Short Stays, Big Dreams: A Travel & Vacation Rental Podcast
"Short Stays, Big Dreams: A Travel & Rental Podcast" dives into the world of short-term rental management, the stay industry, and travel, offering insights, expert interviews, and actionable tips to help you maximize your rental business and explore the latest travel trends.
Short Stays, Big Dreams: A Travel & Vacation Rental Podcast
From Military to Millionaire: The David Pere Story
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Speaker 2:All right, welcome back my beautiful people to Short Stay's Big Dreams, the podcast where we dive deep into short-term rentals, travel, real estate, investing and making money. Today I have a truly inspiring guest. I'm going to let David introduce himself in a second, but just a quick background. David, like myself, is a Marine Corps veteran who transitioned from military life to financial freedom through real estate investing. He founded Military to Millionaire, where he helps service members and veterans achieve wealth through smart investing. Now, david, welcome to the show. I'm super proud to have you on here.
Speaker 3:Thanks for having me, brother. I liked your intro video there. That's cool.
Speaker 2:Yeah, it's a little animated version of our management company. So you know, our umbrella company is PMI, but we have several vertical components to it. One of it is a travel agency, but but yeah to to to the core. We are real estate investors that invest specifically in the hospitality market. I used to say, in the short term, rental market, but but we're. But we're now expanded, we're developing couples resorts. We invested in bed and breakfasts, small motels, small boutique hotels, so we now say we're in the hospitality industry. David, give me a favor so that, for those that are not familiar with you, can you give us a quick background on your story as to how you went from military into finding this beautiful world of real estate investing.
Speaker 3:Yeah, I mean, the short answer is somebody handed me the book Rich Dad, poor Dad, and I read it at a time when I was stuck on recruiting duty as a Marine and so I was working, you know, 80 plus hour weeks and hating my life, and they handed me the book and I was like, huh, this sounds cool. I don't know why I wouldn't do this. And so, probably like four months later, I bought a duplex to give it a shot, so I lived in one unit. I rented the other half, which everyone now talks about as house hacking.
Speaker 3:This was, we're coming up on, 10 years ago that I bought that first property and you know, that's just kind of like.
Speaker 3:I lived in it for basically free for a little while I was like this is cool. And then, when I PCS to my next duty station and it started paying me, that was kind of a light bulb moment. I was like, oh, and it started paying me, that was kind of a light bulb moment. I was like, oh, I'm making you know, 200, 250 bucks a month off of a property that I have a manager for I spend almost no time on. This is, this is cool, this works. And so I just kind of went in, went all in and I just, you know, I bought that, then I bought a vacant lot, then I bought a 10 unit that I bought Next was another duplex and then I just started scaling and buying, you know, bigger things and this, that and the other, and, and along the way I started this community talking, just documenting what I was learning and that's the what everyone knows me for now, which is for military to millionaire.
Speaker 2:And then that became a full-fledged business and so now we help other service members and vets achieve financial freedom and we you know, I roll, whatever I make out of that basically into more real estate and it's been, it's been a ride, it's been fun. Yeah, it's, it's. It's funny because I have a little bit of a similar past, I mean, uh, history that you just mentioned, except when I got into it many years ago, cause I'm, I'm, I'm pretty sure, um, I'm pretty sure I'm at least two decades older than you. So the book Rich Dad, poor Dad, I ended up reading years afterwards.
Speaker 2:But I always tell the story that when I was a young Marine at the time most Marines were getting in trouble and getting discharged for writing bad checks. So at the time the commandant was like everyone needs to go to a financial class. And that financial class I'm 19 years old and I'm sitting down listening to this gunnery sergeant who was at his last year he was getting ready to retire giving this financial class, basically on how to write book and how to you know I mean how to write checks and how to balance a checkbook. But he talked about how to set yourself up for financial freedom for when you retire from the Marine Corps. Cause he was, he was big on staying in for the 20 years, not taking full advantage of what the Marine Corps had to offer military in general, that if you do it right, you can be where he was. And I remember him posting up his financial, his bank account and his financial statements and I was, holy shit, that's what I want to do his bank account and his financial statements. And I was holy shit, that's what I want to do. And as a Marine, I follow orders. People die.
Speaker 2:And when he said, buy a house every five years or every time you transition to another duty station, just buy a house, rent it out, but live on base and take full advantage of everything base has to offer and you'll be where I'm at. So I did that not, you know, through ignorance, but I did it. But fast forward, uh, to today, you know, because of that simple advice. You know I've been super well off for a very long time and following you, you did the same Now. You did it faster than I did because you took it more seriously than I did at the time. But walk us through it. When did you realize? You just said that you're like, wow, that was good. When did you really realize, hey, I am doing so good that I don't need this government job anymore?
Speaker 3:Well, you'll appreciate this. So I was a staff sergeant at the time. My last command I got stationed at. I tried to go back to Japan. Actually I volunteered. They have a for Motor T, they have a staff sergeant billet open at Fuji. It's a one year rotation without family, and I was like I want that job. No one ever wants the job. So I applied for it and they told me no because they didn't need someone for that job right now. Ironically, three months later, the monitor was sitting in a brief bitching at the entire group of staff and CEOs and motor T that nobody would volunteer for this job. And I was like I did. You told me to go to hell. So now I'm stuck somewhere else. And uh, and he like and he remembered it too was the funny thing he was like yeah, my bad, he's like I should have. If I'd thought a little bit ahead, you could have just stayed for a few more months. And then anyway, um, I got.
