Ep #621 – MFRS – From Laid Off Truck Driver to Multifamily Entrepreneur
Warrior Jonathan Russell began buying rentals in 2016. Shortly after that, Jonathan experienced the uncertainty of working for someone else when company he was employed by downsized, and he found himself unemployed in 2017. He then went full time buying real estate. Jonathan to date has done 86 doors comprised of single family rentals, multifamily properties, flips and new construction spec builds.
Here’s some of the topics we covered:
- The power of leverage
- The flexibility of real estate entrepreneurship
- Proper framing of adverse situations
- Networking
- Leveraging your superpower
- Benefits of multifamily over single family
- 100% responsibility
Full Transcript Below:
Rod
Welcome back to Multifamily Rockstars. So this is where we interview people that are crushing it in this business, and we show you guys the inside scoop into how multifamily investors are creating massive success in their businesses and, of course, in their lives as well with their families. As always, I’ve got my co-host Mark Nagy for my Massive Action team, the director of our Massive Action team for the Warrior Group. Mark, what’s going on, brother?
Mark
Hey, Rod, not too much. Just super excited. Finally for the boot camp in December. It’s been almost two years since we’ve been actually able to shake some hands with people in person and network that way. So I’m pumped that it’s going to be a good end-of-year kick-off here in 2022.
Rod
Yeah. No, I’m really looking forward to it as well. You know, I’ve decided I’m only going to be doing one of those live events a year moving forward because they are pretty consuming and pretty exhausting because it’s pretty much me on stage for three days. So you know, I’ll continue to do the virtual events every quarter or so, but I’m only going to do one live event. So if you guys are listening and you haven’t registered, for God’s sake, what are you thinking? Go to rodinorlando.com or text “Rodinorlando” as one word to “72345”. And if you DM me, I’ll give you a code so you can come for you know, a great deal. So DM me on any social channel. I’ll take care of you. I’ll hook you up. Anyway, we’ve got an awesome guest, one of our Warriors, Jonathan Russell on the call today, and John’s got 80 plus doors and excited to have you on the show, brother. Welcome.
Jonathan
Thank you, Rod. Thank you for having me. I appreciate it.
Rod
Absolutely. So why don’t you take a minute and talk a little bit about your– you know, how you started in the business and I think you’ve got an interesting story about being downsized and all of that. Why don’t you tell us about all that and how you got going in this business?
Jonathan
Yeah, absolutely. I’m out of Jonesboro, Arkansas, here and kind of always had an entrepreneurial spirit. Started off with having a trucking company after school. And when I say trucking company, it was one truck like me, as the driver, mechanic, operator, everything. I enjoyed the business side of that, but just kind of got really burned out on the travel and just all the time, all the stress that came along with that. And so that led me into a job with a company out of Chicago driving the truck with them. They worked out really well for me because I just had a place here in Jonesboro. I would just make trips back and forth to Chicago a couple of times a week. And during that time, I really got to dig into audiobooks. And your podcast in particular definitely helped me kind of get the real estate going. So then about my first house as a high foreclosure, and still at that time really wasn’t planning on doing as an investment. This was the only thing we could afford. So we did that and lived for a couple of years, sold it. And then when we sold that had that profit, that’s what kind of light bulb went off. That’s okay. That was relatively easy. And so we did the same thing again. And that’s what kind of got the momentum rolling on that in 2016, after doing a couple of those, started buying the rentals. And at that time, I was still driving for that company. And then in 2017 there they called me out of the blue and said that we’re downsizing and fired me. Okay, when is this effective? And then like today, I was like, okay, so that was kind of a jumping-off point for me. Thankfully, I already had 12 doors by that time, all single-family. And that kind of was the kick in the butt. I needed to go full-time, just kind of being more aggressive at that point. And I would love to say I had the guts and just do it myself. I had to get fired. They got to be shoved out the window to get me going.
Rod
It’s called leverage,
Jonathan
Right. So it’s been kind of off the race. That’s kind of the quick story of it.
Rod
Love it. So when did we meet? How did you get into my ecosystem?
Jonathan
Through the podcast. Like I said when I was driving that truck, I never just constantly listened to you. Bigger pockets and tons of audiobooks, just kind of soaking up all the information I can get. And then just as I said, all we listen to the podcast, and then this current year 2021, I decided to take the lead to go ahead and join the Warrior Program as to go and try to take action even further.
Rod
Nice. Nice. Now, I know that you’ve done pretty much everything so far on your own or in JV’s. Are you thinking that you want to go larger, maybe do syndications as well at some point or what are your thoughts on that?
