Untold Real Estate Power: Financial Triumph and Life Mastery with Richard Advani

[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. I’ve got a lot to cover. Wow. I will try to keep this intro short, even though I’ve got a lot to say. A lot of life has happened. Because we have an awesome guest, and I want to get you to him. Richard Advani has got a lot of different experiences that are fascinating to hear about. But we are coming out of the holidays. If anybody paid attention, they might have noticed that we took a break. We took three episodes off, essentially, for Christmas and New Year’s. In the meantime, we traveled to Kansas to visit with Erica’s family. Prior to that, I did record an episode where I had pneumonia. I hadn’t been diagnosed yet. So I was feeling a little bit better than initially, but still very sick.

[1:19] That was one of the worst illnesses I’ve had in a long time that I can remember, at least. It might be the worst one I’ve had in general. It wasn’t walking pneumonia. It was full-on. I don’t know if it’s called spot pneumonia or just regular pneumonia. But it basically left me with a fever for about two weeks. One of those weeks, I was on antibiotics the whole time. And I don’t think I was contagious anymore after a couple days of antibiotics, but still running a little bit of a fever. So I was kind of just taking ibuprofen and Tylenol off and on, rotating those to kind of just be a little bit functional. But anyway, so huge long sickness. Started on the 13th. We traveled on the 26th to Kansas.

[2:13] And on our route, we found out that her dad had just tested positive for COVID. And so I’m like, oh my gosh. We are going to, if I get COVID yet on top of pneumonia, first of all, that probably isn’t a good thing to mix, those two diseases, I’m guessing. But just to be sick longer felt horrible. I really still felt sick the whole week we were in Kansas. I never really fully recovered until we got back, feeling to feel like, you know, kind of more normal. I still don’t have the energy I did. This morning, we actually had to shovel snow. We had about eight inches of snow come down overnight. And we had to shovel our property, which actually was taken care of by a neighbor. It was super nice of them.

[3:02] They came over with their motorized snowblower and took care of our driveway. They must not have realized that our other neighbor just had a baby because they didn’t do theirs. So we shoveled out their driveway for them. And then we went and took care of our rental property. I was shoveling snow while the kids were out playing with Erica in the snow. You know, they were so excited about the snow. They just couldn’t wait to play in the snow. So they get out there and they’re just all screaming their heads off. They’re all crying. And it was kind of funny because, you know, my wife doesn’t normally like to take videos of kids crying. It’s not something that like it’s, you know, kind of cruel in a sense.

[3:51] But it was just funny at that moment that we have snow, like a good amount of snow for the first time in years. And they’re just all bawling their eyes, all three of them, in the snow with their sleds and all that kind of stuff. So, but anyway, we got them a little bit warmed up. And then we took them to our rental property to shovel snow with us. They helped a little bit. You know, they threw snowballs and sluttered a little bit too. But we just kind of feel like it’s important to involve them whenever we can to help them see that we work for things. So I like to take them to showing sometimes. We don’t do a lot of maintenance stuff with our rental properties. So they don’t see a ton of that, but usually if there’s a flip or if we’re getting a property ready to rent after it’s been renovated, there’s a lot of cleaning or things like that that go on.

[4:44] So we’ve had them, we’ve taken them out to do that. Or there might be landscaping that we have to do that we’ve taken them with us. Because I just think that it’s important for them to kind of realize the work that goes into the lifestyle or, you know, or just life in general. And I think we’re hoping to get a trailer at some point, like a lawn trailer, to take my mower maybe next summer to mow this rental property. All the other ones that other people just take care of themselves. But this rental property is a quadruplex. So it’s a little bit more hard for people to figure out who’s going to mow. They’re going to each have a mower and mow just their quadrant. So anyway, we’ve been paying for mowing and it’s a unique deal where we’re cash flow poor, but it’s a really good property.

[5:38] And it’s a win-win in many ways the way we structure the deal, which I won’t get into at this moment. But long story short is we want to get our kids involved in helping maintain that property as well. So if I could get, you know, set up so we could take the mower over there, mow, you know, Erica can be there with the kids and they can help weed the flower beds while Erica maybe trims around. We just want to kind of keep them involved. Another thing that we try to keep them involved with is the other realities of life, and that is death. We had Erica’s cousin has had muscle dystrophy, you know, was diagnosed very early on, was not expected to live as long as he did. And he actually just passed away yesterday or the day before at 38, about to turn 39 this year.

[6:37] And, you know, this is the first time we’ve had a lot of death in our life here recently. And a lot of young, younger people death too. We’ve had grandparents, but we’ve had cousins that have died. And we try to have the kids be there for these things typically. We take them to the funerals and it really is hard because it pulls us out often. You know, I try my best if it’s Erica’s family to keep the kids entertained, to keep them busy so my wife Erica could be there. But, you know, they see the sadness. They see this whole process. And we think it’s important. And we have conversations and they ask questions and we, you know, we have these conversations with them. This funeral, we’re not 100% sure if we can go.

[7:40] There are still some lingering COVID symptoms running through the house. I unfortunately never got it. And we think my son never got it, but my eldest daughter tested positive and my middle child, she is symptomatic but hasn’t tested positive. So it’s one of those things that we also just came back from Christmas and they’ve been traveling a lot. And now we have these snow days and we’re coming off a Christmas break. To pull them out of school again is going to be tough. So all I have to say is that we normally try to involve them in our lives, in the hard things. Because, you know, it would be easier for me to go and just shovel the driveways by myself without the kids screaming and throwing snowballs and all that kind of stuff.

