Ep #521 – Accelerating from Single Family to Multifamily Quicker

David Kamara started his real estate investing career with duplexes and triplexes. He started listening to this podcast and realized he could leverage his time and money quickly by getting into multifamily properties. Here’s some of what we talked about:

  • Working for yourself vs working so you have more free time
  • Broker relations Partnering for success
  • Partnering with someone that has a resume
  • Answering “Proof of funds” question
  • Networking through your brokers
  • The value of referrals
  • Working toward your strengths
  • Asking yourself better questions
  • Trading time for money
  • The freedom lifestyle

To find out more about our guest:

Full Transcript Below

Rod: Welcome to another edition of “How to Build a Lifetime Cash Flow to Real Estate Investing”. I’m Rod Khleif and I’m thrilled that you’re here. And I know you’re gonna enjoy and get value from the gentleman we’re interviewing today. His name is David Kamara and he’s been in the game for about 15 years. It’s got over a couple hundred units and we’re gonna have some fun today. Welcome to the show, buddy.

David: Thank you very much, Rod. Great to speak to you.

Rod: Likewise. So, why don’t you take my listeners kind of through a little bit of your chronology, do a much better job on the bio than I did, and just talk about how you got into this business, and why you love it, and take it away.

David: Sure. Thank you. So, my story is, I came to the United States for college. It was really even a longer story than that. We had a military coup in my home country. My mother’s Ukrainian, my dad’s from Sierra Leone, so I grew up in West Africa and in Ukraine, speak a couple languages. Got to the United States really, by kind of as an accident. It was supposed to end up in Germany. But landed here ‘97 November, just celebrated 23 years. Yeah, actually and had to find my way through, how does this whole place work, right? I came by myself. My parents were still back home. I had a family that really helped with, kind of, getting me settled and situated. Did community college, work during the day, kind of, community college at night. Ended up graduating with a Computer Science degree from the University of Michigan. Moved to Chicago, started working in industrial manufacturing doing some web development and software development for them. And, right around then we bought our first house, my wife and I. And that whole experience, right? Being able to purchase a property and have five percent down leverage, and really have control of this massive asset was just kind of mind-blowing to me. And at that point, I attended a number of seminars about real estate investing, read a ton of books, and was really convinced that, Hey, this is the way to go. This makes a lot of sense, you know. You can leverage some assets and make some money. I ended up buying a couple of duplexes and triplexes at that time. And then, there was another property not too far from where we’re living that I was looking at buying, went into an auction. I actually ended up at the auction and it was a very interesting process but I ended up winning it. From that, things kind of changed, this was 2007-2008 time frame and as we all know what happened then.

Rod: Right.

David: I ended up changing jobs, ended up starting to work at a management consulting company, and that career took off. It was a very demanding career, very fun career, also very high on travel. My wife and I started having building a family at the time. We had two kids when that started. We have four kids now. And really it was just kind of, I think, I didn’t think as much of the real estate career at that point. Because again, the houses and the duplexes were working just fine. And here was this management consulting gig which very exciting, very interesting, challenging intellectually, and really it’s kind of a time suck. So, several years later, I was fortunate enough to be able to quit my management consulting job and actually open my own management consulting little shop. So, I quit my W-2, opened my own little thing. And, I started thinking about it, well, it was great. I wasn’t really working for someone. I was still however, having to get on a plane and be at clients locations for three to four days a week. And I started thinking like, okay this is great. I do feel like I’m working for myself. But how do I get out of this situation? And at that point, I started listening to your podcasts and listening to a number of other podcasts. And I said, yeah, I mean, this real estate thing, I know it works, my wife knows it works, we’ve discussed it but we haven’t really taken it further. And so, I started looking for how do I accelerate going from single family to something bigger, faster, much more quickly. Actually, there was a point where my daughter and I were having a conversation in the evening, on a Sunday. And she was like, hey dad, are you gonna work the next day? And it was a tough conversation because sure I’m gonna work but it meant that I wasn’t gonna see her for days. And basically, I mean, that kind of kicked me in the butt and said, yeah, you really need to do something about this. The money is great and the consulting business, but the quality of life is just not where I wanted it to be. So, I got some training, got some education, and really never looked back. So, the first deal was done with my money. Basically, my wife and I decided we should just go ahead and buy a building. It was a 40 unit. And then–

Rod: Where at?

