How To Build A Business That Allows You To Chase Coyotes In A Helicopter On A Monday (200M AUM) w/ Devin Elder

Devin Elder. Long time coming buddy. Long time coming, man. I've

been looking forward to this day for a long time. Brian, how are you?

I'm doing good man. Let's start off with something that's gonna be a really good value add to the audience. Uh, So you are so badass that it makes me nauseous. I watch that. , I get sick to my. Looking at you search my bio, and it's just frustrating to me. Yeah, , I wanna actually start off with this because it's a point that's pretty recent in my life, and I think that the audience can get a bit of value out of this. And obviously you have perspective for somebody that's gone through the journey, built up multiple companies, which we'll get into. But you're, you just do cool shit. You're like a big hunter. You've got the helicopter, you're a pilot you're golfing, like you're always doing all this cool stuff. And I'm curious when it comes to hobbies, was that something, did you always maintain these hobbies throughout your business or was there a point where the business was built enough for you to have the hobbies and like just live this cool life outside of your business?

Yeah. Yeah, definitely. I think it came from. really one of my guiding principles which I started writing down many years ago. And and it's still a guiding principle and that's every day is a good last day. And, I think there's different ways to paraphrase that. Steve Jobs has allegedly a quote attributed to him, whereas he said, if you're not like loving what you're. for too many days in a row. You gotta change what you're doing, man. And so my adaptation on that is I'm 44 years old if I'm extremely lucky. I'm started the back nine of my life recently, halfway, maybe more. And they might be it though, man, today might be it. And so I, through my experiences as an entrepreneur and everything I just realized I need to be enjoying every day, if possible, as a, as an aspiration. Now it doesn't mean it's gonna happen every day, like today's a Monday. Stressful. Got a lot of stuff going on. I hope today's not my last day, cuz it's been busy and stressful. . But that's okay.

You look good though. You look good. If it's your last day today, you look good. You

gotta, you're coming on the podcast, you gotta do, you gotta do what you can. This piece of content will be out there for a long time, right? So that's it for me, like, all right, every day, a good last day. And then I think as entrepreneurs, we should constantly be question. , what is possible? Why is it like this? , maybe that's just more my nature, but you know what if we could do this, what would it look like? And I just feel like I've had enough experiences specifically as an entrepreneur with a dream. And then you set the goal and then you just figure out how to get there. And so that, man, I've taken on a lot of new hobbies in the last handful of years. And, And a lot of that I think is, I've got three kids and I just want to like jam pack my time with them full of super cool adventures. I, dude, it's Monday. We're recording this. , 24 hours ago I was flying around in a helicopter chasing coyotes at one of our ranches with them. And I'm they're 11 and 13, 13 year old's gonna be gone in five years. And I want 'em to just be like, man, we did a lot of crazy stuff with dad. And same thing with golfing or different adventures we have. So just trying to stack together a bunch of good last days and under the idea that'll make a good life when it's all. That makes sense.

I like that, man. I like the idea of the stacking of the days and I asked that from the perspective of someone that's I'm in what I like to call affectionately the baby entrepreneur stage, right? Sure. So Scott, you got the kind of different, the different stages of business. , my business is a little infant right now and it needs a lot of attention. In David Osborne's world, it's going from the I do to the, we do. I'm protecting the sapling as it grows and love it. I was hanging out with Pasha in Singapore and he asked me, he was like, who are you outside of your business? He's what are your hobbies? And I came to the realization that I don't really have any anymore and there's not much that I think about outside of my business anymore because I'm so obsessed with my business and I'm so obsessed with Action Academy and I love it so much. It's all I think about. That's the frame that I was asking the question. So that's why I was curious about your perspective selfishly, but I think the audience would get a lot of perspective and value from that. I think,

at your stage, and you're a different stage of life than I am, but I was at that stage too, and in the hand. In the early years of my business, I was absolutely. Completely, positively obsessed 24 7 with that business. Every, so