Speaker 3:instead of that, I got camp pendleton, delmar beach, which everyone hears, and they're like wow, that's beautiful, best pot you could get stationed, except that I was at the one yeah, except that I was at the one mef headquarters in the g4, so I worked in a windowless vault with no access to electronics and I never like everyone's like, oh, right, by the beach, I'm like, yeah, I think so I don't see the beach so sure. Um, you know, every now and then they let us leave for lunch long enough that I can walk to the beach and grab a burrito, but other than that, like I just kind of eat in my car half the time and I hated it. Um, you know, I was a, a, a motor transport ops chief and I was running motor pools with 50, 60 Marines and I loved it. I'd done the whole combat thing and convoys and all of that. And the moment I got stuck in a office with a bunch of, you know, as a staff sergeant I was other than like two Lance corporals, I was the lowest rank there, permanent party, and so you know it's like me with like three mass sergeants, two master gunnery sergeants, two majors, a bunch of lieutenant colonels and a colonel and I was like this is dog shit, this is terrible.
Speaker 3:And I remember vividly that I was sitting in a office getting griped at about something stupid. It was a Lieutenant Colonel Didn't really like the guy anyway, and it was. I mean it was something as dumb as like the color on a PowerPoint font or, uh, the punctuation of the email, or I mean it was really stupid, unwarranted. I just need to find something to be upset about. Let me go pick on this guy and I was the guy and as I'm sitting there and he's bitching at me, I just I'm in in my head. I'm not listening to anything he's saying, because what I'm doing in my head is I'm calculating and I'm realizing, while he's yelling at me, that I make more money than this guy does when I'm not working in the Marine Corps than I do at work, and I was like, why am I doing this?
Speaker 3:And it used to be really fulfilling, but it was a few bad leaders in a really bad unit and I just realized you know, I can make a much bigger impact for the military outside of the military as a voice helping service members and vets, than I can in the military, being essentially just treated like crap. Because what I, what I learned, is that the more successful I got on the outside, the more people tried to make my like leadership, tried to make my life miserable because they just didn't like the fact that I was successful on the outside and I just didn't like that. So I left and I thought it'd be more fulfilling to teach service members and vets how to do the whole financial freedom thing and use their VA loan and all that. And I can't say I'm upset about the decision.
Speaker 3:I did the reserves for two years and at the end of that two years I did not re-up. And so, yeah, I've got 13 and a half good years in the Marine Corps active duty and another year and a half-ish in the reserves. And they keep calling me to come back to the reserves and I'm like nope, sorry, I don't care enough about the pension at this point. Like it was great for me, I loved every minute of the Corps, but it was time to move on.
Speaker 2:Yeah, you're like me. I loved I mean, I was one of those people that really, really loved the Marine Corps, but like you it's. You know, I discovered that I can be much more beneficial to my family, to others, outside of the Marine Corps than I ever could inside the Marine Corps. Now, the Marine Corps did and again, because I did everything that I was told to do in terms of finances, you know, and not really thinking about it, it turned out great for me. So, like I said, I am a big fan of the Marine Corps. I think everyone should at least serve at least two years of any of the military services. I really think it does help out a lot.
Speaker 2:But let's focus on this transition, because I find it extremely fascinating how you did it, because, again, it took me a long time for me to really say, hey, I made it. I've done well and I'm still working as hard as I ever did, but it took me a little bit. So that duplex was your start. But explain to me, after the duplex, what else did you buy? What was your investment strategies after that duplex?
Speaker 3:I was basically a buy and hold guy Everybody says that but I didn't have a specific asset class, so much as can I hold this or will it pay me to own it. I went from the duplex I bought a 10 unit. It was kind of an accident. I was trying to buy another duplex and a guy who owned a duplex said, you know, he didn't want to sell the duplex but he wanted to sell a 10 unit he had. So we had a conversation and it worked out numbers wise, so I bought it and then I bought another duplex and then I started buying kind of whatever I could get my hands on.
Speaker 3:I was doing some wholesaling marketing for a while and my goal was essentially like if I can wholesale one or two deals and then buy one, then I'm basically paying. I'm building a business to pay to buy my own real estate. And so I did that for probably a year and a half, two years where I was at one point I was doing four deals a month that we would wholesale two or three and then probably flip one every two months and then I would either burr or just outright buy as a rental another one or two every quarter. And so it was just kind of, you know, I was making some money and I was, but what happened that active business as a wholesaler side is is, it's a machine. You got to feed the beasts. There's no stopping that. And it was detracting from my ability to build out the brand, because every time I went to sit down and do a project I'd get a call and I have to go look at a house or or whatever, and I had an employee for a little bit who was doing that. And then I kind of learned a hard lesson about what happens if you give too much information to the wrong employee and they take half your business model and run. And I had a pretty nasty break there with somebody and I just kind of was fed up with it. So I sold the wholesaling business to a friend and at that point I kind of started looking to go bigger, so whether that's, I buy a bigger deal and I, you know, creative financing or whatever, or if it's me raising capital for other deals, and so one of the last deals we did in guy was basically like, well, if you buy it, I want you to buy everything. And I was like, well, what's everything? And so we came to terms on. Uh, we bought a third, a 15 unit, a 23 unit apartment and then a 40 unit hotel and we've since sold everything but the hotel. I think we were 300 K in and we probably pulled 600 K out now and we still own the hotel.
Speaker 3:And then, just kind of I don't know, I started getting into some bigger stuff. So I stumbled into, I got a piece of equity on an RV park and then I raised capital for a couple apartment buildings and then now I own a boutique hotel in Tennessee as well. I'm a 12.5% owner of that one and last year my transaction I did I did all of three transactions last year I've got. I raised capital for that 130 unit hotel in Tennessee and I got a 12 and a half percent stake. I bought a duplex zero down, creative financing, off a friend and then I bought a 13 single family house portfolio with a vacant lot, also zero down, but because I raised capital and I signed on all the debt and took all the risk. And then that same friend about the duplex from, he's the operator and property manager for that deal and so we just did a straight split where you know he runs everything and I did all the money and risk and then we both equally benefit from the deal, and I'm trying to do more of those.