David: So, we live in Ann Arbor, Michigan. So, we went to school in Michigan. Moved to Chicago for almost 10 years and came back. This deal was in Battle Creek which is known as Cereal City, USA. It’s what Kellogg’s headquartered. Not a tremendously large Metro, it’s about 50 000 MSA. But it was healthy enough that I felt comfortable. It was also about an hour and a half drive from where I live. And it was a decent property. It was a $2,000,000 deal, 40 townhomes with a lot of upside that I saw. So, I ended up doing that and then I think, in the space of the next year we did like something like four or five deals. Mostly started with my own cash and then towards the end, I started talking to my network about it. People are very interested and said, hey, we’d really like to hear more about this, maybe you can tell us some more. And so, that was kind of a pathway to syndication.

Rod: Then you started syndicating, right? And so, you got some help, you got some mentoring, you got some coaching, and to get into the multifamily space, that’s awesome. And then, you bought your– What sort of financing did you get on that first asset? Was it just bank financing on that 40 unit?

David: I kind of turned around with a number of different things. I actually got a mortgage broker, who was extremely helpful in kind of, you know, walking you through the various odds out there, agency funding versus local bank debt. But he introduced me to a gentleman who was very helpful from a local bank but also had authority to sign on much larger loans. So, it was a great relationship that I still have today and they’ve helped us in a number of deals. And since then, we’ve also done agency debt as well.

Rod: Okay, fantastic. And so, you’re in Ann Arbor. Do you know my friend Albert Berriz?

David: Actually, I don’t know Albert.

Rod: No? Okay. Well, he owns a big company there called McKinley, and they have 20,000 doors. He’s a member of my mastermind, really, really good guy. In fact, he was my first interview on the podcast.

David: I think, I do know Ron Weiser, who is one of the founders of that.

Rod: Okay. Well, Albert is the other one. And yeah, it’s McKinley, that’s it. And, yeah, they’re– a super nice guy, he’s a billionaire and I forgot to hit record on my first interview. Yeah. So he was gracious enough to re-record and then we did a second one, but he’s a super nice guy. So, you started on your own with the management consulting. Let me ask you a question. Just out of my own curiosity. You said the management consulting really took off. Do you feel like the crash caused it to take off because companies needed help in streamlining and improving their operations? Or just– It’s off topic but just real quick. Do you feel like the timing of that had an impact on that particular type of business?

David: I think, yes. I would say that, so companies, first of all I didn’t even know this role existed, right? I mean, you go to school, you go to business school, and then you hear management consulting. What is that? But it’s very interesting, right? So essentially, companies will bring in outside third parties that are “smart” in the space and say, here’s how your company can be more effective, more efficient, better. Here’s the strategy you need. That was all fine and good. The company I was fortunate to work with at the time PRTM was focused on what they called “Operation Strategy” which was, not only do we tell you here’s what your company needs to go but they also helped you deliver that. So they actually focused on the operation. So the kind of people that they employed were mostly experts in the field. So they had lots of PHDs that were in whatever the, whether it’s healthcare, or electronics, or software, they had people that had actually been in companies of that sort. So that when they brought those folks on board, they could execute very quickly. With the crash, I think what happened was, there was a lot more focus on results, right?

Rod: Right.

David: He wanted to make sure that they could not just put out nice white papers and board presentations but they actually could deliver on the promises they made. And yes, that really accelerated our growth at the time and actually our company ended up being acquired by press waterhouse.

