Rediscovering Joy and Building Wealth: Dan Nelson's Inspiring Journey

[0:00] Welcome to the REI Agent, a holistic approach to life through real estate. I’m Matthias, an agent and investor. And I’m Erica, a licensed therapist. Join us as we interview guests that also strive to live bold and fulfilled lives through business and real estate investing. Tune in every week for interviews with real estate agents and investors. Ready to level up? Let’s do it.

[0:24] Welcome back to the REI Agent. It’s Matthias here. I wanted to talk a little bit about music. So music has been a big part of my life for most of my life. And this is probably actually surprising to a lot of people that know me now, that know me from my real estate phase, since I started real estate, I guess. And it’s mainly because I’ve been kind of so focused on real estate and focused on other things in my life that I haven’t played as much music. But, you know, I was in choirs, played instruments all through, you know, much childhood. When I picked up the guitar, I, you know, just learned guitar really well. And it probably, I joke about giving up guitar, not playing much guitar for a long time because I got the girl.

[1:10] So what was the point? But I hear recently, I had used another person’s acoustic guitar pretty much the whole time I’ve been playing. And I have an electric guitar that I built in high school, which I actually have at a guitar shop getting fine tuned to try to actually make it sound a little bit better. Because it turns out that’s a precise thing to do is to build a guitar. And apparently I didn’t do it perfectly. So we’re trying to get that thing up and running, which I’m really excited about. But before then, I decided to actually buy my own acoustic guitar. You know, I was like, I’m a grown man. I can afford to buy myself a guitar. And I have loved that thing. I have been playing it all the time.

[1:55] I’ve been really coming back to songs I used to play and learning new songs and have just had a lot of fun with it. And the acoustic’s great because I don’t have to plug it in into anything. And I can just, you know, have fun. I bought a PA system that I am looking to add an amp profiler to. So basically a pedal that will make it sound like my guitar is coming out of an amp, but it’s just coming through the PA system. And I bought a looper that will allow me to loop things and sing and play guitar and play different parts over it, etc. It’s a ton of fun. It’s a ton of fun. And I think that it’s one of those things that I’ve lost or I lost over the years. And it’s one of those areas that I really was able to get flow out of.

[2:43] I was able to focus in and get a lot of satisfaction out of. Because I think that is one of those things that makes people happy. Having that state of flow, having that state of, you know, focus where kind of time melts away and nothing else matters is just so important. And for satisfaction, I think that if you’re not able to achieve that ever, it’s hard. And I think that most of the stuff in our lives these days is kind of pulling us out of that state of flow. You know, getting that quick dopamine hits from TikTok or, you know, Instagram. That stuff all kind of pulls you out of that state and keeps you away from it. So, I am just having so much fun with it. I actually made a joke about forming a Radiohead cover band to a friend.

[3:35] And we were actually going to be jamming tomorrow to a couple of Radiohead songs. Which, you know, I don’t know where that’s going to turn. Because not a ton of people. There’s diehard Radiohead fans. But then the bulk of people don’t quite get it and just depresses them. So, I don’t know. We probably won’t be, you know, frontlining any venues anytime soon with our Radiohead cover band. But I don’t care. I’m having so much fun. It’s a great, great hobby. A while back, I talked to a guest that we talked about having this kind of a mind-body connection. It’s a similar thing to have that state of awareness, the state of concentration. It’s kind of like a mindfulness practice. And so, I definitely feel like I get that too with the CrossFit.

[4:21] They were into things like martial arts. And I think that I could see how that would also really get you into that, you know, body awareness. But for me, I’ve had to learn my body better than, you know, I’ve ever had to know it by doing CrossFit to really understand how to function optimally and to avoid feeling. I don’t want to say injury because I know that people think that they’re going to go to CrossFit and just kind of hurt themselves. I, you know, I have like muscle soreness, muscle tenderness sometimes. My back can hurt if I don’t, if I do, if I’m doing lifts improperly. But it’s not like I’m ruined. It’s more like I got to figure out how I can do these things properly and not have that uncomfort from it.

[5:11] So, yeah, I guess that’s my little thing of saying if you have something that you have not done for a long time that was a huge part of your life, look into picking it back up. I mean, you might find yourself with a lot of great enjoyment from that hobby. Another one for me was snowboarding. I used to snowboard a lot. Now, that’s more expensive and harder, especially with kids. So, I am currently, my goal is to go once a year. Once a year. I have the equipment. Just have to buy one, you know, lift ticket. And if I can go once a year, I want to be happy. And so, I, two years ago, went for the first time in a long time to Snowshoe, which is one of the bigger resorts in the East Coast. It’s actually owned by Interwest, which is a West Coast resort company.

[6:04] They get lake effect snow. And they are in West Virginia. And so, it’s a fun place to go. And I was able to go again and had so much fun. And had a trip planned that never worked out. And I thought I wasn’t going to get it last year, get my trip in. But I actually ended up going to a conference in Colorado in May. And they had, yeah, they had a, still had snow on the ground. So, I was able to go snowboarding while I was out there, which was great. This year, I hope to get a trip in, at least one trip. Maybe we’ll go back to Snowshoe this time. So, we will see. But, yeah, revisiting those old hobbies that you may not have been able to do for a while. And that might be a luxury of, you know, kind of getting to a place where you feel like you’re, you know, you’re past the grind phase a little bit.