Speaker 3:So right now we're looking at uh, I'm helping with two different deals. One is a we're looking at I'm helping with two different deals. One is a it's a value add development play in San Diego where they're adding ADUs into garages, and the other is a commercial flex space, new build development in Houston, which is just, you know, a more stable asset class, not as sexy, but the numbers are great and I'm okay with the not so sexy great numbers. So, and I like the idea of a triple net flex space. You know where all my tenants are business owners that are much less dramatic than the hospitality side. So it's kind of a hedge for my sanity because, well, you're in hospitality and you know the returns are great in hospitality, but but the people are not always so great and yeah, and in and in the commercial space the returns are not always so great, yeah, and in the commercial space the returns are not quite as good, but the people also don't bother you about anything.
Speaker 3:So I'm like, okay, I'll do both of these extremes, because I kind of like the stabilized, drama-free and the super chaotic great returns, but I'm not the guy dealing with the chaos anymore on the hospitality side.
Speaker 2:Yeah, I like that. I mean, there was a lot you said there, so I want to backtrack a little bit.
Speaker 3:Yeah, that was me word vomiting. I think everything I've done.
Speaker 2:Yeah, no, no, it's awesome, it's awesome and I like it. But I want to backtrack a little bit and let's first start about financing, because you did start to buy a lot and you talked about a lot of different methods as you did it. But let's go back in time and your first, let's say your first two to three deals that you did. How did you finance those three deals?
Speaker 3:The very first one was an FHA purchase, so three and a half percent down. It was going to be VA, but my lender told me you can only use a VA loan once and I believed him like an idiot. The second one was 85% bank financing and then I got the seller to carry a second for 10%. So I came in for like 4.95% down. So I paid I think it was like 10,990 bucks and some change for a 10 unit that I bought and then I paid the seller back the down payment and paid the bank back over time.
Speaker 3:And the third one was let's see, I sold. I had a red S2000 turbocharged convertible which was my baby. I sold that to pay the down payment. But I want to say it was 15% down, I think, because my bank is very, very local and they'll play ball with that, and so I think that was just a straight up conventional investment loan. Then I've done a bunch of creative financing stuff through the years too, but generally my creative financing tries to just be you know, hey, I'll pay full price if you carry the second, if possible.
Speaker 2:Yeah, we're going to touch on that because I love those strategies. I've used all of those strategies myself. Some work, depending on the deal. Some work better than others. I prefer some. But for those that are listening, here's the point here. The point here is that where there's a will, there's a way you can figure it out. Once you find the property, once you find something and the numbers work, someone or some institution or some individual can help you get that deal done. But you have to have the will and the desire to seek that out right. David just talked about it. He used FHA. For one, he did a traditional loan. For the other one he went a conventional, low interest, I mean low down payment one with 15%. He got the buyer to put in the down payment. So there's a lot of different ways to finance a deal. But the point is you can do it as long as you have the will and desire. But, David, out of all the strategies that you have used, which is, give me two of them that you prefer them that you prefer.
Speaker 3:Well, I will answer with the one that is not necessarily replicable to a huge extent, but the absolute best strategy out there, I think for any at least service member or vet, is the VA loan to buy a fourplex. That is, I think, the single best first investment you can make. You get to live for free, you get to learn all about real estate, you get to do it with very low down, so your risk is very minimal. On the like how long you have to wait to get started, and then, because you're living for free, everybody always says, well, if you put zero down, you have no money. And I'm like, if you're living for free and you were going to have to spend $2,000 a month on a mortgage, then you can just save $2,000 a month very quickly and within five months if we do math. I know math is hard for you and I as Marines, but five times 2000, that's 10 grand is about all you need for an emergency fund for your first property. If it's a little duplex, fourplex, right. And so I'm like dude, can you weather five months of living in a house? Most likely because it had to pass an inspection, so the odds that the house is going to just fall off the face of the earth right away.
Speaker 3:You know, obviously I'm not telling someone like go over their head. But if you buy smart that's my absolute favorite strategy for getting started really depends on the asset class. But I am a I mean I'm, I'll say this I'm actually looking at buying some houses cash right now just to kind of balance out my portfolio's leverage, because I like creative financing so much and so if I can leverage the bank or the seller or anything and not put cash in and just have like a decent reserve in case of an emergency, I'm all for it. And and everyone says, and everyone says the risk on that is huge because you're over leveraged. And don't get me wrong, debt is a risk and there is risk in leverage, for sure.
Speaker 3:But I'm also investing in a really stable Midwest market where my properties pay me to own them, and so if the property is paying me to own it and then eventually something happens where I have to come out of pocket a little bit, that's okay, cause in the long run I've got a buffer, I've got a budget and in my market you're not going to see a six figure swing on your property value, you know I mean shit. The properties, half the half my properties. I didn't even pay six figures to buy. So I mean it would have to go to zero for me to get close to a six-figure hit, you know. So people are like well, how do you stomach? I'm like, well, I have a couple large lines of credit, some cash and then I just ride the wave.
Speaker 2:No, that's awesome information because I 100% agree. People there's you know, you hear it all the time but people really don't understand is that there's a big difference between bad debt and good debt. Good debt is when you're using money to get an asset that puts money in your pocket. In addition to that and I don't know what your take is on this but for a long time, but for a long time, I didn't even care if the property put money in my pocket as long as it didn't take money from my pocket, Meaning if the money that the property generated paid all the bills. I didn't care if it made money or put money in my pocket, because I know, in time, that property is appreciated. So in the long run, I'm still going to get a return because, like you, I'm a buy and hold guy. I'm not looking to buy a property and sell it six months later. That's called flipping, and I'm not in the flipping business because for me, flipping is risky. When you buy a property, as long as you're willing to hold it long enough, you're going to be fine.
