Leveraging your network to find deals

0:00I want to start off today with just your Evolution personally as an investor like what did you initially start off investing in and now what is Buddy considered to be a deal today like what's worth your time because I know that changes a lot as you mature as an investor over time yeah it does at the very beginning and you can go back there's a lot of there's a lot of podcasts and interviews and you know stuff you just Google and you can find this story so I'm not going to go into it in detail it's a really good story though so definitely go back and listen to the first deal I ever did it was a catastrophe but that but it was just scraping it was like anything everything whatever and then it was then it evolved to I'll do anything that I need to do to learn how

0:49To to do this thing and so I was handwriting postcards to mail to people to try to get deals you know we were we were cold calling we were doing everything and we had to really creative because we didn't have any money and so we were doing wholesaling and we were doing sub2 deals and like seller financing and Trust deed lending and all that and and I was learning all this stuff while in between deployments but at the very beginning a deal was just it was like Hey I want to buy I was in station in 29 Palms and I was like I want to buy a $70,000 house and rent it out for 750 bucks a month you know the whole 1% rule thing and make a couple hundred bucks a month of cash flow and that's a really big deal because at the time I was making around $6,500 a month as a as a military officer and so you know when you look at like what you bring in

1:37After expenses a couple hundred dollar a month right so $2,400 a year that's a you know that's that's a multiple percentage increase in so you're giving yourself a raise right so it's not just about the long term of you know I really drank the Kool-Aid of when you buy rental property that has Bank financing your home price appreciates every year your rent goes up every year your appreci or your the equity you have builds every year as it pays itself down and you get the cash flow on top of it so four pillars of rental real estate all happening at once not to mention the tax benefits and so I was like whoa the longterm of this is like at the time I was 25 I was like man by the time I'm 30 this could really be something I could really have multiple hundreds of thousands of dollars of net worth which

2:26Was just a dream right because when I first started I was negative $70,000 literally like I was I was poorer than someone who had no money yeah and so he and so I was like well $200 a month of cash flow well that's a really big deal to me now imagine we do that every six months or Year all of a sudden you've got $1,000 extra a month coming in that's a really big deal to somebody who's making six grand a month right and so that's what it started as and it was I was it was at the time you know all new investors typically they normal investors that don't have have like trust funds or whatever they start out where they have so much time and no money so they trade time for money right that's what it was just you you know time's not worth anything because you don't you don't know anything either and as it evolves over time you start to evolve with it

3:14So like I had this this idea in mind that I wanted to build $10,000 a month of passive income right and and for me I was like if it takes me 10 years 15 years whatever I want to build 10 grand a month of passive income and then I'll be able to just not have a job if I don't want to and and do what I want that was the rough idea but that goalpost moves over time yeah and when you hit 10 grand a month you're like oh well this is great but what if I wanted to travel the world with my family it's G to I'm going to need more than that so then you start right and then it's like well what if I want to build something really cool to help a ton of people well that cost money too and so it evolves over time and I'll tell you the most powerful thing you can do to build a life of Financial Freedom is to create a structure where you're

4:03You are rewarded for helping other people accomplish their goals right so Zig Ziggler said it he said if you want to if you want to live the life of your dreams help other people live their life of their dreams or diamand says if you want to become a billionaire learn how to help a billion people right Tony Robbins and everybody all the greats of the past they all have something that's similar that's like help other people right and you'll get what you want right and so and you have to be smart about it you can't just go out and just really nearly give your time away and and not have a structure around it but so so for me I was like well what if what if we built this community of people who are all out there doing what I'm doing so just you know we're out there finding deals and doing deals but what if there were dozens or hundreds of us all out there going to do deals everybody's building this together it's more fun and

4:52I always when you're out there searching for deals you always find deals that are good deals but that you can't take them down you don't have the money you don't have the time they don't fit your portfolio you whatever so do you let them go to waste or if you have a community can you turn around and just offer them to somebody in your community via joint venture or wholesale or whatever now imagine hundreds of people doing that so create this Hive of people that are out there now finding hundreds and hundred deals and this goes to your question of how it evolves over time so then over the past five six years I've now got hundreds of people that are out there doing deals and finding deals and the biggest deals in the history of white feather have come from other people that find these deals that they can't take down themselves and they send me an email and they say hey what do you think of this and if you go on my YouTube channel you'll see interviews that I did with several of

