EP219: Building Wealth One Deal at a Time - Dr. Jordan Romano

Speaker A: Are you like most sales and other professionals who want to grow their wealth faster than what they are currently doing through their company, 401k? Even with that company, match the stock market or just plain saving money? Would you sleep better at night if you had the financial freedom to be job optional in just three to five years through investing in real assets? Maybe you don't want to stop working, but wouldn't it be cool if you could retire a decade earlier than most and do the traveling you and your family have planned for years while you're still young and can enjoy it? Let's face it, most busy professionals don't have the time or desire to take on more work outside of their W2 to grow their wealth. On the Wealth Flow. Each week we share the stories, the investments, and take a deep dive into the various asset classes that can deliver that accelerated growth to your portfolio passively. That's right. No extra work for you. Instead, we'll put your money to work, learn what the 95% aren't talking about, and join the top 5% of earners today on the Wealth Flow.

Speaker B: All right, welcome to the Wealth Flow. My guest today is Dr. Jordan Romano. He is a, uh, he has been trained in Harvard. He has spent 14, uh, years practicing at Mass General and Dartmouth Hitchcock. He also has a passion and always has had a passion for real estate. His mother was a realtor. Uh, he learned to invest in what you know and where you know. His first deal he actually found on Craigslist. And uh, his education was knocking doors and chasing opportunities and learning from the misses as much as the wind. So, Jordan, I am looking forward to jumping, uh, into your story. Thank you so much for being a guest.

Speaker C: Yeah, thanks for having me.

Speaker B: Yeah. I always love to start with everybody's background though. Where did you grow up and what eventually led you to law and then, uh, sounds like, to real estate as well.

Speaker C: Yeah. Um, so I grew up in the suburbs of Philly, uh, with my mother and two older sisters, um, I don't know, quintessential Americana, you know, riding bikes to my buddy's houses, you know, be back by dark type of, type of upbringing. We don't do that too much. You know, Call me when you get to their house on the, on the house phone. Most people don't even know what a house phone is anymore. But, um, it was, it was pretty, you know, it was suburbia. Um, I went, um, to a great public high school. Um, you know, sports, liberal arts, college. Took a year off after, um, after college and was fortunate Enough to. To get into medical school. Um, after that, I matched up in New Hampshire at Dartmouth and spent five years there. And then, uh, have been down in Boston, uh, since 2011. 2012.

Speaker B: Okay, fantastic. And, uh, and. And so what led you eventually to getting into real estate? I know, uh, obviously in the introduction your mother was. Which obviously helps. That helps expose, um, you know, my kids growing up as a real estate broker. So, uh, they had some exposure to, uh, to real estate. Certainly, I can understand that. But, uh, tell me a little bit about how you got into your investing.

Speaker C: Yeah, it's. It's interesting, right, that like, sometimes people gravitate to what their parents do, and sometimes it's like, uh, the. The polar opposite and they go in the complete opposite direction.

Speaker B: Exactly.

Speaker C: You know, there's. There's an investment thesis that's, you know, invest in what you know, uh, and that was around me and, um, I had been. I was a young attending. You know, I was making more money. I still had medical school debt to pay off. I actually just paid it off, I think in the last year to 18 months. So, you know, I took some. I took my time because I was doing better investing elsewhere. But, um, you know, it was invest in what? You know, and at that time I knew that area. My mother actually visited me during my residency in rural New Hampshire. And she was like, oh, it's nice here. I think I'll retire here. And happened to be the housing crisis. And she found a home, uh, and bought a home there for. She was like, oh, the homes are cheap. And the answer is because it was, you know, 2009, um, she retired there. And I'm like, well, I know the market. I know kind of how this market operates. Let me, Let me look into that. And that was. So. It was really following the thesis of investing in what, you know. And there was something honest just because I've always been not necessarily contrarian for contrarian sake, but like. Or just to. I just. Why is everybody doing. You know, a lot of people, even today, they'll. They'll say, well, the S P 500 average, if you. If you just do a diversified portfolio of X, Y and Z, you will do this. And it's. Listen, just because the past has. Has you drive a car looking forward. I think the information from the, you know, people always say the rear view mirror is this big and the. And the. The windshield is. Is this big. You. The information coming at you is probably more important, uh, than what's behind you.

Speaker B: Right.

Speaker C: You can do the platitudes and, and, and sayings all you want. You know, history doesn't repeat, but it rhymes. Okay. Um, but uh, to me, real estate was something real. I didn't. My father was a trader and worked in a bank. And so, okay, I understood stocks and things of that nature, but I wanted to have something real, have some real impact. Um, and that's how I, and by the way, like many things, at least in my life, in my experience in life, I didn't have this grand plan. I just did deal number one. Right.

Speaker B: Yeah.

Speaker C: And then I'm like, oh, that worked. Let's, oh, here's something else. And I had a plan for one deal a year and that escalated quickly. So, you know, I don't. Some people go into it with this giant plan and I would say I just went into it, uh, with curiosity and one deal led to the next.

Speaker B: Yeah, makes sense. Makes sense. How about, uh, so tell me a little bit about that first deal, uh, that you did. What, what uh, were the circumstances around it? And, and uh, you know what, what about it made you decide that you want to do another?