Speaker 2:I always tell the story back when we had the crash of 2007, 8, 9, right, Specifically 2007, 2009. I, like many investors, had properties that got devalued, but all those properties bounced back, and then some, as long as I didn't panic and start selling pennies on the dollar, I knew I was going to be fine, and that's exactly what happened. I held them long enough until it rebounded, and now it's. It's there there. Then they tripled and what they were worth when I originally paid for them. So so, and now? Um, do you have anything else to add before actually, the next question?
Speaker 3:No, I think you're spot on. I tell people all the time all you have to do to be successful as a real estate investor is afford to hold onto the home because, no matter what else happens in the longterm, either the property is going to go up in value or it's going to get destroyed, and then insurance is going to pay you for it anyway. So like there's not really a middle ground, as long as you take decent care of it and you can afford to hold the mortgage, because time will weather out basically everything in real estate.
Speaker 2:Yeah, one of the point that you made and I don't understand why it isn't used more. It's what you talked about, because I like your strategy using the VA to buy a fourplex. Same thing using FHA to buy a fourplex. Yes, those for me, are the best strategies, especially for someone that's not in the real estate game and are looking to get into real estate investing, because it does two things right you have to live someplace, so it's giving you a roof over your head. It's going to teach you whether or not you like being a landlord, because it's not cut off for everyone. But the fact that you're going to be renting out the other three units, it's going to give you that understanding whether or not you want to be a landlord. Because there's a lot of people, especially today, because you know, back in my day we didn't have the internet, we didn't have all these gurus. We didn't have. You know, back in my day we didn't have the internet, we didn't have all these gurus, we didn't have these so-called gurus telling you you're going to be a multimillionaire by investing in real estate. I didn't have that. When I was buying these properties and renting them out and managing them, I understood that. I'm okay with having that tenant calling me at three in the morning because the toilet's backed up, so I didn't have an issue with that. But fast forward to now.
Speaker 2:I work with a lot of people that, oh, I want to be an investor. They buy their first property Six months later, oh, it's too much work, or I can't stand the tenant Right, and they want to sell. But you know, I always tell them listen, you don't like being a landlord. That's one thing. Do you like investing in real estate? Yeah, okay, then don't be a landlord. Hire a management company, make sure you vet that company. They will do all the work, all the stuff that you don't like to do. You're just going to lose a little percentage that you have to give to that person. But stay in the game. It is in is. In my opinion, it is this you know people are going to push back on this, but I think, if you, it's easier staying in the game through real estate than it is staying in the game through the stock market. What? What say you to that?
Speaker 3:Yeah, I think I mean don't get me wrong, I love both, I have both. I believe both are good. I think index funds are truly a more passive investment than most real estate. The scary part is if you put call it 20% down, we'll just do a traditional loan put 20% down on a home that's $100,000 and it drops from 100K to 90K and then you have to eat a couple hundred bucks here and there to keep it afloat and then it comes back. I think that is a lot less scary than if you have $100,000 in a stock and it dumps 10% and now you're actually taking.
Speaker 3:Like emotionally it is if you look at your stock portfolio during a drop, emotionally it will wreak havoc, whereas real estate, like you're just kind of like well, as long as I don't sell it, it's a lot easier to get into that place, which is what you need to be as an investor, which is, as long as I don't sell it and I can afford to hold onto it, eventually I'll be fine In the stock market. You see that hit and it is your cash getting destroyed and there's no guarantee it feels like there's no guarantee that it's going to come back because it's not a secured asset. You're just like. I only own this stock and I own you know. So, yeah, I agree Like emotionally it is, I'd much rather weather a recession with real estate than weather a recession with stocks. From an emotional standpoint, the best thing I can tell people with the stock market is just don't look at your portfolio in a downturn.
Speaker 2:Don't be curious. Yeah, so true, 100%, and it's with. I mean, there's timing with both strategies, but I think it's more critical with the stock market than anything else. And I give the example of I remember at the peak, when you go to peaks and valleys, right. But I go back to 2007,.
Speaker 2:I remember a lot of people, especially in the military and government employees that I used to work with. They're like yeah, I'm going to retire, this is like in 2004. Yeah, I'm going to retire, this is like in 2004. Yeah, I'm going to retire, like in 2007. They're looking at their deferred comp and they're saying okay, I got all this money in deferred comp, I'm going to retire. But when it came for that year to retire if you remember 2007, man, everything took a huge dump and they couldn't retire because they were expecting their portfolio to have so much money in it and it didn't. Whereas had they bought real estate, the value of that home may have gone down, but that rent was still coming in. So I mean, it's just an interesting dynamic. And I know some people are going to say so, it's just an interesting dynamic. And I know some people are going to say, oh, you can always make more money in the index fund et cetera. I get it, but there's a timing component to it that a lot of people don't fully understand.
Speaker 3:Yeah, there's definitely pros and cons to both and largely you can look at my portfolio and realize I lean towards real estate.
Speaker 2:Yeah, I'm with you, I'm in the same boat. I lean towards real estate. Yeah, I'm with you, I'm in the same boat. Now let's talk about markets, because you mentioned something interesting that most of the properties you own are not these $600,000, $700,000 properties, or the area at the time you weren't paying that much for these properties. So what markets are you in and which markets do you think are markets that are safe to invest in?
