Ep 188 – Replacing W2 Income in 18 Months Investing in RTR New Builds

Leaving the “rat race” is something everyone dreams of. But sometimes it’s foisted on you and you have a decision to make. Bernard was impacted significantly by the Covid guidelines and ended up in a position where he could go all in on real estate investing to offset the income he lost. 

After deciding on turnkey as the way to go, and new construction specifically, Bernard started acquiring properties as quickly as he could in growing areas that have allowed him to replace his W2 income in only 18 months. 

Adam Schroeder and Zach Lemaster talk with him about how he’s been able to do it, what’s next for him, and why he chose real estate out of all the paths he could have taken.

Website:

Rent to Retirement Active Inventory

Transcript:

Adam

Hey, Rent To Retires, it’s Adam Schroeder here with another episode. Joined as usual by Zach Lemaster, the founder and CEO of Rent to Retirement. And we are talking to one of our investors, Bernard, today. We want to hear a little bit about his journey. We want to hear about, uh, how it can be replicated. So, Bernard, thanks for joining us.

Barnard

Thank you for having me. Appreciate it.

Adam

Absolutely. It’s fantastic to have you on here. So tell us, are you one of the people who, uh, got a thousand doors in six months?

Barnard

I would like to say yes, but no. No, not that fast. <laugh>, it’s, it may happen, I tell you that much, but no, within, uh, I would say within about a year, year and a half. We’ve got six so far.

Adam

Okay. So tell us a little bit about kind of your, your backstory. What got you thinking at all about real estate and what was your first endeavor into the space?

Barnard

Well, I was always interested in real estate. I was an, an agent in the past life. Um, always had it inside of me that the desire to have it. Um, my family, um, has always had an investment property for a long time. Um, but over the years, you know, nobody really wanted to do much with it. Um, so it, it got a little bit, um, I would say aged <laugh>. So everyone’s working, no one’s really taking care of it, but it, it produced some rental income and it, and it ran itself. Um, so what happened to me was I was a casualty of the, uh, the vaccine mandates. Um, I have nothing against anyone that, you know, wants to make their own decisions, but that’s what it is, you know, live and let live. So that came into my life. So because of my deep convictions religiously and, and for that matter, um, just liberty and freedom, I, I was, I had to leave my, my work.

Barnard

I, I had a great career. I’m not gonna get too into what it was, but it involved being outside, outdoors, a lot of labor. It was a labor, but it was a labor of love. I enjoyed it, but that was taken away from me. So not wanting to deal with that ever again. I decided what can I do on my own? So, thinking about it, I knew real estate would be a good path. We do have this property that I can do something with, so I decided to jump right in. So wanted to rehab the entire property, raise the rents, do what I had to do. So I started doing that. Um, started renovating one apartment, but then realized quickly, it’s not a landlord friendly ar uh, area. It’s very tenant friendly. Taxes are super high. Expenses are super high. So I said, what should we do?

Barnard

Maybe we should go outta state. So that’s where I started to click and go online and look for what my options would be. And I came across rent to retirement. So that’s what set everything in motion. So basically I was forced into this situation. I never wanted to have to deal with that again. I wanted to do something for myself. I wanted to work for myself. So rent through retirement seemed like a good way to go. So I reached out, I think I spoke to Ben initially and got into the Cape Coral situation. Um, I was always interested in new construction, things like that. So I said, maybe that’s what we should do. So we started with a lot in Cape Coral, and currently we’re going through that whole process back to the building itself. Um, let me backtrack a little bit. So, like I said, I wanted to renovate it and I wanted to, to improve it and rent it at market rates.

Barnard

But again, too many factors were telling me not to do that. So while I was doing the Cape Coral situation with rent through retirement, I came across the 1031 process. So I said, besides doing a couple of properties, my wife and I on our own, why don’t we, 1031 this property into multiple properties. So that’s where Zach came in to help out. I, I reached out to Zach and we hit it off immediately as a total gentleman, and he never pressured me into anything, but he outlined what we can do. You know, you can go this route, this route, this route. So we decided to 1031 into, uh, into four properties in Florida. Uh, we closed on the last one fairly recently. They’re all up and running, all rented. So the 1031 situation is now, like I said, it’s going really well. We have a Cape Coral built that’s still, um, still in process. Um, we’re gonna be closing on an AAHA property soon, and we’re just gonna keep going forward like that. So a little mix, little old school, 1031 and some, some new stuff with our, with our own situation.

Adam

Nice. And you get to not worry about tenant laws as much, ’cause Florida is probably a lot friendlier than where it sounds like you’re, uh, you’re dealing with or you were dealing with.

Barnard

That’s where I wanted to be. I wanted to be in the southeast, so Florida was choice number one. And Zach and I had multiple conversations about the different areas, the aspects and, and all that. So I, I was convinced from the start that that’s where we should start.