5:41Them last year and the year before where you know a guy does you know like Justus and he he gets this deal under contract for almost $6 million 11 properties in Daytona Beach Shores Florida brand new never been lived in just been finished right with construction he gets them locked in for just under $6 million and he's got like three days to give $300,000 earnest money and like you know like 60-day inspection period and so on to come up with six million bucks he doesn't even have he's got like eight grand in the bank when he makes this offer right but he comes to me and he says what do you think about this and I'm like well dude you know your your market analysis everything it's all tight let's find out what these are actually worth so we did a snap appraisal on them took 48 hours to do an appraisal so if an appraiser ever tells you it's going to take a

6:29Week and a half like just know that if you pay him enough money they can prioritize it yeah and so he went out and did it and we got the appraisal back and he had these locked up 11 properties at $150,000 discount each one brand new properties wow right so almost $2 million of equity in this thing jez and so if left to his own devices he can't he didn't have the 300 earnest money he didn't have the 5 million it would have just whoop gone by and you try to go wholesale somebody you try to go wholesale a deal like a $6 million deal just right now you got three days to wholesale a right you might be able to do it Kirby because you got a big Network and you're but it' be it'd be hard even for you I would imagine right now imagine a new guy yeah impossible it's not

7:17A deal for him it's impossible for him to do it but for an established Network like what I have it absolutely is not impossible so I was actually traveling through Central America at the time and I sent an email out to about 400 of right forther investors and we got like 70 people on a zoom call and we showed them the deal and we said what do you think we should do and everybody kind of voted why don't you wholesale them individually to 11 of us right we'll get plenty of equity cash flowing deals brand new we'll get they're phenomenal deals and we'll give you a medy wholesale deal for each one of them a wholesale fee for each one of them and so long story short within two months we had wholesal those 11 properties and made almost $600,000 of wholesale fee he took 300K I took 300K I didn't even know this deal existed never heard heard of

8:05This particular area of Daytona Beach Shores did not know it existed it was impossible for him to do the deal by himself so it needed both like you said whenn whenn this was actually win win win because Justin won I won it was a lot of work on my part and a lot of work on his part but I'll do that for 300K in two months right and and then what's even better the best part is that we had the choice to raise private capital and keep these 11 properties ourselves and if we had he and I would have split it 5050 and he' had gotten a million bucks of equity so eight grand in the bank to being a millionaire but he didn't want to do that because he wanted like he believes hardcore in the mission of white feather which is to help all of our members build Financial Freedom and he said if we hoard all of this Equity ourselves it's

8:54Not the most good we can do M we don't need to make all the money let's make 30% of what we could make and give away over a million dollar of equity and 11 people in White Feather will get great assets that will drive them toward Financial Freedom that was his decision by the way I gave him the decision to make and so he made it fast right that's a beautiful example of three things one where my deals come from now like I don't I don't go out on Zillow I'm I'm not hunting down like I used to I'm not handwriting cards right I've built a community now and we're all out there searching together mhm we also approach it with an abundance mentality it's like it's not about just like let me gather everything right it's like bro you don't have to make everything like just like provide value to everybody around you and structure it to where you get compensated

9:43For your time as well and I promise you it'll work out right and then the third thing is most importantly with him the number one sort of characteristic of people inside the White Feather Community is action it's an action bias right because you you're you know I know you've got great education books and and it's it's all out there education and books and information it's all available just go on chat GPT and ask a question it'll give you the answer it's not about information anymore it's about the action that's combined with that and that's something that that is really prevalent inside the community yeah wow wow yeah I I know we had talked about that story in the past but I couldn't remember the numbers and it's just always like it blows me away most people here you know they're they're

10:31Searching for their first like $5,000 wholesale fee and to get a $300,000 wholesale fee a piece that's that's pretty incredible and I had to I had to reshoot the wholesale module because of that so like I actually I grew up as well on the whole $5,000 wholesale fee sort of model yeah and like I mean my first wholesale was a double wholesale it was two properties and I wholesaled one of them for 5,000 and one them for 13,000 but it was a package so I made 18 Grand on my first wholesale deal back when I was a first lieutenant and I was like riding high was my first deal I ever did and I was like I've got to be the greatest wholesaler in the history of the world right 18 Grand and I never was able to repeat that by the way I did one other for five grand and then none of my other ones worked and so like that was it that was the extent of my wholesale career but I remember teaching for a for years