[8:30] And it would be easier for us to do these funerals without the kids. You know, it’s distracting and they require, you know, entertainment and attention and all that kind of stuff. But again, I think it’s important that we, sometimes the easier way is not the better way. And I think that, you know, when we can, we try to involve them in these things to give them a glimpse of what life is really about. And to understand, you know, on the working side that you got to work for money, but on the death side, on the family side that, you know, we got to be thankful for what we have. Be thankful for the life we have. Be thankful for the people in our lives. So, anyway, that’s my long intro. Probably could have been longer.

[9:24] More things have happened since the last recording. But all that to say, I am very excited about our guest today, Richard Advani. Richard is coming out of Southern California, has been a mortgage officer and an investor for many years. It has businesses and hobbies that are very exciting. So, I think that if anybody is looking for inspiration to work hard and get to a better spot and enjoy their life, this is a great podcast for you. So, if, yeah, stay tuned. Without further ado, Richard Advani.

[10:08] Welcome back to the REI Agent. I am here with Richard Advani. Richard, thanks so much for joining us. Thanks for having me. Excited to be here. I’m pumped about this conversation. You are hitting so many different areas in your world that we can talk about, that we can dive into. But maybe to start, why don’t you tell us a little bit about what got you into real estate and your journey of getting started in real estate? Yeah, absolutely. So, it’s kind of going to take away from what you’re going to ask me a little later on. But, you know, when I was 17 or 16, my older brother handed me Rich Dad, Poor Dad by Robert Kiyosaki. And I know a lot of people have read it later on in their lives. And that book has had a significant impact on them.

[10:52] I was lucky enough to have that handed to me, you know, in my late teens. And, you know, when I got my first job and started making decent money, I remember I wanted to buy an Infiniti G35. They had just come out. I loved that car. And, you know, I thought of Rich Dad, Poor Dad. And I was like, okay, you know what? Let me buy my first rental property and let that income created pay for, you know, the payment on this car that I wanted instead of just, you know, putting that cash as a hefty down payment. And made a lot of mistakes as I went, you know, at 19, 20 years old buying the first one. But, yeah, that’s what kind of got everything started. Okay. Did you get the bug then? When did you – okay, you’re a car guy.

[11:37] If people aren’t familiar with Richard, he’s a car guy. You race. At what point did you feel like you could, you know, jump in and buy a nice car? Did you buy a dream car? Like, did you set a goal? Like, okay, now I can do it. I can buy that car. Yes and no. I mean, I set a goal, you know, when I was 30 years old that I wanted to be able to buy a Ferrari, right? And not because of the cool factor of the Ferrari. It’s just growing up, that was always the pinnacle car to me. And, you know, when I approached 30, I started – I kept pushing that back, right? I’m like, ah, I should probably buy some more real estate with it. Yeah. I should probably buy some more real estate with it. And I think when I was about 30 years old, I just turned 40, I spent the most I’d spent on a car.

[12:26] I bought a Toyota Supra 1998 Turbo, you know, the last year built and spent 75 grand. And, you know, I finally spoiled myself a little. But it’s hard, right? Once you see the beauty and the wealth and the growth that real estate creates and how it compounds over time, it’s hard to take 100 and 150 or 200 grand to throw at that dream car knowing, you know, the expense of it, the true expense, right? The lost opportunity of that investment. So I kept pushing it back. I still have not bought my supercar, you know. And now that I have a rental car business, it’s becoming more of a reality because, you know, it’s not just a liability. It can be an asset at that point. So, yeah. So it’s like that – are you all through Turo or are you doing – with your rentals, do you have a different kind of business going?

[13:18] I have independent as well, but I’m transitioning off Turo, but I’d say about 80% of our business does come through Turo. Great platform to launch the business, but, you know, it eats heftily into the potential profit margins. Yeah, so it does make sense and you can justify. And I’ve had that. I’ve had that. Like I’ve been wanting a Tesla forever. You know, you can say what you want about them. I’m a huge nerd, so driving a computer around is appealing to me. But, yeah, I’ve thought about the whole like, okay, I could Turo it and justify getting it because, yeah, that’s as common – I think that’s a very common thing for real estate investors to go through is that you start building up wealth and it’s hard to live your life a little bit, you know.

[14:04] Hard to treat yourself to something – you know, traveling is one thing. I think that might be a little bit easier. It’s certainly less expensive, but, you know, that huge expense of a really nice car that depreciates, and we all understand that. We all – not to factor in, like you said, the opportunity cost of that money going somewhere else. So it’s interesting. It’s a fun dynamic that you have there. Yeah, I think at the end of the day, everyone’s balance is going to be different, right? Right. Yeah. I don’t – I wouldn’t be mad at the 30-year-old me that did buy the Ferrari, right? Right. But I’m also not mad that I didn’t do it and that I waited because, you know, that turned into three Ferraris money.

