the whole group for input, but if there's not time for that, you know, Duc can make that decision on his own. Regarding marketing, for example, no one's gonna question it, because that's his job. I think we've been fortunate that we haven't really butt heads on too many things. As far as a downside of a partnership goes. Yeah, we don't really, I mean, I don’t see that we have that yet. Just by defining those roles.

You know, we might have a different opinion. But then the kind of majority vote goes to whoever is responsible for that activity.

Vincent:

The CPA thing, right? We just had that like I wanted one guy, Duc brought somebody else that was cheaper, and the group voted for the cheaper guy and that was settled. That's no point in getting, you know, worked up about it or anything like okay, that's the way the group's moving, press, right?

Matt:

Yeah.

30:00 - 35:00

Duc:

Yeah and I think just communication too is key to avoid some of the downsides. I think one of the biggest downsides is miscommunication, right? Like, I mean, that's typical in any team, like if you don't communicate enough, or if you don't, you don't get the message across correctly. But so we've been trying to mitigate that by having, you know, regular communication, like, we have a group chat and zoom calls, and we have our, you know, regular weekly calls with our property manager. So that's how we kind of stay on the same page.

Matt:

Yeah, Vince and I were talking about this earlier, and I don't know what the Marines call it, I think the Air Force is still calling a command and control the Army's calling that mission command now. But any task that needs to be done, right, you just, instead of micromanaging where we're giving a clear and concise intent and an end state, and then we just let the operators execute that, however they choose to right. As long as it gets done, we don't really care how we're not gonna micromanage. And we do the same kind of within the group.

David:

Yeah, that's what I was about to say, as it sounds like you've thrown a lot of general military leadership and just leadership into, because that's what the way you said it earlier Matt about if a decision is made, and there's not time, like, you guys all know, the end state. It's a decentralized command, you all know, hey, this needs to happen. And this will get us there. Like, if I don't have time, I can make that call. If I do have time I can, you know, bring it to the table. Which I think is really cool. I think that's powerful to think of, you know, I'm going to exclude Duc for a second here.

But I mean, because the military, right people, people get wrapped around, we all hear it like the people who get out and they're like, Oh, you know, I just kicked indoors for a living, I didn't learn anything in the military. Like, that's not what makes you money. Being an aircraft mechanic, being a motor t guy, being a logistician, being whatever in the military. That's not what makes you money once you get out, what makes you money when you get out is understanding how to form a team, how to work together, how to lead, how to make decisions, the decision making one I think is huge, like being able to just pull the trigger on something. And so I think it's cool that you guys have, whether intentionally or totally inadvertently been able to bring very clearly some of those aspects into your JV.

Matt:

Yes, universal across every industry. You know.

David:

Yep.

Successful people know how to make decisions and do.

Vincent:

I can!

David:

Can, go for it.

Matt:

No, I was just gonna say earlier.

David:

I’m gonna leave that in there and make this like super long, awkward silence.

Editor take that out.

Matt:

We talked about earlier, kind of the decision point to do a JV and that's, that's kind of where I was at for me is like, I knew I had some gaps to fill. But Vince presented the opportunity. And it was like, I can lean on some other people and learn along the way. And that was my decision point, like, I'm just gonna do something right. I'll figure it out as I go.

David:

Alright, so if you had to, what would you say is the best part of being in a partnership that you've seen so far?

Matt:

For me, it's just been these other guys' knowledge, right? Vince, already owned properties, Duc already owns properties, Steve already owns some properties I had done. Like I said, some live in flips, I'd done some training, but I didn't own any multifamily properties. I had, you know, an understanding of the napkin underwriting, but these guys and their spreadsheets it's really amazing what they do. And I'm just not there yet. And I'm okay with that. I'm learning, these guys are teaching me. Luckily, they haven't been too hard on me.

But for me, the biggest advantage to the partnership is having teammates that, you know, they give me confidence in making these decisions, too. Because I know that they're, they got my back. And they're gonna, you know, I guess they pick up the slack if, if I if I dropped the ball on something, and I'm always learning,

Duc:

I think one of the strengths of a partnership is that you can diversify the risk. So that, you know, if I do one deal by myself, that's all my money in one deal. But if I'm spreading it out with multiple people, then you know, that means I can do more deals faster, bigger and diversify geographically too.