I'm not crazy. Go ahead. Good. Yeah. Check in the box. I

That's, I think that's what it takes and I think that's why so few people are successful entrepreneurs is the amount of rocket fuel it takes to get into orbit is so high. It's it takes so much energy to get out of the orbit of a comfortable job or whatever the case is, and risk everything to go do it. But once you get into space, , you're really not, you're really not expending a lot of rocket fuel anymore. So if you're in that, get out of orbit phase. Yeah. Man, it's years of putting it all on the table. And I, I still love to work really hard and build my businesses and stuff, but it's also completely based around like what I want to be doing too. But that was, that's just the new phase. That's a phase that's come out of years of being in that obsession. So when I hear people like starting a business . And they're un uncomfortable with this or totally obsessed for several, many years. Like that's , that's what it takes. . brian: Yeah, that's what I, okay. That was my assumption as well. But I just like getting your perspective on it. And for me it's just don't know. For me, it's, I think that the key differentiator between somebody that's like the corporate guy to getting enough rocket fuel to be able to get outta that orbit. I like that analogy. For me, it's vision. That's what I preach. Vision. Like you see where it's going. So that's what keeps you going is instead of running away from something, you're running towards this grand vision. Like I'm seeing, I can see it in front of me, millions of people. With, through the show, through the community and everything, and people see that with their businesses. Is there, can you pinpoint maybe one or two things that helps you with the rocket fuel to escape the orbit when you're, when you were in that corporate position, which we'll get into in a second. Yeah, I totally agree. It is the vision. It's what's the vision for the future? Reverse engineer the steps and then you just get obsessed with executing on those steps. But it is a vision of a, of. a different life. And so those have changed for me. At fir at first the vision was, I, if I could just get outta my corporate job, then I've had enough energy to put into this business that I think I could make it do things that were really big and that were bigger than my corporate job was, but the visions change over time, okay. You get outta your corporate job, okay. And as then the vision changes, right? It gets a little bit bigger and you keep. , you keep growing that. There was a, I was doing my, an early multi-family deal many years ago, and it was big tough closing. And I remember we were skiing, I think it was at a event actually. Yeah. And so I would get back from skiing and go answer investor questions or whatever. And it was a challenging time, but I remember thinking the same thing I thought on the mountain. I'm like a mediocre skier. look where you want to go. Like at all times, you, you know, there's a million scary things to look at. Look off the side of the mountain, this and that. You could die. But don't look over there. Look at where are you trying to go? You're trying to go right in front of you and look at that. And so I think it's the same thing with the vision. I think it's gotta be really clearly defined for us entrepreneurs. And then, , it's almost like a thousand times a day. You might have to retrain your focus on that vision. You get sidetracked, put it back on. You're gonna start looking at stuff that's scary, put it back on the vision, put it back on the vision, and eventually, over enough time you build that habit. But without that, it's real hard to stay on track for sure.

Perfect man. I'm glad that I've got the correct ideas. I just like to stress test them. It's like I could come up with my own theories, but I like to like throw them to the wall and see which ones are actually valid, but because I love it. Yeah. The thing is I am ready, willing, and able to change my opinion on anything with newly presented information. Love it. I think that's the game, and I think that's what makes people lethal when they're able to pivot like that. So I wanna talk about your corporate job at the pivot from there, because you left your corporate job at 34 years old and now look what you've done in 10 years. So right now we're in this culture where it's just if you're not a 25 year old Decca millionaire, what the hell are you doing? Which I think is insane. And so I'm curious, what did you do for your corporate job and walk us through that transition period, leaving there, and then starting the multi-family empire that you have today.

Sure. I think the corporate career deserves a little bit of context. I, all I wanted to do when I was a kid was sing and play guitar. That's it. I really didn't wanna go to college, didn't wanna do anything, but I ended up going to college and then I ended up meeting my wife, my now wife. And, was in my twenties and I was like, I was singing in a bar band. I literally made a living singing in a bar band, right? And it was great cause I had my freedom. I was could sing and play guitar and pay my bills that way. But I knew okay, I don't think I'm gonna make this like a real professional career where I've got a recording contract and like serious money didn't seem like that was gonna happen. And I'd met my. girlfriend and now wife. And so like in my twenties, it was like, God, I think I gotta get serious about stuff. So I went and got a corporate job in it and did sales and marketing at this big IT company and did that for a lot of years. And at first I was super gung-ho about it until I, after a few years got to this point where I didn't have any heroes in that company. So like my boss's boss or whoever I was, I don't wanna be like them. And I c I was like looking around, I'm like, man, these guys have some money, but I sure as hell don't want to be like them. And that was when it dawned me like I gotta make another plan. This is literally what's in store for me. And that's if I do well cuz I'm saying I'm gonna get my boss's boss' job in five or 10 years. Like maybe. But there's a lot of us and there's only a couple of them. I would've to really kick ass for five or 10 years just to end up like giving it all you. Yeah, and it's I just thought, and I'd already been an entrepreneur singing in a band and stuff. I knew I could like, put something together that could make some money and pay the bills. And that wasn't like totally foreign to me, even though it was like, A different type of deal. So started reading a ton of books and I planned my exit, I actually took a job that was less stress, less pay for the last two and a half years of my corporate, my 10 year corporate career. . That was intentional. And that was after I discovered real estate. I started buying single family houses. I started doing the Burr method, buy it with hard money. 10 or it was like 12 or 14% interest. Renovate 'em, refinance it out, and then you built some equity and some cash flow. And I was like, wow, this is a really cool model. Wish somebody had shown me this in high school, but, all so I built a bunch of those houses and then I just decided I'm gonna quit my job when I have. Passive income to pay my bills. Now granted this time I married house kids like lot, a lot of responsibilities, but I still was dedicated to getting outta that job and building a real estate company, and took me about two and a half years of just busting my butt, burning the candle at both ends, being a sole provider. My wife didn't work. Building a real estate portfolio before work at lunch, after work, weekends, that obsession, right? That just 24 7 obsession. And then finally I built up enough cash flow from a portfolio of about 22 units, mostly single family and a small multi that I said, all right, now I think this job's costing me money. I think if I had all this time and energy, to, to continue building my business. I think I could make it something big. And so that's when I bailed on the job. And, but I didn't do it until I had cash flow to pay my bills. It wasn't a completely like, overnight, quit on Friday, see you later thing. It was like I compare, it's my Shaw calculated, right? I was chipping away through the tunnel with a rock hammer for y for years until I tunneled out of Shaws shanking and got outta there, right? That. That was really one of the greatest moments of my life, aside from like my wife and kids, was quitting that corporate job after years of planning and just working at it. Oh, it was a freaking amazing man. It was amazing.