Speaker C: Yeah, the. You know, it's funny, I always get these stories kind of flipped. I'm not sure if it was the first or the second. The, the Craigslist deal was pretty simple. It was. I happened to be looking on Zillow. I don't know why I looked on Craigslist. It's a small town and so people like post, there's like a listserv etc and I saw it and it was a FSBO for sale by owner. And uh, it was, it was interesting. It was a two family, um, which, that's kind of twos and fours are kind of what's in. And single families are kind of what's in this town. There are some other ones, but vast majority of the multifamily is two and four units. Um, and I saw it and I saw the listing and I saw it was self managed and it was a for sale by owner. And I thought, well you know, what's his story? Let me call him up. Uh, and it was self managed under market rents. Um, and what I liked about it was I always liked the sort of value add proposition. I like the under market rents there, but it was almost a double wide lot. So when I looked at the satellite picture or the town, you know, uh, plot maps, if you look across the street, it, this house actually took up the, the property, the building, the structure was to the immediate one side of the lot line. And there was this kind of Gap. And when I went to the town, I found out that, I don't know, 1800s, early 1900s, that other home had burned down and they joined the lots for tax purposes because I guess the same family had owned it and it had exchanged hands through the, you know, next, you know, 100 plus years, uh, as one unit. But I can go back to the town even now, and it's on my list. I just haven't gotten around to it, to, um, subdivide, you know, to separating those once again. So I was essentially getting a free piece of land. So that's why I did that deal.

Speaker B: Okay. Okay, fantastic. And what did you do with that one? Did you rent it out? Is. So is it a long term, like rent and hold or.

Speaker C: Uh, yeah, that. My, my strategy has changed a little bit over time. I think the recent years, I think most people have said, you know, boy, things have gotten kind of curious. Right? Like when I first started a decade ago was, was like Airbnb a thing? No, it was probably just, just coming, uh, you know, just starting that, that sort of phase. Um, my strategy has always been that this is my 401k. So this is, it was a buy and hold. You know, some people would call it, while it worked with interest rates, now they're going the other way. But people call it the Burr method. You know, um, buy, rehab, rent, refinance, repeat, something along those lines. But, uh, that's generally what I did while rates were, were moving in a advantageous way. Um, that has not been. That hasn't been the case. And I'm sure we'll get into kind of what I'm doing now. But yeah, this was, this was straight up buy and hold, stabilized the property, raised the rents just because there were some dislocations in, in how he was structuring his, his rent at the time.

Speaker B: Okay, okay. And is that one that you still have at this point or have you sold that one?

Speaker C: Nope, still on it.

Speaker B: Okay, perfect. That's fantastic. All right, so you got the one. Um, and, uh, and put that in. And now, uh, so from there, what, uh, did you progress to buy another, um, you know, small, multifamily, um, single family? What was the next kind of.

Speaker C: The next was a single. The next deal was a single family. Um, and at end of the year, I like the end of the year deals. I will say the vast majority of my deals I do in the fall to winter, uh, being in New England. People don't want to pay for heat if they're just sitting on an empty home, they've got to pay tax. They got to wait for the spring market to, for things to really pick up. You're heating that, you're heating the house for four to six months plus you're paying tax, plus, you know, there's probably deferred maintenance that is just going to get worse and with the, with the winter. So, um, people tend to let go of their, their properties, um, at least the deals that I've done. So this was a single family home. Uh, it was an estate sale. It was a different time, so it was a lot cheaper. A, uh, very small single family. Um, but it was in an area that was zoned where by right you could do two family. You just had to get the permitting. So it was, I don't know if it's similar in, in the jurisdiction where you are, but this was what we call R2. So in R2 you could make it a two family straight away. Uh, it was a single family. I, the price reduction came from call it high 1/ hundreds to 149. And I, and right then I, I do business. Uh, my, my mentor is my, I would. My mother who helps me a lot in real estate. And I said, I'm going to get this for 100k at the end of the year. And I was kind of joking but sort of manifested it and sure enough, it was still on the market, uh, in, in late fall. And I went to them and I said, listen, I'll make this nice and easy for you. I'm going to inspect it for informational purposes only. Um, some people think that's a gimmick. I actually do it because my, um, my home inspector, you know, will give me a list of like, things you need to do right now, things that can, you can do in five years and things that are coming up. But he catches things. I'm pretty good, but he catches a lot of things. Uh, pay the experts, I would say, because they'll catch things you didn't notice, uh, and things that need to be done right now. But I do it for informational purposes. So I said, Listen, 100k, I'll write you a check. Um, and by the way, that doesn't mean I have the money. A lot of the times, uh, I'm aspirational in my offers. So I don't know if I actually had the 100k in the bank at that time. Uh, but I said $100,000. I will inspect it for informational purposes, but then this will be off your hands. They said, yes, we did the deal. I got the permitting to turn it into two small, one, uh, bed, one bath units. Um, and it's been a great property. Great little property.

Speaker B: Yeah. And that sounds.

Speaker C: And I did. I did end up refinancing, pull out. Pulling out some cash, uh, from that property as well after the renovation.

Speaker B: Fantastic. What. Uh, and. And so I guess just kind of walk us through maybe, uh, a couple different ones, uh, and ending to where you maybe are right now. But you know, I always like to see kind of how people progress. And it sounds like, you know, two fairly similar properties. Um, you know, one of them was an estate sale, one of them you kind of found on. On Craigslist. And um, so would just really, uh, love to hear from, you know, kind of where you went from there.