Vincent:

Yeah, for me is definitely breaking through a plateau not just money wise, like I ran out of money or whatever, but also my bandwidth right? So I had this hodgepodge of 20 units that I still have but I knew very quickly that I wasn't going to be able to continue to script to scale and grow those keep picking up these these duplexes and four units and whatever so just being able to have that a pull our resources together and go after bigger deals faster and grow faster was huge for me and then also sharing the workload on those deals.

Like we said, you know, I'm still active duty so I just got back from TTY Alaska, where I was out for a week and there's a lot of stuff I couldn't do so you know, everybody else do and picked up the slack. I was able to make calls and send emails when I was and have the internet access that I normally would or the phone access that I normally would.

So that that's huge for me just be able to grow, grow faster together, get rid of that, that scarcity, you know, fear mindset of I need to control everything, everything needs to be mine, and have that, you know, that abundant mindset of like we can grow a lot faster and a lot bigger together. Definitely the biggest remain.

35:00 - 40:00

David:

Yeah, that's a valid point.

I mean, that's why I, like I still try to stay like a full month ahead of content right now. Because I don't necessarily have that if I'm not around to record stuff, then. I'm working on it. But for now, like with the content side of the house, if I'm not here, then I mean, there's no one else running the podcasts. So in that regard, I totally understand. But yeah, that'd be really nice. Sometimes on the real estate side to have more people, you know, out there to help out with things because without my property manager, I wouldn't have been successful this far. It would fall apart at one point or another when I was gone.

So Alright, would you guys recommend tackling deals with Joint Ventures off the bat? Or should you underwrite some deals or knock out some deals on your own? I know, we've got all different experience levels. I'm kinda interested to hear what your thoughts are.

Vincent:

Yeah, for me, partner as fast as you can. I think my learning curve has been pretty sharp. That started with a single family built up to 20 units in about 18 months, and then quickly realized that I was hitting a wall really fast.

So I jumped into that that lightbulb for me of JV and partnering about two years, three years into this, for most people, a lot of people we talked to at meetups and stuff like that networking, they go 10-20 years on their own, just, you know, lone wolf's out there and real estate investing before they they've had enough and they need to they need to partner with somebody.

So I think, for me, partner with somebody as fast as possible, preferably somebody more experienced than you. That way you can like Matt was saying you can learn from them. As you're also investing. You're getting a return on your money at the same time.

Matt:

Yeah, I would say for me, even if I grow to be the most knowledgeable multifamily investor that there is that partnerships, like Ben said earlier, it's just that velocity of capital, you know, with my money, maybe I can buy a 10 unit, but with four of us, were buying a 52 unit and the returns are just better, right? I mean, you can multiply that money and buy bigger deals.

So for me, personally, I don't see myself ever not doing a JV.

Duc:

Yeah, for me I started while leasing multifamily in a partnership in Indianapolis, so bought a three unit with a partner. And then before two years is over, we sold it and we both made our profit. And then in Pittsburgh, same things partnership.

So yeah, I mean, the multifamily space has always been partners for me, because it's a matter of just diversifying, and you want to grow faster.

Vincent:

Yeah, another key point side, circle’s background. So we're all in Hawaii, right? And all of our products, all of our properties are all mainland in Michigan, we're looking at Texas now and Pittsburgh. So imagine how hard that would be if we were on our own managing property, acquiring property, underwriting property, doing all the due diligence, from properties 4 or 5000 miles away, right? That's, that's a lot of stress to put on yourself for no reason. So you build these teams, you do these partnerships.

I know Duc’s when his partner is on the ground in Pittsburgh, right? So he's the boots on the ground guy for this JV tries to the equity group. We built the team in Michigan, that their boots are on the ground there, and we just kind of keep constant communication with them.

But yeah, if you're especially active duty, back to our military audience, you're going to be geographically separated to your units, you know, at some point in your career, right, it's going to happen. So I don't want to wait for the time again, assignment. To start building the systems and start building these teams, it's gonna be so much stress that you're gonna put on yourself that it's not needed that you can plan ahead. There'll be systems out way ahead of time.

David:

I agree with that completely. It's all about teams.

Even for me who most not all anymore, but most of my stuff was done without a partner. Kind of like you first you know, X number of units is all my own. But I still had the team on the ground and without that there would have been no way for it to be possible. So it's about a point.

Alright, so I know, Vince I know you've invested in some coaching this year, which we talked about back when I was in Hawaii. So I guess I was just gonna ask, you know, looking from the coaching standpoint, just because I know you've done that, and I've seen you at some of the events. And, you know, I don't know for Duc, Matt, I don't know what you guys do for personal development. But I'd love to hear kind of what you guys have done as far as coaching, learning, mentoring, whatever, and how that's helped you out, like what the most valuable thing you've gotten out of that was.