I remember when I quit, it was a Wednesday and . I was like, okay, nobody's here to celebrate and it's the middle of the day, and so I guess I'll just play some music in my car and try to manufacture some. Bliss here, , yeah. So that's what I tried to do. I always trying to jam. I was like I gotta do something. Should I go get an extra chicken sandwich from Chick-fil-A and a ice cream? What do I do, man? Really hard, but no, I, yeah I love what you said. So once again I have the same quote. People don't listen to me, don't listen to me on this podcast. Listen to Devin. Listen to these guys that say the same thing as me. I'm just a guy, okay? Okay. I'm just a guy I love. But then when Devin comes and says, look at your boss's. And I say that, then that's when you guys know there's some truth to it. So that's exactly what I did. My VP of sales, that's what I was getting groomed to be, was a vice president of sales for the Southeast and my company. And I looked at him, I'm like, man, you are not seeing your daughters grow up and you are very outta shape and you just look at PowerPoints. I was like, if I kick tail like this is what I'm gonna become in five years, I was like, no. So people, ladies and gentlemen listening to this, look at your boss's boss. If your boss's boss, it's not someone you admire, respect, and want to be. , time to plan your escape. Now, Devin, I'm curious about your methods. So you just broke down the tactics of it, the bird process and all that, which all of us are familiar with on the show. I'm curious, is this something that you were trying to do solo? Or did you have any mentorship or mastermind at that point? Because I know that's something that's important for you now.

You know what's really interesting? I read, I started reading books like Tim Ferris. , which was extremely motivating. Looking back, I don't think it's very like practical, but Sure. To get a young, fair guy fired up. Fair. , which I think is of the point of the book is to get you fired up. I don't know how actionable it is. Sure. Got me fired up. Robert Kiosaki Sure got me fired up, but it wasn't until I went and paid 10 grand for a coaching program. I went to a weekend real estate. I've been wanting to be an entrepreneur, called it, trying to figure out how I was gonna do it. , I put some big money down and I was like, I'll be damned if I'm not gonna make that ROI on that 10 grand. Which was a lot of money for me at the time. And that's what did it, man. It was and obviously it was coaching, mentoring, but I, one of the biggest aspects was like just seeing other people do it. Like this guy's, this guy bought some houses I looking and they're not smarter than you. Yeah, it was like this, like permission that I could do it. And obviously learning, there was a lot of learning and I think I'm a huge fan. I still have mentors and coaches today and groups that I pay to be a part of. It's it's the number one hack I think to being successful is like pay to be around people you want to be like. So that was interesting because that was my first, like I did not do one real estate transaction. I'd read some books, thought about it, this and that. But I joined a coaching program, got in a group, people that were doing the same thing, got some coaching and of saw what was possible. And that was the start of the whole thing for me. A hundred percent. And I'm still a big fan of being in groups. I'm in a couple of groups right now to continue to, help me get. . brian: And the reason I asked that was Shaw shank redemption, where you're chipping away and you're chiseling away at that brick wall and you're trying to get out of the, trying to tunnel out into the, into freedom and into financial freedom and all this goodness. And I think a lot of people try to do it solo. I did it solo and then I realized I was just like taking a spoon. To the wall when I realized I could be taking a freaking pick ax by just taking somebody else. Cuz it's just changing the instrument. And then it's almost the same thing as looking over to the jail cell next to you. And then that guy's already , he's already got a tunnel that's 20 feet deep and you're like, I gotta step my game up. . I was like, John's over here on halfway out . What am I doing? Exactly. John's not smarter than me. What's going?

