The Business Behind Buildings: 500k in Monthly Cashflow & 1900 Units w / Logan Rankin

Logan Rankin. Hey buddy. How are you

doing? Good, man. Doing real good. Thanks for having me on.

We unfortunately have gotta be friends, man. We gotta be friends. . You just got done hiking in Zion, national park, killing it and multifamily taking over the world.

Let's be friends, man. It's before. That sounds great.

Right? Love it, brother. So I am pumped to have you on today's show. You have a decade long career in operations and leadership in the retail space. So that in and of itself is worth the podcast. Then you decided to do this thing called real estate and blew this thing up into 1900 years.

Yeah. A little bit over. Yup. Yeah.

1900 units. So you dabble in real estate and you own all of these yourself,

correct? That's correct. Yeah. I still retain all the a hundred percent equity, a hundred

percent equity in 1900 units. This is awesome because normally you'd never see this. You see this 1900 units, you see these numbers thrown around in their massive syndications that. 80 partners. So that is definitely sets you apart. So we'll obviously get to that, but first we're going to start with the backstory, take us through this corporate journey and some of the skillsets and traits that you picked up there that really helped you translate here in black.

Yeah, that sounds good. And I'll even start it just a little bit before, too. Like my background, I grew up in a small town in Northeastern Wisconsin, which by the way, most of my apartments, actually, all of my apartments are still in Northeastern Wisconsin area. And but anyway, grew up in a small town of about 3,500 blue class hardworking. Same with my parents. Worked really hard, high integrity type parents, great parents, but we just didn't know or talk anything about money or building wealth. So like most people are, a lot of people go through the rest of high school, go through college, graduate from college, still don't know anything about building wealth, but know that I never had any, so I wanted it. But the only thing I knew. You graduated, she should probably get a job. So let's start working for a corporation. So I did, and then it had a lot of, I had to put myself through college. So I'm sitting at about $40,000 with debt and all I know is that all debts, bad debt. Cause that's what was shared to me through college. So I'm aggressively paying that off and then they tell you to save money. So I'm saving, then they tell you, you should put money in a 401k. So I start putting money in a 401k anyway. Yeah, man. That's I did it all like for the listeners, like that are stuck in there. If anybody is still in their W2 job I was lucky enough to get a pretty good job. That was performance-based. So I worked 70, 80 hours a nights and weekends seven days a week. A lot of times landed in a fixer up type of store and did well turned it around, got promoted. After two or three years of doing that, I ha I'm like, I'm making more and more money, but I'm still doing everything I ever learned from school. So luckily like one of, one of the biggest things that helped me change is I didn't my family, my friends, I didn't have anybody around me that I knew had substantial wealth. Or knew a lot about money. Everybody around me told me the same thing that school and society was telling me. So I'm like this is, I don't know what to be. I'll start reading some books. So I started reading 10 pages a night. You can finish a book a month, you read enough wealth building money type books. You start getting into real estate because 87% of the wealthiest people have real estate. So then I'm like this is interesting. I've tried just about everything else. I tried the IRAs, I tried the stocks. I tried I just loved the opportunity that real estate could give you, but I didn't know anything. In fact, like the only thing I knew is just people keep telling me it's risky. So I remember, I still remember, and everyone

says that, man, everyone says why? Okay. So how affected are you by the stock market crash? I'm not at all. Not at all. So what's risky anymore people. Okay. Stop telling people that are investing in real estate for the first time, stop telling them it's risky. K continue. Let's ask

them. I like to ask them. And you think this is risky. Tell me a little bit about your investments and then they'll say something like, and I'll say, okay, 401k. So where is your money invested? Like actually what companies, what stocks what funds? And they have no clue. I like to ask them how much they're paying for fees. They have no idea. Like they can't touch it. Yeah. And then what do you, what were your returns? What are your cash on cash returns? Not just your ROI. And they'll tell me some, probably negative 14% this year, but usually they'll tell me some kind of ROI they'll be like, is that in your bank account or are you going to wait till you're 60 before you can touch that? Because. That's what it is, but yeah. Anyway. Yeah I took the risk. I convinced my wife at the time to invest in our first investment property, which by the way, was a single family home made about every mistake you could make acquiring that property, still own that property. And it left us with $7 in our bank account. And I remember I told my wife, I'm like, I, based on this book, I underwrote this deal. Just like it said, it should produce $3,300. And if it does, we're going to take. With that money. Okay. It's fine. We can do it. And it came within 50 bucks and that Brian, that changed everything for my life. It wasn't the $3,300. Obviously. It was the fact that if you asked me to underwrite a 401k and how much it's going to be in a year, or a stock or anything, I would have no clue. So I realized that it was predictable. I realized you could control it. And best of all, that money was sitting in my bank account. So then I convinced my wife not to take that vacation. Saved up for another 12 months and we bought a duplex. So we doubled, we bought two units. The year after that we saved all the money. Again, we went broke again, literally, less than a hundred dollars in our bank account bought two duplexes the next year. So we doubled again. So three years, seven. Then your question was, what did your previous job help you with? I, at this time at my leadership job in retail, I was starting to really Excel. At one point I was overseeing five different states, 19,000 people three and a half billion dollars worth of sales taking out a lot of responsibility. And I realized the reason I was is because I was pretty good with people, I can lead people. I could engage people. I was awesome at operations. I love looking at operations and how to make things effective and efficient, but most importantly, like I obsessed over P and L so I could look at a P and L and how the store was being run. And like now we've got to figure out how do we incorporate the people and be able to drive that. So once I realized that, and I translated that into real estate because I started looking at my properties, it's not properties anymore. I started looking at them as. That changed everything. So I really started to figure out how to change this business. I E this property and make it a lot more profitable, which made it a lot more valuable. And that helps scale. And somewhere around 180 200 units in. Beginning of 2019. My, those units, I had a third-party management company at that time. Those 180 200 units were making as much money as my W2 job. And I was making about a half a million in my W2 job. So it's not what you make, it's what you keep. So that was the crazy part. I'm like spending 10 hours a month on my real estate portfolio. I'm still working 70 hours flying around different locations in the United States out of Wisconsin. I'm like, man, I'm making the same amount of money on 10 hours. So quit. After I ran that analysis and first thing I did is start my management company. Hired somebody with no real estate experience. Doesn't own anything to run, make sense. We can talk about that later. He's still the president still kicking ass. So we had four people including myself. Today we just hired our 74th employee. We're going to spend over 3 million on payroll this year. And like you said, I scaled up from those 200 units to 1,923 units to be exact. And then I do help my employees get into real estate as well, too. So we probably have another two or 300 units that the management company manages. We only manage from my properties and the employees properties and at the same cost basis, it's like their 401k.