[14:48] You know, the longer we can wait as investors to reap the rewards, the more fruit we’re going to, you know, be able to take from the tree, as you know, as well. So it does take some amount of discipline, but I have plenty of fun, like you said, travel plenty, and, you know, don’t get me wrong. I wasn’t living this uber-conservative lifestyle my whole life. But what I was doing was working 100-hour weeks my whole life, you know, initially. Sure. Okay, well, let’s go back. Let’s go back to your rental portfolio. So you were accumulating rental portfolios. Were you working a job at that time as well? Yeah. So I got into the mortgage industry when I was, you know, about eight to ten months before I bought that first rental.

[15:34] Didn’t know anyone in, but I heard you can make, you know, lots of money and kind of clawed my way in. And what’s interesting is after buying that first rental, I realized, and it was a very rocky experience, but I realized that I really wanted to focus on that niche, right? Being a real estate investor, working with real estate investors. And that really set the foundation for my whole career. And, you know, I was top three in the country out of 7,000 people for Wells and for B of A. I’ve always been in the top percentile of mortgage performers. And that was because I focused on that real estate investor niche. Oh, that’s cool. And did that then span across multiple states? Were you hyperlocal?

[16:19] How’d that look like since you have a niche that obviously would be anywhere? Yeah. Yeah. So the cool thing in working on the mortgage end for the big banks is you had a national license, right? And it’s interesting because traditionally, if you’re working, say, in Long Beach or you’re working in wherever in the country, you’re servicing that area, right? So initially, a lot of these big banks didn’t know how to handle me because, you know, as I essentially said, don’t give me a national license and then tell me to work in one town, right? So I was working pretty much across the country. I made it my mission to figure out who the providers are, who the players are, attend the RIAs, attend the real estate investment groups, and kind of put myself out there.

[17:03] And what I realized 20 years ago was the real estate investor niche as it relates to lending was pretty uncapitalized, right? There were no lenders, and there still are no lenders, that have like an investor-specific division. Everyone’s promoting primary home ownership, right? Right. And so there was a huge need in the market, so it made it easy to capitalize on that. Yeah, so what value propositions did you give these investors at these meetups to kind of separate? Was it relationship-based? Were you able to offer certain loan products? What was your angle? I think the biggest angle was, and the biggest value that I offered then and continue to offer investors is my experience, right? And me being an investor as well.

[17:50] Now, obviously, when I was new, I had one property, two properties that didn’t hold quite as much weight, although it did. Because, you know, given that I focused my lending business on working with investors, you know, I’ve done thousands and thousands and thousands of investment loan transactions. I’ve looked at the appraisals. I’ve had access to all of the hard data. So, you know, I knew a lot even when I didn’t own a lot. You know, fast forward to today where I do have a very large portfolio, I think a lot of them lean on me for that expertise and for that longer-term outlook on the real estate as an investment. That makes sense. That makes total sense. I mean, that’s true. Like, I mean, if somebody is just doing single-family or primary residencies, like, it is a different game for sure.

[18:38] Did you get into DSCR loans at all? Yeah, absolutely. I mean, DSCR loans, I would like to say, didn’t exist back then. They did because essentially, of course, they’re a commercial loan product. But they weren’t open to single-family homes. DSCR has come out, you know, I would say the last three or four years. We were an early adopter compared to most lenders. And, you know, initially when I heard about the DSCR lender as a seasoned professional, I was like, oh, oh, no. Like, we’re coming out with what? Like, it’s a no-doc program? And that’s a lot of investors’ initial thing, right? You’re like, oh, no, this is scary. And it’s not really, right? DSCR loans have been around forever. They do require a 20%, 25% down payment.

[19:21] You have to have good credit. Yes, they don’t check your income. But if you understand, you know, how business and business loans work, they don’t care about your personal income, right? They care about that business. And with these DSCR loans, those individual rental properties are considered individual businesses, right? So, yes, we do offer them. And what’s been really cool the last two or three months, and I didn’t understand why initially, but, you know, DSCR loans, which are no-doc loans, versus conventional full-doc loans, typically carried about a 1% delta. And with DSCR loans being about 1% more expensive. What we’ve seen in the last two or three months is that delta just getting smaller and smaller and smaller.

[20:07] So much so where DSCR loans today, of course, are almost less than conventional. And what I, after doing some research, realized was, you know, the conventional, of course, as we know, is tied to the 10-year treasury bond. And these DSCR loans are tied to the shorter-term treasury bonds, which haven’t had as much volatility. Yeah, so it’s been cool to say, hey, the no-doc option is actually better than, you know, the full-doc option. Yeah. You know, I feel like this post-COVID mortgage season, I feel like you’ve really had to be on top of, like, what is the best loan program for this given situation, for this given client. Like, it has been more complicated. Or maybe I’m just more, you know, educated now.

[20:54] I don’t know. But it just seems like there’s been moving parts that haven’t been around that make a huge difference. Like, I mean, some of it’s been, like, there’s, you know, a local bank might offer a really great 10% down, no PMI kind of in-house loan product that, you know, depending on what their rates are compared to the, you know, conventional could make a lot of sense. We’re talking about primary here, but. No, you hit the nail on the head, actually. There’s, there, prior to the last three years, there was only so many things you needed to understand to be a good borrower, right? To be an educated borrower. And there’s so many options that didn’t even exist three or four years ago. So, you’re right.