Rod: Wow. Well, yeah, that’s something I’m interested in. I’ve been threatening to do an entrepreneurship podcast. I’ve built 24 businesses, I love business, I love, you know, just talking business and I was just curious. Because I’d again, I’ve been threatening to do that for a while now. My team–

David: It’s really interesting because every client is different, right?

Rod: Right.

David: Every problem is different. And, it’s really a people business, right? You have to also, not just know the subject matter, but you have to be able to navigate the myriads of personalities that you encounter, and make sure you can work with them.

Rod: Yeah. You know, every business is nothing but people and systems. And so, you know, you get the system down, you get the KPIs down, you get the culture down for the people, and you’ve really got something. And I know, again, it’s a topic I love. We went off topic there guys. Sorry about that. But that was mainly for my own edification so thank you for humoring us. But back to multifamily for a minute. Now so, you know, let’s talk about that first deal a little bit more. You know, in your experience of getting a first deal, can you speak to that a little bit? Because, you know, that deal is always the hardest, it’s always the most stressful, it takes the longest and then, it seems like once it’s done, they’re like dominoes after that. I see with my students all the time it’s like, that first one takes eight months, sometimes a year. And then, next thing I know they’ve got six assets, you know, like months later. That’s what it feels like, anyway, can you speak to that a little bit?

David: Yeah, no absolutely. You’re totally right. I think, the difficulty that a lot of people that are starting out in the business face is really just being taken seriously, right? It’s an exclusive business because, I mean, the brokers are kind of like your gatekeepers and they don’t necessarily have any incentive to work with anyone new. Because, I mean, they don’t know you. You’re untested. Right?

Rod: Right.

David: There’s very little incentive for them to send you a deal that may be a good deal and you may end up wasting their time, right? That’s their fear. Their fear is, I mean, they’re making a good commission on this deal and they don’t want to really waste their time. They would rather send that deal to somebody who they’ve done business with that they know can execute. And even take a little bit of a percentage cut and what they make on that deal but have certainty.

Rod: Right.

David: So, the difficulty is being able to speak to brokers in an educated manner and to be able to convince them, right? You have to be convincing that you are indeed serious and kind of work through their, I guess, screening checklist or whatever that is. But also, I think, I mean at some level you have to be persistent, right? I mean, I think we all have met people that are very intelligent but don’t have the, I guess, endurance and mental fortitude to stay with it, right? And I think that’s important, right? So you need to bring both of those things together.

Rod: Can I ask you to drill down? Let’s drill down a little bit on, let’s start with the screening. Can you elaborate on how someone that’s listening, that’s struggling with this, might approach that hurdle?

David: Sure. So, you have to know what you’re speaking about, right? So, every industry has its own vocabulary in its own lingo. And you also have to just understand what is driving the broker, right? What are they incentivized to do? You almost have to look at it from their perspective and be in their shoes to say, if I was that guy, the broker who has access to these deals, why would he want to speak to me? Right? And so, thinking about it from that perspective, you really have to kind of dispel all the fears that that broker would have in really working with you. First of all, it’s a waste of their time potentially, right? Ninety percent of the time it would be. So, how do you make sure that they feel that you’re different from the other guys calling him? Mostly, that takes the form of addressing their key questions. Do you have the money to do the deal? Right? So, and many people may not and I guess for me that was a little bit easier to handle because I was using my money for my couple first deals. But I mean, a lot of people partner in this business, right? And a lot of people don’t have a million dollars sitting in the bank before they do the deal in six months. It’s just not how things work, right? That’s not–

Rod: Right. Even big syndicators don’t. They raise the money. Yeah, so.

David: So, you have to essentially let them know that you know that and that. I mean, the money exists but it’s not sitting somewhere. And I mean, bottom line, if you need to go partner with someone, do that, right?

Rod: Right.

David: Have somebody who’s credible in the business and use their–

Rod: Resume.

David: Credibility and resume, so to speak, to get you in the door. Even if you’re raising the money, you’re not using that money. That may be a quick way to avoid a lot of the scrutiny that would be coming your way otherwise.