Speaker C: Yeah, I mean a lot of it is just kind of knowing the area. I'm a big fan of being hyper local. And so there's just kind of one town and maybe the neighboring town or two that the. And these are relatively small towns that I invest in. I, um, think doing anything bigger, it's just you're going to get hometown or like now where I live in South Boston, I think it would be, uh. There are a lot of, um, all the home. The vast majority of the homes that are turning over are. There are a lot of what we call triple deckers. So it's three apartments, maybe first floor, basement or they would call a garden. It has a little patio outback. Um, it's. There's a, A standard kind of price range because there's a lot of volume and a lot of product that's very similar. When you get into these small towns, you know, there's a lot of trees that can be cut down, which means they can build a lot of houses. So it's very, um. Yes, a lot of. There is a typical market for the existing product, but people can build as well. People aren't building as much now. Um, the next deals that I had done there was. So I study the map. So I kind of know what's available, I kind of know what's on the market. And I play the game of like. And I said, you know, I wonder if some of your listeners do this. I would encourage the new folks certainly to do this, which is if you don't have the money to invest or you don't. You only have one one in the chamber to pull. And once you pull it, you're done for like five more years of investing and you want to therefore need to be very cautious. It's almost like doing, uh, you know, the fake trading where you're trading not with real money, just to see how you do to train yourself to be better. So go on Zillow and just be and. And study it, or walk properties and say it's going to sell for this price. I think this is where the price is going to trade and so you can really, really understand the market. So I saw something. This is just before the pandemic come on the market. It turned out it was the largest single family in the town. Um, it was on a small lot, but it was almost like a. Like a boarding home. It had like 18 bedrooms or something like that.

Speaker B: Oh, wow.

Speaker C: And I went to the town and I got permission to turn it into four units. I could have been greedy and made it like six units. Uh, I didn't. Um, it was doing that through Covid that I would say the town was accommodating. The, the contractors were accommodating. It was kind of hard. You had to like, put do people in stages and things like that. I had to sprinkle it. Uh, the regulations in New Hampshire have changed. So now if I would have done it again, I wouldn't have had to have put in the, uh, you know, $50,000 sprinkle. Sprinkler system. So that was an additional cost. That was.

Speaker B: Yeah.

Speaker C: Uh, um, it was all learning and very expensive. Um, you know, from then there was some missed deals, uh, buying somebody's portfolio that I could have done, but it was mostly C minus class. And I didn't have a property manager at the time, and I didn't. Didn't. It was a. It just would have been a lot for me to handle. I would have more than doubled in size in one foul swoop. So I passed on that. Um, in hindsight, would I have liked to have done that? I don't know. I. I tend not to. The other thing, too. I don't know how your listeners live their lives, but I certainly live my life without regret. You. You made decisions. You made choices. There's things you did, you. Things you didn't. I'm. I'm a forward individual. And so that's how you, you know, I can't change it. I. There are decisions I made. Some of them were good, some of them were bad. Some of them were good not because I made the decision, but just because, you know, um, you know, our. Our currency's being debased and, and uh, there's asset inflation and I was buying assets. I. I'm. I'm Not a genius. I'm. You know, I'm. I just happened to. To be, uh, somewhat fortunate. And listen, I will say I did get, uh. I was fortunate during COVID that my portfolio basically rents to the largest employer in town, which is, you know, nurses and training doctors. So during COVID uh, I did not lose any rent. I lost maybe two weeks of rent on one tenant across my entire portfolio. So I was, you know, I got lucky.

Speaker B: Yeah, that's great.

Speaker C: Other interesting deals, you know, I've moved from the kind of value add to, um, kind of land plays, um, buying land, subdividing it. I've done two deals now where I've done that. I'm working on a third. Um, and that's just being curious. So I had driven the town, this piece of land, to this property, one of the largest property, um, owners in the downtown proper. Drives by it every day. He lives, like, a couple blocks away, so, you know, he missed the deal, too. Now maybe he's just thinking in bigger terms than I am. Although he's made me an offer on the subdivided land. Uh, but I drove past it. I don't know. I'm up there at least once a month, a dozen times. And I happened to be in the car with my mother, and we drove by, and. And this was another thing. It was 0.9 of an acre. The house sat to one extreme side of the property line. And I just said it out loud. I said, that's a lot of land. You know, it was an open space. And. And I just said, that's a lot of land. I went back, I looked at the map, and I said to her. I said to my mom, I'm like, with the. All right, all right. It's our. I think it's R3. Um, like, do you think the town would let me subdivide it? She's like, there's one way to find out. I'm like, listen, they're at least gonna let me cut it in half. I'm not. I'm not gonna get greedy. But, like, 0.3 of an acre, everything around it is on point two five. So I've got a. I've got a neighbor. I'm not trying to, you know. And they keep saying they want starter homes. 0.3 of an acre is a great place for a starter home. It's on city water and sewer. So, sure enough, I bought the property again. It was a December deal. Uh, and I went to planning, uh, and zoning with the surveying group who did the surveying. They're Phenomenal. They did a great job with the presentation. The planning board knows them. That's also part, uh, of again, being hyperlocal is when you, you know, like, you hire. And it's not like they were doing anything that was underhanded. It's just there's a comfort level with the quality of the work that was done. I was hiring a group that of surveyors who do the surveying for all the, like, hospitals things and for, you know, for, for pretty much everyone else who presents things in front of the planning and zoning boards. And so they approved it. It actually happened to be on my birthday too. So that was a nice little present. And so now I have this. The. Now I have this point nine that has the existing home on point three and two other point three parcels that are, um, listed and for sale right now. So I've kind of pivoted a little and into like, how can we think differently? Because building's expensive and you know, I, you know, it's harder to buy those two units. Um, you know, that two unit that I bought that first deal was $224,000. It would be double that price today.