Yeah, that's the crazy part, man, because you're like, wow, these people really aren't smarter than me. They just are dumb enough to believe in themselves and take massive levels of action. Isn't that the truth? . Walk me through the transition between you exit this corporate job and you got these 22 units, small, multi you've got these single family houses. Walk me through the transition where you had to kill parts of you that were able to get you to financial freedom and then rebirth yourself as this new entrepreneur that was able to take you to where you are today. What parts that you needed to die for? . devin: I definitely had to transition out of the single family space. Like tho those of us that are in multi-family, you go to lunch with a broker, you tell 'em you flipped a hundred houses, they're like, how many multi-families do you have? And the answer's zero. It's like they don't even care. So it's a different, I had to like totally get on that multi-family track, even though it was real estate. And I'd done a lot, I'd done some real estate. That was a big, that was a big one for me. and then, now that I have a big team, it's, I'm really trying to reconcile working through other people. That's something David Osborne says, you gotta work through other people. And I was a solopreneur for a lot of of years where Hey man, I had an idea. I could pretty much execute on it instantly. , right? And that was a lot of fun for me and it was effective, but it's only effective if you're a solopreneur. And now I've gotta like work through teams and that's been a big change for me and a part of me that's had to just evolve and move on. But there's been a series of those over, over the years, a series of changes and. Old things you had to just let go. But one of 'em was getting into bigger deals. You can think about the Robert Kiosaki board game. There's two versions and one of 'em, you finish one and you graduate to commercial real estate. And that's what I had to do. And then the other one to really continue growing was to start building teams. And that's been, you know what, I've been focused on the last handful of. , brian: what was the pivot point family wasn't the answer anymore?

I saw some guys, man, that had a thousand doors and I was just like, God these guys where I want to be at. And I always I, know, I completely knew that from day one I wanted to own a thousand doors. and I just didn't have any money and I didn't, certainly didn't have the confidence. So it took me a couple years of buying houses, burr, flipping houses, working my job, doing all that to where like, all right, I've built if you can do multi-family, you need some cash. That's just, it's a capital intensive business. , if you don't have like hundreds of thousands of dollars to go do that business on a big scale, It's, I don't wanna say it's impossible. It's super tough to do. So I had to build up this nest egg first. So while I was doing all the single family stuff, I had these mentors that were, guys that had been through their careers. They'd made some money, then they got into multi-family and. . I had those guys in my ear for a couple of years saying oh, come on man, you can just go out and buy a hundred unit and you can do this. And they were bring, bring me along while I built up my capital. Cuz I needed both, I needed the capital and I needed the confidence to, to be able to do it just doesn't happen. It didn't happen overnight for me, for sure.

If you were to go back, would you still do it the same way or would you have gone a syndication route?

I think I would've gone syndication. , I'm a glutton for punishment, man. I'll do something and just run it into the ground, I'll just do something to just

until you can't do it no more

I, that's how I am, man. I think I was in single family for too long. I just didn't, I, I didn't have the right tools, the right framework. In some cases, maybe not the right mentors. It's okay to change mentors, one mentor's not gonna be your savior. You can get it mentored from different people. You can get different perspectives and you should, and I remember getting some different perspective on syndications a couple of years into my real estate journey at a conference where I was like, wait a minute, you can do it like this. Hang on a second. And that was a big catalyst for me that if I'd had that a few years earlier, I probably would've done things differently. But it's okay. There's there. There's, you learn lessons to to learn along the way. It's definitely not a straight line up until the right. Like we want it to be . brian: No, not entirely, man. But so now, today I'm looking at the numbers that were on your website at least. So they, they may be out date, but looks like you have 5,000 units and 2,700 that are under management by you. Is that still Rio or did you blow that outta the water already? Yeah, no, that's about. , those numbers

are about right. Okay, sweet. . Yeah, so it worked. Long story short, , you figured it out, man, and you took off to the freaking races. So this is really cool. So let's paint some more color to that transition for the first couple of deals going into the big deals where you finally get the confidence. You got these mentors that are on your shoulder, like the angel on the devil, and then you've got old Devin over here screaming at you and you're like, what are you doing? You got the mentor over here saying, what are you doing, man? Buy the a hundred. . So walk us through those first big deals that you started doing, and then what were your realizations going through that process, maybe of things that you were validated with, what you thought they were before, and then other things that were like, this is completely different than what I thought.