40:00 - 45:00

Duc:

A little change of pace.

So yeah, for me, I joined Lane's mastermind, and thought that was really helpful, because now I have, like, closer access to some of the stuff that he puts out. That's kind of a little bit more exclusive than just the general stuff. Because I mean, it is a ton of content, but also the networking with potential, you know, future investors and other passive investors in that group.

Matt:

Yeah, so for me, like I said, my strategy, when I first started with was a little bit different, I was going to get into the wholesaling, single family.

So I did the clever investor mentorship program with Cody Sperber. I got a lot of pretty good computer based stuff through the program, some direct marketing, things like that. And then, ofcourse, my mentor. So when I switch strategies, I still pick up the phone and give him a call because he's doing the bigger deals, right.

So now I just have different questions that I can ask him. You know, not too long ago, I think we were looking at a mobile home park. And he has some experience with that. So I hit him up and was sitting in the deal. And sometimes I'll contact him, you know, because we're always raising money, right? So I'll contact him with deals and see if he's interested or see who he knows that might be. And then just kind of on my own, because these guys have done other programs, right. So we kind of all share lessons learned from that.

You know, the networking events, I really like those as opposed to just like a strict course Vince and I just got back recently from the Jake and Gino wheelbarrow profits in Orlando. That was pretty awesome. That was new to me. He's part of that community. So we got to meet a lot of people that he's been talking to online, meet a lot of the vendors, and then just read books, like book after book, you know, pick one up, finish it, you find another problem, find a book that covers it, and start reading it.

Vincent:

And for me, I did a lot of the bigger pockets.

Yeah, so I started all the bigger pockets books, Brandon Turner books. That's what I used to buy all my first 20 units, all the small multifamily. And then once I hit that, that wall, that plateau, I needed another resource and other something to get me over that I'm in bigger pockets really didn't have at the time. That's when I found the Jake and Gino wheelbarrow profits Academy did that program. And within six months of starting that program, we were in contract on a 52 unit.

Not only does it give you the knowledge, but the competence to be able to tackle these deals, the people in the community are a big help. Just having a community out there. Everybody said very similar goals, very similar problems. Everything's been covered 100 times. Just ask the question, and people respond to you in an hour.

But yeah, the program itself has been, has been awesome. And helping us shorten that learning curve, and then implement systems that we would have had to build from scratch. And not only do they tell you like, here's the system, here's our vendor who we use to implement this system, right? Whether it's a ratio, utility billing systems rubs, or something else for utilities or mismanagement, they'll give you, here's why you need the system. Here's the system we developed and here's our vendors to help you get the system off the ground.

So that was huge for us. Being able to just almost plug and play just you know, you do little tweaks on everything just to personalize it to whatever your need is, or whatever your problem is, but just having that resource there has been huge so I'm a huge fan of quality coaching programs. Absolutely, I wouldn't advise to go to those weekends, you know, boot camps that are you know, you get the free buffet and run in the back of the room and sign up. Like where Dan Merrill or whatever those.

David:

Him, Rich Dad Poor Dad, and I think there's a..

Vincent:

Yeah, so I wouldn't advise that I would definitely say, you know, referral only kind of, kind of thing. I find somebody that has proven success, like they've done the program, and they can show you their portfolio. Here's where I was two years ago. And here's where I'm at now. 100% because in this program, that's kind of the due diligence I would do before you start stroking a check for a couple grand for these things, guys. You're a lot of people that, you know, yeah, I went to this program, I did all this stuff. I'm like, Oh, yeah, what are you doing? They're like, Oh, well, I'm still, you know, building my foundation, right? Like a lot of the, I don't want to keep name dropping, but you hear a lot. I spent 10 grand in his programs, great. They do everything. And I'm still kind of in the setup of my mycorporation phase, like, Dude, it's been a year. Like you haven't done a deal yet. You dropped 20 grand on this program.

45:00 - 50:00

David:

I set my Corporation up by literally getting my property manager to send me a Word document of her LLC filing and changing names.

Vincent:

Yeah. And it's like 50 bucks, right? To register with the state.

David:

Yeah, I mean, maybe.

Vincent:

Yeah, so definitely find people that can show you can prove to you their success with programs and you know, people are enthusiastic and passionate about those. So for me, the Jake and Gino family has been instrumental in my success and growth over the last year.