[21:35] It’s harder, but even more important as a consumer, as a professional in this business to understand everything that’s available. Because it’s way different than four years ago, you know? Yeah. And that’s, like, one of the, you know, I think that people buying a house is, let’s say there’s a seasoned person that’s, again, let’s talk about primary here for a second. There’s somebody that’s, you know, bought and sold six houses and they’re like, do I need a real estate agent? I know how to do this and all this stuff. And that alone, I mean, you know, having that, you would have no idea coming into the, you know, if you haven’t bought or sold a house in 10 years, you’d have no idea what this landscape looks like now.

[22:13] And having, you know, connections to lenders like yourself to really understand what, you know, specific loan product at this given time makes most sense for that person. I mean, that’s a huge advantage. And usually, I mean, it’s not always, but often, you know, the agents are kind of the first stop for the person that’s looking. But before we get further into that, I did want you to break down what DSCR is for people that may not understand what that loan product is and kind of why it’s different and requirements, et cetera. Yeah, absolutely. So, firstly, DSCR stands for Debt Service Coverage Ratio. It’s a mouthful, I know. So, essentially, what it means, though, is they want to know that in order to loan on these properties, they want to know how much income the property generates versus what the monthly payment and expenditure is going to be, right?

[23:04] How the property debt services. And the major requirement for these loans is that 100% of the gross rents that are coming in, and those gross rents are determined by an appraiser that goes out and determines what’s reasonable for the area. So, 100% of the gross rents covers the mortgage payment, including taxes and insurance, right? And if it does, for example, let’s say the payment on the property is $1,200 a month and the rental income is $1,200 a month, that would be a one-to-one DSCR, which is the minimum requirement for most lenders. But assuming it meets that, and assuming you have the down payment and, you know, six to 12 months of money left in the bank, so you have an overall good financial profile, you don’t need to provide any income documentation, right?

[23:47] They’re not worried with how much you make. They’re not worried about your credit card or your car loan payments. All they care about is, hey, does the rent on that property cover the mortgage payment, right? And if it does, they’re happy to lend you 80% or 75% on that deal that you’re only putting 20% out on, you know? Yeah. And the beauty, the last thing I’ll say on that is most of these DSCR loans are 30-year fixed, right? They used to be balloons and arms and all these tricky programs. They’re not now. They’re 30-year fixed, fully amortized. You know, your payment won’t change over the duration. And you mentioned this was kind of a commercial product in the past, or it is, and it’s just kind of opened up to more single-family type properties as well.

[24:30] Is there a cap for how many, like the amount of money that you can borrow on a DSCR? That’s a great question. Generally, for DSCR loans, there is not a cap. A lot of them have an initial 25 loan or 5 million cap, but to kind of expand that, it just requires an underwriter review, right? To put a second set of eyes on the overall file. So far, we’ve not been capped out, but it’s important to understand there’s, I mean, there’s tons, but most of us in the lending industry are working with five to seven different DSCR lenders, the same ones. And each one of those may allow 20, 25, 30 before they even start looking at it closer. But so far, we’ve helped people get their 60th and 70th finance properties utilizing DSCR loans.

[25:20] Okay. Well, and, you know, just to give a little bit of context or a little bit of application, make two context to this conversation. You know, if you’re a new agent starting out and you haven’t been in the business for two years, you’re not going to be looked at by conventional mortgages if you’re trying to get investment property. So this, if I understand correctly, would be a good avenue. Let’s say you are doing very well in the first two years, which, you know, can be hard for some people. But if you have the cash to do the down payment and you have the reserves is what it sounds like you need, you could buy a property where otherwise you wouldn’t be able to qualify for one. Is that correct?

[25:59] Yes and no. The program, one of the major requirements of the DSCR loans is that you have a primary home. There are ways around it, but the reason why they have that is they want to make sure you don’t use the program to qualify for a primary home. Yeah, otherwise you wouldn’t qualify for. So the ways around it possibly are, you know, if you live in California, you work in California, everything’s in California and you’re trying to buy a, you know, $160,000 home in the Midwest, right? You know, it’s believable that it’s going to be a rental. But generally they want you to own or already own some type of real estate, right? Whether it’s a primary or a rental. And I typically suggest that someone’s serious about building up a portfolio that they start, they might not jump into the real estate full time until they do own something that they may be house hacking or, you know, whatever.

[26:54] So that’s still, that’s a really good point to make though, or to understand because you could find yourself in a difficult spot if you jump right in before you do own something. So that’s great. Back to your investment portfolio, you accumulated, you’ve told me you do short-term rentals as well as buy and hold long-term. Correct. Yeah, I’ve been doing short-term rentals for almost 10 years now. So I’m a, you know, super duper host, all that nonsense that comes with that. But yeah, I’ve been doing it for a long time. You know, about three years ago, once everyone started hearing about it and doing it, you know how it goes is, I would say it was too, not too late. But, you know, my profit margins dropped drastically, you know, from three years ago to what they were prior to that.