Speaker 3:I am majority in the Midwest. I bought my first house here in Springfield, missouri, when I was stationed here as a recruiter and I had a property manager and an agent. So I just kind of kept buying here even though I was stationed elsewhere. And then when I moved back here I had a bunch of real estate here. Now, it's funny, a lot of the deals I'm a partner on where I either raised money or just invested passively, are not here. They're a hotel in Tennessee, the flex space I mentioned is in Houston, the ADU build outs in San Diego. That's because I really know and love those operators. I've also got a piece of some apartment complexes in Kentucky and North Carolina or South Carolina, whichever Carolina, winston-salem's in and I you know those are. Those are operators that I know and love and deals that I trusted and so that's why those came to fruition. But if I am actively going to purchase something that I have any deal, any role in the operations, in that everything I own is within an hour of me and so in large part just because it's easy for me, cause it's here, but it also is it's a market that I believe in.
Speaker 3:We are half the medium. You know the average home price in the U? S is our median home price, so I don't see us getting hit too hard, because when those more expensive luxury places to live get to, if there's a recession right, I'm not calling for one, if there's a really hard recession those people will simply sell their property and move to my neighborhood, and I think I mean we saw that during the pandemic, where we had a whole bunch of people moving in and property values here doubled and they're still half the median average and our cost of living is lower and our taxes are lower and our property taxes are lower and our sales taxes are lower and our government doesn't really give a shit what you do with your life and so and we're a huge manufacturing hub and so, while Springfield, missouri, is not the beach and it's not sexy and it's not glamorized, it is stable, it is affordable and it is going to just slowly continue to grow. So I invest heavily here because I mean the tenant laws, the taxes.
Speaker 3:I mean my property taxes are less than 1%. My sales tax is like 4.2%, which is some of the lowest in the country. I mean things here are pretty good in a lot of ways. And then, on top of all that when I'm looking at markets, I'm really bullish on the Midwest because of those very reasons where it's still underpriced and there's a lot of decent sized cities that are growing as cities move inward or people move inward, and so I don't know. I love a lot of markets but I'm a stable cashflow guy when it comes to my investments over an appreciation guy generally.
Speaker 2:Yeah, I mean great point and once again, I'm in agreement. There's a couple of things that I strongly agree with what you say and I preach and I tell people. The first thing is, when you're going to invest, especially if you're new and David did exactly the same thing is invest in areas that you know that you live in, some place at least you know. Maybe the furthest away is two hours, something you can get in your car and get to. If you're going to start and learn the game, that's how to do it. Invest in your area. David's talking about the Midwest because that's where he's from. I started here in South Florida, why I live here. I invested in this area. Majority of the properties that are owned are in this area because this is where I live. I can go look, I can study the market. It's much easier. The second thing that David talked about was that he looked at cash flow, or he likes cash flow more than he does appreciation, meaning he's looking to buy a property not necessarily because of the appreciation value of the deal, but the cash flow component, and I agree with him that right now, because of the entry point, the Midwest is where to go. Anywhere in the Midwest is actually to go. You know, anywhere in the Midwest is actually pretty good. In addition to that, there's a market that right now is starting to gain traction.
Speaker 2:We started buying in the past and that's land, specifically farmland. And the reason why I'm personally bullish in farmland for a couple of reasons, but you can really get some great deals in the Midwest Even, for example, some of the cheapest land, some of the most beautiful land, is in West Virginia. But the point and the reason why we're investing heavily in these farmlands for the following right If you look at the current farmers today, they're all elderly, they're all either retiring, they're passing away. So, for example, the last couple of land purchases that we made were from people that have passed away. The property fell to their kids and the kids want nothing to do with it. A big transition in farmland. So you can buy these beautiful properties for pennies on the dollar and in terms of what your returns on them, they're going to be great. I mean, there's a reason why Warren Buffett, bill Gates, china are some of the people that own the most farmland in the US.
Speaker 3:People there is definitely conspiracy theory about China.
Speaker 2:Yeah exactly so for me, and I heard the same before and I like to always use that when you see people like Bill Gates or big companies, big corporations, starting to invest in something you know, the fbi calls that a clue, and I take that clue. I'm like these people have the money, they have the resources to do the research, so maybe I should really follow suit or at least investigate as to why that's happening. Anyway, I got off on a tangent in terms of land, but. But I agree with David. Fine, if you're looking for great properties, a lower entry point with a good cash on cash return, the Midwest is where to go. Anything else to add, because I want to talk about one other point that you made.
Speaker 3:No, I think you're spot on.
Speaker 2:Okay, the next point I want to talk about that I think I don't know if you caught that, but I think it's very important that you guys understand uh and I did a whole video on it with david green uh is on finding the right partners, right? Yeah, so david did not explore outside of his what I refer to as farm, his local area, until he had that relationship with people that he knew and trusted, and that's why he can buy in Houston. He can buy in Tennessee because he has people that he knows and trusts there. More importantly, he already has the experience of investing, because he's done it. He's been doing it on his own within his area, so it gives him a little bit more experience of what to look for, what not to look for. But the key point is finding the right partners. David, can you expand on that and if you don't want to talk about your negative experience, you don't have to but can you expand us as to the importance of finding the right people?
Speaker 3:Yeah, I mean, I think it's just relationship based more than anything. Right, You're going to watch how someone does something. The longer you know them, the more you'll know about them. And then the problem is I'm an incredibly trusting human and so when we talk about, like, some of the things that I've had go negative, you know I've learned that I kind of need to vet and fact check people. You know I'll talk to investors in a deal or whatever and I'm not going to.