Matt:

I think it's important to to touch on Vince said that he kind of found that community as part of getting through his plateau. So just to kind of touch on what Vince said is start with that foundation, your self education before you're dropping money. I mean, you wouldn't hire a trainer to get you ready for the NFL if you didn't even know what the sport of football was, right?

So reading books, there's tons of free resources out there bigger pockets is one. If we're going to plug books, I've got me events, both of our books sitting here, ready to show but start there. And then that way, when you get that mentor that you're paying a lot of money for you have the right questions to ask, right? You don't want them to be telling you do this, do this, do this. Okay. What does that mean? What is the JV? I was on JV in high school. You know, just to build the filmnation, be ready for a mentor, right? They say when the student is ready, the teacher will appear.

David:

Yeah.

Matt:

Knowledge.

David:

Bingo.

I like that you mentioned. I mean, obviously, all the tangible benefits for all of you guys. But the one thing that most of you said and I know Vince definitely said is the like, the intangible, it's when you pay to play with these coaching organizations or with these masterminds, or whatever. It's the people you're getting around, right? So like Duc was in Lane's mastermind, I now have a mastermind that I operate, and the guys that are in the group are all studs. And that's been awesome. Because it's like, holy crap. Every time I get on a call, like, I'm getting to talk to people who are rock stars. They're getting to talk to people who are rock stars. Everyone in this group is talking to people who are rock stars, and somebody can solve basically any problem that everyone has. And it's the access, like that's huge. Being able to just pick up the phone and go, Oh, I know who can solve this problem. So much easier than Google. And better advice usually.

Matt:

Yeah, I forget the exact verbiage but something about proximity equals success, right? If you just get around people that are doing what you want to do. Yeah, you'll figure it out.

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David:

I guess my first question as Matt was itching to do over there I'll let him plug his books, so what kind of resources, books, courses, websites like what do you guys recommend for the newbie?

Matt:

Yep, by David Lindahl.

David:

I know David Lindahl and I doubt it's like a...

Matt:

But this book might as well be you know multifamily for dummies. It literally is a step by step do this then this then this. And you know, make money while you have a day job and never be a landlord.

Vince recommended I read this book, and I did. And it's like it's so basic. It tells you everything literally that you need to know.

Vincent:

Who's next? Duc?

Duc:

I guess for the newer investors this book by Brandon.

David:

Yeah, that was one of my first three.

Duc:

Yep, yeah, look, I'm no and low money down. Because it kind of makes you think creatively because a lot of people..

David:

Yep, those are the other ones.

Duc:

A lot of people think that we can't invest because of so and so reason or excuse, but I just have to, you know, think a little bit outside the box and there are ways to get in the game.

50:00 - 55:00

Vincent:

Yeah, for me. I'm gonna plug this book here just because it just came out and I was very very impressed with it. It's a honeybee by Jake and Gino the wheelbarrow profits owners. It's pretty much like a new generation Rich Dad Poor Dad. And let's see the richest man in Babylon. So it's kind of like that. But even me, I got 72 units, I have been investing for a long time. And I'm still highlighting this book. So even for not just beginners changing one of those huge paradigm shifting books, because it absolutely is that but also has some stuff in there that experienced investors need to be reminded of like, for example, vertical integration, right. So we're still not vertically integrated in the full sense of the word we're trying to get there. But, you know, you don't see many beginner investor books talk about, you know, vertical integration.

David:

What that is because you're right, not enough people talk about it, and I'm sure half my listeners don't know what that is.

Vincent:

Yeah, so it's pretty much you have your core business and our example right, it's military or not military. Multifamily apartments, right.

So yeah, mostly apartments. And then you have all these different industries or aspects that need to feed into that core business. So you have property management needs to be inside. So most people third party, that out, right, some subcontract that out vertical integration would be developing, starting another company or another offshore LLC, and having you own the property management company, and then you owning the capital equity group. Also, right, rather than going out and having to raise money and bring money in, have a capital group that can also fund your deals and fund other people's deals, right so every aspect of your real estate industry you own rather than subbing it out and having that economies of scale in house. And that's one of the topics of that book is they talk about that rather than you might, you might need to sub it out at the beginning, because you don't have the bandwidth or the know how to do that stuff. But once you get established, you should really think about bringing as much of that stuff in house as possible. And putting these offshoot companies that all feed your main core business, which is acquiring an operating multifamily apartment building. So.