[6:54] And you’re able to have the money, have a little bit more time, flexibility to do some of those things. But they really don’t have to be. I mean, there are simple things that you could have enjoyed previously that you had to carve out time for. Like if you were, like, to write poetry or if you like photography. That was another one of mine. I haven’t done quite as much here recently. But, you know, whenever we go on a trip, I like to bring the camera along. It’s nice to have the equipment. But I’m rambling now. So, anyway, let’s get back on track here. We have a really great guest. It has nothing to do with what I just talked about. But he was a really interesting person to talk to out of the Chicago area, Dan Nelson.

[7:37] Dan is an interesting person because he started out as an investor and then got into real estate sales as well. So he’s a really good fit for our clientele or our demographic here over at the REI agent. But Dan is, yeah, has unlocked or has tapped into an amazing place in Chicago where you can really find different niches, little different pockets that, you know, could be really run down and cash flow very well to, you know, not cash flow at all and have really good appreciation. So it sounds like the Chicago market is pretty unique in having a lot of different opportunity to what to invest in. So, without further ado, let’s have Dan Nelson come on the show.

[8:28] Welcome back to the REI agent. I am here with Dan Nelson. Dan, thank you so much for joining us today. You bet. Glad to be here. Dan, you are a seasoned investor and now agent. Tell us a little bit about your journey in real estate. How did you get started? Sure, yeah. I did not come easily. I came kicking and screaming. My wife quit a job and came home and I said, we just bought a house. And I said, what are you going to do for a living? She said, I think I want to start flipping houses. Wow. I was like, okay. I really had never heard of it. It was a long time ago. I was like, that was not a strategy I was aware of. And at the same time, I had gotten involved in a poker game that was with a lot of players.

[9:14] I had a lot of money and weren’t very good. And so, I was bringing in all this cash. I had all this cash for the first time in my life. And I was like, okay, I think we can do this. And we started on the property we were in. Then we moved to another one. We just kept buying them and moving and doing that. And then at some point, I got really actively learning about real estate because I didn’t know anything about it. We were just learning along the way. And then I was like, we really should start buying long-term hold properties because this isn’t really real estate. This is a job. It is a hard job. But also, if any of these fail, we’re going to go bankrupt. So, we need to have something else.

[9:54] It’s funny because I got into long-term investing to protect us against what she was doing as a living. And so, then I started getting on the long-term investing side. And she just kept flipping. And we still do both of those to this day. Okay. Now, can you please write a book about how to get into investing through poker?

[10:17] It would be a lot harder today. So, poker changed a lot over the years. It’s much more. There’s just a lot more talented people than there was when I started. But even now, if you know basics and you’re playing with someone that doesn’t know what they’re doing, it’s pretty easy to take their money.

[10:35] That’s amazing. Yeah. That’s not a path I ever would have considered that it was lucrative enough to get started on flipping. That’s amazing. So, now you are doing flipping and buying holds. Are you using the BRRRR method as well as you go through this process? I think if there’s one that you want to keep. Yeah. I would say our first investment property funded our next two investment properties. So, yeah. Obviously, my wife’s a flipper. So, it’s very easy to tap into her resources. So, we buy properties, rehab them, and then refinance them or get a home equity line. And now, we mostly get a home equity line as opposed to refinancing. So, we have that both to protect the property. If something goes wrong, we don’t have to save any money.

[11:22] It’s sitting there on top of it. And also to fund other properties. But, yeah. So, that’s what we’ve done. That’s how we built up our portfolio and our business. Break that down a little bit for me. So, you’ve accumulated enough cash from the flips to buy and fund a whole deal in cash. And then, instead of getting a HELOC. Or, sorry. Instead of getting a refinancing that money out, putting it on a traditional mortgage, you’ll put a HELOC on it and just pull out money as needed? Yeah. So, we don’t. You know. When we started, we weren’t buying anything with cash. We had almost. I had the poker money. But, it wasn’t a fortune. You know. Yeah. So, we got a mortgage on all of our properties. So, we did get a mortgage on them.

[12:07] But then, instead of refinancing them, we just got a home equity line on them and used that. Now, to me, the advantage of refinancing them is if you can get a lower rate. To me, that’s the advantage of it. Because the home equity line, you don’t. You know. You can deduct your interest payments on it. So, there’s a lot of values that also you only owe that money. As long as you, you know, don’t pay it back. But, as soon as you pay it back, it becomes a bank account, again, that you can have there and access. Does that make sense? Yeah. Totally. I guess I never really thought about doing that. That is really interesting. Because, yeah. I mean, I fund a lot of my deals through equity lines myself.

[12:48] But, as far as whenever I burr something, I always am considering putting it on a traditional mortgage. And, right now, the interest rates are so high anyway that, yeah, it’s tough. I mean, I always think of one of the great things about an investment property is you figure out it makes sense for you. Like, whatever your goals are, it’s cash flowing or it’s a long-term appreciation play. Whatever it is, you figure it out it makes sense to buy. But then you just hold on. And then, one day, the interest rate drops to a point where it makes sense to refinance. Yeah. And then, suddenly, you make a lot more money than you ever planned to. You know. So, that’s how I view refinance. Yeah, Dan. That’s such a good point.

[13:28] You don’t know how many times I’ve told this story. But, people were just like, ah, it’s not a good time to buy. It’s not a good time to buy. You know, interest rates are too high. And I explained, like, well, here’s the thing. My friend had, you know, about 20 or 30 refinances when the interest rates dropped like crazy back in, like, 2021 or whatever. And there’s no way he could have bought that many properties at that time. But he was able to refinance them all. And so, he made out like a bandit. I mean, like, he got all those properties just, you know, cash flowing so much more on super low interest rate loans. He could choose what kind of, you know, he could choose his retirement date, basically.