Speaker 3:I actually have run background checks on people before that I invest with, but we probably won't go through that whole rabbit hole of vetting people so much as. Look, you've got to know their track record, and if they don't have a track record, then you should not invest a significant amount of money until they do. And you should know them as a person and know their track record before you really start pumping money into something or vouching for them, Because if you're vouching for them, your reputation matters and if you're investing your own money, you should just never invest an amount that you're not okay losing with anyone or in anything period. However, it's more important if it's like someone who's kind of newer to the game, right, like you've been in the game for 20 years so, or or maybe more, and so you could easily go well, here's my record like, yes, I've had some hits, but like these are, these are the deals we've done right. And that is a much better understanding of who you're investing with, because who you invest with is ultimately more important than the house you buy, and you know. Then it is for, like, there's a couple of guys I know who. They've bought a bunch of apartment complexes and that's great, but they haven't gotten full cycle yet to sell any.
Speaker 3:And so it's like well, I don't know if your projections were even close because you didn't get. You know none of them have finished. If your projections were even close because you didn't get, you know none of them have finished. So we have, you've said X, Y, Z, but we don't know. There's no track record.
Speaker 3:And that's not a discredit to them as a person. It's just saying you know you need some more time to really know. And that's true of anything in life, right? You know I joke about Bitcoin. I just made a video yesterday. There's a use case for crypto and there's benefits to it, but it's been around for 15 years. You don't really know what it's going to do. Everyone has ideas, but it's still it's still too new for anyone to truly be able to know an average return, or you know what it's going to do in the market. And so if you're looking for, if you want to, if you can afford to take some risks, great there's risks, great there might be a big payoff. But when you're looking for the stable returns that won't leave you homeless, something tried and true is always better.
Speaker 2:No, I can't agree with you more, and it's funny because I just did a podcast and we talked it was all about crypto. I don't. I personally like I own crypto, but I don't own it as an investment Because I agree with you it's too's too new, too volatile. We don't know where it's going. We don't know what regulations gonna, what type of regulation is gonna play a big role in it. Um, do, do, do.
Speaker 2:I believe you should have some. Yes, I believe you should have some. I believe, but you should look at it just like you look at, and I'm going to refer to currencies, right like I, I, you look at, and I'm going to refer to currencies, right Like I, I, I play around with currencies, with the dollar, with, with, with other the Euro, other currencies in the world, but I see it the same way with Bitcoin, but I, I, I want to now really cause we don't have a whole lot of time left, but I really want to dive into veterans and how to leverage the VA. So can you, can you? First, let's talk about your services. How do you help service members?
Speaker 3:I mean, a large chunk of it is just free information. Right, we just create a space where people can come in, and you know, I've got a big Facebook group where they can ask questions, or I've got a YouTube channel and a podcast with a lot of educational information. I wrote a book that kind of talks about everything I wish I'd known when I joined. So a lot of it is just free information. You can download the book for free on my website. And then really, the only paid service we have or do is a community called the war room, which is, uh, it's a mastermind group. We've got 500 and I think 507 people in it. So, uh, and it's, you know, it's a pay to play group. Um, you pay a decent fee up front and then there's like a small monthly recurring after your first year if you want to stay in. And essentially we have cultivated a community of. You know, I don't let someone in unless they're currently serving or or an honorably discharged veteran. We don't let spouses in without their serving significant other. We don't let non spouses in or like we don't, you know. And so we've created this group where it's everybody speaks the exact same language because they're all service members and vets. They're, because they're all service members and vets they're. They're honest, right, nobody's trying to sugarcoat anything and they they're very willing to help each other. We foster this incredible community of people that are willing to give back and it's just really cool to see it kind of happened organically over time and it's just gotten to be an incredible place with a ton of resources and you know, more importantly, the accountability aspect and how we can help people achieve those goals. And then it's just yeah, it's just a cool space, and so that's that's the biggest I guess the really the only like monetization on the services that is out there, where it's like hey, if you want to join this club of people who are serious about their goals and will help you, then you know this is the place to be. And other than that, I basically just do a ton of free content and information because I know, like you know, at the end of the day, if somebody watches my free stuff and they save or make a ton of money, then eventually they're going to be like you know what? Maybe I'll try out his community.
Speaker 3:I hosted, for example, I hosted a free webinar. I do it every week, hosted a free webinar, like three weeks ago, and the guy was in the process of closing on a house and his lender had not told him that, because he had a 10% disability rating, the funding fee was waived and they were going to close with a funding fee on the loan and he's 30% disability rating. And so him showing up on my totally free webinar, not paying me a penny for anything he messaged me on Instagram was like hey, I just wanted to tell you thanks, you just saved us $11,200 on our mortgage that we don't have to pay. And I'm like cool, you know, like so that guy when he gets down the road and he wants to invest, yeah, and that guy when he gets down the road and he wants to invest, he's going to remember that. He's going to remember that and he's going to be like damn, the free information Dave gave me saved me more money than this group costs. So what's the not free information look like? And that's kind of my goal.
Speaker 2:I mean great, great story and great point, great entry to my next question, which is what mistakes do you see veterans make as it relates to VA loans? Because a two-part question. The first part, let's talk about the myths about the VA loans, and then the second part is what mistakes do you see?
Speaker 3:Yeah, the myths. I mean there's a ton of myths, right? We'll just rattle off a few of them. The most common ones I see are you can only use the loan once, which is false. The most common ones I see are you can only use the loan once, which is false.
Speaker 3:There's a limit to how much your first usage is, which that January 1st of 2020, that went away. So as long as your credit and debt to income qualify, you can buy as much as possible. Zero down on your first use. And then after that, there's some stipulations. People don't realize that disability pay is counted at 1.25 times whatever you receive towards the loan. So it's counted at pre tax valuation. So it can actually help you buy more house than you think they don't realize.