Jonathan
Yeah, absolutely. Just the benefit of scale. It’s still relatively new to me. Just you know, definitely out of my comfort zone. But you know, we always say that’s where you got to go, so definitely makes more sense to go the bigger deals. That’s definitely my goal going forward to try to tackle some bigger deals. And again, talking about the Warrior Program, that’s what surrounds yourself, those types of people because you kind of get you know, doing 80 something doors. Kind of careful not to get a big head or feel good, but too good about yourself. But then you talk to someone who did that over a weekend, so kind of put you back in place, a tad, a bit. But you know, some people would get discouraged by that, but it motivates me just to keep pushing forward.
Rod
Nice. Nice. So let me ask you this. What have you learned this year about the business that will help you move forward? What are some things you’ve learned?
Jonathan
Just the power of leverage, which, even with a single-family always knew leverage as far as bank leverage, as you know, you’d be able to use the bank’s money, but to be able to bring in other investors in addition to the bank’s money is kind of down steroids, so it kind of helps you– it’s just really the same concept. But I was kind of missing that piece. You know, you can leverage other things, not just the bank’s money.
Rod
Nice. Nice.
Mark
So, John, I know you mentioned you had 12 doors in the single-family space before you became unemployed in 2017. A lot of people would look at that and say, hey, you know you were stacking up single families, 12 doors. That’s awesome. What made you initially decide to, I guess, jump out and get a mentor rather than just continuing to kind of stack things and do it on your own. I know a lot of people start that way.
Jonathan
Yeah, just the benefit of speed. I was wanting to get there quicker because I had a good system in place as far as buying single-family houses. And I still add a few as I can. But when I looked at it, I could just keep doing what I was doing and probably add easily eight to ten houses a year and be fine. I’ll be happy with that. But I wanted and still want a lot more than that. So just want to surround me with people and coaches that you know, have done– like Rod says, find someone who does something easy that you think is hard. So that’s what I’m going after.
Rod
Nice. Nice. So I know you’re married. Do you have kids? I don’t recall. Forgive me.
Jonathan
Yeah, we do. We have two sons.
Rod
Okay. Nice. You know, everybody thinks it’s easy that it’s all roses, and there’s never any challenges. Tell me about a setback or a failure that you had, and maybe something that positions you for future success, maybe a deal that you get your nose bloodied, but you learn from it. You know, if anything like that comes to mind.
Jonathan
Yeah, absolutely. There is actually a single-family house, but the lesson learn and the concept applies. Anything, but there’s a house that we bought, three models, and it had termite damage, which I knew it did up front, but I kind of didn’t dig deep enough, and we started digging in, you know start peeling back the onion and just feel as bad. Really bad. So kind of come out of pocket, a lot of money that I wasn’t planning on. But then we just sucked it up and got it done. And so lesson learned, just don’t give up. Because once we got it done, I was able to go refinance it and still have plenty of equity to pull back the money I put into it. And so the way I looked at it was– at the end of the day, it was still five. Wasn’t a home run like I thought it was going to be, but it was still no door and just a solid deal. But if I would have given up halfway through it, I would have lost crazy amounts of money. So you know, there’s going to be bumped if you just ride it out and keep your eyes open most of the time, you’ll be okay on the other side.
Rod
I got one follow-up on that Mark. Can I ask what was the magnitude of that termite damage? Because I’ve had two of them. One is pretty significant. But you know, what I found was it’s just wood. You know, you just got to take the wood out, put new wood in, which is not like the end of the world. Now, how bad was yours?
Jonathan
Yeah, it was pretty much like I said. If I could do it over again, I just would tear down the house and build it–
Rod
Oh, no, it was that bad. I see. I had, like, maybe one and a half walls in a house. Okay. So it was bad. Okay.
Jonathan
Yeah. It was all the joy–
Rod
Okay. All right. Fair enough.
Mark
One of the three T’s people doesn’t want to deal with tenants, termites and toilets. Right.
Jonathan
That’s right.
Mark
But you had a positive mindset, which brought you through. It is what I’m gathering from that story. And I want to kind of stay on the painful moments for a second if we could. I know you talked about you know, getting fired, like, literally that day in 2017 you know. What was your mindset when you became unemployed there at that moment? And what did you do to mentally get through that to where you’re at today?
Jonathan
I think it’s just all about finding a reason, just trusting the bigger picture, because, like we always say, it seems kind of cliche, but it’s just true. Just mindsets everything. Because one thing I didn’t mention, I went through a divorce early in 2017. And then in that fall, I met my current wife, Meredith, and we were dating. Everything was going great. Then I lost my job on December 7th, I believe. And on December 17th, Meredith had a car wreck and was paralyzed, which you know, she went through rehab and you know, a year’s worth of– And she’s relatively okay now, but you saw that finding a reason. I just justified that everything that happened was so I could be with her and take care of her. That way, I wouldn’t have a job. You know, in real estate the flexibility allowed me to still grow during that whole time. Focus on real estate, but I just you know, find a reason in the madness.