Yeah, for sure. So my actual journey was a bunch of houses and a six unit on the south side of San Antonio that I bought myself, me and the bank. No investors. I think I put. 40 grand of equity into it. So it's like a house. I seriously bought the six unit for the price of the house, right? I just didn't wanna bring on investors. I, this, that was my first multi-family. I ran it myself, ended up being a great deal. Like return wise, cash on cash return and equity. Multiple stuff was great. It just wasn't a whole lot of money, but, It all helped. The next deal I did was 75 units with two partners, a husband and wife team. So we were the three GPS on it and they had done some multi-family before. They liked to absolutely do everything themselves. I'm talking like, cut the grass on the weekend out there. And so that was something to me. I was like, I don't think this is a way to scale it, but they know they've done this more than I have. So I'm along for the ride. My next deal is 130 units where it was just me and that I was. Dude, I'm gonna put the chess pieces on the board and let 'em go. So it was finding the property management company finding investors, and really just being like the quarterback of the deal. And I'm not gonna, I'm not gonna design the office. I'm not gonna freaking do any of the work on site. I'll show up every now and then, but I want to build this in a way that if I had a thousand units. would be replicable and like mowing the grass on your property on a Sunday. Man, that didn't scale to a thousand dollars, that's for sure. So that taught me a lot. That partnership taught me a lot. It was also an extremely challenging property, like terms of crime and vacancy and stuff like that. So that's actually the most challenging property I've ever been a part of. So that kind of set my baseline too, like that 75 unit with some partners that like to do be really like physically, hands on site. , it was almost like showed me all the things that I didn't want to do. Okay. I don't want to be on site. Sure. I don't wanna be in the leasing office. I don't want to do any physically a single thing on the property. So by the time I got to the next property, I was like, all right, let's test this theory. Let's put the team in place and see how this goes. I got some ideas. Go execute. And that property is awesome. Another thing it did too is, that's 130 doors. I remember closing it and standing across the street and looking. dude, I own like this whole thing I did that I own, percentage of it. Investors actually own most of it. These, 40 investors, 30 investors, whatever. But I'm running this show and to be able to do that was super cool. And then after that it, it just like snowballed and buying, buying 200 units, 300 units, 400 units, stuff like that. I feel, I figured on that 130 unit, cracked the code of like, all right, this is how we're gonna raise capital, this how we're gonna run the management, this is how we're gonna execute on this. And really, it's just grown from there. I think that 130 unit was really like the most pivotal thing cuz that, that was me on my own, taking all the lessons I learned from my whole life Corporate. a lot of single family, small multi, a partnership, and it really is, it is just like progressive. I never, it's not like I went and got 500 doors on her contract. Day one. It was very much one foot in front of the other for me. . brian: Yeah. And I like your, so I was looking at your website and you've got a four step framework basically where you do acquisition, reposition, cash flow, and a disposition. So I want to get into the capital raising side, like you just said, where you figured out how you like to raise capital. Then you said how you like to property, how you like to manage the properties, cuz you brought all of that in-house and you're vertically integrated that. So I wanna go into that, but first let's punctuate the, this transition period. What's a piece of advice that you would give to someone? That was in the position of 34, 36, 38 year old Devin who had these houses and they're, they keep buying more birds and they keep doing all of this, but they haven't yet gone to that big deal. Hey, they haven't yet done that big deal. What's some advice that you can give to someone to give them over the hump so that they can get the confidence to start swinging big? Be friends with somebody that's, . Bottom line. . I love

that. . Listen to Action Academy. . devin: Yep. Be friends with somebody that's doing, if you're, that's in anything, right? If you're, I love that hanging around. It's such a weird deal. Our peer group determines I don't know most of who we are, It's terrible, but it's people that are outta. Hang out with people that are outta shape fit people. Hang out with fit people, rich people hang out with rich people. Teachers hang out with teachers. Doctors hang out with doctors. So you wanna be the guy that owns a thousand multi-family doors. You do. You better hang out with some dudes that own a thousand multi-family doors. And that's . I think that's it, man. Otherwise you be reading books and you're gonna be isolated and in your own little world. And we're just social creatures man. Monkey see, monkey do. That's the number one thing. Just be friends with and hang around with people that are doing it. I think that's the best answer. I think that's probably the best answer for that question. Seriously, because I'm thinking about it and I'm like, even with my business, I run my business the exact same way you run your business, but mine's a media company. So how I do it is I'm like, okay, cool. So these guys there was another guy Logan Rankin that came on this podcast may be worth introducing. But Logan was talking about he has 2000 units and he was saying when he had 500 units, he was already planning for his systems for 5,000, and then he was planned for 10,000 and then he planned, because what happens is people stairstep it and they keep running into their own self-imposed bottlenecks because you plan for one 50, then you get to one 50, and then you gotta scrap the entire playbook. So I like that you said that with a thousand, it's the same thing with my community with Action Academy. We got like a hundred members in there right now, but I say, okay, what can I do in the community that I could also do at 10,000? And that's what I think about in every decision I make. Let's talk about the capital side. So I know you're really good at capital raising. You have never lost investor money on a deal. That's something that you're really proud of and it's one of your core values, right? So talk about capital raising, how you like to go about that. And then also on, on your.