So essentially vertically integrated.

You got it. I would tell you we can get into this too. It's property management companies probably. Yeah. The wrong word. We're just as much a pro a property management company. As a construction company, we can do 85, 80 5% of anything that needs to be done. Turns whatever in house. We got nineteens going at the same time. Rehabbing units. And our specialty is speed. So everything that we're building is how do we reposition these businesses with speed and obviously having the labor in house having great negotiated contracts on materials in a market that doesn't have where labor is not readily accessible, and either as materials is is our competitive advantage.

Awesome. Okay. So let's reverse engineer this a bit in a couple of different chunks. So let's talk about the income first. So a lot of people are, so it's passive income is very sexy now and all people talk about is getting $10,000 a month in passive income so that they can quit their job and do real estate. Full-time my contrarion belief. And now I just left corporate America too. So I'm technically retired myself at 26. But so I've done this whole journey, but I was able to do that because I spent five years becoming the best that I could be at that performance based job to where I was making a high income. What are some tips that you can give that you did that are applicable and you can wrap. To be able to increase your income to that level because a 500 level debt that's a director level 500 is difficult to get to, but they're there. I know that there are commonalities that anyone can apply to focus on getting their vertical, that income, that active income coming in as high as possible, because that's when the banks start loaning to you a lot better. That makes your life a lot easier instead of just making 40,000 and being like I'm going to go home. So I'm just curious about that. Cause I think that's a huge strategic advantage that you used.

You're the I've I've done like, I've done to help promote my book here. I've probably done 10 or 12 podcasts in the last couple of weeks and you're the first person that actually dig into an asset. I even wrote this in my book, dude. Cause I, Brian like ha. This is exactly. I love this question so much is because when I feel like people want financial freedom and they want the passive income, like you said, I almost feel like they've started doing shittier at their job, right? Yes. Yes. Get the running

away from the job.

Yes. Half passing it. I believe just the opposite. I believe exactly what you said. I think you should duck. Cause you need more. You don't want to save it, but you need to accumulate money as fast as possible to be able to stack that money, to be able to invest. My story is right. I'm going broke all the time. You're going broke your bank. Yeah, exactly. Cause I'm investing in. So the faster you can make money the better. So I like, I went all in. I read like that was my lab was how I was going to help educate myself to passive income. But I also was reading different leadership books. Cause I believe to be able to Excel at your job. Cause that's what you asked. Like one of the biggest things that you can do is become a leader, right? Leaders get paid more money. And one of the best things that a leader can do is help everybody else around them be successful. One of my goals. And every relationship that I have, my ultimate goal is that they win more than I went in. And doesn't have to, I'm not even talking about a real estate transaction. I'm talking about life. Like when I hire somebody or when I w when I interact with somebody, I want the amount of value that I provide to them to be slightly higher than the value that they provide for me. And it's a conscious thought. And I think that's what it really helped me at my W2 job, because I'm thinking about like, how do I get everybody? Or how do I make my boss. All right. Like how do I make my boss work less and get better results? How do I make the people that work? How do I promote the people that work for me? How do I help my peers? Because the more you do that, that all comes back to you. So I would say that's a really big big deal that I think that not enough people pay attention to the second thing I w obsessed around who was the best at every job I've ever had. So I'd find what are the. What are the fucking metrics that make that job, the performance and the results, then I'd figured out who was, and then I sit at target and then I chase them down and beat them. And not in a I crushed you type of way. Cause we're all one company it's competitive.