Rod: Yeah. And that’s, you know, what I try to teach as much as I can is, you know, don’t get locked up, you know, trying to fumble your way through the first deal. If you have to partner on your first deal or two to get them on your resume, to have credibility, to show a broker that you’re close, then partner with somebody that’s got that already and don’t beat yourself to death. It doesn’t have to be a lifetime relationship and it’s great if it is, but if not, you just do a deal or two. You agree?

David: Absolutely.

Rod: Yeah.

David: Another way too is, I think people get stuck in this, Oh, I need to do a commercial quote, commercial deal. There’s a lot of these. I mean, not a lot but there are some deals that are floating out there on “realtor.com” with like, residential type brokers that are maybe smaller, maybe frankly mispriced. Look there. I mean, those guys don’t have the same level of scrutiny for you. They just want to make sure that you have money and they’ll ask you for things that you’re not typically asked like, hey, show me a bank statement, or proof of funds, or something that, I mean, frankly there are websites that can get you proof of funds if you need it.

Rod: Right.

David: You just have to be creative and smart to get there. I mean, you don’t have to be untruthful but you just have to understand how can you fulfill the requirements.

Rod: Sure.

David: To have someone take it seriously.

Rod: Well, I actually think brokers use that proof of funds sometimes, question on newbies to stall them out and, you know, if you get that question, I think very often the broker is not sure that you have the ability to close. And, you know, because if most commercial brokers know that the bulk of the operators out there don’t have millions of dollars sitting in the bank to close on that asset, they raise those funds very quickly because of their network and you have to be able to communicate that. Would you also think, agree with the statement that, the more credible you are in your response in defining with some, you know, articulating why a deal doesn’t work for your criteria when you’re speaking to the broker. Maybe, you know, you’ve normalized the expenses, you’ve gone through and expressed, you know, the returns that you’re looking for in an articulate way to the broker that that might also help get over that hurdle of credibility. Yes?

David: Absolutely. I think brokers are looking, I mean, it’d be very, very unusual I would say if, if you contacted the broker on a first deal and that would be the deal that you did with them. It’s much more so the case that you spoke to them about a deal that may or may not have been kind of meeting your criteria. But you, like you just mentioned, were able to express very clearly why it didn’t work, or what you were looking for, what needs to be different? And again, that comes from being educated about the process, understanding the numbers and being able to communicate those very clearly like, Hey, I’m looking for this kind of a cap rate in this area if it exists. And I’m looking for these kinds of returns, right? And I’m not looking to go do a mass rehab or I am looking to go to a mass rehab but here are the metrics that need to be hit for that to happen.

Rod: Right. And I think that, absolutely. And then, they see that, you know, you took the time to dig into the asset, you ran the numbers, you normalized the expenses, you ran a pro forma, and so you’re not somebody that’s just, you know, shooting in the wind here and you actually did your homework.

David: Ask them some tough questions, right?

Rod: Right.

David: Sometimes, ones that they have to go back and do some research on. And you also, frankly, just the cadence of your response with them, right? So brokers, I mean, like anyone else doesn’t like people who waste their time. So, if they’re sending you some data points and some information about this property, take the time and respond, right? Even if it is, Hey, I’ll get back to you in a day. I received this, thank you very much. As opposed to, nothing *crickets crickets*. And then, you get back to them in a week and say, Oh, yeah, that deal you sent me two weeks ago. It just is a different type of, you build a different type of rapport.

Rod: Yeah. No, no. Guys, what he just said is really important because brokers are used to being ignored. You know, they’ll send some information and that’s a black hole. And, if you are responsive and you’re consistent like he just described, your cadence is consistent with in your communication, then they can see they can rely on you. It’s almost a subconscious thing but it’s critical. Now, let’s talk about the actual broker relationship for a minute David, if you don’t mind. So, you know, can you– Well, why don’t you speak to it and then I’ll elaborate on if you don’t hit the points I’m thinking, I’d like expressed here. So, how would you build that relationship and continue to nurture that relationship?