[27:44] But it still is, you know, I’m very successful at it. I’ve actually turned on two new Airbnbs in the last couple of months that are doing amazing. So it really showed me that market specifics and studying the market is very, very important. This is harder now. Exactly, yeah. And you need to find places that aren’t traditional Airbnb areas, right? Everyone runs to the resort areas or the beaches or, well, how about looking at a high-concentration suburban area that has few hotels? Could be anywhere, nowhere near a beach, nowhere near a vacation area. But guess what? As a lot of you people can attest to this time of year, people go to visit family, right? And if you and your wife and your three kids are going to go visit your in-laws and insert here, Oklahoma, for example, you don’t want to get a hotel, right?

[28:35] It’s going to take three hotel rooms. If you get an, imagine getting an Airbnb in that same general area or neighborhood as, you know, where your mom lives. So, yeah, that’s more what I’ve been targeting recently. And it’s been, you know, basically not competing, right? Everyone was like, yeah, competition is good. No, it’s not. You know, I don’t want to compete with anyone. I want to run the opposite direction. And it awakens. I have two Airbnbs here in California that are higher-end properties. And they’re still profitable and do well. But, you know, I’ve seen the impact, you know, the last three years. Yeah, definitely. And I think a lot of people got burnt when they were doing analysis based on numbers prior to the oversaturation or the increased saturation of the Airbnb market.

[29:19] It looked like it would be a great property. They’re bidding in a bidding war, bidding it up. Luckily, they probably have cheap debt. But other than that, it can be definitely tough. I’ve seen that. We have a resort around here. And, yeah, the Airbnb market went from – it was the slowest market, this area. It was probably the slowest market in our whole county. And then it was definitely the hottest, like, through COVID. So it was an interesting transition to see for sure. Yeah, you see that a lot, I think, in places like Palm Springs and the high desert and, you know, the mountains in Phoenix. And a lot of places that have kind of retracted from those highs because there was a frenzy. And at that time, that’s when you could do 10% down second home, right?

[30:07] You can’t anymore because everyone abused it, right? And used it to buy Airbnbs that, you know, in fact, a lot of them were over leveraged, though, right? Because they were buying them at 10% down based on these high rents and this huge market that was created. But as you said, everyone got greedy, and I don’t think anyone took a moment to say, well, how much can this market support, right? You know, and what’s that line? And I think that line got crossed in a lot of markets. And then also the fact that I think less people are using Airbnbs. I think the use of Airbnbs were a lot higher because it made a lot of sense in COVID. Like, let’s just drive somewhere close, stay in a place where there’s nobody else around.

[30:48] And then I think, you know, there wasn’t as much international travel, et cetera. So, yeah. But that’s interesting that you seem to have found a niche that is working for you well, despite what we’re talking about this recent history. Obviously, creating something unique and having the amenities that really sell a place is also very important if you are in an area that needs to be competitive. Absolutely. Absolutely. Okay. So, we covered that. You mentioned now that you’re getting into some – you’re partnering with somebody to develop. Is that correct? Oh, yeah. Yeah, definitely. So, earlier this year, I partnered with a builder I’ve worked with for the last 15 years. He’s a little older. And we have met a couple times in the last decade.

[31:39] But long story short, yes, I partnered with him. We have 120 to 150 homes in various stages and already delivered a bunch of them. But we build to rent single-family homes and duplexes all across Oklahoma. So, I’m actually splitting time between Southern California and Oklahoma at the moment. It’s 75 degrees in SoCal right now. Tomorrow, I fly to Oklahoma where it’s, I think, 30 degrees. So, I know my wife and daughter are a little anxious about that. Will it make you feel grateful for where you live? It has been. Definitely. Look, I love Oklahoma. In fact, I prefer Oklahoma City to Southern California. But this time of year makes me appreciate and understand why it’s so expensive to live here and why it’s so crowded.

[32:25] Right? Right. Because it’s always 70 to 75 degrees. You know, that’s our winter. And when you see it freezing, when you go fly somewhere else and, like, you know, three hours later, you’re like, oh, my God. This is way different. You’re very appreciative. Definitely. I mean, just look at what I’m wearing compared to what you’re wearing. I’m looking outside your windows right now. It’s sunny. And we got, like, you know, eight inches of snow overnight. I’m coming to it tomorrow. Yeah, that’s great. Well, okay. So, let’s shift again and let’s go into the cars. Tell me about your racing and what you do. Like, I think one of the things that – let me segue this a little bit better. I think one of the things that’s great about real estate investing is that it can really afford you the life that you want to live.

[33:12] And, you know, as we talked about, you know, cars aren’t always the best investment as far as, you know, if you want your money to appreciate and, you know, grow and all that kind of stuff. But also, if that’s what you love doing, I mean, that is important to make – to live a life of not having regrets, to make – not feel like you just sacrifice your whole life. So, tell us a little bit about your racing and that side of your – you have a lot going on, man. Yeah. Yeah. I don’t sleep much, but I’m having fun. So, you know, you made – to your point, rather, you know, investing in real estate and being disciplined and waiting to eat the fruits of the seeds that I planted longer and longer afforded me the opportunity to kind of chase a dream I had.

[34:04] And, you know, when I had just started getting deeper into real estate in my low 20s, I, you know, recreationally would run in weekend cups and, you know, race my car. And I was a seasoned champ and I was getting into it. But I realized it wasn’t really conducive to, you know, it was expensive and not conducive to my life goals and my investment goals. So, I kind of put it on hold. You know, fast forward to, man, 36. So, about four years ago, I met one of my neighbors who was a big YouTuber. And he was into cars and it kind of like – I still had a lot of high horsepower cars at that moment. I had a Viper and I had my Supra and they had thousands of horsepower. So, I was used to, you know, having a rear-wheel drive car with a lot of power.