Yeah, so started out raising capital. First deal was hard money, so that wasn't really raising capital, but it was an experience where, wow, okay, these guys will gimme money for a pretty beat up house and a bank wouldn't loan on that, but there's other ways to get the capital. Okay, fix it up, refinance it out with the bank. Once I'd done like a bunch of those bird deals, I think five or six of them. , I'm presenting at a meetup, real estate meetup, trying to hang out with people that are doing real estate and a guy comes up, older gentleman, Hey man, I, I see you're using hard money. I'd loan it to you a little bit cheaper and I'm easier to work with. And boom, that was my first, a hundred thousand dollars that I raised. I couldn't believe this guy was gonna gimme a hundred grand. Now granted, , it's all papered up the right way. The attorney's got, he's got a first lien he sees I'm already have, I already have a track record, but to me, like I didn't grow up with any money, so that was mind blowing to me. So I made up my mission in life to just freaking take care of this guy for the next couple of years. Just. Pay him in, pay him interest payments a week early. Make it like a no-brainer that he never had to worry about his capital with me. And I did that for years and I think that habit just stuck. It's like, how do you just freaking over-deliver when somebody's entrusted you with their capital and. , it was several years of flipping and doing a boatload of houses, dozens of houses, over a hundred houses, right? So then I finally did my multi-family deal. I was like, I've actually raised millions of dollars. It was just from private investors as debt. But now we're doing it as equity in a syndication. It's still a hard leap for me to make, but I was able to make it. And with that same kind of group of folks, when, because I started, you begin with the end in mind. I'm flipping houses, but I'm going, I wanna own a thousand doors one day. I'm going, if I give this house to this lender and this house to this lender and show 'em all a great experience, they're gonna want to come back. And these can be my future investors. And they all have friends that want to be investors. And that's just how the whole thing has gone to the point. Now we. Man, like close to a thousand investor positions in our deals. It's bonkers, but it's through that process of just, honestly, just doing what you say, right? Like here's the setup, the return profile, and then we go do it. Not, yeah. Not rocket science, but also hard to do in real estate. I There's a million variables close a deal. There's surprises. And that, that's the business of it, right? Is just dealing with all the surprises and making it like the most easy, painless process for the investor where they go, Hey, you know what? My brother's interested in this, and you guys have done well, and just growing that, any business should grow through referrals, right? As the number one. Lead gen source if you want to get technical about it. And that's how we've set up the investor approach since freaking day one.

I love that man. And it's cool because it's like the small things are always the big things, right? Especially when you compound them. And then for you, it's just like the little actions, like paying the interest payments a week early. Just some the small things to differentiate yourself from every other investor that, that guy's probably loaning money. I think that's massive and people don't overlook that stuff and they look at the macro that they don't even focus on the micro ever.

Yeah, that's right. That's right. Yeah. That stuff was super important early on and it's super important now for our firm and I've, of had to hand that off to a team to, to run it, but under the same vision that this is gonna be a world class investor experience and let's, let's do everything in our power

to make. Before you were talking about hiring out property management, and I know that you're one of the dudes that has yours vertically integrated now and then, so you manage 2,700 of the 5,000 with your D J E. Property management group. So talk about the formation of that, because a lot of people may be listening to this that are multi-family investors, but they are struggling with the property management side and they keep going out. Third party. Third party. Walk us through the process of bringing that in-house. What does that look like from the ground up?

I don't think there's a correct answer. It's, I don't think it's, Hey, fair, vertically integrated is better than third party. How'd you do it? Third parties. I did it out of necessity. I had two assets that were, I had a third party management company on a big one. And just classic. First of all, property, multifamily property management's really hard, and it's not a very high margin business, so it's thankless and difficult. And , you're not, in my experience, you're not gonna find one that's like head and shoulders above the other. They're all running on thin margins and , it's a tough business. . But I had two assets that. Looked good on the financials, but it's because they weren't paying bills. And you can do that for a little while, but you can't do it for long. . So you get all these vendor liens pile up and I was like, man, something's gotta give. At the same time there was a, Dan Sullivan's got that book Who Not How that Benjamin Hardy wrote. A really cool book. I'm sure you've seen it or read it. . So me starting a property management company was a hundred percent who not how. And the right person came into my life at the right time. Somebody that I already known and had a professional relationship with. They were leaving their role at a management company. And I said, Hey man, let's you know, let's start a company and you'll be employee number one and you'll run the thing. And so he, that's what happened. And fast forward in a number of years, he's actually the coo. He's my integrator of all my companies now. So he really, the. works his freaking tail off. But I didn't sit down and build a property management company. I hired somebody to build it and I almost treat it like third party. It's just that I'm also the owner of it which is good for control perspective, so it's, that's how I did it. I wouldn't, I didn't have the desire or the skillset to go out and build a property management company on my own. I've built a private equity company, right? I My job is to find deals that are gonna perform for investors and be good stewards of capital. All the things that need to happen to support that, I'll do it. But that's how I did it, was finding the right person and bringing them in. And then you're playing that, business owner resource allocation game where it's like, gosh, do I gamble on this payroll? and hope that we've got enough revenue, to offset it and make it work. But fortunately we had a portfolio already that was, Hey, you're on multi-family asset. You've, you're gonna pay fees to somebody. And I was looking at our fees that were paying to a third party management that was like, not doing good. I'm like we could just take these fees and I could pay payroll and, have my own company and kind of do that. And so that, that's what I did. , the fees are already coming in. I'm sorry, the fees are already going out from the properties. We just said, you know what we're gonna just put this on our own company. And it's been a, it's been a learning and a growing experience for sure. But I prefer it to having a third party company, but it's not for everybody, that's for sure.