[14:10] Like, it’ll all be paid off by this date. So, some of them might be on 20-year mortgages, 23-year mortgages. You know, there’s all sorts of things you can play with on that. So, yeah, that’s a really good point. Interest rates will come down. They don’t stay the same. So, it is something you can count on in the future to make things better. Yeah. I mean, absolutely. It just has to be, as long as it makes sense today, it’s going to, as long as it makes some sense today, it’s going to make a lot of sense down the road. And the idea of holding property for a long time is you get to choose what to do with it and when to refinance it. And it’s just some, it’s a great opportunity that you don’t have anything else.

[14:48] It’s funny when people talk about, like, it’s not a good time to buy because I swear in my life, the only time anyone ever said this is the best time to buy was 2006. In 2008, 2009, 2010, 2011, we said we don’t know where the bottom is. Like, we were buying not as aggressively as we would if we knew what we knew now. We didn’t know. Like, we didn’t know. It could be a depression that went on for 30 years. Like, we all know in hindsight now. But so, you just buy when you can and everything else will work out. It’s long term. I mean, you know that. That’s the key there, too, that you said is that, you know, as long as it makes sense now, right? Like, it has to pencil out. You have to be cash flowing if you, and you have to count on all those other things.

[15:30] There’s extra stuff that people don’t always add into their cash flow analysis, like, you know, vacancy rates and all that kind of stuff. So, that makes a lot of sense. And are you focusing on single family rentals? What are you focusing on for your portfolio? Mostly it’s two to four unit, but we also have single families as well. So, it really depends on whatever makes sense. But anything between one and four units is pretty much what we buy. Okay. And have you explored anything like going bigger, having bigger multifamily properties or rolling things into bigger properties? So, you have a wife, and you know that, you know, if you want to really do this well, you make the choices that are best for both of you, and both feel comfortable.

[16:13] So, keep in mind, she’s not really that interested in investing. What she likes to do is take something ugly and make it pretty. That’s what she likes to do. And she’s been incredibly successful at it. So, what I want to do and what she wants to do is completely separate. So, yes, I would love to get into 100 unit properties and all the challenges. It sounds really exciting. But that scares the life out of her. So, I’m happy. We’re in pretty good shape. So, it’s kind of hard to complain. Yeah. I mean, there’s no magic answer that one’s better than the other. And you could, you know, start rolling stuff into other people’s syndications and not have to lead it. Yeah. Having properties that are appreciating and paying down the debt is a great position to be in.

[16:57] You got a lot of choices. Yeah. Exactly. That’s how I feel. Okay. So, you did this for a while and then you actually became a realtor as well, right? Tell me about how you got into being on the sales side. Yeah. Yeah. So, of course, I know that a lot of what you have focused on in the past is like a, I mean, I will say a good life to work balance. So, for 15 years, I worked in corporate world and I’m crazy workaholic. So, my wife did not see me that much. So, she wanted me to become a realtor because she wanted to see me more. And she made the case, look, you can do our own deals. And I said, that doesn’t make sense to be a realtor. I also said a realtor is not a real job. I don’t want to do that for a living.

[17:42] I have a living. And so, I’ve been in learning development my whole life and I got a job training real estate agents and managing brokers and all that. And I saw real estate completely differently than what I did before. And I would come home and tell the stories. My wife would say, that’s why you have to do it. And she finally convinced me to start and I started. I’m so glad. I wish I had listened to her 10 years before I did because I enjoy it so much. But yeah, that’s essentially how I got into it. Okay. That’s really fascinating. Yeah. It’s one of those things that it can be a gift and a curse. I mean, when I first got started, especially when I’m really in the grind phase, I always joked with people.

[18:24] It’s like, yeah, I get to choose my own schedule. I get to choose what 16 hours a day I work. Right? Yeah. Yeah. I mean, I do think it is important that you figure out how you’re going to manage your life because it can just eat you inside out. And you can be going along and be so happy. And then all of a sudden you’re like, I don’t want to get out of bed this morning because you just deal with so many people that are in the most stressful part of their life. And it’s very easy to take that on yourself. And so you do have to find ways to manage that. Yeah. A hundred percent. And I think if you’re building up a portfolio of rentals as you go, you can take some of the stress off of you. So I mean, if you have your living expenses covered by your passive income, you don’t have that commission breath when things are going sideways.

[19:12] And you know, you really desperately want to make this deal work out because you need the money. You don’t have to be in that position if you’re, you know, yeah, got that rental portfolio. So are you focusing on investments? Sorry, like investor people for your sales or you do a single family like for living in as well, primary residencies? So yeah, we always live in our house. So since, well, for 20 years, we’ve lived in a property. In the beginning, we moved a lot. And now we move every two years to take advantage of the capital gains. So we live in our house. But now that are, you know, now that we’ve enjoyed a little bit more luxury, my wife will rehab it before we move in. We used to rehab it as we live.

[19:57] So now it’s a little bit easier life than it used to be. But yeah, so we move, you know, essentially every two years. Okay. And I’m sorry. And I meant more of on your sales side when you’re selling to clients. Is that for investors or just people that want to be in a primary residency? Obviously, you have a sphere of influence. So people tap into you for their single one. But 90% of my business is investors that are looking to buy anything from, you know, $99,000 condos to large complexes. But that’s mostly my business. Okay. Okay. Yeah, that makes sense. And you’re in the Chicago area, right? Yeah. Yeah. Okay. So what are people looking for typically that you help? So I got two different kinds of clients.