Speaker 3:Let's see what there's no credit requirement for the VA. There's no debt to income requirement for the VA. It's whatever your lenders comfortable with on both. Some lenders are great and they'll work with you, and some lenders won't and they'll work with you and some lenders won't, and they won't even tell you that it's because they don't work with you. So you have to go find another lender because you know, I mean, there's just a bunch of random stipulations, but the VA loan, you know, oh, and people think if you buy a single family or a fourplex, you can't rent spaces out. And I'm like, no, no, no, you have to live in it, but you can rent other spaces out while you live in it. That's fine. Those are probably some of the big ones. You know there's some really cool stuff you can do with the VA loan and you know it's all context depending.
Speaker 3:I think the biggest mistake, you know, honestly, I think the biggest mistake is people hear they're qualified for a $650,000 house and they set their budget at $650,000. And then they're like I bought this single family house with the VA loan and I can't afford it. This is bullshit. And I'm like, well, you know, just because you could theoretically buy a $650,000 house, like if you'd bought a $500,000 house, it would have caught, it would have cashflow and you would have been fine. Or if you bought a you know $450,000 duplex, that wasn't a dream home, you'd be in a way, better state.
Speaker 3:So people buy at the exact top of what they think they're entitled to and then they wonder why they're. So you know, it's the basic, the most basic. There's like two fundamental principles to finances. Uh, one is the economic principle of supply and demand. If you understand that, you understand the economy as a whole in one nutshell. And the other is like live within your damn means, and if you just live within your means, you've got money to invest and then you can live outside your means.
Speaker 3:It's funny because I say all this right and I just I joke online because I'm always talking shit about service members, buy buying challengers with crazy interest rates and all this stuff. And then people see online they're like, wait, dave, didn't you just buy a brand new, like 35 miles on it 2025 Corvette Z06? And I'm like, yeah, I did, and I generated twice the value of that car in revenue last month, the value of that car in revenue last month. So, yes, I put 30,000 down, which is, you know, and my payment on it is less than my mortgage. It's still a big payment. But I also did a 60 month financing.
Speaker 3:You know, simple, no craziness. And I'm like I'm also okay with that because the day that I put 30,000 down, my business generated 38,000 that day. So I'm comfortable with that at this point. But I also didn't do that for the last nine years that I've been building up to a million and a half $2 million a year business. So it's a little different now, and you don't get to the spot where you're making $2 million a year and you're able to buy the Corvette with not giving a shit, like no care in the world, if you bought the Corvette in year one, and so it's like it's just that you know short-term sacrifice for long-term gain mentality. So just don't live, just live within your means.
Speaker 2:Short-term sacrifice for long-term gains. People, I love that because that is so true. I always tell my story because people think I'm crazy and like you when I was a young Marine. You know, first of all young Marines, if you are an E4 or less, you're making no money and you're really bad with it.
Speaker 2:Yes, that's my point. You're super bad. I mean, I can't tell you. I remember now, now again, I had.
Speaker 2:I grew up I grew up in Puerto Rico Family had very little money. My mother had no idea what financial literacy or she was really financial illiterate. She was really financial illiterate. You know, we lived paycheck to paycheck and my only mindset was that I didn't want to live like that, right. So? And I got married super young. So you know, as an 18-year-old I had a family. So, luckily for me, my wife and I had the same mindset of hey, we're going to live below our means, not in our means, below our means, we're going to take full advantage of the military.
Speaker 2:So we lived on base. We shopped in the commissary, we went to the we were at Camp Pendleton at the time and they used to. On weekends you could go to the show of movies for free, you can go bowling for free. So we did everything on base. There was nothing we did outside of base, it was free. So we did everything on base. There was nothing we did outside of base, it was free. We're doing it, and there was so much to do.
Speaker 2:But a lot of people in my unit, especially these young guys, the first thing they would do go into town because they were giving as long as you had. You know, you said you were in a Marine Corps, had that military ID. They gave you a car with 21% interest rate and they're driving around these new cars that they can't even pay. I'm like, are you kidding me? I was still taking the bus Because I'm like I'm not spending that right. But the fact that we sacrificed that and I tell the story too because I remember we didn't even have so when they gave us base housing, we didn't even have furniture or silverware or anything and I remember going with two buddies to the mess hall and literally borrowing the forks, the knives, the bows so I can have something at home, put them in our pockets and go have something at home. But those years I go back and look at those years and I'm like, because we were sacrificed, those years like that and we were young, we didn't need anything.
Speaker 2:Today my family does not have to worry about like we don't even look at. You know, if we have to something breaks, I don't even have to worry about. Like we don't even look at. If we have to something breaks, I don't even have to look to see if I have. You know how much is it? No, fix it right. We don't worry about finances at all anymore, all through the grace of God. But also because we sacrificed. You know we lived before below our means, you know. Even today, you know, I'm not living in a because we sacrificed, we lived below our means. Even today, I'm not living in a $10 million mansion. Even today, I still house hack. We live on three acres and I rent out space for people to park their boats so I can make money to pay the taxes on this property.
Speaker 3:I like that. I am in the basement, which is a walkout to one of an Airbnb.
Speaker 2:So yeah, live for free. Exactly, that was my mentality was always live for free, and I got that from the Marine Corps. The Marine Corps gave you housing. I'm like I'm never paying for housing. I agree, so so. So, david, let me let's switch to the last topic I want to talk about and that's what I would we just got into, which is mindset. Right, what was your mindset? What was your shift from earning a paycheck to building wealth?
Speaker 3:I mean, I think the biggest shift was the book four hour work week, which is you know. It just basically talks about how, if you work a W2, you work a salary job. The mindset is how can I do the least amount of work and still have a job and get out of here as early as possible and get my paycheck and to become an entrepreneur or an investor? The mindset needs to shift to how can I make the most amount of money every hour that I'm here. How can I get the most accomplished in this hour? So it becomes very quickly. It becomes instead of looking productive, it becomes efficiency and the more efficient you can be, the more productive you can be, the better. I think that was probably the biggest shift for me.