If you're a top performer. People don't get this competition rocks. This is not a zero sum game. If you are the top person and that's exactly what I did, man. I told you we're going to be friends. I told you, I called it. Sorry about it. What are we? Six minutes in? Yeah. So in my company I joined and the reason that took off was because I went and looked at the leaderboard for the company and I said, okay, who is the person? And it was this girl at a fricking Montana. And I was like, okay, she. I'm going to email her. Nobody does this. Yeah. I was out of college. I emailed her. I said, Hey, I want to do what you're doing. How did you do it? I would literally do everything that you're doing. And she just told me what she was doing. And I did it and I became number nine rep out of 5,000 to 79. Yeah. So that's oh my God. I love your self-development in the leadership regard. I think that foresight was really. Really good for me. Question about this from your kind of corporate structure here. So for me, when I was in my role and I was looking to move up, I started looking a couple of positions ahead and I didn't like what I was seeing with those directors. I didn't like the lifestyle they were living. They were on their third marriage. They were, I was just like, do I want to be that guy? Yeah. And the answer was. And so that's what started my exit is for corporate America. I'm curious about your perspective and what your

trajectory was. Yeah. We are going to be friends because we have a similar story, man. I have two. One is exactly what you said. I did. Look, I looked, I didn't just look two levels above, but that was, you always look two or three levels above, and you just, okay. I looked at. Two to three levels above me, what their lifestyle looked like, just like you. And I'm like, man it's a cool, like you always get stuck in this, like man, like that's cool. Cause you know, three levels up, everybody looks at them as they're very powerful. They have a lot of responsibility, et cetera, et cetera. I don't want, I, at least I don't want to be doing that kind of lifestyle. I don't want to be traveling as much as they're traveling, not seeing the kids. I saw. I saw a lot of broken marriages, a lot of second, third marriages. Like you, I also will tell you something. I found a way to figure out like what they made too. And I was like like that's not that much more than I make. And I, and then I looked at what I was making a real estate. I don't know I, you. You're doing so much in your W2 job, you can almost put what you're making the company. You can only figure that out a little bit too. If some of that profit went back to me, like what would that look like? I even went all the way up in my company to the CEO. And I was like, yeah, he's making pretty good money, but there's also I don't know if that's even the lifestyle that I want at that point. I love working for a fortune 50 company. Cause you learn so many different things. I wouldn't change it for the world. But it, for me, it was a stepping stone. Once I started looking above, because I wouldn't want to do what those guys are doing for the foreseeable future.

I love that. And then also you were at the ceiling of a W2 position, right? 500. Like I hit that quarter range MN, even that was scraping the top. If you go outside of vested options, stuff like that. So I saw the writing on the. And those guys are working 90, a hundred hours a week. So I said, here's the perspective I would offer to all of you listening is if you are going to work 90 to a hundred hours a week, and if you've you're cut like me and Logan, why not just do that on your own thing? Yeah. So let's take let's use that as a segue right now, because that was some really good advice that you just gave and it's really just goes back to be where you are. Be so good. They can't ignore you Cal Newport and then go on to the next venture. So if you had a defining characteristic, it would be scale and scalability. That's your thing I can already tell from the paragraph intro that you gave there. That scale is your thing. And that's your superpower. Let's talk about that because you began with the stack method, bigger pocket style, you started single family, duplex, two duplexes, and then you started making a jump.

Yeah, what caused it was? I started buying apartments, right? So after I had seven units, the next year I bought 10. Then so I had 17 the year after that I bought 50. So I went from 17 to 50. So now I'm really jumping in a lot of that was apartments. And like I said, I started realizing that these apartments were buildings anymore there businesses, and I love business. You talk about competitiveness, businesses, the ultimate. I played college basketball. Like I get asked this a lot times. You miss basketball. I don't Ms. Bass. I love basketball, but I loved it mostly from the competitiveness and business is the ultimate competition. And there's like virtually no ceiling and the scoreboard is ever going. And so I, the same thing with, through my apartments, right? So you take an apartment and you just get really good at realizing I'm in Northeast Wisconsin. There's not such a thing as appreciation here, unless you. Okay. So even at fair markets like here, like there's the, like the con the comparable appraisal sucks everything's want to become from an income approach. So I got really good at that. So we're where's what does that look like? And then how do I drive it? And one of the things I've always wanted to do is provide housing and like the C class B class area, particularly because growing up blue class and like in a town like that I always have. A lot of these apartments, the landlords didn't put any money into them. So it's felt sad. And I'm like, man, these people are working so hard. They're very reliable on their payments. I'm risk adverse. So like you got to take risks. The risk on an A-class in a recession, they're coming down to BNC. So I'm like, I made a conscious decision when I started scaling to go after the C class and make them be by choosing to, I'm taking apartments from 1970. I still have shade carpet and weird green lime green walls and all this other stuff that hasn't been. Yeah, the these 50 year old sexy apartments, and I'm making them sexy, right? I'm sticking $10,000 a unit into these things. I'm making them look brand new. They just weren't built brand new. So I'm all in probably at 50% of the ratio of building brand new, which means I don't have to charge what these brand new apartments are charging. So I feel like I'm not as cheap as the 1970 Shay carpet. I'm not as expensive as the brand new construction. So I fit like right in the middle. And I feel like not just in Wisconsin, actually think the more I learn across the United States, there's a really strong niche for that right now. For that, middle-class blue class person that wants to be proud of where they live and quite honestly the renter is changing too. As I started to, to answer your question, as I started to really understand that's where I geared my entire property management business towards is how do we build a company where we can control every, as much as we can in-house. So now we can control the speed of these repositions. Like I'm repositioning 13 apartments right now at the same time. And we spend last month we spent $712,000 on. I haven't spent less than a half a million on cap ex in a single month, probably in a year. And the reason for that is we rehab, 71 units. So on average, $10,000 a unit, and we're doing we're flipping units in 72 hours. So we're like caught LVP floors. If they're heavy cabinets, bathroom, like everything, 72 hours. And we're doing we have nine teams, so we're doing 15 to 20 of those a week. And then we get roughly, if you do the math, about $250, I think it was two 60, this month, $250 more a unit in rent. You think about what that looks like you take two 50 times 72. 18,000 more a month times that by 12 216,000 is what you get more and I spent 712,000. So that's about for every dollar I spend in cap X, I'm making five. So you have to look at it. Yeah. So it's I want to spend more when it's been a million a month on CapEx, because the faster we can turn these the higher, the rent, the better the ROI. And then you can refi that was one of my points is yeah, I want to provide good housing. I, one of my, my, my goal is we can get into later or not, but I want to disrupt property management altogether. It's super bad. Provide better experience, better living, whatever for the residents, but ultimately there's risks when you're spending that much money on your property. The risk is what is the market going to look like by the time you're done? And can you refund that money back out so you can have an infinitive return? So if I can re if I can, reposition apartment in 12 to 18 months instead of 48 months, I a significantly lower the risk, but B I get that money out so much faster to be able to philosophy.