[20:48] So you would be surprised the average age of my client is 28 years old. Really? I never anticipated that. Wow. Somebody comes and meets me and they talk about buying an investment property. And they’re over 35 and they have a full-time job and they have a family. My chance of selling them investment property is about 10%. Really? If they’re under 30 and they weren’t born in America, my chance of selling them a property is about 80%. Because they come to the world way differently than I did. You know, probably you did too, which is go work for 30, 40 years, retire with your 401k. And that’s the life you’re supposed to have. But they grew up with just access to information that I didn’t have. And they just see it so differently.

[21:36] And if they weren’t born in America, they don’t even come from that standpoint. They came here to like live a different life than where they came from. So they’re looking at everything. So essentially, you know, I have somebody that has a portfolio and wants to continue to grow that portfolio. And generally they tend to be outside of Chicago areas like California, Washington, New York, anywhere in the East Coast where it’s, you know, really difficult to buy an investment property that makes sense to buy. Yeah. And they’re buying here in Chicago. And then I have young people that are looking to buy their first property. They’re going to burrow it. They’re going to live in it probably for a year and then, you know, refinance out and then move on to their next property.

[22:16] That’s interesting. So what does, yeah, how well does property click cash flow? So I know that BiggerPockets likes to throw around the 1% rule. I mean, I would imagine you’re not getting that in Chicago, but do tell. Yeah. So Chicago is a little different market. I mean, it’s a big city, so it has all the advantages of a big city, but it doesn’t have, you know, like market like Chicago or, I mean, like a New York or San Francisco has where it’s just impossible to buy anything. So we have a wide range of properties. So we have much more affordable properties. And then we have, you know, what I call sort of that mid range where you’re going to cash flow a little bit, but you can see the path where if you make improvements, you’re in an area that’s appreciating.

[23:02] It’s going to cash flow more over the next five or 10 years. It’s kind of easy to see that, you know, most of the time those kind of properties, they’re selling them. The owner has, you know, owned it since 1980. It’s paid off and they’re renting like a two bedroom, one bath for $800, but they could get $1,800. Right. Doing so well, they don’t know. So you buy the property, you know, you get the rent for $1,800 and then it cash flows. So day one, it’s not going to, but down the road it will. So there’s ones that cash flow from day one. There’s sort of those middle ones. Then, you know, obviously there’s appreciation plays here as well. Sure. So those middle road ones, what type of price range are we talking about?

[23:42] Are we in the 200s? Like what would that look like? No, I mean, you’re not in the 200s in Chicago. I mean, that middle range isn’t going to be 200s. It’s going to be somewhere between 350 and 550, depending on where it is, the neighborhood. I mean, Chicago really is like, it’s 72 small towns. So, I mean, they’re not really small towns or neighborhoods, but every neighborhood has its own sort of value and, you know, average rent price. So it really depends on where you’re buying and what you want to do. So for, you know, mostly younger clients, they’re looking to live in a neighborhood that’s appreciating the values going up. And, you know, for that, you know, like I said, somewhere between 350 and 550, depending on what they’re looking for and how many units.

[24:30] Okay. Yeah, that makes a lot of sense. Yeah, you talked about the whole, you know, 401k thing. And I’ve had this internal battle still, you know, when I got into real estate and I got into investing, I was still doing, you know, my self-employed 401k and just, you know, trying to maximize that out as much as possible. Then I just started being like, but I don’t want to spend that money on that. Like, I want to put that into an asset that I can, you know, use now. And I mean, that’s, you know, I think being a real estate professional, there’s some more incentives to do so with being able to, you know, accelerate, depreciate the properties that you buy so that you can get right off more of your taxes.

[25:16] But yeah, just being just, it’s just more tangible. Like, you know, I know what property I’m, I can, I can feel it. I don’t know Apple. I know Apple pretty well. I have almost all the products, right? But I don’t really understand how they work. And, you know, if I’m buying stocks, like that’s essentially would be the goal, right? Is to fully understand the business and know what you’re buying. But real estate, I can, you know, I feel it a little bit more. I understand that better. And yeah, I don’t know. I just don’t, I don’t, I get, I get more and more why real estate investors seem to be like tunnel visioned, only going to real estate, not really putting money elsewhere. Cause there’s a lot of advantages to it.

[25:55] Yeah. I’ll tell you, you know, I told you at a corporate job. Yeah. So for 20 years, I put the max into my 401k. And, and so, I mean, the stock market’s been a historic run, right? Since. Right. So my 401k is awesome. I started investing in real estate later and started buying those investment properties later. My portfolio, which I have not invested nearly as much money as we’re three times what my stock portfolio is. And people will say, well, yeah, the markets have, the real estate markets have a historic run too, but that’s quite different. You know, in the same time, those things have happened. Obviously it depends on where you buy, what you buy and, and, you know, whether you improve it and all that, but I would never discourage someone from using the matching part of a 401k.