Rod
The meaning. Finding the meaning. Guys, life is about meaning. Wow. I didn’t know you went through that, buddy. I really appreciate you sharing that. That’s pretty amazing. I mean, lose your job. Your wife gets paralyzed. Holy cow or new lady gets paralyzed, divorced, all of that in one year. Holy cow. You know, some people will take that and let it destroy them. And you know, it depends on the meaning they place on it. You know, I’ve seen lots of examples and some of the other self-actualization stuff I’ve done where two people can have the same horrific experience and one comes out stronger. The other one comes out defeated. And so you know, I’ll give you a great example. When I lost $50 million, my meaning is I would have never met Tiffy and I’d give it all up again for her. So you know, you can place a positive meaning on something. Well, good for you, man. I really appreciate you sharing that. So let me ask you this. Why do you think some people give up or why do you think they fail? What do you think is a common reason for people failing or giving up in any business?
Jonathan
I think just getting overwhelmed, which it’s easy to do. It’s really easy. I still you know, struggle with that daily. Just you know, things can kind of pile up on you, and just taking a deep breath and just realizing that nothing is really that bad at the end of the day, you know, it will all shake out. I think most people give up just because they get, you know, overwhelmed. And part of that is not surrounding themselves with a good support system. But I think just being overwhelmed is the main thing.
Mark
Wow. So tell us about some of these deals you’ve done over the past year here as a warrior. And what was your superpower in those deals, right? What was your role? What did you bring to the team? What do you think your superpower is and then a secondary is–
Rod
Hold on to the JV ones, obviously, because you did some yourself, too, but on the JV ones.
Mark
Yeah. And on top of that, how do you think other people that don’t know yet? How do you think they can help find their own superpower that might be listening right now.
Jonathan
Yeah, absolutely. I think the part of it, the first part is just definitely networking do because if people don’t know what you’re doing, then how are they supposed to help or you help them? It’s just people, you have to tell people what you’re doing. And then, seven of the doors I did this year are JV for a partner I have in Missouri and the kind of structure there is, it’s in his backyard there, and he found them and brought them to me. And he takes care of this as far as boots on the ground there. And with the doors I have and balance sheet and such, how they will secure the financing and as far as the knowledge and security behind them. And he’s a little bit newer than me. So it’s kind of a good combination with him being boots on the ground allowed me to still grow without putting so much on my plate. And it’s just a good combination.
Rod
Perfect. Perfect. Perfect. So I’ll ask you a question I asked on the show regularly. You know, if you could go back and tell your younger self something about this business. Is there anything you do differently? I mean, certainly, you don’t want to give up the lessons and even the setbacks and the failures, you grow from those. But is there anything you know, that you might do differently from what you know now?
Jonathan
I think just a benefit of scale. Just getting the multifamily sooner because like I said, I spent two or three years there just on single-family and the single-family is like, they’re okay. They serve a purpose for whatever your goals are. But if you’re trying to scale and grow, it’s almost impossible to manage. Too many single families just get too spread out very quickly.
Rod
It took me a few thousand to get that memo. So you’re way ahead of me.
Jonathan
Right. So just the multifamily, just the benefit of scale with that is I should have picked up on sooner.
Rod
Let me ask you this. Oh, go ahead, Mark. Go ahead.
Mark
Well, I was going to follow up on that. When was your realization on that of like, hey, I want to jump from single to multifamily. Was it a certain amount of doors? Was it a cash flow number to where you said I needed more? Was it the tenants were becoming too overwhelming. What was that kind of, the straw that broke the camel’s back that said, hey, I need to jump to go bigger here?
Jonathan
Yeah, I think just the management itself, because when I got up to 30, I was still self-managing everything. And then, that’s why I kind of jumped into multifamily. And then we went from 30, I think it was to 50 within, just like a very short period of time. And that was just kind of very–you know, the lesson there is I picked a property manager too quick and the first one didn’t work out too well. So I kind of just kind of dumped everything over because I was kind of overwhelmed, but you know, kind of sorted through that storm and then found a better one. Everything’s been rolling since. But really, to answer your question, as far as I knew, just the number of doors, as far as having that structure in place, the management team, and all that to support all that.
Rod
A lot of detail associated with that. Let me ask you this. How did you overcome the fear associated with this business? Tell me how you push through fear.