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Speaker C: You know, it's, I'm. It depends on what day you catch me on I think my thesis. And we'll look back. I've been listening to too much doom and gloom stuff on YouTube. You, uh, know, are things, are we going to have a, you know, are things going to fall higher, you know, in the market? And then there'll be a correction, but from a higher point, it's hard to know. I tend to subscribe to what Sam Zell says. Like in an interview, he was A legendary, uh, you know, the father of the reit. Um, and if you don't follow him, he's a bit cantankerous and kind of definitely spoke his mind. His, his book was entitled and kind of encapsulates his personality. It was called Am I being too subtle? I think he passed away about a year ago. But he used to say, somebody asked him like, what do you think of the market? And he's like, I don't care about the market. Show me the deal. They're, they're good deals in bad markets and bad deals in good markets. So what, what's the deal? That. I'm not saying it's easy to make good deals in a bad market, but, but deals are still being done. Um, and so, you know, in my, I'm blanking. Oh. So what am I doing? I have a feeling, you know, a lot of people are thinking, oh, uh, rates can't go higher. I think they could go a little higher before they come down. But I'm thinking there's a lot of people that are going to have to transact. And because of that, I, I am building my cash reserves to where they've, ah, higher than they've ever been because I think I'm going to be, uh, purchasing more than I have traditionally in a shorter period of time. Um, and by the way, I am not afraid to transact at high interest rates. I bought a four unit about 18 months ago, uh, and my interest rate is 8.6, uh, 8.625. And I just said, listen, I'm going to hold this thing for 25 or 30 years. If I, if the, if the interest rate is 8.625 for four or five of the years, I'm going to refinance. What once it gets to like low sixes. If we ever hit something that has a digit of five as the first digit, I am definitely pulling the trigger to refinance.

Speaker B: Yeah.

Speaker C: And then I just, the product changes hands so infrequently that, that was my, that's my trigger. It's like if you're going to hold it, if the truly the plan is to hold it for longer and you're doing some value add, you're going to clean up the property, etc. I don't care about the cash flows very nicely. Even at 8.625, it's going to be amazing when I get it down to six or six and a quarter or six and a half. And so, you know, that's, that's what I'm I'm looking at, I'm building cash reserves because I think I'm going to be purchasing, uh, you know, some properties soon. Um, that's my hope at least. And the interest rate honestly doesn't interest me because if you're involved in the, in the process for long enough, um, you should hopefully catch a, you know, something that's a historically lower than where we're, where we've been recently.

Speaker B: Yeah, no, I agree. I mean, if the deal makes sense, uh, at the current interest rate, you know, you might as well do it. I don't get too sensitive on that side of it. I've seen everything when it comes to interest rates. Um, you know, when I first got into real estate as an agent, the, the rates were kind of around the 8% range and that would freak people out. Now, um, you know, and then of course, uh, you know, the, I've got a. One of my, my primary is on a two and a half percent rate. You know, that would be amazing to get again. But I don't know that we're going to, uh, get anywhere close to that. Certainly not, uh, anytime soon. And so, uh, you know, but all of them have had a purpose and um, you know, as long as you're cash flowing on it, I think it makes, makes sense to, to do the deal. And like you said, you can always refinance and put yourself in a better position.

Speaker C: That's an if too, right? Like if the deal has to work with the refinancing, the refinancing is, makes it sweeter. Right. But I like, I'm, I'm making a nice. Right now. I think the other piece too, which is hard. And that's why it's hard. It's very nuanced to give sort of like real estate advice. People like, oh, should I get started now? And I guess the answer is like when they say, oh, are you buying or what are you doing? The tough piece is also like, who am I? Like, what's my age? What's my, like what's my portfolio look like? Because if my portfolio, it's like dollar cost, averaging my cost basis for my real estate. You know, I bought a lot of real estate when two units were, I was paying, you know, well, it's a value add because I got the land too, But I paid 224 for that property. That's worth, you know, 4, 6470, uh, close to 500. So to me, to buy something now I'm averaging it. If I bought something at a higher price today, I'm averaging it with a much lower average than, than if I was just starting out today. And so that's what I would, I would cautious folks. You know, I'm just telling my story of what I've done that I'm, that is certainly not a prescription as to uh, you know, maybe you, you maybe if you're curious, you're listening to some of what I'm saying and saying, oh, that's interesting, let me look into that. But certainly don't take this as a, as a prescription from a doctor of what medicine to take. I'm, I'm complete, I'm a unique individual with uh. And there's a lot of nuance to um, to you know, to investing in real estate for sure.

Speaker B: Yeah. So what does your portfolio look like? Ah, now currently. So you've got some of the original homes. Ah, in fact you've got still that original, the original home. Um, some of them are single families. Some of them it sounds like are um, you know, two unit, three unit, four unit, maybe.

Speaker C: That's right.

Speaker B: What uh, what where and they are they all in the, in the same general area right now?