Barnard

Yeah, I think Adam, uh, recently, um, showcased, uh, some, some statistics about Florida being the state that is the quickest eviction, like one of the quickest eviction states, but then the slowest foreclosure state. So from a, from a landowner, uh, or a property owner and and landlord perspective, it’s pretty favorable, uh, in terms of the, the legislation. But that’s excellent. Bernard, you, you’ve had quite the journey. I mean, I’ve always been really impressed, as I’ve told you directly about the simple fact that, you know, you’re one of these people that sets their mind to something, and then you do it and, and you figure it out. You know, you don’t expect to have all the answers upfront, but you’re, you’re going to take action and go out and, and find those answers, right. And actually take action on it. And you learn, you learn by doing.

Zach

Um, and then you bounce those ideas off of us, and we have those, those conversations about, you know, different strategies and maybe just running through the numbers of certain things, but then you take action. So I, I commend you on that. And I mean, that’s, that’s the type of people I love to work with directly, because you’re, you’re doing it right, um, which is great. But let’s, let’s back up a little bit just on like, why, why real estate? I think this is, I mean, this, you went through a, a tough scenario, a tough personal and professional choice that you had to make, um, based on your convictions, and that were unfortunately like, kind of forced into a situation and you, you chose yourself, right? And I think that will be ultimately, like, that may seem like a, a tough challenge at the time, but now you’re on this trajectory where like you are, uh, in control of driving your own ship, right? And a master of your own destiny where you can create the, the outcome. And, um, that is such, I would hope that it’s somewhat liberating too. Um, now that you’re kind of working through this, would you agree? Or

Barnard

E extremely liberating. Um, you know, at first it was, when it first happened, it was like, you know, it was like a, a punch to the stomach, what am I gonna do? Um, but now, now it’s completely opposite. Now I feel empowered. I feel like I’m in control of my own destiny, my wife’s destiny, my mother’s destiny. You know, we can, we can do this, and I’m in control of that. I don’t have to worry about, you know, working for someone else where that pendulum is always over your head. What’s gonna happen, you know, at any moment it could be taken away from you. And that’s something I, I want to get across to whoever’s listening. Also, there’s nothing wrong with a nine to five. It’s great, but you should always have a backup plan, um, because again, that could be taken away from you.

Barnard

It could be, could be health issues, could be family issues, could be a mandate, you know, it could be anything. So that’s something I want to stress and get across to people is, you know, you have to take charge of your own life. So again, at first it was scary. It was, I even had analysis paralysis, like you guys like to talk about. There was so much information, because that’s what I, that’s another thing I wanted to learn as much as I could, but I got too much information. So at the step back a little bit, and, and again, speaking through you, uh, with you, it helped a lot to calm me down and, you know, focus on a couple of things instead of focusing on 10 things. But again, the main point is of course, for everyone who’s got a, a nine to five and, and, and situations like that, have a backup plan because you don’t know what could happen.

Zach

Yeah. And, uh, I’m glad that you pointed out like even even health aspects, right? Like we just, we don’t know what the future holds, but I, I, I would think that most people like listening to our podcast are trying to invest in real estate and do some of the things they’re trying to take control of their own financial situation. Over this past 12 months, I’ve had two friends of mine that have both passed away, um, due to cardiac arrest for, for both of ’em. And they’re, they’re, yeah, they’re, they’re younger guys. I mean, and they had young families. Yeah, both of ’em have young children. And it’s like, and you just, you don’t know. So the things that you think are secure may not be secure. Um, you know, and it’s just, it’s really unfortunate to see. So that’s something that was a wake up call to me too, to just be like, man, and one, take a step back and enjoy, you know, I’m working so hard to create like this lifestyle for my family, so enjoy it, but also be in a position where like, you know, I’m in control of financial situations and the outcome of where things are are gonna be headed.

Zach

But, um, yeah, I think I wanted to get deep on that, just real quick with you, Bernard, because I think there’s a lot of people that are in different situations. It’s not always, um, people hate their job or they wanna leave their job, or, you know, there’s many people that are, will always work. We, I think all of us with this entrepreneurial mindset, we will always be working, right? Retirement is not sitting on a beach drinking mi ties. It’s exactly, it’s being engaged and active in the things that you care about and being a little bit in control of your destiny. So I’m, I’m glad that we went into that. Thank you for that.

Barnard

Yeah. The, the, the money, I’m sorry, the mo I just wanted to say the, the money may be the reward, it may be the goal, but it really isn’t. It’s, it’s the freedom. It’s the, it’s the lifestyle of being able to, like I said, control what happens to you. You know, you may, you may, may not become a billionaire, but that, that idea that you can do what you want when you want, and if you wanted to go buy something, yeah, you could buy it. You know, it’s just, it’s nice to have that sense of security and, and ability to do it on your own.

Adam

Yeah, I was gonna say, let your real estate buy you that ma ty.