Yeah, I saw that word in your website, velocities. I was like, sounds like a dinosaur, a loss of ties. I love it. A couple pivots. I want to take you on here first off the vision. So a lot of the times, so I've got this, I've got this massive vivid vision of where I want to go. Five years, three years. With my companies where I want to go. Curious if you started with this grand vision for these 1900 units and started materializing these companies, is this something that you saw and then work backwards, or I'm curious about your vision process with all of this, or if you just ready fire aimed it. And I said, oh, this works. I like this. Oh, this works. I like this kind of curious because you've had this meteoric success. And so far I've seen the commonality is a really powerful, strong vision Securus.

Yeah. I would say definitely strategic. And I'm always thinking like three, five, maybe even 10 years. Sure. And did, I think I'd have $210 million worth of real estate that I own right now? No, I didn't even set a vision for that. It's been 2019, so three years, really the majority of that has been built. My vision was predicated on trying to play offense on what the market was giving me. So I knew a couple of things even before COVID I could see inflation continuing to rise. And I still don't think there's a better hedge than putting your money into real estate. So I'm like, okay I envisioned myself continued to do that, but then why? Because I have enough money. So it's a good hedge against inflation. It protects my money, but what I want to continue to do well, I also wanted to, and I feel very passionate about improving the lives of the people that actually live in these housings because I think more and more people are going to have to rent. And I think there's a lot of shitty property management companies. I think there's even worst landlord. And I want to be able to provide people quality housing, quality experiences in places people can be proud of. So then I thought how would I, how am I going to be able to do that? I just came from retail. So I could tell in retail is getting harder and harder to hire. Good. So one of my visions that I had was, and the COVID obviously sped it up is we need to build the labor in house. We need to continue to build a company predicated on it strong culture growth and help ensure that we have the labor as it starts to grow because. We grew a lot during COVID we continued to grow. I love when people bitch about can't find good people and I'm like that you there's great people right now, out there. And I think that is one of my biggest visions is feeling like, what do we need to do to be able to attract great talent, keep great talent, and then build with this great camp talent. And we did, and we have, and it's still one of the biggest competitive advantage right now. Most people will say finding the deals the hardest. I wouldn't argue with that. It has been really hard to find deals, but I would tell you I've been able to overpay for some of my deals over the last year or two, because if you acquire that deal and then again, you can, you have the team to be able to reposition these apartments. They're still significantly cheaper after you get done with them, but if it takes you four years to be able to do that, it's hard to pay a little bit more than maybe what the apartment is being worth like as is. So I'd say some of that went into like my vision of. What else thinking about for my company, for my property management company. Cause everything's predicated on that business controlling the assets, controlling the repositioning and it's going to continue to grow like my, in the next five years. I think we'll be at 10,000 units and we'll be in multi different states. Cause we want to ensure we're providing housing, great housing, not just for Wisconsin, but for everywhere across the United States. So that's what, we're, what we're thinking.

So it's a powerful why. So you've got something, you've got something that you're working towards, which obviously overflows into your production here. That was one of my questions that I wanted to, that was jotting down is I want to go walk me through the, walk me through how you grew your org chart. Walk me through your hiring process. Walk me through Logan with you and your wife, flipping a couple of properties to now all of these employees that you have because the. Biggest sticking point for it. 90% of entrepreneurs and businesses is going from the, I do it to the, we do it. And so you figured that out pretty quickly. Now, granted, you did have experience from your retail background that helped you lubricate this, but still it was a new field. It was now your own thing. Walk me through the how you grew this.