Speaker 2:Yeah, great, and I love that, because the other thing as an entrepreneur, when and this is the reason why we got into more into the real estate side, is because there was a lot of I had a lot of opportunities, like I. There's a bunch of businesses that I own. One of them was a lot of I had a lot of opportunities, like I, there's a bunch of businesses that I own. One of them was a gym, and I own a CrossFit gym. I love the CrossFit gym, but I knew that the CrossFit gym was not going to lead me to the financial freedom that I wanted. Why? Because it's limited.
Speaker 2:Right, it's like you said. I want to have the ability to earn an unlimited amount of money in the smallest amount of time. Right, most businesses are capped. Whether you own a coffee shop, like I said, the gym, you're capped. But if you want to expand that cap, you have to do what? Open another gym, open another coffee shop. If you want to increase that revenue, because that one location is limited, I want it to be endless and one of the ways, one of the businesses you can do that is through real estate investment. You can. You know, like the saying goes, you earn money while you sleep, right, yep. So that's a good shift in mindset. Now, in terms of education and continual learning and financial literacy, where do you fall into that? How important is that?
Speaker 3:Oh, I mean, yeah, investing in yourself and personal development is probably the most important thing you can do. It's funny, I don't read nearly as many books as I did when I was first starting off. It's more networking with specific people who have a way to solve a problem. So the more I've grown, the less I'm reading like foundational stuff and more like I have a problem or I'm going to have a problem. How do I solve that? Very quickly, and that's kind of been the the where we've moved the company towards, or at least my own stuff. But I mean, I also spend. Well, we'll just you know what. Nobody cares what you do. I spent $60,000 last year on a performance coach and a mindset coach. You know I spent probably a hundred grand if you count events and conferences and masterminds that I go to, and so, yes, I view it very importantly. That's probably where I would leave. That is like that's yes, it's absolutely very important to me.
Speaker 2:And I'm with you. I think that's the most. One of the most important components is making sure, first of all, we never know everything and people that think they made it and sit back on their rowers won't be there tomorrow. They're not. You constantly have to learn, constantly have to grow, because we live in an ever-changing world. Nothing is constant, so you always have to evolve, and one of the sayings that I always use, because it's drilled in my head from bootcamp, was Marine adapt and overcome. And we have to adapt to the ever-changing world or we're going to get left behind. So I agree.
Speaker 2:Yeah, now the last question I have for you is related to like, like habits, right. So what? What habits do you have that you believe led you to the successful person that you are today?
Speaker 3:You know it's funny. I don't know that I do as well with habits as I probably should, but I think journaling. I think I wake up in the morning and I'm not as consistent as I should be, but I try to journal about what I'm going to do that day, my goals and what I want to accomplish and that action, if consistent, produces a lot of results and really solidifies the plan for my day going forward.
Speaker 2:I love that. Yeah, I'm a firm believer that habits is what makes successful people successful. You know, a lot of people say a lot of people will tell you, no, it's their discipline, it's their passion. Especially, a lot of people say their passion. And I'm like nah man, passions are come and go. Discipline helps you, but I believe it helps you after you develop, because it helps you develop the habits right, you know, because discipline is doing the stuff that you don't want to do, but doing them anyways because you're disciplined in that field. But eventually that becomes a habit. It's like brushing your teeth right, you don't think about it, you get up every morning and you brush your teeth because it's a habit, right? So in business, when you develop the habit for like, for example, for me, you know marketing and prospecting is the most important for business. So I have developed that habit of constantly prospecting the marketing. So that's what has led me to continue to be successful.
Speaker 3:That's a good one yeah. Yeah, sales marketing is very powerful.
Speaker 2:Yeah, it's funny and it's ironic because a lot of people don't talk about, first of all, I think everyone at some form or another, I don't care if they're a W2 employer or not we're all salespeople to some extent, right? Yes, and I love the fact that you were a recruiter, because a lot of this stuff I know for a fact they taught you while you were recruiting, and I think especially Marine Corps recruiters, like if I'm looking to hire a cell staff and a Marine and I see an application and it's a Marine recruiter, I'm hiring that person Cause I think they are the best salespeople on the planet by far.
Speaker 3:They teach us a thing or two, yeah.
Speaker 2:They do, they do, they do, uh, uh. So, so, anyways, um, do you have any closing thoughts before we?
Speaker 3:we uh wrap it up for tonight no, I think I just leave it with you know the people you surround yourself with, like you need to surround yourself with people who have similar goals or have already achieved what you want to, and that'll make your life substantially easier in getting there.
Speaker 2:Yeah, I'm glad you closed on that, because I was going to throw a quick pitch towards you. And great advice. And again, people, if you're a veteran, join his group, even if you're not looking to be a real estate investor. Join his group because you're going to learn stuff and the group itself, it's going to give you the necessary support you need to make sure you stay on track financially right, because you know.
Speaker 2:It's sad to say that and for me it's sad that the Marine Corps stopped doing that, because that financial class that they made me take when I first stepped foot in Camp Pendleton really changed my life. But it's sad that they did away with that because I think majority of Americans, or majority of people in the world, they lack the financial literacy that they need to just live a normal life. Most people live paycheck to paycheck because they don't understand that aspect and they want to listen to the media and certain people say, no, it's because the rich is taking your money or because the government is, is you know? You know? No, it has nothing to do with that. It has everything to do with the individual understanding what it is to have at least the bare minimum in terms of financial literacy. Um. So with that, david, appreciate you. I'm a huge fan of what you're doing. Continue doing it, and I'll see you on Instagram, buddy.
Speaker 3:Sounds good, brother, shoot me a message, let's talk.
Speaker 2:We will, guys, subscribe. If you haven't subscribed, follow me on Instagram. Love you guys. David, hold on one second because-.