[26:43] If your company is matching, you should definitely do it. But I definitely think you have to diversify and real estate makes so much sense to me. Yeah. No, I think, especially when you get into some of these strategies, like the BRRRR method. Um, I think at one point I realized I was, I had about a 700% return on my investment, like from, from like, you know, I think I, I putting a, putting a, you know, three and a half percent down on my first house that turned into an investment property or investment property, got a relock on it to my second house. I put like, you know, $30,000 down on it, um, and put a relock on it as well. Uh, and at the end of the day, using all that to turn into a real estate portfolio with the BRRRR method, it’s just, you know, like, yeah, you can really accelerate stuff when you get creative and, and have some of those, uh, value add opportunities.

[27:36] Yeah, for sure. And, and I’ll, I’ll tell you a story. It was one of my first couples I ever met with. It was, I think it was a very first couple I didn’t know. And they met with me and I’m just explained, you know, I’m, I’m answering other questions about real estate and why invest in it, why it makes sense and how I do it. And I’m all done. And they were, you know, they were immigrants and they, their first language wasn’t English. And the whole time I was talking, they would stop and talk to each other in their language. I had no idea what they were saying. And they, I couldn’t tell if they were understanding me. And then at the, all, they were all done. They said, uh, we have a question for you.

[28:13] And I said, what is it? And they said, you told me that you buy a property and then you might make money off of it from the tenants. And I said, yeah. And they said, um, and then the property goes up in value. Right. I said, yeah, but you’re, you said, okay, but you’re telling the IRS is going down in value. Right. I said, I said, yeah. And, but meanwhile, the tenants are buying this building for you. Right. And I said, yeah. And they said, and you don’t pay for it. Right. And I said, okay, I don’t know what happened, but no, no, you have to pay for it. And they said, no, no, no. You said we pay 5% or three and a half percent or 25%. I said, right. He goes, I can’t put 25% down on Apple stock and ask other people to pay for my Apple stock.

[29:02] Exactly. I said, oh yeah, that is one way to look at it. And they said, why doesn’t everybody do this? I don’t know. But of course, you know, this is not a culture where we’re growing up, learning about this and doing this, you know, it’s go to college, learn this degree and spend the rest of your life working for someone else. But yeah, the freedom that it gives you, if you can figure out how to make it work is just incredible. Yeah, totally. I had somebody else to further that, that line of thought. I had somebody else explain, like if you’re buying $500,000 worth of Apple stock versus a $500,000 house, you know, you’re putting $100,000 down on that house, right? Well, they both go up by 20%.

[29:41] You have realized a hundred percent gain on your real estate because you only put $100,000 in it and it’s now worth $600,000 worth of stock. You’ve realized 20%. So it’s, yeah, that’s that magic of leverage, I guess, right? Yeah. And you know, when you talk at different prices, it doesn’t matter to me, you know, we have $200,000 properties in Chicago. You can buy those. Likely in 10 years, they’re going to be worth $250,000. If you buy a $500,000 property, likely it’s going to be worth $800,000, $900,000 in that same period of time. So one of them, you’re going, it’s going to be worth dramatically more than the other. So, you know, as you think about these things, we focus so much on cashflow and, you know, keep in mind, I didn’t know what I was doing when I started, you know, just what made sense to me, I did.

[30:32] And to me, like that’s, that I’ve had more growth from that than I have from cashflow, although cashflow has been great too. Yeah, I, that’s, that is a, I was just talking to an agent out of San Diego and we had a long conversation and then that’s prompted me to do my intro about just, you know, taking advantage of whatever market you’re in. Cause I think like the honest, you don’t have to invest in your own market, right? But if you’re willing to hustle, I mean, it can be the easiest way to start, right? Like kind of like what you all did is you moved into a place and you fixed it up. So, I mean, if you are able to, this agent was able to buy a four bedroom condo and fix it up while living in it and rented out three of the rooms and, you know, still had to pay.

[31:19] It wasn’t like, you know, making cashflow on it still had to pay, but it was cheaper than her rent. And then, you know, obviously that property now has, you know, quadrupled in value or whatever. And so that’s, that’s, you know, whatever market you’re in, there are advantages. So if you’re in a cashflow heavy market, there’s a great advantage of getting your basic expenses covered with cashflow. But if you’re in a more, you know, coastal market, typically you’re going to have more appreciation heavy areas. And you know, that there’s a, there’s definitely a benefit to that too. I mean, you can get immense wealth through appreciation. Yeah. Yeah. I think it’s just, it’s just good to realize all the opportunities there and make a choice rather than just like, you know, focus on one strategy that like, and then say, well, this doesn’t work here.

[32:05] You know, I think it’s important to realize what all your options are. Yeah. And, and not to be defeated by, you know, if you are in San Diego or whatever, like, you know, there’s hope you can still invest in real estate. Yeah. Call Dan up. He can tell you about the different properties that, that, you know, if you want to do an appreciation play in a better cashflow market, that sounds like Chicago is an awesome market. If you can choose kind of what, what area you want to be in, you know, you want to be in an appreciation area or a hybrid area or a cashflow area. That’s pretty cool. Yeah. Yeah. You know, I’m, I’m very happy that, that we’re here and that we built it all up there. It’s been great for us and it’s great to help other people do the same.

[32:46] Yeah. Yeah, totally. So, so now that you’ve gotten out of the corporate world and you are in the full-time real estate world, how have you built back in time for yourself or how have you, have you found more work-life balance? So I don’t manage the properties at all anymore. You know, we’ve moved everything to apps and, and I’ve just, you know, simply by not having the time and allowed us to be way more efficient. And, and I mean, I don’t know what your personal experience is, so I’d be interested in hearing this, but when I had more time, I worried a lot about things that I couldn’t control at all. You know, like somebody is upset about another tenant or whatever, but I don’t have time to worry about that.