David:

Yeah.

I think that kind of clear?

David:

That was accurate.

Vertical integration is. I mean, that's where the big money is. That's what I mean, we all know, Cory.

Vincent:

He just did it right. So.

David:

From House flipper, to house flipper with a brokerage with a lending company with a contractor. And it's just everything comes through them. Which means you get better prices.

Vincent:

Yes.

David:

And it also means you're making money when those people are working for other people. So it's just a win win.

Vincent:

Yeah, exactly.

David:

Man, you probably get better quality out of your contractor because you employ him rather than like hope he shows up.

Vincent:

Exactly, yeah.

So that's, I think every entrepreneur should have that at some point in their business plan of after they get their foundation to be always thinking toward building systems and then building for vertical integration. Like one of the old tricks on unplug the E myth, right. So every entrepreneur that can build a business needs to read this book, The E myth by Michael Gerber definitely talks about the poor into building the franchise model. But not that used to be the standard write that for entrepreneurs, but it doesn't talk about vertical integration, right? So we need to get to that next level, right that 2.0 of a build the systems have everything in that franchise model to where I can plug and play and you can step out, but now get vertically integrated. So you own every aspect of the company that's feeding your main business.

So that one's really good. I know we talked about this before. And I'll just plug one more is the book that made me the most money is Never Split the Difference. Not a real estate book. It can be anything.

David:

I wrote an article.

Vincent:

Yeah, I do.

Yeah. So the article was, you know how one email was saved? That was 8$0,000.

Matt:

84,000 yeah.

Vincent:

Yeah. And that was 100% from this book, The Chris Voss concept. So it's not really a real estate book, but we're talking about the biggest ROI and 300 pages. Hands down on that book.

David:

I made, I saved 4800-4500 on negotiations on a property while I was still reading that book, because that's not 80 grand, but it's definitely more than the book cost.

Vincent:

Exactly. Yeah.

So not not really a real estate book, but absolutely hands down the most money I've ever made up a book off of, you know, a weekend of reading.

55:00 - 1:00:00

David:

Yeah, and on that note, before we wrap this up, I'm going to plug if you haven't read this book, you totally should especially because if you guys ever plan on raising capital, but it's similar to never split the difference in a weird way. It's called The Like Switch. I was recommended this a month ago, and I had it sitting in here but it's In my room now to do more actual, it's one of those. It's the first book. I think, normally I listen to an audio book. If it's really good, I'll buy the hardcopy.

I think this is the first audio book that I bought the hardcopy before I finished the audio book. But it's another FBI guy who wrote a book and this guy basically his job was like convincing foreign spies to spy on their nation for the US through nonverbal stuff.

And so the whole book is just like, how to make people like you. And the guy who recommended it is a huge, huge capital raiser for flipping and, and everything. And he was like, This is the reason I've raised capital is people like me, and I'm not a likable person. I just work. He's like, I'm a quiet dude. But it was pretty cool. But it's a super cool book because it's written in the same mindset as never saw the difference where, like, it tells you how something happened and then breaks down piece by piece how to make it happen. Even as a picture, if it talks about eyebrow raise as a picture of it, so you can see what he's like, it's a pretty cool book.

Alright, so before we wrap this up, where can people get a hold of you guys? Duc this is your moment to shine with all the links and..

Duc:

I guess for our company, we have a website. So tricityequity.com. And then our IG is also at tri city equity. And then for me my IG Duc.Ong.Realtor. I'm actually hosting multifamily meetups also monthly, on Oahu. So our group is Honolulu multifamily more. And the next meetup will be December 3 at Symphony on ward in Kakaako starts at 6pm. So if anybody's on Island and ready to go, then check us out.

Matt:

So my Instagram is also actually found through the same but at Matt Callihan.

Vincent:

Yeah, I don't know if I have an Instagram. But I'm on Facebook. Vincent Gethings is the only one. Email is [email protected]

David:

Cool!

Well, any last parting words or advice before we wrap this up?

Duc:

Yeah, I think well, like if you starting out, I think networking and meeting other investors is huge. Because that doesn't really cost anything or you know, very little compared to these guru programs. And when you're making decisions, you should always identify your criteria and make them based on underwriting and math. Not emotions, because it's easy to get caught up in the deal and be emotional about it. But like, we'd really try to stick to that principle of investing based on underwriting.

David:

Yeah, emotions are terrible things, they will destroy you.

Vincent:

What do you got Matt?