[34:47] But anyways, this kid took me to this drift track. And I was like, what is drifting? Like, oh, my God. These people slide around the whole track. So, I go there and my mind’s blown. I’m like, this is insanity. And I was like, you know, I want to start doing this. So, I bought a $5,000 350Z beat-up car. And I went to my local drift track and didn’t know anyone. And I went out there for my first laps and I ended up drifting pretty much the whole track. And I came back into the pits and everyone’s like, wow, well, who are you? And, you know, how long have you been drifting? And I was like, this is kind of my first time. And everyone’s like, wow, like, you know, there’s actually a path in this profession of going pro.

[35:28] It’s really hard. And, you know, yada, yada, yada. So, long story short, I did some research. And I said, so, wow, there is a path to going pro on this. And, you know, up until then, I hadn’t really done a lot for myself, right? It was sacrifice, investments, work hard, which was fun, right? That was fun to me. And I enjoyed it. Don’t get me wrong. But I hadn’t made a big investment into a hobby. And I put that on hold 10 years earlier, right? Well, the good thing is real estate afforded me the opportunity to actually grab that bull by the horns and, you know, build a race car, establish a race team, earn my license in a year and a half from, you know, within a year and a half of setting foot in that first drift car.

[36:14] You know, I went pro, which, you know, I don’t think has been done in that short period of time. But, you know, I had the, you know, passive income and the opportunity now to say, hey, you know what? I can spend $70,000 on tires my first year. I can build this race car. I can, you know, buy the trailers, trucks of support to chase this dream that I had that, you know, if I continued racing 10 to 12 years earlier, 14 years earlier, when I was younger, I probably wouldn’t have had the means to chase my dream now, right? So putting that on hold earlier allowed me to get to this next level. And so, you know, now I’m three years into being a professional driver for Formula Drift. And, you know, we have races all across the country.

[36:59] And, you know, it’s one of the fastest automotive, fastest growing automotive sports in the world. So it’s exciting. Yeah. And, you know, I definitely could not have done that without, you know, real estate being the foundation. Yeah. Yeah. It’s such a good, that’s a good testimony. I mean, I think like, you know, there’s always the, that idea of the, you know, when you’re young, you have all the energy, but you don’t have any of the money. And then when you’re old, you have all the money, but you don’t have any energy to do the dream. And so I feel like that’s just a testament to, or that should be maybe people’s guiding star to delay a little bit, to sacrifice a little bit, to work a little bit harder, to kind of get that ball rolling.

[37:41] Because once it starts rolling, it becomes easier and easier. You have access to more capital. You have more opportunities to buy investments, to buy great, you know, invest into syndications, to do whatever. I mean, that alone usually takes a, you know, a million dollar net worth outside of your primary income or primary residency to be able to tap into. But, you know, all that being said, it’s like, it’s just a little bit of delay, a little bit of sacrifice, a little bit of hustle, a little bit of grind to begin really can make you able to live your dreams and do things while you still have that energy, right? Like, and I think that’s also important to take, to understand that we don’t want to be, you know, sitting on a huge mountain of cash when we’re not able to really do anything with it.

[38:26] Like, we need to start actually having some fun and enjoying our lives too. And it’s, you know, it’s all about phases of life, I think. Exactly. And to your point earlier, there’s so many different vehicles available to people that want to start investing, right? If you don’t have the time or don’t have the resources to buy a house or buy an apartment building, there are syndications, like you mentioned, right? There’s all kinds of opportunities and vehicles set up. So, you know, you can rely on someone else’s experience to take care of that part and be an investor in deals. So, you know, it’s, that’s the beauty of real estate, right? There’s so many different levels and different variations.

[39:03] And I think that’s one mistake a lot of people make as they look at real estate as just one thing, right? Real estate. Real estate’s like, there’s penny stocks, right? You can go buy $50,000 property right now today in cash in some places in the country, right? It’s a penny stock. There’s blue chips. There’s all these types of things. And there’s different vehicles depending on what your individual goals and objectives are, right? When you’re retiring, you know, cash flow is important. Great. But when is it important to you, right? If it’s important 30 years from today, then buying a good quality assets, probably more important than, than, you know, the cash flow today itself. So yeah, it’s, it’s, it’s fun.

[39:41] And, you know, I’ve, I’ve had people along the way in my life to say, well, you know, why don’t you go and do more things and, and why are you saving and investing everything? And what people don’t realize is think of monopoly, right? It’s a boring game, especially when you start, right? But you get 20, 30 minutes in, 40 minutes in, 50 minutes in, you buy some houses, you buy, you know, a park place, you put a hotel on there, right? It starts becoming fun. And that’s what people don’t realize is, you know, saving to invest and watching it grow. It’s, it’s fun. And, and that is the fuel that, that keeps it going. But there are a lot of people look that, that will keep doing that till death, right?