[33:33] It was all in the app. And it’s like, if it’s something I have that we have to worry about, my wife basically takes care of it. But I’m always like, is it something we can fix? And if the answer is yes, then we just send, we just connect whoever the person is going to fix it and send it over. And if it’s not, we just say, that sounds tough. Hope we can work it out. Hope you work it out like that. And it just, so that part has really changed dramatically because that was something I don’t, but as far as a realtor, you know, building is the hardest thing. Once you start getting it going and building, you know, you can focus just on your clients, but as soon as you stop building, it’s really difficult to find time for yourself.

[34:14] So always got to find efficiencies with me, it was people, you know, so, and I started adding people to my team and started saying, what are the things I don’t want to do that I don’t like to do? And then finding people that could do that. And, you know, some of that is, you know, people that are here in Chicago and some of it is VAs and, and that helped a lot. And still, you know, I’d still always trying to figure out how to make more time for myself because, you know, as you become more successful, you do get, you know, more people that want to talk to you personally. And that’s the best part of the job is talking to people and trying to help them. But, but it is hard to find the time to do all that.

[34:53] So it’s something I constantly struggle at, but I’m always trying to solve the problem with more people. So let’s, let’s dive into that a little bit. What was your first hire?

[35:04] So I, yeah, yeah, I was at, what did you say on the what side? On the sales side. So like when you, when you started building a real estate team, what, how did you start? Um, what, what, what, what was your first hire there? So I knew I needed someone. I was exhausted and I was continuing to grow. And I, and also I am really good. My skills really the sales side and talking about investing. What I’m not good at the details part of it, as you know, like knowing that’s with clients likes writing contracts and doing all the paperwork. That’s not the boy of the, that’s not why you got into it. Um, so I was looking for somebody that had that side, you know, it doesn’t, you know, it was comfortable with that side and, and looking and I’m struggling.

[35:48] And then I sold a property to somebody that moved from California. And she said, I’m an agent in California. Will you give me a referral? And I was like, oh, okay. You know, it’s like, I thought that like, I was going to get off scot-free and I said, sure. And I gave her and she goes, okay, well, if I’m getting the referral, I should do the work. And I was like, what? And so she filled out all the paperwork she did. I was like, I’m going to hire this person. And I was just like, I’ve never seen anything like this. And I was just like, when do I tell her? When do I tell her? So I was like, wait till she closed. But I couldn’t. I was like, Hey, I have this opportunity. What do you think? And she had a newborn baby.

[36:23] She was like, I really can’t. I mean, I just want to be at home with my kid. And it’s been phenomenal. So, I mean, it was, I was looking really hard and very careful who I chose. And so it was pretty easy for me to go out. So that was my first hire. And so she’s a real estate agent, but mostly she focuses on everything back in transaction. Really, she manages everything. That’s awesome. Did you do, I mean, so you just kind of had a sense that she could handle it. You didn’t do like any kind of assessments about personality or work traits or anything like that. I didn’t do any of that. You know, so I was a manager everywhere I was for a long time. And I always had a lot of people that reported to me.

[37:04] And so there was a lot of things I learned early on and tried to figure out early on. And that sort of became secondhand. So, I mean, you’re still going to make mistakes. But I did feel like I have a pretty good sense of who’s going to fill it. Also, I will fire quick. You know, I don’t, you know, if it doesn’t work out, I’m going to make a quick decision. So I’m going to spend some time trying to figure out if they feel comfortable. But I just feel like I have a pretty good sense of that. But if it doesn’t work out, then I just move on. So, but that’s what I’ve done with other team members. Yeah. So then from there, did you start bringing in people to help with the buying side? Or what did that look like?

[37:46] Yeah. So, you know, I am mostly, mostly minus sales. It’s very few listings. Not that I don’t have some, but most of the listings have a fear of influence. So you can imagine that that’s mostly what I do. It’s a lot of traveling. It’s a lot, you know, and the investor is a lot different than a single family home buyer. Like they’re, they require a lot more, a lot more detail and a lot more expertise. So, yeah, I had to bring people on team. So some of that was figuring out, you know, in the beginning, I made some mistakes in the beginning. Because, you know, I was still moving to real estate. So what really you needed, it was hard, it was hard to tell. It’s also hard to tell who wants to hustle and who doesn’t until you, until the fire.

[38:27] And like, this is a, if you’re going to work with investors, you know, you have to, you have to be willing to work hard. But it’s just no other way because, you know, you’re, they’re not looking like, do I like the countertops? They’re trying to figure out, is this going to make sense? And is this the best property? And where should I be looking? Like, there’s a lot that you have to like weed through that you don’t necessarily have to do if you’re selling some account. Yeah. Yeah, that makes a lot of sense. Yeah, it’s a, that, that whole skill set. So coming from a managerial background, that, that probably really helped you get, get that kind of rolling and have a good idea of how to keep it running well.

[39:06] And so you’ve also taken on, taken on some virtual assistants. Yeah. So that’s been great too. You just have to figure out what you can give them and what you can’t give them. And you have to have someone managing them, you know, for, for the most part, the VA part has been just about like, so the person that runs my team manages the VA. So I just say, this is what I’m going to run. And then she decides, is she going to do it or is, or is a VA going to do it? And then she manages that part of it. So I really don’t. And it’s funny because that was not my plan. I was like, okay, I’ll manage her. And we, we had a daily meeting. And then one day she pulled me aside. She said, what are you doing?