David: Sure. So, I mean, the first broker that I did a deal with– so the way brokerage offices typically work, right? There’s the senior broker that’s got the brokerage license. And then, there are a few junior guys that their job is to run around and call people to see who can buy something or who can sell something.

Rod: Right.

David: I like and have had a lot of success in working with some of those junior guys that are hungry, right? But smart and willing to do the work. Also, have to earn their trust, right? So, I mean, the broker who has been in the business for 20 years that owns the office, I mean, really he’s not gonna sit down and listen to you for 30 minutes. That’s just not gonna happen. They don’t have the time to do that or they very seldom–

Rod: Or the inclination.

David: I mean, they just have better uses of their time. There’s nothing wrong with the brokers. It’s just not how the business is set up. So, with some of these junior folks that are, again, in the business, hungry, that’s their job. You establish a rapport, right? Maybe you go to have a coffee, right? Or meet up with them, try to understand what they’re about, what are they looking for? And again, those things that I just mentioned, you want to be responsive, you want to give them input on why a particular deal they set you may not meet your criteria, and you want to have a genuine discussion and have them educate you as well. They see a lot more deals and you can ask them questions about, Hey, in this sub market, like say, Okay Metro Detroit where I live, what happens in the North side? What happens in the East side? What happens in the Western server? Whatever county you’re looking at and pick their brain a bit. I mean, they like that and you develop that kind of a relationship where after a while, right? They trust you just because you ask smart questions and they understand what you’re about. So, when they call the next potential seller, that tells them about a property that meets your criteria, they may likely give you a call, right? Even if you haven’t done a deal with them yet at that point.

Rod: Yep.

David: But you’re one of those folks that have spent time with them as opposed to anybody else who just calls and says, No, this doesn’t meet my criteria. I mean, people are people, right? It’s all a relationship business, right? If you spend time on establishing some level of trust with someone, they most likely would treat you a little bit differently than if you’re just the next guy sending an email or not even responding to an email or phone call.

Rod: Yeah.

David: That’s one. And then, once you do calls–

Rod: Hold on, hold on. If you just hold that thought. I want to elaborate on what you just said, just for a second. Please don’t miss what you were gonna say next. Guys, if and you’ve been blessed to be able to buy effectively in your backyard, two-hour drive around you, you know, you’ve been able to do that, a lot of people can’t. And so, what I want to tell those of you that aren’t gonna invest in the market you live in, is that, you start the conversations over the phone but the relationship completely changes when you fly out and meet with these people. Would you agree with me David?

David: Absolutely.

Rod: Yeah. You go break bread with them and you just literally lock up your entire day from breakfast, noon, lunch, dinner, cocktails, whatever. You go visit properties with them, you go see property managers, potential investors, bankers, whatever. You really hit the ground running when you go spend a couple of days in the market that you’re targeting. And I’ve heard it time and time again from very successful operators that I’ve interviewed and students of mine that have followed that model, that you’ve got to go break bread with these people. And then, they see you, they see you’re real, and then the relationship shifts, right? David?

David: Yeah. Okay, absolutely.

Rod: So, what were you gonna say before I cut you off there? Sorry about that.

David: No, that was very good. You want to be opportunistic about it, right? If you have your daily W-2, and I think, I heard Brian Briscoe on your show. He had a person in his group that he was working with whose job was traveling. I think it was the Carolinas or something, right? So, it was very easy for that person to go set up meetings with brokers and meet with them, and kind of be, put a face to the name, right? And express what they were looking for. That is very effective. You wanna be smart about it, right? I guess it’s what–

Rod: So, you’re going the same direction I just went. Okay, thank you. Yeah. And you could do it yourself or yes if you put a team together where ideally you’ve got someone with boots on the ground in the sub market that you’re interested in, they could do it as well. And then, you’ve even got more credibility because you’re just not a team of one at that point, either. Okay. Very good.