[40:25] I’m not that person, you know, I value experiences and I value what, what money can buy, right? And that is the experiences and the quality of life. But I also know work-life balance to me is not a weekly or a monthly thing. It’s a, it’s a lifetime thing. The more I sacrifice early on, the more I can enjoy later, you know? Yeah. No, totally. I agree with you. I think that like we’d talked about, it’s, it’s life phases. And I think that like, if, if other people are fortunate enough to tune into this kind of mindset, like you were reading Rich Dad, Poor Dad at an early age, I think that it can really kind of get you started. Cause when you’re, when you’re younger and you had more energy, you should go out and have some fun too, but you’re a lot more flexible.

[41:13] Like, you know, I, the idea of, of house hacking now with three little kids and a wife and two dogs. And, you know, now we’re in a 4,600 square foot house that’s filled. It’s like, that’s, that’s not going to happen for me anymore. I’m not going to be able to be flexible and, and, and, you know, move around house to house. And, and, you know, it’s just, it’s just so much harder, but when I was, you know, single, if I had, you know, the foresight to buy something as soon as I could, um, and rent out rooms and then, you know, bounce to the next one, as soon as I was able to, that, you know, could have jumpstarted me further. And so, you know, kudos to anybody who was out there listening and reading, uh, to, to, you know, get to this point, uh, at an early age, that’s just, it’s just huge.

[41:58] I mean, that’s so these lessons are not taught in school. And so it’s just so important to, you know, self-educate how you can live your dream life and seeing, hearing stories like yours, where you’re at now, uh, that’s going to be inspiring for a ton of people because, you know, a lot of the young kids, I was, I worked at a high school for a while. They thought about, you know, what it meant to be a millionaire. If you’re a millionaire, right. Millionaire seems like this huge thing where, when, you know, it’s really not that big anymore, like just a single millionaire, right. Um, they think, you know, that, that you’re going to be driving around a Ferrari that you’re going to, you know, have, you know, all the fancy shoes, all these kinds of things.

[42:38] And in reality, uh, most people, when they hit a millionaire status as, you know, a real estate investor or whatever, they’re probably like, Oh man, I’ve got so much further to go. I’m just kind of starting. I’m just start kind of getting rolling maybe. Um, and so anyway, I’m just saying it’s a really awesome guiding star for people to see a success story like yours, where you are fulfilling, you’re living this dream of racing cars that you’ve had your whole life and you’ve been able to do it because you hustled hard and you sacrificed at the beginning of your, your work career. Yeah, it’s an, and the other thing that it’s done is given me the platform and the means to now invest in other businesses, right?

[43:17] Two things happen when you invest in real estate. One is you start, you start looking at, uh, you know, businesses a little differently, right? You have that mental change. And the second thing is you start obviously generating that income and that wealth that you can then use to invest and other things, right? Four years down the line, that change in, in awareness of businesses and, and also that risk tolerance aligns with the wealth that that real estate creates. And then you can invest in other opportunities. You know, I, I love cars and, you know, I, I, you know, I have a, as I mentioned, a rental car business now, you know, with 30 plus cars in it and, you know, it’s exciting. But what’s, what’s interesting also to your earlier point is most millionaires I know don’t drive fancy cars.

[44:03] They don’t drive even luxury cars. And it’s funny. I have, you know, Escalades and you name it, all kinds of cars. And I rent them out. Ideally drive a 2012 Prius. Cause I don’t care, you know, and that, that now granted, maybe it’s, maybe it’s because I have a couple of race cars in the garage so I can justify that to myself mentally. But, but I, I, I don’t, you know, and most of those people don’t. And, and I would say 90% of the people I rent my premium cars to probably have a lower net worth than the people I rent my economy cars to. Right. And you would think it’s the other way around, but you know, most of the time it’s not because most of the wealthy people aren’t addicted to showing stuff.

[44:45] They’re addicted to their, their 30 minutes into monopolies. We discussed earlier. They’re addicted to the energy and the hustle of watching the investment grow, you know? Yeah. Yeah. I mean, it’s a skill. The people that are wealthy often have honed a skill and yeah, spending frivolous money on things that don’t go up in value is not part of that skill. Or finding a way, right. To make those things work. Yeah. You know, whether it’s tax benefits or whatever it may be, you know, and that’s people ask me like, what, what’s my, my favorite thing about Turo, right. Is it the ability to drive the cars or is it, you know, whatever to me, it’s the tax benefits, right? Not even bonus depreciation, just section 179 allows you to depreciate these cars over a certain term.

[45:32] So if it’s December and I know I’m going to face a big tax liability, I could put no money down on a vehicle over 6,000 pounds to add to the rental fleet and write off a huge portion of that, you know, to offset the income from my other businesses, right. My real estate or my day job. So yeah, I think, I think financial education is extremely, extremely, extremely important. And, you know, the average person, myself included, typically if you’re shopping for CPA and you’re like, wait, someone’s charging three grand, you know, you go down to the local, you know, tax preparation office and it’s 60 bucks. Well, that person who charges three grand may be saving you 50 grand, 80 grand, 100 grand a year, right.

[46:16] And the rich pay for professional services and they’re happy to do it because it’s not about how much it costs. It’s about how much it’s saving them, you know, where, you know, the average middle class doesn’t look at it that way, but we’re not taught any better, you know. Right. No, totally. I agree with you completely. Uh, when I was, when I was talking to that student or the students about, uh, what they thought a millionaire looked like, um, you know, I just read, read the millionaire next door and, and so it was, it was fun to kind of like open their minds a little bit about it. And, um, I don’t know how much of an impact that really made, but I feel like, you know, any kind of extra little financial education you can give, um, and in the school setting is important.