When it comes to, when it comes to the valuation of your business, does that help? I believe it helps correct. With the multiple that you'd be able to

exit. a hundred percent. And that's really, there's a book called built to Sell that talks about that, right? How really the owner, and any small SMB guys or people that are buying businesses, whatever, it's if you're buying a business, you don't want the owner involved as to make it work. So yeah, the property management company runs pretty. without me. And I, And I told my, my integrator that Hey, we need to run these companies like we're gonna sell 'em. I don't want to, because I'm gonna be in real estate probably forever. I'm gonna continue to grow our assets and my family's assets. It's like a family office, right? We're always gonna have a property management company. , we're always gonna need one for the rest of my life, so might as well be ours. So there's no plan to sell it, but it's. To sell the financials need to be this, I need to not be involved. All these things that you would set up for a company to sell actually makes the company better and run better, even if there's no intention to sell. So I'm a huge advocate of like building your company to sell it, even if that's not the game plan.

I love that. I keep hearing that over and over again, and it seems for me. Once again, I just have beliefs that through this podcast and through doing this like literally every single day, this is my full-time job now. It seems like that is one of the friction points between the seven figure and eight figure net worth mark, is that, I feel, would you agree

with that? I think so, yeah. A guy like oh, there's a million guys or gals to point to, but David Osborne's been a real kind of inspiration for me. , you've gotta work through other people and you talk about building a process to be 10 x and I think about the same, back to my first rental house, everything I did was I'm gonna have 10 of these. If I'm gonna have 10 of these, I sure can't do X, Y, z I can't do that. I can't do sure would be easy to drive over there on Sunday and just take care of it for free, but that doesn't go 10 guilty. Yeah, I totally agree. I totally agree. And that. . I just look at anybody that's built a significant business. They're not. They're working through other people in systems. A hundred percent.

What was the transition? Let me think about how to best phrase the question. So it's a transition from solopreneur to building these teams and to be in almost the word that comes to mind is magnetic for these other people to be attracted to your, or. To come in and be , ready, willing, and able to take on these new companies. Like this guy was in your orbit that was ready, willing, and able to do the property management. And then, so you just have more and more people that become magnetic to you. What some advice that you can give to somebody that's going from that solopreneur. How do they become magnetic to attract these people? , devin: that's a tall order for I think it's all about, nobody does anything for you, ever. They do it for them. They do it for their reasons. They don't care about you. They care about them. And so I, that's how I try to always frame it. What's in it for this person? Why on earth would somebody want to come run this company for me? And that's what I try to. Why would, why on earth would somebody wanna come work for us? Be a leasing agent, or be an investor relations director? I don't know. Can we structure a comp plan that's better than what they had? Can we structure an environment that, I was in corporate world, there's some stuff that really got 'em on nerves. Maybe could we try to avoid some of that stuff? But at the end of the day, same thing with investors. , what's in it for them? Nobody cares about me. . And so that's my focus as a business owner is can we structure and this kind of goes back to our core values, right? Our first core value is everyone involved wins. And that's the principle I learned early on in my real estate, investing through a mentor. Okay somebody can come work on my company. This has to be a win for them. I'm not trying to squeeze them for an extra nickel. I'm trying to create an environment where, their best option. And. I hope that's the case for anybody. That works for me. I know it's not the case for a hundred percent, but if they've got a better option, awesome man. Take it. I'm try. I'm, we're trying to do everything we can to make this your best option. From a every facet of that you can, but people are gonna do things for their own reasons, so that's fine. I don't take that personally. Just trying to. . So I think we do that in two ways. Like on the private equity side was a much smaller team. It's really more about kind of compensation and aligning that and a career. I think on the property management side it's a lot about culture, and a lot about also providing career paths for those guys. And as we grow that creates all kind of promotions and they, people see their peers getting promoted and I. . I can't read minds, but I think that's probably motivating to those folks. So just creating it's a situation in an environment where they're gonna win. And then just aligning that all to whatever the company goals are. Hey, if this company wins, you win. And to me, that's the easiest way to structure that. And I like simple. I like simple comp plans. I like simple alignment with company goals, company wins. You win. That's what I've found so far. And I am a student man. I'm learning every day. But that's what I've found so far. Yeah. And the context that I asked that question through is a lot of people ask, how do I find the best partner? How do I find the best mentor? How do I find the best person to go into business with? And then I found the answer to be becoming that person that you're looking. You know what I mean? Yeah. It's like becoming the best partner to other people, becoming the best, mentor to other people or the best mentee to where the, that top mentor will be like, hell yes. I wanna work with you. That's that's the context I was asking the question through, but you completely answered that. So I, I appreciate that. Fast forward to today. What positions do we have right now? What's the company look like today? What's the team look like today and what's the vision for the