[39:43] Like, this is, this is not how you should spend your time. That’s my job. You shouldn’t like, not in a, like a way that’s like, she wasn’t threatened or anything. Like she was just like, this is such a stupid waste of your time. What are you doing? And it was so great. And that she’s very protective. And so that, that was great. Like, I mean, as you bring people on, it can, it can tear all your time away too. So you really got to figure out how you can do it. That’s part of the challenge. Are they helping you or are they hurting you? And I, you know, I learned a lot along the way about that too. So it’s one of those things that you can, yeah, you can, you can talk to different agents in the way they’ve, they’ve handled their businesses, how they’ve grown their businesses.

[40:25] And if they’ve gone the team route, if they’ve not gone the team route. And I think that there is definitely a clear distinction that people who have not have still worked at ways of kind of freeing up their time and making, you know, if they’re referring out buyers more, just taking that, you know, referral fee or if they are delegating other tasks they don’t enjoy as much. But, but yeah, there’s, there’s definitely, there’s something to hiring people. I mean, if you have people on your team or, you know, even just assistants or whatever, they, they, you’re going to have an element of oversight with them. And that, that is a type of work you have to be willing to take on. Yeah. Yeah. And I definitely refer out to depending on where it is.

[41:07] And I refer a lot out of, out of Chicago too, to other markets. But it’s the same thing. Like I care so much about them being successful that whoever I send to, I got to feel really confident that they’re, you know, they’re going to treat them the way that I think they should be treated so that they don’t just like get an easy sale, but the person doesn’t really realize what they bought. You know, that’s the biggest challenge to me is, you know, that referral partner has got to be somebody that I can feel really confident in. And also, you know, the nice thing about investors, if you treat them right, they often buy again, you know, so. Right. Part of it too. Yeah, no, totally. That is, that is true that you could probably get a good stream of business from one person more than a single, somebody just buying to, to live in a house even.

[41:53] Cause I think they, they used to be that people would move every seven years is kind of like the average, but I think that’s increased as well that they’re staying in their houses longer. Certainly now there’s a lot of people that may kind of want to move, but they’re like, I’m not taking on that new payment for those interest rates. I’ll just deal with this smaller house or whatever for a little bit longer. Yeah. I mean, you see people that like, or they have a big house and they want to move to a smaller house, but the smaller house, the payments are going to be the same, even though it’s more affordable because of, yeah, the interest rates. So yeah, you definitely have, it’s, you know, we definitely still have a problem.

[42:29] We don’t have enough properties on the market. Definitely. Now when you’re sourcing deals, I know that your wife does flipping. Is she buying from wholesalers? Is she doing direct marketing? Does that overlap with your, you know, buying holds at all? Are you, are you looking for off market deals as well? So, so yeah, I mean, kind of, kind of every, everything that you can imagine. We, she does buy things on the market too. Like everyone, other people, other realtors that do this and it’s crazy. Why are you doing that? But if a deal makes sense, it makes sense, you know? Right. And that’s, that’s part of it is like, if you get so focused on off market deal, you might miss something that makes a lot of sense.

[43:09] And, you know, especially now, I mean, anyone can go online and see, you know, theoretically what their property is worth. So a lot of the off market deals, they’re off market for a reason. Like they couldn’t really sell them to a traditional person, something significantly wrong with them or, or it’s in an area where like there is really no resale value. And so, you know, I, I, I never close the door on, on market deals. Obviously I’d rather get it before it hits the market, but yeah. So, so it’s, it’s a portion of it’s, it’s both. Okay. Okay. And, and have you, I guess you’re not doing a lot of listings, but I’ve, I’ve wondered if there’s any kind of approach you’ve taken to kind of give people multiple options.

[43:52] Like say here, I can buy this from you for this price. We could test the market at this price. If you have the money, it can help, you know, provide you some contractors to try to get, you know, top dollar. Have you ever tried any approaches like that? Oh yeah. Yeah. Yeah. And then, and all of that has happened. I find it’s a lot harder now though than it used to be because I’m not an idea. Like I think the best way to source your deals is of course, if you’re full-time wholesaling and all that, then, you know, you, you’ve got probably a lot of strategies going on. You have more, and I don’t have the time to do those kinds of things that I did when I first started. But, but I find it a lot harder.

[44:35] Like for me, it’s like getting to know the area where I own the properties and work in all the time, get to know the owners around there. Hey, when you’re ready to sell, I’m ready to buy, you know, and all that. I used to be able to say, you know, exactly that. Hey, this is what I would pay for it. And you don’t have to worry about anything. We don’t have to list it. You don’t have to pay any commission. And I, and I’ll just take it off your hands. And that was a very appealing thing. And now they’re like, well, Zillow said my house is worth this. So even when I argue, well, you know, Zillow isn’t the, let me show you some comps. Then you’re still, I mean, to give you an idea of my next door neighbor is selling their house.

[45:11] Like, and we said we’d buy it day one and she wants three, $200,000 more than I could sell it as an agent, you know? So I think it’s a lot more challenging than it. Once was, but of course, yeah. Even though I’m not traditionally a listing agent, I’m still looking for listings all the time. I’ve still got things going their way. It’s just a small portion of what I do. Yeah. I’ve thought about this a few different times. If people are coming across deals and they, you know, simply can’t get the numbers to work on a purchase. And, you know, what, what’s basically what’s the most ethical route to go with some somebody, if you are going to potentially want to buy it. And I think that a, you probably needed to disclose that you have interest in buying it at the beginning.