[46:56] So, yeah, no, that’s, that’s, that’s a really good point about the, the cars, um, uh, being tax write-offs as well. I know that there’s a couple of different ways of doing it too. If it doesn’t, if it’s not 6,000 pounds, I think you can take it. Mileage can be, if you’re using it heavily, an option. Uh, but then also you just, you know, depreciate over what a max of maybe five years. Is that, does that sound right? Five to seven years. Yeah. And, and for me, I’m depreciate as business equipment, right? Essentially because I’m a rental car business. So the way I write it off may be different than someone that doesn’t have a rental car business. Yeah. For agents, I think it often makes more sense to take the mileage depending on the, you know, but, um, it’s a pain to track.

[47:40] So one thing on your note too, is, is there has to be personal versus professional use of the vehicle. And if you’re using the same vehicle, you’re a hundred percent, right. You want to go mileage. Cause for me, it’s easy to say, oh, well, here’s my primary car and here’s my 25 rental cars. They’re all business use. They’re always available to be rented, you know? Right, man. We have covered some ground.

[48:05] It’s I, yeah, it’s been a, a lot of different, different paths. You you’ve, you’ve gotten, you’ve gotten after it. This has been a fun conversation. Um, I, I got to ask about the book. Um, is it rich dad, poor dad, is that your, uh, fundamental book? The one that, uh, you feel like everybody should read? Uh, yes, but I have to say that cause that is what created and started my journey. And, and it’s amazing cause it’s an easy read and all that. But for a lot of people who’ve read that, which is most of the, probably your audience, um, I think a really powerful book and I did it audible wise and it was a 30 hour listen, uh, was Tony Robbins money master the game. And it’s not the normal rah, rah Tony Robbins thing.

[48:51] He breaks down a to Z of from stocks to bonds to real estate to everything. And I mean, it’s literally an encyclopedia. It’s a long, long listen for when you’re driving. Um, but that’s a very, very powerful book. And it’s funny people who reach out to me for, for advice or they want to invest. And I say, listen, they want to buy, I’m like, listen to this book. And when you make it through, you can come and talk to me. And most of them don’t ever come back. Yeah, it is. It is a long one. I, I gotta admit, I forget. I’ve, it’s been a long time since I, I got that on audible as well, but I don’t know if I made it through, to be honest. It is long. I mean, it took me a year. It wasn’t a continuous.

[49:33] So like, okay, let’s get three hours this week and six hours this week. But it was, there was a lot of, if you break it up, which you have to, you know, if you break it up, which you want to also, cause that’s where you’re gonna get the value is a lot of valuable information. And therefore someone who doesn’t understand anything about anything, right? They don’t even know where to start. They don’t know what a stock or a bond or an investment or a, you know, anything is. He, he is, have you read his health book? I forget what it’s called off the top of my head. He wrote one about health. It was very similar. It was trying to be like a panoply of all the information possible about, you know, being a healthy person.

[50:11] Um, and it’s also very long, but he, he, he goes in like deep in these, like, you know, yeah, he’s got his, his, you know, mindset books and all that kind of stuff. And I, he’s just passionate about helping people. I mean, I think, I think it’s very genuine. I do too. You know, some of this stuff, can they seem gimmicky? Um, and you know, some of the stuff I hear here and there, but that’s what the theme is for that topic. Right. And he’s very good at that. But to your point, you listen to his other books and it’s not that. It’s just, he has such a wealth of knowledge. And as you said, he’s so happy to share it with, with everyone out there. And he does know how to itch, you know, to scratch an itch that other people don’t know how he knows how to motivate people and get them to take action.

[50:58] Now, unfortunate human nature, they take action for a week and then forget about it. But, um, you know, he knows how to get them to start, take that initial action. Well, that’s, that’s why it’s so good to like, yeah, read something like that, be inspired, but also to do some daily things like podcasts that just kind of keep your head in the game. I think if you don’t, uh, kind of feed your brain, uh, the things that you want, where you want it to go, where you want it to focus, it’s going to just, yeah. If you’re, if you’re just on TikTok, if you’re just playing a candy crush, you know, it’s, it’s not going to get you to where you actually want to go if you set these big goals. So, um, yeah, that’s a, that’s a really good recommendation.

[51:39] Thanks. Uh, Richard, where, if people wanted to follow you, learn more about you, is there any, any, uh, websites or social media that you suggest people go to? Yeah, absolutely. So mortgage wise, it’s, it’s Richard at Vonnie.com. My first and last name, um, my, if you Google my name, you’ll pull up my social, um, it’s more automotive based. Um, and then for, uh, our, our home building, it’s bankers invest, okay. Dot com. Um, but yeah, Google my name. You’ll find all the crazy various things I have going on, um, in my life, but yeah, there’s anything we can help with on the finance related. If you’re a new real estate investor and, um, you know, we build brand new homes ready to rent or rent it out and handle everything in between.

[52:26] Um, you know, feel free to reach out. We’re happy to help. And I appreciate the opportunity to be here and share with everyone. Yeah. Richard, thank you so much for being a guest on the REI agent. 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.