11:20You know you're going to go out there you're going to make three to five grand on your wholesale deal every once in a while you can make seven something like that I made 18 one time but that's like an aberration you're you know just focus on the 5K that was it I T that I had to reshoot that whole module and tell them like okay this is not normal I do have to tell you that it is possible technically to make $600,000 on a wholesale because I've seen it a few months ago and technically it's possible and I just that reframed in my head and he was a student by the way he was a student in the accelerator at the time the real estate investor training that I run he was a student in that training course at the time that he did that deal yeah yeah that's incredible and yeah and there's another guy John shy he

12:08Came out my podcast he's a West pointer who's in commercial real estate had a similar story about a big commercial deal that he controlled did a bunch of due diligence on for one reason or another it didn't work for them but they had control the asset and that's you hear a lot of people talk about you don't have to own assets you just have to control them in a lot of cases to make good money because they controlled it they had the option to buy it and instead they let somebody else step into their shoes purchase a property for a big fee and again it was several hundred, of wholesale fee so it's it's incredible what's possible when you start to think big like that yeah and and all you have to do is look at the the different pieces that have to be in place like there are people who you know like me and

12:57And actually I think probably like you now where we have a lot going on we have a lot of businesses we have a lot of other things we don't want to be spending the time trying to hunt down and negotiate deals and all that stuff so if you hand deliver a pre-negotiated deal that's in contract form and all I have to do is pay you 20 grand and now I can take down that really good deal that fits my portfolio really well oh that's worth so much more than 20 grand to me because the time and effort that was saved because how many hours did you put in to find that it's worth it for you because you're trading time for money but whenever you're in a certain level you want to trade money for time right I will happily trade money for time because I don't have very much time yeah right exactly so exactly yeah yeah it's a great great great Point one

13:45Other thing too that you did this year that I wanted to ask you about is you started a fund you call it the shield fund most investors don't start with a fund you know they start by borrowing money for specific indiv idual deals but many who stick with it over time you know eventually then they form a fund to purchase deals so can you share for people who maybe have done some deals maybe they've thought about a fund they're not really sure what it does like what specifically does your is a purpose of your fund and then maybe some of the pros and cons for people that are that are thinking about doing the something similar yeah so there's what I would say is there's two okay so when most people think about syndications they think about let me just I'm going to over I'm a marine so I'm just going to oversimplify everything because that's just how

14:34I operate right so a syndication is where the way I understand it is where you you got a a big piece of property and you don't have enough money to take it down and so I call Kirby and I call Justin and I call Dave and I say hey guys you got a little bit of cash I got a little bit of cash together we got a lot of cash and we can buy this thing together so I'm going to run it I'm the operator at I'll take care of everything I'll run the management I'll do all the work and so I'll take a big piece of the of the profits but you guys just wire money and you're limited partners right meaning you don't you don't really run anything you're not it's total passive for you so you and then you'll you'll get kicked out a certain return so you bring your friends together they invest in this syndication but it's in

15:22Into a single property typically an apartment building or something like that that's a syndication a fund is another type of syndication that has the ability to buy and sell different properties over the course of time now you typically have fun parameters where you say these are the types of properties maybe this is the geographic location these are the rough parameters of what's going to go in and out of the fund but it gives you a lot more freedom as a manager to to make decisions and typically your funds are not year long or two year long they're like 5 to 10 year long funds like we've got something called forther Freedom fund which is a fund that's based out of Northeast Florida in Jacksonville and it's meant to I mean we're doing groundup development we bought two Green Field lots and we're we're

16:11Just finished actually building these luxury town homes that we're going to sell we bought properties that we run as short-term rentals a bed and breakfast a you know various like an apartment building all these things are in the fund and they cash flow and then we sell them and then all that stuff and each of the people invested in that fund they get their distributions from it so that's how a fund works it's just more flexibility than a syndication and typically it's a longer framework and then you have a you have parameters like like as an investor you're going to get anywhere you'll get like maybe 8% or 9% preferred return and then your your internal rate of return can be anywhere between 13 and 18% that's a that's a fun parameter you're it's not set expectations it's more loose The Shield fund is something that I'm very