future? Yeah, so the vision for the future in a, to, to simplify this to be a billion a billion in assets under management. So that's about a, a five x growth from where we're at. And that's a, I would say like a nearer term goal. Like a multi-year goal for our goals for this year in 2023. And we're talking like very early in 2023. We wanna raise and deploy a hundred million dollars of capital. And I have some ideas about like asset classes and where that's going. . The market's also pretty wonky right now, and so we might get heavier into one a cla in when more heavily into one asset class than another. But I think the easiest way is, as a firm, we're pointed towards a billion in assets under management, and that's just, I classify it as everything we own. And then deploying this year, a hundred million in capital into multi-family, into land, into some development deals, different things that. And then the team, is probably 80 people. A lot of that's onsite staff. But then we've got our integrator, my coo, we've got our head of investor relations, we've got a head of acquisitions and dispositions that we just brought on. We've got an accounting staff. I've gotten admin. There's a couple other admins hr. And then from there it goes over the property level where you've got regional managers and onsite managers, maintenance, leasing, that kind. The company partner, big man, they're getting big . Yeah, I

was about to say that's gonna be a big tax expense. You have a whole line item, man. Oh man, I love that. I love that. For people, and feel free to not answer this if you want to, but we're in GoBundance so I gotta ask, but when you have a team of 80, what is that personal equity position and that personal cashflow look like when you're run running a team that big and you're now that you're leveraging

through other? Yeah, man. I just take, so I'm basically set up like a like Ahol, a holding company, a hold co, right where it all I do take a salary cuz it's an S-corp. So I take a, what my CPA has said is like a reasonable salary for a CEO of a company this size. It's high, a lot higher than I. would want to cuz trying to keep the p and l lean and I don't really want to take it as W2 income, but funny, full circle. Like I'm wearing a suit and a tie and I'm a W2 guy now. Wait, I thought I was trying to escape that world, but , here we are, back to it. So I take a pretty strong w2 and then I take a another distribution from my investment company and that's what I live off of. And I, I don't know if I'm. Disclose the numbers there, but it's a very comfortable lifestyle. Sure. You know enough to do the stuff we want to do and basically at a point where Hey, we can do anything we want. Take any trip we want, have anything you want. Wife can drive whatever she wants. Wear whatever you want. Kids experiences, stuff like that. We can do whatever we want, but then beyond that, it's like you're not trying to grow a paycheck. So all of it is back to this family office idea. Anything beyond that goes back into the investment company that goes back out to the investments. And then also we've got a foundation, right? So the foundation takes a percentage of the profits from the operating companies has that, and the goal is to just give away all the money that the foundation has every quarter. So that's a lot of fun. But it's a kind of set up to where it's I'm not trying to double triple 10 X my personal income because. absolutely living the lifestyle that I want and the more stuff I want. Probably gonna go through the businesses, the businesses own my plane, own my helicopter, owns my ranch, owns my livestock, owns this other ranch, owns this other thing, owns the beach house, right? So those are all businesses, like I don't wanna own those in my name. I want to find ways for the businesses to own those things. My house is paid off. I've got this monthly income coming in. that, look, my target is seven figure annual income into the house, right? , and that's enough. To live like, dude I honestly, it's, that's enough. And I say enough, of course it's enough. It's, used to live on $3,000 a month, right? Beans and rice. Rice and beans. Dave Ramsey. But that's enough to where Hey man, we are maxing on our lifestyle kids. An amazing lifestyle. We had these amazing experiences. Every day's a good last day. Beyond that, I want it all going back into the businesses getting reinvested and it's it's like family office kind of approach where legacy. Yeah. Not even that. I've got some thoughts on that. I don't know if we have time, but more about keeping everything running, keeping everything growing, giving employees opportunities, continuing to put investor capital work. and being good stewards of it and having a good time doing it. I think that's the, you know that's where I'm at this stage of the companies and in my life.

Very fair. It's just, I'm just so interested in it because now I'm seeing how there are so many different ways to take distributions from business because I just now started my business and I just got out of that W2 where I was like, oh, I make a W2 salary, so this is my salary. This is commission. I make a lot here. Okay. And now I don't have that anymore. I can't just make money any way I feel like making it. Now I have to be strategic about how I make money and how I channel it, and how I take distributions and how I set up an S corp. And it's just interesting to me, man. But where can people find you, , ? devin: Easiest way is dj e texas.com. That's got all of it. So stop by, pay us a visit. Would would love to connect with. Awesome man. I will be pulling up to the ranch shortly, , because now I gotta be best friends with you. I'm sorry, like you, you can't get rid of me cuz now I'm down here in Texas. We're just Texas boys now born and raised over here . devin: Let's do it man. Let's take the helicopter out to Salt Lick. We'll grab some barbecue dude. Say less man, say less so for people, listen. , go do exactly what Devin said, grow up that team at 80, be a baller, be a little bit more of a baller today. That's the parting advice that we'll leave. But man, I appreciate you. Thank you so much for everything that you do for all the advice, for all the wisdom. This has been fantastic, man. With that, this has been Brian Lubin with Devon Elder with the Action Academy Podcast, signing off.