Speaker C: Yeah, it's, it's pretty wild. Uh, when they say um, it's the legendary trader for, for George Soros, his name is Stan, ah, Druckenmiller used to say, uh, put all your eggs in one basket, just watch the basket carefully. And so I wouldn't say that was my plan again early on is to put everything there. But it does, there are benefits for it. Like when, when somebody's cutting the grass, it's easy to negotiate, uh, and defer some of that, that higher interest, uh, you know, um, inflation on, on some of these services because literally everything's, you know, the vast majority of my properties have a neighboring property that I've also owned and they're all within several blocks of one another. So it's not like you have to drive 10 miles to get to another property. I am very hyper local and invested in. Um, I mean that was sort of my thesis. One, to give back to the town. Two, it's a hospital. It's the largest employer uh, in the state of New Hampshire. Um, aging population, they're not, you know, it cost a certain amount to build. I'm buying below replacement cost. I was doing the 1% rule for a while. Like these properties penciled. Uh, it's hard. It's much harder now. Uh, but you know, when I, when I started, um, it was. The thesis played out very, very nicely. But yes, everything's very close to one another. And it's single families, uh, twos, threes and fours, as you said.

Speaker B: Okay. And is the population in the town, um, is it growing or what is that, what does that look like?

Speaker C: You know, it's a, it's next to a college town, I would say it's transient. People like me, they go there for training. You're there a lot. There are a lot of folks that are there for three to, um, you know, three to six years and then they move on. So there's a decent renter population. Um, and um, is it growing? I, um, think it's been limited, like a lot of small towns limited by uh, the jobs, limited by um, the, the inventory of homes and single family homes. It's definitely growing, but. But I would say slow.

Speaker B: Okay. Okay, now. Fantastic. What are some of the lessons that you've learned? Um, you know, kind of along the way, it's always love to just kind of hear from various, invest, you know, what they learn. Because each one is a little bit of a process and you've done some different things on each one of them. It sounds like, you know, especially kind of subdividing out the land and various things. It's obviously just a different approach, uh, to those things. So we'd love to hear some of your.

Speaker C: Yeah, I would say stay curious. I think being curious is, you know, like when I look at Zillow pictures, I am looking at like, you know, are there dishes in the kitchen? Like, is that driving by the house? Is, are there people actually there? You know, and it's not to be sneaky, but it's um, you know, there are certain people. You could use a poker analogy. And it's like there's some people just play the cards exactly as they have them, and there's some people who play the people. Um, and I don't mean that in a disingenuous or manipulative way. It's just there's a lot of information out there. And so I'm, um, You know, I think my, my lesson is also to be cautious. Like, I don't, um. I enjoy what I'm doing. I'm giving back. And I feel like I'm, I'm in being in service to the, to the town by investing in the town. I don't have to, um. And I think that's the other thing is that, you know, I just backed out of a deal. It was hard to do. Um, there were some ruffled feathers because of it. It doesn't happen very often in These small towns. And by the way, somebody just swooped in with cash and, and took over the deal. Um, but again, the person who did that could write a. Call it a half a million dollar check. And there's only so many people who can do that. And the person who can do that has been in the town for a long time and owns over 100 units, probably closer to 200. And so his, you know, the reason he can pay that price and I couldn't and I had to back out is his cost basis, as I was discussing before, is even lower than mine. So to him coming in there, it keeps his workers, you know, busy. He's, you know, he'll make a little bit of margin, but he doesn't have for him to pencil things. It's different than mine. So not everybody's the same. Not everybody has the same, um, same vision or has the same timeline. Um, I would say be willing to be wrong. Be willing to. To. I had looked at that house that I Talked about before. The 09 of an acre that I subdivided. There's a dozen times I drove past it and I just assumed, if it's on the market, they're smarter people than me. They're passing on it for a reason. But people miss things every day. And by the way, just because you buy something doesn't mean, you know, time will tell if how good of a decision it was. Right? Like, maybe, all right, if you flip it, you'll know sooner. But I think sometimes it's also. What time frame are you judging yourself? Um, you know, in terms of other lessons. You know, I think it's also just to have fun with it. It's. It's not. I think a lot of people put, this is not my primary job. This is my 401k. Um, you know, I, I think that there are, um. Maybe I'm starting to enter in the phase where I could be a little bit less aggressive. Um, but I, I enjoy the. I, you know, I enjoy finding deals that other people, um, seeing things where, where other people don't. Don't see any value.

Speaker B: Yeah. What, uh, maybe for the audience, I think it might be good to kind of, you know, you referred a couple times to, uh, this as being like your 401k. And it's funny, I, I say the same thing. I've talked, uh, several people, uh, you know, given them or help them weigh the option of do I sell a house in order to move up to another one. Um, you know, we're being relocated. Do, uh, you know, I Put a renter in that existing home. And I've, you know, I look at that as similar as a 401k, you know, um, and in the sense that it's, uh, going to be going up, hopefully in value, but also you're going to be paying down. You're going to have somebody else if you've got a renter in there that's paying down the debt. Ah, on it. And ultimately, once that debt's paid down, you know, you've got a store of value sitting there, um, for should you ever need it at some point, um, or just to completely use as the rental, uh, income once, uh, it's paid off. So would love to hear how and why you refer to it as a 401k.

Speaker C: Well, I. Mainly because I'm not contributing to a 401k.

Speaker B: All right.