David: Very quickly. The one other thing I wanted to add was, once you have that first deal with them, I mean, they’ve just know that you can execute. And, I mean, in my case I think I ended up buying three or four more deals from the same broker just because we liked working together, they understood what I was looking for, and I mean, it just worked.

Rod: Yeah.

David: Again, the first one is the most difficult because then, I mean, other brokers start calling you because they’re seeing you in their databases. You’re someone who’s executed and has closed the deal. But, yeah, that first one I think is the domino that needs to fall first.

Rod: Yeah, for sure. So, let me ask you this and then we can move on to something else but how do you maintain that relationship? We talked about how you start it but how do you nurture it? How do you, you know, develop it even into a friendship as it were? But can you speak to that a little bit? I mean, it may seem obvious but I think for a lot of people, it isn’t.

David: Yeah. No, I think, you have to maintain it. I mean, again, you have to put in the time, right? I mean, the very simple things to do would be, kind of, a call once a month or once every two weeks depending on what your needs are. If you’re doing many more deals, if you’re active in the market, or even if you’re not, right? I think it’s very fair to say, you close that first deal, you kind of heads down on what next, how do I run this property well? But you’d find that the right brokers are extremely knowledgeable in the market, they will introduce you to a lot of the other professionals that you need like, the property management people, right? And property managers are extremely important part of your team. You kind of live and die by your property managers. So, brokers know who manages what in the area, right? So, they know sellers, they know bankers, meet with them, right? I mean, it’s kind of like you say, it is kind of obvious but, and again, I’m not saying anyone should not be true to themselves and not be genuine, right? If you truly don’t like this broker they just closed this deal with, I’m not saying you should be their best friend.

Rod: Right.

David: But, I mean, there are people where sometimes you hit it off and it’s like, just reach out to them and say, Hey, what’s going on? Let’s do lunch. I know it’s difficult now with what’s going on with the Coronavirus. Call them up and say, What’s going on? And just hear what they’re looking at. Maybe there’s something that may interest you, maybe there isn’t, and I think brokers also appreciate you being upfront with them, right? If you’re not looking for a deal in the next six months say, Hey, right now I’m tapped out. I’m working heads down on this thing I just bought. That’s kind of where I’m at but let’s stay in touch because things may change or may not change. You just wanna have that touch point. And frankly, the easy way to do that is, schedule something on your calendar, right? I mean, very easily say recurring monthly meetings, call broker A or whatnot, right? It doesn’t have to be long, it’s a touch point.

Rod: Yeah. Just a quick call can be in your CRM, could be in your calendar, either way. So let me ask you this. Let’s shift gears for a second now, away from the broker. But let me add to that and, you know, you find how you build these relationships guys is through referrals. So you ask the broker who the property management companies are they like that manages that asset class and size that you’re interested in? You know, what bankers have they worked with in that local market that they like that you might want to build relationships with, you know, contractors, things of that nature? And that’s how you build these through referrals. But let me ask you this. Shifting gears for a second. Do you think there’s a type of person that’s best suited to be an operator in the multifamily space? Do you think there’s a type cast type or how would you answer that question?

David: That’s an interesting question. I mean, I think yeah, definitely there’s a type. To be an operator you need to pay attention to detail, right? I mean, there’s operations and if you don’t, you’re not gonna do very well.

Rod: Right.

David: And I think people need to be honest with themselves, right? There’s, I mean, we all have our strengths and we all have things that maybe we’re good at but we just really don’t enjoy doing. And so, I think if you are the type of person who really gets into the weeds of something, yeah, I think go do that and make sure you’re on top of all the numbers. Frankly, some people are not good at running numbers so those are two separate things too. You may be a good number guy but you don’t like the operations and getting to the reads. You really need to understand what your skill sets are, right? You need to understand again at some level, some degree of accounting, and spreadsheeting, and excel, and numbers, that’s one. Two, you need to be good at operations which is, if something needs to be done, you kind of need to birddog it almost to completion. And those things are not difficult but it requires a lot of–

Rod: Its project management, really.