[46:02] But, you know, I think there’s a good, there has to be a good way there where you can kind of provide them options of, you know, this is how I want to, if I bought it, I could do it for this. And you have to understand that I’m taking on a lot of risk. I’m going to have to do all the work. I’m going to have to be paid for the work I’m doing on the house. Right. And the risks that I’m taking on. But this probably, this will be the easiest, fastest thing for you, but it will not be the most, probably the most money for you at the end of the day. And so here are the other options. So I think there’s different ways of doing it. I’m always curious if people have explored that with having the, you know, fiduciary duties, even if you’re not, you know, in a signed representation agreement with them yet, I feel like you should probably still operate with, you know, high integrity for anybody that you interact with when they come to selling you at their house.

[46:53] Yeah. I mean, I really don’t judge anybody what they do unless they’re, you know, committing a crime. But yeah, it does, it does weigh on me. You know, you know, I, for me personally, you know, I, I, I, I, I, I, I, I, I, I, I, you know, it is a challenge, but yeah, I’m very honest. Yeah. Hey, this is going to be a good deal for me, but, but, but what it allows you to do is not ever have anyone come in this house and walk out and you don’t have to do a thing or worry about it. If we put it on the market, these are the things that have to happen. And then there’s going to be, and I don’t know, I mean, I hope it sells in a week, but it might sell in three months and this is all going to go on. So just up to you what you want to do, you know, then that begins the negotiation.

[47:31] And that’s why part of it is like, I call it being the mayor of, of the area. So if they see you as somebody that, that they like and care about in the area, sometimes they’ll give you a deal just because they like you, you know, that’s why it’s harder when you come in cold, you know, but obviously people are still doing it and being successful at it. Yeah. The, the, the cold part is, is not a business model I really enjoy. So I like your approach. That makes a lot of sense. Um, I have to ask if, um, you have any books that are, you know, fundamental for you that, uh, you think that everybody should read, or if you have any books that you currently were really impactful for you that you’re really enjoying now, um, anything that comes to mind there?

[48:17] Um, well, it’s funny when you ask that, because when I think about this, I don’t think about traditional books. Like obviously I read rich dad, poor dad, and I’ve read, you know, all the Gary, uh, the books and, and all that. And they’ve all had impact on me and a lot of real estate books. But a lot of the things that, that have had the most impact on me are books like the jungle by Upton Sinclair. And the jungle is about, um, it was written a long time ago, but it was about, uh, the people that worked at the stockyards in Chicago. But a long time ago, there wasn’t as much regulation about real estate and they showed you how you could really be taken advantage of as a buyer. And it might not sound like something that, um, would be, uh, valuable to you, but it’s helpful to remember where we came from because we spend so much time in the present thinking about this is how real estate is.

[49:12] This is what it is. But to remember how it was all created, it helps you just putting those blocks together. It helps you, uh, just see it completely differently. Like no matter what you think is a problem or no matter what you’re coming, coming across, things are way different than they used to be. Some things are better and some things are worse. And today’s problem isn’t necessarily tomorrow’s problem. It isn’t, it might’ve been something that was solved in the past. So like all those things help you like really when you’re in the moment go, it feels like a problem at the moment, but like there were bigger problems in the past and there, there are other solutions that we don’t think about because we’re just worried about the moment.

[49:51] Hmm. That’s really interesting. I’ll have to check that out. I, that’s not been one that’s come up before, but, um, you know, the, um, I think, I think we’re a lot of people are struggling with, uh, changes with the settlement and all that and having to really explain their worth, uh, to, uh, their buyers, their buyer agents for the first time, maybe. And I think that, you know, any kind of fodder you have, any kind of additional information you have, uh, for that conversation, uh, could make a lot of sense and having a historical overview of, you know, how things were, it makes a ton of sense how that would be beneficial in, in that kind of conversation. Yeah, I think I, no, go ahead. I was going to say, yeah, I mean, I, I agree with you and, uh, um, and I think, you know, that’s part of it is real estate changes all the time.

[50:44] That’s all it does is change. And if you get so focused on the, you know, like this, and, but if you can sort of put some, uh, some perspective on it, I think, I think it’ll help have those conversations. Hmm. Well, I got another one on my reading list. Dan, I, my reading list is too long. So, uh, thank you. And, and why’d you do that to me? You bet. Well, definitely make sure you’re wide awake when you read it because it, it might be a little slow, but I really think it’s an incredible book. Okay, cool. Um, well, Dan, if people are interested in investing in the Chicago area, um, have any questions, maybe even about the Chicago area, is there a good, uh, place to follow you? Yeah. Yeah. So it’s, it’s Dan loves houses everywhere.

[51:29] Dan loves houses.com. Uh, Zill, um, uh, uh, tick tock, um, Instagram, everywhere you look, it’s Dan loves houses. Okay, cool. We’ll put that in the show notes as well. Um, but Dan, Hey, thank you so much for being on the podcast. This has been a really fun conversation. Uh, you, you’re making me want to become a historian. Awesome. Great to meet you. Thanks for listening to the REI agent. If you enjoyed this episode, hit subscribe to catch new shows every week, visit REI agent.com for more content until next time, keep building the life you want. All content in the show is not investment advice or mental health therapy. It is intended for entertainment purposes only.