Yeah. I think that's it. I would say understanding how a chapati, I learned a lot about understanding how a company or a business should operate, but remember it was a fortune 50 company. Like you, my company was large. So growing a company from, four employees, like you just it's really tough. There's oh, It is, it's not it's still tough. It's it does not shock me. Why so many small businesses go out of business. It is because what you just asked right there, how you go from four employees to 74, there is a lot of shit like in between them, right? Because you have. Many different hats. There's a lot of moving parts. I'll share a few ways of how I did it. I also share a couple like mistakes that I made too. Cause I think people resonate with that. I'm never afraid to share those things. One of the biggest things that I've had to learn, and I did learn this one the hard way too, is you should be building your standard operating procedures for the business and never for the employees. Okay. So a lot of. You have four or five people, you'd be like, oh, Bob is really good at these things. So let's make sure Bob does this, and your credit, curating the system for Bob. That if you want to scale, you can never do that. You have to create the system that is best for the business, and you have to hire and train. Your employees to be able to fit that system, because if you do it'll break and it's not scalable. So that's one of the biggest things that I spend a ton of my time on another big mistake that I've made that we've gotten really good at is you want to build the system for three to five years and start operating it. That now, when I first was creating my company, we created a for building the system for let's just say 500 units. Once you get to 600 units, you forget that system needs to be upgraded. So what N what normally was working really well at 500 is now not working great at 600. So now you got to retrain your entire staff on a brand new SOP of brand new standard operating procedure. When it's already a hundred units too late, and training is not like it happens in a week, it takes time to people to get that on there. So you gotta be forward-thinking. I think a lot of businesses go out of business because they're not thinking. We should be operating at a thousand, even when we're at 200. Like that's what we really got to think about. And even though we don't have a lot of people we don't have the staff to operate like at a thousand. That's fine. If you don't have a second leasing specialist and when. Oh, at 500. And then what does that person do? Do they do the same thing as the first person? Like how does that look? So you're just creating what your company would look like. And then you're hitting benchmarks as you'd be able to get there too. The reason I hired the president that runs my company is because he's incredible at. Team and development. He's incredible in a lot of things, but he is second to none when it comes to culture and people don't want to, the labor market is shifting and people want to work for growth companies. If they want opportunity, they want to grow. And people want to work for companies that are fun and that care about them and that there's culture. And I think a lot of people forget about that. So when you're scaling, it's fucking, it's really. So the last thing you want is just to be driving your team over and over again and not having any fun while you're doing it. So I think, I don't think real estate is that complicated. I think scaling a business is more complicated, but he didn't have any real estate. He was running one of the biggest stores ad in a state that I was currently in, he had leadership experience. That was awesome at culture. So I would also tell you when you're focused on scaling your company, you should be really in tune with that. And then as you start to get bigger, like this year, for example, I'll spend a hundred thousand dollars on development and training for my. We don't have hiring issues. A lot of people I continue to educate or coach a lot of people when they say they have hiring issues. I like to dig in. And have you, you said you were just off to salt lake. Did you guys see, I see this all the time. Are you guys like seeing, when you go out, like to a restaurant ton of them are closed down, like during lunch because they can't. That all over the place. So it's just, I asked the business owner once that was closed at this really good restaurant here, and he's oh, I can't, we can't, we just can't get the people to work. I said who are you? Are you, how are you hiring he's on all the different hiring sites. And I said, so what are you looking for? What are your first couple of things that you're looking for? And he goes, first thing he says is experience and then particularly experience waiting tables. And I said the. Why are you looking for people with experience waiting tables? I'd be looking for people that have good or great work ethic, great attitude, and a personable he's then I got to teach them how to wait tables. Cause they've never done that before. I said, yeah, you freaking do. You got to teach, but wouldn't you want to teach them the way that you want to provide the experience to the customer? And we're talking about waiting tables. Yeah, but it's not that complicated. So that's something you want to start thinking about with your company and scaling too, because if you're scaling quickly, we are, our lowest year was a 240% growth year. If you're growing at that kind of scale, you, your team's gotta be resilient and adaptable, but most of all, a lot of these people, at least in the trades, Business, they're not that resilient and they don't want to change and they don't want to adapt. So what we do is we hire a lot of people without any experience. And then we have exceptional training and development programs and we train them on 90% of what needs to do to be a plumber, 90%, what I needed to do to be electrician, et cetera, et cetera. And we just do it all in house so that they're more adaptable and we can mold them to what we're trying to accomplish. I think really spending, I don't think enough entrepreneurs to scale spend enough time on team Brian, I guess that's my biggest takeaway.

What are some of the, what are some of the attributes that you'd look at? What are some of the commonalities that you see a better your benchmarks for what will make a good employee when you're looking for hiring for your team, where experience isn't as necessarily important because you're going to train them. So what are you looking for? Yeah, I'm looking

in tangibles. The intangibles are. Like that's number one. Do they have a dry for results? By the way, I can find that with one interview question. And it's usually, where do you see yourself in the next five to 10 years? It tells me everything I need to know about like where they aspire, what they're looking at, or what is the greatest result that you ever drove in hot? But I want somebody that is driven to do more, whether they ended up staying at my company or not that's number one, number two, they have to have a great attitude. That is one of the intangibles to. Like you, you won't last, if you're not resilient and adaptable and have a good attitude to be able to adhere to the changes that we're making. And then accountability is everything. I don't believe you can teach accountability. So you gotta buy it. So that's it like if you have those three things you're hired and we'll hire quick and then we'll plug them into our system and continue to develop them, through our company. Yeah. And you know

what. What do PE firms, what did these large scale corporations look at when they're buying a company? They're looking at the systems.

Yeah. Yeah. If your systems are great I, I still am shocked by the amount of emphasis we put on hiring experience and skills. If you got the systems, if you got the training, you get the development like that is that it. And then you got to be able to keep them, you gotta be able to keep, I had another person I was talking to. He's he's at a few good years of growth in his business. And he's I'm just going to stay still this year. I'm just going to this year. Yes. That's exactly right. That's what I told him. I'm like, you're dying. This doesn't have to grow by about 8%. You're literally going to kill your business. Plus you're going to kill your morale. He's I'm trying to help my round. You're going to do the opposite. People want that kind of growth, like healthy growth. If you feel like the wheels are falling off, take a step back. But yeah, I that's the hardest part about being a small business because. The only way to be a successful business is to get out of being small. I've I, I think it is an absolute grind, unless you want to work 90 hours in your own business, doing everything for the rest of your life. You got to stop being small. So the fastest way to stop being small is grow as fast as you can. A lot of them come from growing fast. But that's okay. You just got to be okay or have great contingency plans, which is something we constantly work.