David: Yeah. It’s project management. Stick to it so you kind of have to get on top of something and create a list, and be okay with conflict to get into people’s face if you need to, and say, You promised me this will be done by Wednesday, where now on Friday. What’s the status and when is it gonna be done? Again, with management consulting that’s kind of what I do so I don’t really shy away from that, and it kind of comes easy to me. But, yes, I think people need to be honest with themselves as to what their skill sets are and if they don’t have that skill set, they should partner with someone who has it.

Rod: That’s the last piece is what I was looking for. Yeah. Because some of the best partnerships I’ve ever seen are like the one that I have, you know. I’m not the spreadsheet guy. I can read them, I just don’t love it. And so, you know, if you’re doing what you love and what you’re strong in, and you align with someone, or partner, or hire, whatever for where you’re not strong, those are some of the best partnerships I’ve ever seen. You know, I interviewed these three kids on my podcast here in their 20s. At the time, I think they had 70, 80 million dollars with assets, I think it’s probably a lot more than that now. And they were all partnerships of an analytical, spreadsheet kind of a person, with a more outgoing, you know, investor relations, broker relations, you know, communication person. And, you know, you’ve obviously got both skill sets David and that’s, I see that sometimes as well. But, if you’re one of the other guys, then, you know, and like inside my warrior group, inside my mentorship program, those are the kinds of alliances that are always being formed. And, you know, you’ll get somebody that’s maybe great at process, great at project management, great at, you know, following through the asset management piece aligned with, you know, and sometimes you’re wearing two of these hats. Maybe you’re great at communicating in the asset management, someone else is great at the analytics, and maybe even, you know, the broker relationships. But those kinds of partnerships as it were are incredibly powerful if you’re playing your strengths. Would you agree with me? Because if you’re playing with your strengths then you’re doing what you enjoy. And when both people are doing that and they’re complimenting each other, I think success is inevitable.

David: Yeah. I totally agree with that. I think, you don’t want the worst– Let’s put it this way. The worst scenario would be if, either your team or you yourself are dreading doing what next, right? I mean, it wouldn’t work after some time. You may push through it for a bit but it wouldn’t work in the long run.

Rod: You won’t have super success. Now, I’m sure you see that and you saw that in your management consulting. You’ve got what they call a square peg and a round hole in a particular position because they don’t love it, right? I mean, right. I mean, part of being a, you know, management consultant is making sure the right seats are filled with the right people, right? I mean, that’s probably one of the most important things and it’s the same thing in this business. So let me ask you this. I think you may have alluded to this. Actually, you know what, you did. I was gonna ask you if there were any “Aha” moments but I think you figured that out. But let me ask you a question. I mean, you know, you were working for yourself. You were hired as a management consultant then you started your own, you know, hung your own shingle. Did you come to the realization that it was still pretty much self-employed at that point? Or did you read “Rich Dad Poor Dad” or “Cashflow Quadrant” and look at that model and say, Okay. Well, I’m still, it’s all relying on me or was there an epiphany, I guess. Let me ask it that way. Was there an epiphany there?

David: There was, I mean, basically I think the way that I think about it is, this isn’t Rich Dad Poor Dad. But essentially it’s, are you trading your time for money, right?

Rod: Yeah.

David: And whichever form that takes, it’s the same thing. You’re an employee. Whether you’re an employee under your own shingle or somebody else’s shingle. As far as I’m concerned, it doesn’t really make too much of a difference. I mean, for me, the difference between being employed by a large professional services organization and my own small professional services organization was, I had a lot more leeway, right? I had a lot less politics to deal with. And, I mean, I could basically kind of decide what I wanted to do.

Rod: Right.

David: Kind of decide who I wanted to work with but not entirely, right?

Rod: Right.