Jonathan
I just take action. I try not to overthink stuff like not saying you should go in blindly. Definitely do your due diligence. And actually, if anything, I’m guilty of like, to term my house, moving too quickly you know and I just jumping in and stuff. So I think overall, that’s benefited me because the fear is always there. But just you know, to push through it with action is the way I do it.
Rod
Nice. Well, I know that your wife is incredibly supportive because I saw that on social, and I wanted to ask a question about that. What are some hurdles that you think you know, couples looking to do this should keep an eye out for? Maybe there’s nothing that comes to mind but any advice you could give for somebody that’s listening or watching that’s married that you know might help as it relates to the relationship.
Jonathan
Yeah, I think just making sure the communication– just make sure you’re on the same page and know what you’re trying to do, because we live a relatively modest life, and we have a nice house and nice cars, and we do travel some, but you know, we don’t live as luxury as we could. But we, you know, make sure your spouse understands, and you’re on the same page like you’re both willing to kind of sacrifice the tad a bit now because, you know, it’s becoming. I think that there’s a disconnect there that can cause tension and problems if you don’t know what each other is doing as far as that goes.
Rod
Yeah, and aligned. And you know, one of the things I talk to the warriors about a lot is to make sure that they are aligned with their significant other. You know, do the goal-setting workshop at my live event together. You know, that’s one of the first things we do. By the way, if you come to Orlando, just know that’s one of the first things we do, because how the heck are you going to get anything if you don’t know what it is, but if you can bring your significant other to do that at the same time, and then you see how aligned you are with what you want, that can just be so incredibly powerful. By the way, guys, if you’re interested in the Warrior Program, text the word “CRUSH” to “72345” again, the word “CRUSH”. So we help you freaking crush it in this business, to “72345”. And that’s how you apply, to join. And we don’t take everybody just so you know, but you know, we check you out, you check us out, and if it’s a fit, it’s a beautiful thing. Has it been good for you, Jonathan? The Warrior Program?
Jonathan
Oh, yeah, absolutely. The knowledge is there no doubt, but to me, just the networking and surrounding yourself with, like I said, just the people who are doing huge deals. It’s just very inspiring just to know that you know, you don’t have to recreate the wheel. It’s right there. You just have to follow in everyone’s footsteps.
Rod
The wheel is there. You just got to work it. No, that’s great. Thank you. Again, that’s “CRUSH” to “72345” guys. Well, you know, how have you utilized your mindset and psychology to push through when things are happening? I know you take action. You said that, but you know, are there any things you do to stay motivated? Any quotes that you like, anything around mindset psychology that you would be willing to share that has helped you, you know, achieve the level of success that you’ve already achieved.
Jonathan
I think just in general, just personal responsibility, just knowing that everything’s up to you, like, good or bad, it’s on you like nobody else’s fault. I think you can get into the victim mentality of blaming tenants or blaming property managers. But like I talked about the property manager, you know that was my fault for not screening properly and not hiring a good one. So as long as you maintain that everything’s up to you, I think you can avoid falling into that victim trap.
Rod
Love it. Yeah. 100% responsibility is probably one of the most important components of success because you have no one to, you know, but you take responsibility for the good and the bad, and when you own it, it’s very freeing. It’s counterintuitive. I love it. Well, listen, I think, I really appreciate you coming on the show today, buddy. You know, we love these episodes. We love to bring warriors on and talk about what they’re struggling with, what they’ve been successful with. Let me ask you one last question. What are you most proud of in business or in life? I’ll let you answer that any way you like, what are you most proud of?
Jonathan
I think by far is my family, just my wife, and kids or what we do everything for you know, just a legacy we’re building in that transition to business. That’s absolutely the why of why we’re doing this just to build that foundation. We’re going to have a great life, but our sons are really going to have a great life. They follow through with it.
Rod
Nice. How old are they?
Jonathan
They are two and nine.
Rod
Oh, they’re brand new. Okay, so it’ll be awesome if they can be chips off the old block and you can get them acclimated into the business at some point. I’m sure you’re doing it like I’m trying to do that as well. Well, listen, brother, it’s great to see you. And I appreciate you. And you know, hopefully, we’ll either see you at the Orlando event or we’ve got a Warrior only event coming up at the end of March. We just locked that up here in Sarasota. The last one was fantastic. So we’re having another one just for warriors to get together and network. And we do deep dives on deal analysis and so on and so forth there. So hopefully I’ll see you at one of those, my friend.
Jonathan
Absolutely. Thank you for having me.
Rod
All right. Take care, buddy.
Mark
Thanks, Rod.
Rod
Alright. See you.