My, my mindset coach gave me some really good perspective on that. He said that you have this graph of growth and he goes your Y axis, the vertical access is going to be success levels. And then your X axis is time. So most people have. Either flat-lined success curve or a very gradual success curve. And as you grow in success, there's problems that arise, right? At different levels of success problems never go away. They become different, right? So my coach was like, Hey, who wants to make a million dollars in a year? Everyone raises their hand and goes, okay, who wants million dollar problems? He wants to deal with a staff of 42. Making cold calls and stuff. Cause that's where it happens to make a million dollars. And so he says, whenever you have a meteoric rise and success in a short period of time, you have to integrate 10 years worth of problems within that short period of time. Yeah. And I feel like that's exactly what you're saying. So did you have any coaches or mentors that were helping you through this? Or how were you handling this?

Yeah. I've lately got into some really good, like high level other operators. Just starting end of last year. But the majority of my learning has been through books. Yeah. I haven't had any coach I've actually never paid for a real estate class or a business class or anything else like that. All of us come from doing. And I don't necessarily recommend that. I think I learned a lot. I, yes, I've scaled rather quickly, but I also think I've made a lot of mistakes and I think I might've been able to scale even quicker if I would have been partnered with the right mentor. Taking my head out of the sand, but retired from a job at 30 in 2019, and then literally started building this company and just basically put my head down and worried about it. And as of late. I'd say probably the last six to 12 months really have appreciated being connected with other people. Obviously we got, yeah. I have a monthly call. It's not a mastermind or anything, but it's just four or five high level operators like Jake from Jake and Gino's one of them Jake Gino on here, Jason. Yeah, he's incredible. So we get a chance to just talk and there are owner operators, a lot of that too, because like we've been talking about, I think a lot of wealth is created. It's created from business. So just understanding how other people's do it, you can learn a ton

cashflow or equity.

What do you care about? Yeah, I care about both, but I love at this point equity, cause I already have enough cashflow in the beginning. It was all about cashflow.

Cool. So what's the cashflow looking like.

Per month.

Sure. Yeah. That's what, that's why one gets turned on by.

Yeah.

Nobody cares about the annual cash flow. They care the one that broke it down by 12.

Yeah. So I would say somewhere around 500 to 600,000 and

then that's business.

That would be on the real estate portfolio. Yeah. And that's after tax too. You don't pay taxes in real estate. But I would tell you, I spend the majority of that and I put it back in cap ex again, I can make, I just want to. The wheel going if you don't want to pay taxes, you've got to be able to spend money on your properties or reposition them, which makes them more profitable, which obviously increases the equity because real wealth is gained through equity. So cashflow is nice, like pays for your lifestyle, pays for those types of things. But once you, in my opinion, once you get to financial freedom and you have enough cashflow coming in, it actually becomes a problem, right? You don't because if cashflow comes in, you're going to do something with it. You never want your money. That's a

really interesting perspective. So what's your like financial freedom number that is good for you, and obviously this fluctuate. So what, which part are you keeping for yourself right now? To where everything on top of that, you're just like reinvest.

Oh yeah. That's a good question. Probably. I probably cut off somewhere around 50,000 a month, I would say. And try and I try to reinvest other four 50 to five.

Yeah. It's so interesting. And then it's you and your

wife. Yeah, two kids seven and four,

two kids, yeah, 50,000 a month. Tax free and that's tax free because that you don't pay taxes and real estate people get your money from real estate. We're talking about the cashflow quadrant, right? So rich dad, poor dad. You have, you're a business owner and you have your investor. You want to get out of self-employed. So it sounds like you've gotten over into that. So from that self-employed baby in the beginning more to the business owner. So now whenever you do. Obviously you write everything off. So yeah. Fricking $50,000 a month coming in. Let's

go. Yeah. I've consistently, like one thing people don't get to is I don't mean this to be whatever it's all relative. Like I've my wife and I have spent no more than I think. I love my financial plan. I do a monthly financial plan every single month. I've done it forever. So I, I could probably tell you to the actual dollar fat in front of me, but I'm obsessed with making every dollar work as hard as it can, but I also can tell you that in since 2010, we've never our year that we spent the highest percentage of our income was 18%. I never spent more than 18% of our entire income and mostly it's between 10 and 15. It sounds like a lot. Relative to how much we make is it's not, it's still fits in the, 10 to 15% buckets. So we're really not spending that much. We're putting the majority of it back into business, back into real estate. And I think that's what you gotta do. And even when you're not financially free, that's what we did. We lived on a lot less. But we even split our financial plan. Into needs and wants just like a business, right? There's certain operating expenses that you need to have to be able to run your apartment, to be able to run your business. Those are needs. And then there's once there's things that you don't necessarily have to spend to keep that apartment running, none of that business running, but you want to that's same with life. Like I think everybody's ultimately could look at their life as you're. You should be the CEO and in your greatest business, you ever run as your own. And that's your that's like how much you're spending and how much you're making every.