Matt:

Yeah, so we're just gonna, you know, talking earlier, I know you'd like to ask if we could, you know, tell you want to get a piece of advice. Something that I think a lot of military get hung up on is they get a pay raise. And the mindset is, oh, you know, I'm making an extra $300. That's a new $300 car payment I can get.

Every time they get promoted, they increase their spending, right? So it doesn't matter how much you make if you're spending it all. So you know, if you're comfortably living at a certain paycheck, do something that's going to help you in the long term with that pay, raise, invest in something. You know, we choose real estate, there's cash value life insurance, there's high interest savings accounts. Just don't take that as an opportunity to spend it and start early, right, I think, at least most of us are investing in real estate. So that one day we can have financial freedom to just kind of do whatever we want. If you're always spending that money. You're just you're not going to get there.

Vincent:

Exactly.

Yeah. So for mine, the E one E two nuggets, there'd be understanding what opportunity cost is and not just for your money, but also for your time. So every every dollar you spend, you have forfeited every other possible decision to utilize that dollar forever, right. S

o same thing for your time. Every hour you spend on the couch, watching TV or playing video games or drinking at a bar isn't an hour that you lost forever, we could be educating yourself.

So opportunity costs, understand the time value of money, right compounding interest, and delayed gratification, right. Like if you can just have the discipline to make smart decisions with your time and money very early on in your career. It's going to pay dividends for literally the rest of your life. So that'd be my advice for them for anybody looking to get into real estate partnering, definitely lose your ego. Find your why like you're no shit like this is your this is your why this is why you wake up every morning. This is what's going to get you through the suck.

So find your why, partner sooner and set on reasonable goals. I think that's another thing that most people do is they set realistic goals because they don't want to fail or their perceptions of what they're capable of are based off of what their inner circle is doing. I use the Power Five, we talked about that earlier, who you spend time with or your family.

1:00:00 - 1:03:49

Vincent:

So a lot of people that I see both inside the military and outside, they set these realistic goals because which are way low, and what they can actually do, based off these perceptions, and they don't really want to test themselves. So I get people to set goals that are so ridiculous, and so unreasonable that the only way to succeed is you have to take massive action, and give up frivolous things, is the only way to achieve those goals. Then after six months, I see him like holy crap. You know, I hit a five year goal and eight months, right.

So I think that's one of the biggest things, or a couple of the biggest things there, right. So.

Matt:

Yeah, I can get Vince going on getting rid of smart goals. Yeah, he is not an advocate of a SMART goal. But you know, it's a valid point, right? If you're shooting to make a million dollars a month, and you come up short and only make $500,000 a month like I'll take that.

David:

Exactly.

Matt:

Reaching for those astronomical goals. Yeah.

David:

I think the smart structure works, but I definitely take the reasonable or attainable piece and say, yeah, we'll just add a zero to whatever that.

Vincent:

Yeah.

So what I teach is to set massive goals that are kind of like the 10x road Grant Cardone's level of goals. And then I set smart milestones, right? So that's part of my when I coach and I mentor my younger airmen. That's how I do that is we, whatever their original goal is, you said add some zeros to it or whatever. And then setting smart milestones that, you know, this is what we need to do one year is what we need to do one month. So we need six months, we need to do this week, we need to do today, in order to achieve that goal.

David:

Yep. you and I agree on that completely. I was gonna buy it, was it 2000? Yeah. To the end of 2016, beginning of 2017, you and I were talking and we were talking about that, and 10x and goals that I had literally written on a piece of paper. I'm going to buy three units at the end of this year as my goal. And I was like, Oh, yeah, what I'm doing here, and I added zero to 30. And I had closed on 10 by the end of February.

Vincent:

Nice!

David:

So that's, you know, that's and then obviously I went on and bought more after that. But like the fact that was what drove it home to me was like, Oh, I just like tripled my what was going to be my annual goal in less than two months. We do this more often.

Vincent:

Exactly like my original, my 10 year goal of getting out of the military. And my retirement goal was 20 units. Read the 10x rule, read the one thing kind of mesh those two books together. And I hit 20 units in 18 months, just by forcing myself to take massive action. So it absolutely works.

David:

That's incredible.

Alright guys, I have to wrap this up. But thank you very, very much to tri…. Whoo!

Tri City Equity Group, tried to combine words there. It's almost like I don't know how to read. That's the marine in me, I guess.

Cool. It's been fun.

Vincent:

Alright, thanks.

Duc:

Thanks.

End:

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