Speaker C: That's the, that's the main reason to. Most people, like, they're just, you know, like, shocked. Like you do. What. Um, you know, there are a lot of. I don't recommend doing what I'm doing for. For most folks, there's a lot. There's so many unknowns in life. The one known thing is we're all headed to the same place. We're all going to die. Uh, and I don't mean to be terribly morose or even flippant and just be like, yeah, yeah, yeah. But the, the tricky part that I, What I like about the real estate is I have a certain amount of control. Now. Some people will point out that you never really own the real estate. The town could change some sort of rule. The, uh, the state has a perpetual lean on your property called property taxes. So there is. If you stop paying your property taxes, they can seize your property. Uh, you know, so, you know that there's some, like, dark nuance there. But, um, and as we're learning, by the way, it's not all. It's all not roses and, and, and, you know, champagne. What The. The taxes have been going up. That is real. Right. The cost to the fuel costs, the, you know, the landscaper cost, the labor costs, the, uh, and, and, and the debt. Right. Like, I had some debt reset and I was just like, o. Like that 2.75 was nice for five years and now I'm at six. Like, oh, what do I do? Um, how do. And so what I would say is, um, I like the 1031 game. I've done it once. It was. I honestly, I felt uncomfortable. I'm like, wow. The, the rules are definitely written for. There are Rules to like. And it's. They're there for everybody. I. Not. Unfortunately, not everybody gets to participate in it. But this is where I would say those rules can.

Speaker B: Are.

Speaker C: Can be very powerful. I bought my. One of the first deals, I can't remember, honestly, if it was my first deal or not, was a condo. So as I was mentioning before, it was a townhome. Um, there's a business school in. At Dartmouth. Um, the parents bought it for their daughter. The daughter wanted to live, like, literally walking distance to downtown because they do a lot of, like, boozy networking. Didn't want to have to drive even the 10 minutes to this place. So it's that vacant, uh, they bought it for. Call it, I don't know, 200. Most of them. There's like 40 in this. In this cul. Uh, de sac neighborhood. And at the time, I, um, just said, listen, it's going to sit here through the winter. It'll probably be fine. You'll sell it in the spring. Or you could. It's six of one, half a dozen of another. Just sell it to me now. I think I paid 186. Um, and I rented it out immediately to a resident who was there for four years. They were. It was fantastic. I was getting like, I don't know, 2200 in rent. And I was making, after all, everything, call it 8%. I got a call from my mom one day. I didn't even pay attention to it. It was kind of. That one had an HOA plowing. All that stuff was taken care of. Um, I got a call one day, and my mother was like, have you seen Stony Brook? I think it's Stony Brook. Stony Creek, One of those. I said, no. She was like, one. Just trade. Look at what they're trading at. I looked at. She was like. I was like, okay, I'll look it up. She's like, now? And I was like, okay. They were trading at like 340. And I'm like, when the heck did that happen? I just m. Honestly, they ramped up very quickly. Um, and I just said, oh, that's interesting. And I just, by my nature, I chat up a lot of people in the town. I knew one of the. The older kind of portfolio owners who was slowly offloading some of his portfolio. And he had a three unit. And I called him up. I said, when are you trading Green Street? And he said, I'll do it whenever you're ready. I was like, what's your number? Uh, and he told me a number back and forth over email Two emails. And I'm like, okay, I guess I'm doing a 1031. Uh, I mean, and. And it was even. Even better. I didn't even put the townhouse. Townhouse on the market. I called a real estate agent who I know. I said, hey, is Stoney, you know, is Stony Creek really worth 340? I think it was three 20s. Uh, is it really worth 320? And she said, are you kidding? You're gonna sell? And I was like, I don't know. Do you have a buyer? And she said, yes. And I'm like, uh, that I always think is a gimmick. Right? Uh, and I even called her out. I was like, all right, that's B.S. you don't actually have a buyer. She's like, no, no, no. I have a doctor who missed out on the last one. Can I show it tomorrow? And then I'm like, oh, this is real. So I, you know, text the tenant, hey, somebody's coming through. And he was like, she goes, okay, he'll take it for 300. And. And I jokingly said, uh, not joking. I was actually kind of serious. Uh, I said, listen, does. Does your doctor buddy want to miss out on yet another one? I haven't put it on the market. He's first in line. What did the last one trade at? And this, by the way, was an end unit. So it. You know, there were some things that it didn't have, the granite countertops, but it was an end unit. It was. It had some other nicer things about it. And she was like, let me talk to him. She's like, okay, 325. So I sold. I sold it in. In about two or three emails in about a day and a half. And I had a 1031 secured in a couple emails. And it doesn't always go that way, but that's the benefit of having, you know, these networks and a little bit of luck on your side. And so that 1031, I literally went like Monopoly. I took a townhouse that I paid 186, and I rolled it into a three unit that I paid, you know, call it just shy of 400. So, I mean, it was, uh. I didn't have to put any money into it. I, in fact, pulled money out of the. The three unit. You have to wait some time. But I, you know, in the subsequent year, I pulled out some money. I. It was. It was a great deal. And so, you know, when you're talking about. Your original question was on, like, the 401k thing, I mean, some of it, too. Here's a side story. Uh, an aunt of mine was a wealth manager. I went to visit her once in Geneva. She was abroad. And my buddy and I, we just graduated college. We're out, I don't know, having drinks with her, out at lunch. And we both stopped at one point. We're like, you're like, sipping wine and, like, you know, eating charcuterie, like, why aren't you working? And she's like, you do realize you make. I move my clients money like, once or twice a year. You know, yes, I'm studying and learning, but, like, and I speak to clients, but, like, moving a lot is not necessarily their transaction costs. Right. So for sure. And that was, uh, an unlock for me years later, where it's like a lot of real estate. There are people who, who transact. It's a, you know, we call them flippers or like, you know, whatever. You're trying to do something quick. A lot of what we're doing, a lot. And I think a good portion of people who find success have bought and not done an arn thing. They just, you know, I, you know, and then you could argue, did you not raise your rates aggressively? Well, yeah, but they've also had zero days of missed rent because they've had the same tenant for 10 years. So, you know, I think patience, curiosity, um, you get attached to properties. I wasn't that attached to the townhouse. I didn't want to. I'm like, am I making a mistake? But treating it as a 401k, it, um, I don't know if I'd want to be starting right now doing that. But it is possible.