David: And, I mean, even in this business, right? I think, if someone is trying to partner with three, four, five people go get a number of deals, it’s work. It’s not like you’re just sitting at home doing nothing and hanging out with family. And so, what I specifically wanted to transition to was something frankly a lot less active and a lot more passive, where, if I could get a number of doors and get somebody else to manage them for me, then sure. I mean, there’s still kind of supervision asset management and trying to figure out how this thing runs. But that’s a lot less hours in my day, a lot less hours in my week. I can spend a lot more time with my kids, my wife, and do things that we really enjoy doing which is why really, I mean, for me I don’t necessarily know that I need to get to 10,000 doors or even a thousand doors. I mean, our properties are covering expenses and frankly I’m very happy. Is more money better? Sure. I mean, you could always do more deals, and always have more doors, and have more passive cash flow, passive income. But at some point, you really have to kind of ask yourself like, what do you really want out of this thing, right? Is the goal to build a massive empire, which there’s nothing wrong with that. I mean, I think that’s great, and partner with lots of people, and create opportunity for tons of people, and improve the communities that you invest in, or is the goal to just do whatever else you’re interested in doing with the money that’s coming in passively. And I think, that’s really a luxurious stance to take, right? I think, you have to be at, I guess, that level to be able to make that decision when I speak to people. That’s kind of the– I want to get them to that place where they can decide what do they want to do.

Rod: Yeah. No, I think what you just said around luxurious, I don’t think it is. I think it’s being smart. I think it’s looking through rose-colored glasses and well maybe that’s even the wrong expression. It’s looking at lifestyle and asking yourself, why do I have to have 10,000 units? What’s that gonna do for me? And drilling down on the answer to that question. What am I looking for? Is it significance? Is it, you know, do I want to contribute that money? What’s the underlying driver that’s driving that? And sometimes, if people can be really honest with themselves like you’ve come to the realization, you don’t need 10,000 units to live an incredible life. You know, you just maybe, you define what that looks like, you know, in dollars and cents. To do what you want to do and you back into it. You don’t just, you know, shoot for the sky for no reason other than you want to shoot for the sky. So I think, I’m really glad you said that David. So, let me ask you. Go ahead.

David: Sorry. I was just gonna say, I think the ultimate thing for, at least for me, right? And hopefully for many is, the freedom to do what we want to do, right? I think, what a lot of people are caught up in is, not being in control of their time, right? Not being able to take time off when family events happen to the extent they want, right? I mean, the birth of their kids, or the death of family members, or whatever the issue, right? I think there’s lots of people out there that enjoy their jobs and take lots of pride in it which is great. I think just the issue for many people is that they don’t have the ability to do it on their own time, right?

Rod: Yeah. It’s all about freedom. That’s the word I hear more than anything else for my students is they want freedom. They want to be able to be with their families and do what they enjoy, and not be locked into somebody else’s timeline. Yeah.

David: That’s also the name of your podcast, it’s all about lifestyle, right?

Rod: “Lifetime CashFlow”, baby. “Lifetime CashFlow”. That’s what creates that lifestyle. And, you know, I try to tell brokers and single family people, I mean, you’re working. Every January first you go back to work. You get enough assets paying you, yeah, you’re gonna spend an hour on the phone with your property manager once a week but that beats the heck out of 40 hours at a W-2. So, listen buddy, I really appreciate you coming on the show. It’s been a real treat for me. I really enjoyed this and I don’t always say that so thank you. Thank you for coming on my friend, very much appreciate you. And guys, yeah, his company name is Cape Sierra Capital. What’s the website?

David: It’s “capesierracapital.com”

Rod: Okay, simple enough. Perfect.

David: From Sierra Leone.

Rod: Oh, that’s right. Sierra Leone is that an, I don’t even know where that is. Is that in Middle East Africa?

David: West Africa.

Rod: West Africa. Okay, very cool.

David: On the Atlanta, facing the US.

Rod: Okay. Pleasure to meet you my friend. Really enjoyed this. I’m sure we’ll talk again soon.

David: Great to speak to you, Rod. I’ve been listening to your show forever. Guys, thanks. Great guests, and also great knowledge. Thank you, Rod.

Rod: Thank you, buddy. Thank you.