I love it, man. So as we're finishing up here, so you've got all of these units get 1900 units. I understand now that you have scale, you have momentum, right? So momentum you're taking off from the runway. There's a lot of friction involved and then you take off your airborne. Now you're cruising at 30,000 foot. Now you're going to start getting exponential returns because you're going to go, you'll be at 10,000 before you know it, then 50,000, a hundred thousand. However far you want to take it. I'm curious about, cause you're a rarity. I'm curious about going from the beginning about you doing this by yourself. And I'm curious about why you didn't do partners. Was this or syndications, was this intentional or was this just I've got the income? I don't know any other way to do this. I'm just going to wing it and figure it out because a lot of the times people are coming into this and starting partnerships right out the gate. So I'm just curious about your opinions.

Yeah. That's a great question. My opinion is first of all, I want to say this before it's anymore is I think in business and in real estate, there is a lot of different ways that you can be super successful. And I think a lot of times it depends on that individual. Or that individual situation. And I encourage that. And that's awesome. I would also tell you, I think it's got exceedingly popular to know, not that much about how to operate or run properties and start your own syndication or sensei. Yeah, I own 5,000 doors. When you really own 17% of those $5,000 or whatever, it may be 5,000 doors, but it's, to me, it's never been about a door count. I could, I literally could care less about how many doors I actually own, but I do actually own them. So some of that stuff is just like crazy. Cause it gets really sexy to be able to. Close the deal, but anybody that's been in real estate or building business long enough knows it's not closing the deal that matters. Like it's not hard to find money these last 10 years. No. If you. Like awesome. If you got good at finding deals awesome. But the real wealth is built, operate the businesses, which is what, the apartments, right? The actual operations. I only spend one to two days a week in my property management company. Now I'm like, I'm not actually in, I don't have to actually be in it now I can work on it. And I think that's a place like I've always wanted to be. I always wanted to create. And build this momentum and build this business. And I have a lot of fun with strategy and development and trying to build something super special. So that's just how I've geared it. And that's where I think a lot of people should be focusing on with rising interest rates. And there is going to be some shifts in the market, even in the real estate, not just in the stock market. And I think even if you are somebody that invest in syndications or have syndications out there, that's fine or partnerships, but I would just tell you the only reason I would be scared. If you have money with somebody, a third-party property management company or somebody, you don't understand how to hold them accountable. If you don't understand operations, it's the same as COVID. Yeah, same people that got affected during COVID were the people that had no idea what operations. So anyway Dan, to your question about partnerships and stuff like that, I've always been attracted in business to speed. So I guess one of my greatest mentors that I haven't got a chance to talk to is Jeff basals. I've I read his annual reports even, and he's always like it's day one it's day one. This. Freaking huge. But one of the other things he always talks about is speed. And he talks about how important that is in decision-making. They're the greatest example of that. People can get their packages delivered in three days for free Nicholas, but if you pay them, they'll deliver to one. So think about that free three days. Pay for it in one, like when it comes to speed is everything. And I think speed and convenience is going to continue to be more and more important. So I guess, you know where I'm going with this? Like when I started growing, I saw a lot of people, especially smaller people that got in arguments with their partner and they're slower on decision-making. Broke up their business, took them two years to be able to recover from it. I kept hearing these from the guys and I'm like buying their. Like seriously, I like 17 units. I'd be like the 50 unit bodies, like getting a divorce and they got to sell their stuff and there's this and that. So I'm like, man sounds like messy. So maybe I'll go a little slower. So that I can go a lot faster in the end because now if you can reposition these properties and pull out the equity I'm getting a hundred percent of that equity not splitting it, like not giving it from a syndication standpoint, but ultimately I didn't even foresee that. The only thing, one of the conscious decisions that I made is like every one of these places I'm buying, like has been a partnership or some weird fund. And And it ended with it. Wasn't good. And they don't all end like that. You can find a great partner and you could do those things. But for me, Brian, like I wanted to learn it all. So I just chose to go a little bit slower in the beginning. And then I knew I could create a business and teach people, so I didn't have to continue to be in it to take that workload then off of me. And I'm not I don't think like one day I'm not opposed to the guy that runs my company, him and I have a different LLC. We'll buy some stuff together, separate from my, 1900 units. And I'm not opposed to some of those things as I continued to scale, but I have no real reason to do it now. And in the beginning was all about speed.

I love the speed. Can we keep going back to speed? Speed. Speed. Speed. Because that's when you first started, when we first started this conversation, the fact that you said that you were able to turn these units in 72 hours, the chefs bananas, right? Because I'd have so many people that are taking. Value add multifamily. And it's just a nightmare and guess, guess who's going to be caught with their pants down whenever this market shifts, which it's shifting right now, cap rates have been a Bismal. Everything has looked honestly, terrible deals have been there, but they're the razor thin margins. The people that are not going to make it through this next market cycle, which honestly, all of us welcoming at this point are people that aren't. They don't know how to operate and that's a lot of them. So there's going to be a lot of opportunity from those people that have these deals and they're wheeling and. But they don't know how to operate. And so the people that are operators are going to clean the freaking

house, I a hundred percent agree. And there's a second thing. You gotta be able to operate and then you gotta be able to adapt, like all these guys in this businessman, they don't want to change. It's just it's nuts. There's tech. I, we don't even do showings anymore. Like I'm shocked by the amount of people that do showing. Like we have the technology to do virtual. Just about anything. You were just talking about your VA before this like you got to adapt to some of the technology of what's going on. That's it the it's speed in my opinion. It's speed of change. If you can adapt then what should scare you? Something. But your company's positioned or your position in a way to be able to adapt the fastest. That gets me excited. Like I can talk about that all day. Like you can look at all my SLPs, like you can take them, you can copy them, but at the end of the day, you will not. I believe there's very few businesses that will be where I am in five years, because they won't be able to, they're not built in their business for speed. And that doesn't mean just growth. It means like the, having the players in your company that can adapt and play defense or offense, depending on what the market gives you. Awesome.