Speaker B: Yeah, no, it's, that was a lot.

Speaker C: I just hit you with like 20 different stories right there.

Speaker B: Well, no, and, but there was a lot, there was a lot within there. Um, and I think, you know, I think ultimately, right. Uh, it is. Everybody has kind of their own race when it comes to this stuff. And, um, you're going to see some things like it, you know, I, I, the, like, you mentioned the, um, uh, the 1031. Uh, sometimes it'll work, especially when you've got another property that you've been able to identify. Um, sometimes you want to apply that, but, you know, you're kind of under the, under the gun to try to find and identify the next property. And it's not always, you know, it's almost like pressure to, to do a deal that maybe you wouldn't have done otherwise just because of the tax benefit. And I think you Know, sometimes you can get in a little bit of trouble with that. But it sounds like on yours it worked out well, you had it even before you put the other house on the market. So. Or the townhome. So.

Speaker C: Well, that's, you know, um, somebody asked me recently, like, what's a good lesson you got? And, and from whom? My grandfather had a, had a lesson and it's um. I think he was applying it more to. He had to leave the country that he was in, in, in a very short period of time. And so he would always tell us no, always know where the exit is. But that can be applied to, to. I've applied it to many facets of my life, including in real estate. And I think that's part of, you know, while I will say, um, yeah, set it and forget it. Essentially, like you can buy something and we all intend to hold something for 20 years. But that's why I continue to study the town. Because if I need to move one of my pieces, you know, if, if I know where the market is, I know what I would move. I know about what I would try to create with a 1031 or what I, I just have those sort of. Not to catastrophize life, but, uh, if opportunities come up, you know, what sort of I, ah, kind of role play. Now I don't, I don't, I don't want to invest too much time in catastrophizing and having, you know, safety plans for safety plans. But I think a lot of folks, um, you know, they just don't, they don't think about that. Like, okay, it's great. For instance, I sub subdivided this land. Well, Jordan, what if you don't get the number you want? How long are you going to sit on it? What are you going to do with it? You know, like I did the easy part. Easy part I got right. I convinced the town to say, yeah, you can subdivide it. Now I'm going to sell it. Well, what if now is not the great, the best market? Well, how long do I sit on it? And then you start doing like, calculations of like carrying costs and things of that nature. Well, what if I sell it and I could buy something else? Okay, what would I buy? And that's a fun game to play, but I think a lot of folks, um, you know, you, you want to have the plan. You want to be chance. What? It's Louis Pastor. Is it? Louis Pastor. Chance favors the prepared mind. You know, just be prepared, stay curious so that when you get. Although, right Mike Tyson also says, I'm hitting you with all the. The sayings today. Uh, Mike Tyson would say, everybody's got a plan until they get punched in the face. Right. So.

Speaker B: Right.

Speaker C: You know, you can have these plans. You get punched in the face. Uh, you know.

Speaker B: Yeah, exactly. No, that's good. That's good. Well, no, and I think you've got to have an exit plan. I mean, I think, you know, ultimately that's one. One. Uh, I wouldn't say it's a problem with real estate, but sometimes, you know, uh, while it can be a great store of value, it's not. It's not super liquid. Right. So, um, you know, being able to. And having somebody that you can sell it to at the end, or at least having a plan, it may take a little bit of time. It may not happen overnight, but, you know, knowing that you can, in fact, get the money out at some point, um, is helpful.

Speaker C: So I'm a big fan of, like, money is useless until it's used. I. I tend to be a little bit more aggressive than most individuals. But I would say. I'm not saying my properties are very lean. I have. I have a nice balance. There are some that are like 80%, 70%. I have. I have one property that is owned, uh, all in cash, like it is. It's owned outright. I use that and take a line against that one. You know, I have. I have, uh, different strategies, I think, as I get older, you know, based on what I've read, um, I don't want to hand problems to, you know, my family when I pass someday. But I think as I get older, I think that this. The. The term is shearing the sheep. I'm gonna. I probably will just leverage the heck out of them and then, uh, you know, and. And use the money. I, uh, don't think now's a good time to do that. And bank debt's expensive. Taking. Leveraging the properties more right now I think would be imprudent.

Speaker B: Yeah.

Speaker C: And so I kind of like the structure that I have.

Speaker B: Yeah. Yeah. No, Jordan, this has been good. Um, I've enjoyed hearing about your story. Um, I've got a, uh. First, how can people find out more about you? How can they connect with you, um, if they'd like to, uh, to understand in here a little bit more as to what you're doing?

Speaker C: Sure. Um, well, I'm a physician, but I also do medical expert witness work. That's another little side, um, endeavor that I have, uh, that's called medical expertwitness.com. um, and so if you're a physician or otherwise and want to get access to me, there's kind of a book time to, to chat with Jordan. I speak with people all over the country, um, and I enjoy chatting about all things, um, you know, medicine related, expert witness related or real estate. So medical expertwitness.com, uh, you'll see a picture of my beautiful face and you can book some time there to chat with me if you want.

Speaker B: Perfect, Perfect. Thank you so much. Um, how. Got a couple other questions for you that I ask every guest. One would just be any advice you would give somebody who's maybe just starting out in their journey.