16:59Very proud of because normally we focus entirely on real estate right however I did buy a whole bunch of Bitcoin a few months ago and I'm very happy about it and so I'm not saying buy Bitcoin I'm saying I bought Bitcoin and nevertheless right and so and there so there are you get to a point where like you know for me real estate is King I love real estate and so on but there are absolutely other things that I'm interested in and one of the things that I'm interested in is helping people get out of toxic debt right one of the things that like because what I see over and over inside white feather it's mostly people that are not in toxic debt it's mostly people that are like hey I want to buy a rental property or I want to use my VA loan and buy a property or whatever or I've got my IRA and I just learned you could self-direct it

17:47I want to learn how to or learn how to mitigate taxes but there are millions millions of military veterans and First Responders out there that are swimming in toxic debt and they're not thinking about using their IR they don't even have an IRA yeah right and so it's it's been on my heart for a long time to to build out a community that helps people at their most vulnerable and so that we're in the process of doing that but that's another conversation The Shield fund and I won't get into too many of the technical details because that'll be boring but like basically when somebody let's just say I'm you know I run up a bunch of credit card debt and I get behind and and I can't get caught up and the credit card some company says you know what you're too far behind I'm just going to send it to collections so they send it to collections and this happens in the

18:36Billions tens of billions tens of billions of dollars of debt of toxic debt that's 16 to 25% interest rates and so that all gets sent to the collections agencies and then the collections agencies right I mean if anybody anybody who's listening to this if you think of a collections agency what just think in your mind how they act like how do they collect are they nice people are they typically law abiding kind of like hey here's the no they're thugs right and and they they try to intimidate you and do all this say anyway so surprise surprise there's a lot of these collections agencies that don't actually follow the Fair Credit Reporting Act or any of the other legislation that's been passed to protect you know consumers from predatory practices and so what happens is a lot of the debt that they assume is not valid and

19:25So if someone were to have a team of attorneys that go after them and they use the law to basically determine if something is valid or not if it's invalid then they can effectively bring a case to wipe away that debt because it's not valid debt because it wasn't legally obtained or legally like whatever I'm not going to get into too much of the details that's where the lawyers come in but long story short is we are helping military veterans First Responders as much as possible who are in toxic debt actually get a lot as much of their debt as we can invalidated help get them back on a path to Financial Freedom by we've created a free program to teach them how to budget how to you know how to you know to keep from getting back into this trap again right and how to get back on their feet and at the same time invalidating

20:14The debt from the collections agencies well when the debt goes away there's a big margin left right and so the investors in the shield fund get a 20% preferred return right so so people that are in White Feather that are invested in the shield fund they invest 50 Grand whatever they get a 20% preferred return so for those of you that don't know a preferred return is a it's the first money out it's the most protected money it's the first money out before anybody else gets paid and so a 20% fixed return is what they get and then the fund managers get their fee and then of course the attorneys and all that right but what's most exciting about it for me is that it's built around invalidating the debt for those people I've got I've got a buddy of mine who was in the Air Force just terrible financial habits right shocking right

21:02This is it's like oh a military person with terrible financial habits like whoa that's bring bring the news right yeah and so he was in $70,000 of various types of personal debt unsecured debt credit card whatever went to collections collections is hounding them racking up whatever they were able to the our partners were able to get that down basically they were able to put in work the process for in validating almost 60,000 of that debt and consolidating it down to around 10 grand of what he would then have to pay in order to get this Deb invalidated so it's a multi-year process but my point is eventually that will go off of his credit event he'll have a fraction of the payment every month that he had before and also as a part of this he'll get taught

21:50The basics of what he needs to not carry expensive credit card debt to budget to be able to actually get himself on a path where he can use his VA loan which he still has to repair you know repair his credit use his VA loan to buy a home and then dude once you're there once you once you're a home owner and you've got your budget down and you're starting to feel excited about your future you know this it's just a matter of making small choices over time and you can live whatever kind of life you can dream yeah oh