So talk about your book, who's it for?

Yeah. It books find your financial freedom. You can get off Amazon. And I wrote this and who let me tell you who is for it's for anybody that wants financial freedom, like anybody that wants financial freedom faster. I don't care if you're in high school. I don't care if you're in grade school and I don't care if you're 50. Like I wrote this book because books changed my life. And one of the biggest things spend a day a week now figuring out how to help with financial literacy. And it took me longer to write this book a year and a half, by the way, then to reposition some of my apartments. So I believe it. Yeah I just, I wanted to put out a really good product and I wanted it to be accessible for anybody. And I didn't want to just for beginnings beginners either. I think there's a lot of stuff in this book that if somebody has a hundred, 200, 300, 500 units, It's not just a mindset guys. There's some mindset stuff like everybody's heard rich dad, poor dad. It's a great book, but most people leave that book being like great mindset, not, I don't know what to do. Like the exact three steps I do every single month with my financial plan or literally in this book. Step one, step two, step three. And I break it down. I give it all away. I still use it. It helped me help me. Super successful and super wealthy very fast. And it's helping me velocities my money. And it's certainly not like a Dave Ramsey financial plan either. Like we don't spend very much time talking about like how to cut your way to financial freedom, right? No. Oh, you should save your way to it. It that's important to be aware, but it talks a lot about how you create velocity with your assets and your liable. And as the chapter on legacy because I have a couple of kids and I also think that we should be teaching kids how to do this. It took me way too long to learn it myself. So the best way to learn sometimes to teach. So there's an entire chapter on that. And of course there's a chapter on real estate. So which that bonus chapter on real estate goes pretty. In-depth on a few different things. But when I find a time, my next book, we'll talk a little bit more about real estate and repositioning.

Amazon get that today. Jeff Bezos maybe pay one day. Yeah,

exactly.

No, I love it. And then where else can people find you?

Yeah, you can find me on most social media sites. My website's Logan raycon.com. That's my Instagram and Facebook and Twitter as well too. Hit me on there. If there's anything I can do to help, just let me know. And how old are you? I'm 34.

34 34 dude owns 1900 units. What's next? What's next, man. What's the next three to five years?

Next three to five years. Yeah, all and probably a little over 10,000 units. A billion dollars worth of real estate is probably the next Real estate portfolio holdings, but there's two other goals that I'm more focused on, honestly. And one is I want to disrupt property management, man. Like I I want to, I think property management, we just talk about operating it'll help. My, my. Portfolio goal though, too. Like you gotta be a great operator. And then a lot of it in real estate comes down to property management, but it shouldn't be called property management. Like you don't manage the properties anymore. You manage the tenants, you manage the re the residents. And we got gen Z, we got gen X, we got millennials. The baby boomers are not the biggest renter anymore. So you have to start caring about the experience. You've got to start caring about the intangibles. You got to start looking at what that looks like and what they want and provide that to them with speed. And. We've got 17 different things, Brian, that we're working on that I think very few people are doing in property management. Yeah, so I'm gonna, I want to work on that. I want to get those things set. And then in the neck you said three to five. I'd love to be in three to five. During that time I'm building these SLPs across those states, testing it out get my first chance to do it in not a different state, but we are literally within 50 miles here. So we haven't like we got a 52 unit. That's probably a hundred miles away. That's all, otherwise all of our systems, all of our people are like, within driving, so Friday I found out I got an accepted offer. My biggest deal ever. It's 60 million over 600 units and it's in I can't announce the location yet, but it's in a city in Wisconsin and it's. Going to be our first venture. So if that goes really well, it'll open up the door to buy these bigger 500 plus apartment communities out of state. So that would be number two. And then as financial literacy, man I want to make an impact here. I wanna make an impact with my, my wife and I started a foundation the beginning of this year. And we really want to affect health, financial literacy and housing and do as much as we can in that space. So we're looking forward to building that up.

It's so cool doing this show. It really is because think about this, right? So we're all young, like we're young man, like fast forward 10 years with me, you and with all these people that are on the show, it's just ridiculous. And people are driving right now. We really take advantage of, we really don't think about the power of podcasts. Cause it's like people are driving, probably listen to this app on their way to work or getting. And they're getting just a masterclass from this. It's just really cool. It really is. Man. Greatly appreciated this conversation, buddy. This has been a everything. So Mike introduced us by the way. Thank you. You have been the official start of the action academy, CRM. Thank you for that because I've been getting, so it's a cool part of the show, right? Because ask a questions and then people recommend people to me constantly, and that's a great problem to have, but then what ends up happening is I have 40. Intros across everything and then people get lost. And so thankfully we followed up a Logan here and it worked. So now I've got a CRM. If you have people that you want to come on, the show, send them to me. We've got a CRM for SLPs, baby. This has been Brian and Logan Rankin with the action academy podcast signing off.