Speaker C: Yeah, I, I've used the word a lot. But be curious. Ah, and be, um, and be willing to have an opinion. Be willing to have a contrary opinion. I think when everybody's moving in one direction, it's, it's. And, and if you're like, yeah, but what about this? Why is that again going back to that one property on, on the acre? Why is nobody buying this property? Like, what is wrong with it? What am I missing? What, like what, why did they not purchase this property? Um, and then have a longer time horizon? I think a lot of people have a very short time horizon. You know, we scroll on our phones a lot. You, you need to build a muscle that's more, um, you know, a, just a marathon runner, not, not, not a sprint. It is, you know, real estate typically based on transaction cost, at least the way it still stands is that it punishes individuals or it does not. It is not in. Individuals are not incentivized to trade real estate very quickly. And so therefore, um, when you're starting out, I suspect unless you're raising money, you're, you have to be very, ah, selective with the deal that you do. Um, I was just advising somebody the other day and he was going to house hack, he was going to buy a duplex and live in one. And I just said, you know, I think the saying is it's not the marriage, it's the divorce. You know, like you can buy it. Yeah, it's listed on Zillow for 750.

Speaker B: Yeah.

Speaker C: But it's been listed for a year and a half. You're in three years, you could be that person waiting a year and a half to sell that. And so there, there are all sorts of, uh, it's not the buying. It's like, what are you going to do it once you own it? And then what, what's your plan and what's your Optionality. And so that's the advice I would give is I like optionality. Oh, I could add a third unit. Oh, I could expand this. Oh, see this barn? I could rent that out. Oh, they've got a third floor that they're not renting out or they're getting subpar rent. I could finish the basement. You know, I like the having optionality, especially in times where things are uncertain, um, because you need to. And it's not about squeezing your tenants. It's about getting the most out of, uh, out of the property, uh, that you're purchasing. And, and, and by the way, there is certainly nothing wrong with just studying and waiting. Um, you know, a, A buddy of mine said to me the other day with this deal that I backed out of. He was like, jordan, do you really need to do an 8% deal? And I just looked at him and I was. And he was like, how much are you going to make on that subdivision deal? And I was like, you know, we started, we started having that real conversation, and I'm like, oh, I'm doing like, sunk cost. I'm in this deal because I've invested in this deal. I lost money evaluating the deal, inspecting the deal, attorney costs. I left money on the table, meaning, uh, like I, you know, earnest money that I just to walk away. Um, I think for me, I made the right call. I don't think I needed to do. I'm in a position where doing an 8% deal did not, at best, an 8% deal did not make that much sense to me. So I think the problem is sometimes when you're new, you want in the. Get in the game so bad that you just want to play. The difficulty is if you're new and you're not raising money, you don't have a lot of capital, you've got like one shot. So you, uh, got. You got to be very, I would say just be very patient and very cautious. And when you do a deal, it just should be super obvious to you when you're starting out. It should, it just should be like, yeah, there is. I'm doing this deal in my sleep. I don't think you need starting out. You want to build. It's building a house. You want a firm foundation. Don't do a marginal deal. Don't do a 6% deal. Don't do a, uh, you know, do something that pencils and, and, and. But it pencils very strongly with lots of margin for error.

Speaker B: No, uh, that makes sense. I think that's great advice. How about a Book recommendation doesn't have to be real estate related. Certainly can be just something you've read that's been impactful.

Speaker C: Yeah. Um, I'll give you a couple. They're all a little different. I mentioned. Am I being too subtle? That's the Sam Zell book. It probably isn't everybody's cup of tea. Um, and a lot of these people, it's. It's kind of neat because you can kind of see them on YouTube kind of chatting about the book. Sam, uh, Zell, Z E L L, Um, I like. He's kind of a tech philosopher. His name's Naval Ravikant. So it. It's, uh, called the. The Almanac of Naval Ravikant. He kind of has some like, life, tech, philosophical, what is success? Type of, um, you know, what is the meaning of life? But it's. But I think it's. It's approachable, digestible, and, um, something I like keeping on my nightstand. Um, the third one is, um, I'm. I think I'm getting her name wrong. It's a red book. It's by. She and her brother were both, uh, professional poker players. Her name's, I think, Annie Dukes or Ann Dukes. I think it's Annie Dukes. And it's. I think it's, um, called Thinking in Bets. Um, it is a bit. I am not very good at math, but it, to me, I flip. I. I'm a. When I read books, I kind of flip through. It was just sort of interesting. It's, it, you know, using poker philosophy to view investment theses. Uh, so not directly related to real estate, but to me it's. How do you view risk and options and uh, and betting, uh, and how she viewed it as a poker player. And to me, um, I thought that that was interesting. It sits. I have a stack of books by my bedside. That's one of the ones that I think is not often cited by other individuals that I think is. Is unique.

Speaker B: Yeah, yeah. The other two we've had recommended, uh, on here, uh, for sure, but I, uh, have not heard that one, so I'll pick that one up for myself. Jordan, I appreciate it. Thank you so much for being a guest on the Wealth Flow and I think we'll call it a show.

Speaker C: Fantastic. Thanks for having me.

Speaker B: All right, if you're still here, I assume that you found value in today's show and with the guests we interviewed. Please take a minute to subscribe and to review the show. It really helps. Also wanted to remind you to check out Bobo Capital Ventures to get the first look at our three new cutting edge first to the market investment opportunities. We have only about 15 spots for each fund for retail investors and we would love more than anything else to have our audience be part of that group of limited partner investors. Thanks for listening to the wealth flow and have a great day.

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