Barnard

Exactly. <laugh>.

Zach

Well, let’s, uh, let’s talk, let’s talk some real estate, Bernard, because you’ve been just going, man, you’ve been doing some great things. So the Cape Coral project you’re talking about, that’s ground up construction, that’s kind of a unique, um, one I believe you got, um, well, I’ll let you tell me. But that’s, that’s ground up construction. So you’re actually participating in the build and then that you went through a 10 31 exchange, which you sold off this building and put into, um, a multiple of their construction projects in a few different locations. Um, all new construction, all Florida, that are now completed and leased. So, um, at this point, you’ve successfully, fully completed the 10 31. Is that accurate?

Barnard

Yeah. Um, obviously you gotta go through the, on the tax period next year when you file, but as of now, everything’s done. Um, I, I handled it perfectly. I, I happen to use, uh, Dave Foster who’s connected with you guys, so I should say he and his team handled it perfectly. But on my end, I did everything that I needed to do. Um, they were very, very helpful in that. So yeah. So that 10 31 situation is taken care of, and now we’re just moving forward with, with other projects, trying to, trying to scale as as much as we can.

Zach

Can you walk us through a little bit of your mindset of like, why you, because we work in the Midwest, we have some renovated properties, we have some multi-family, and, and I know you kinda looked at all this stuff because we talked about it, but, uh, for the audience purposes, I mean, what was the mindset or the decision on, hey, you want new construction? Um, and then I wanna talk about the 10 31 and kind of like the logistical steps of that, but why, why new construction to begin with?

Barnard

Well, new construction, going back to the first step would be turnkey. Um, I wanted to be, you know, again, I had all this knowledge and stuff, but, and I’m, and I was kept learning, but I, I wanted to do something there. I could simplify it off the bat, build some confidence, and then eventually start to do things on my own. So, so turnkey led to, through R T R led to, um, new construction. So why new construction? Um, you hear all these horror stories of, you know, buying a 10 year old property, 15, 20 year old plus and CapEx constantly, some something’s breaking. There’s always something wrong. So why let me eliminate that. Let me do something that’s brand new. It’s gonna be handled by the builder. You have your warranties, you have all, all your mechanicals are new, they’re gonna last a while. So it took away a lot of of worry, um, and of course should increase cash flow because of the CapEx situation.

Barnard

Um, so yeah, and I just, I just like the whole idea also of, of being somewhere from the beginning and building ground up and the builder sends you pictures and you get to see each stage. It’s just, it’s just something really nice about it besides the financial reward, because you also have equity built in if it’s done correctly. ’cause you’re getting it at a pretty good price point. And as soon as it’s available, you already have equity built in that if you wanted to, you could sell it right away. You, you have multiple, um, exit strategies if you want, or you can just keep it as a rental and, and collect your cash flow. Um, so that’s, that’s the main reason.

Zach

Yeah. Yeah. Go ahead, Adam.

Adam

I was gonna say, I, I am, I’m with you ev all of my purchases now are, are new construction, just because, not only for the reasons you said, but also the quality of tenant you get, um, is, you know, just usually better than what you’re getting with the, the rehabs. I mean, I still love my rehabs, don’t get me wrong. They give me cash flow that my new constructions tend to not. But, uh, I, I’m a big proponent of having those in your, uh, in your portfolio. I a hundred percent agree with you on that.

Zach

Each, each, uh, investor is different, you know, and in different financial positions and things like this. And yeah, I think like the, the, if we had to just quickly bullet point, the pros and cons of new construction, at least in my mind, is that generally speaking, newer construction properties are more expensive. So it requires more money down to acquire more deals that may not be accessible to, to everyone. Um, you know, and there’s, there’s a little bit more variability, especially if you’re doing ground up construction. There’s a, there’s a lot that goes into that, that’s like in the, in the spec building space. But even just buying a already built new construction versus turnkey, usually more expensive, requires a little bit more capital. Um, usually lower cash flow numbers year one just because of where the rent to price ratio are. However, long-term less maintenance, certainly I think better rental increases year after year.

Zach

So maybe year one is less cashflow, but year 2, 3, 4 should be a little bit better. Um, and then also you have better appreciation over time, better tenant quality, things like this. I think long-term new construction and higher price homes will outperform. Um, but it depends on what your holding period is too. So you know that we have a lot of people that do well in the Midwest with turnkey properties that hold ’em for three to five years and then go through in 10 31, exchange those just as you did at 10 31 and trade it up. So, um, to each their own. But I, I think that’s, that’s part of that investment journey, is learning what is the right, um, asset class for you based on your goal resources, your timeline, um, your, your purchasing, uh, criteria. So it, it is cool to see you determine what that is and then take action on it, move forward. Let’s talk about the 10 31 exchange for someone that’s never gone through a 10 31 exchange. Um, Bernard, let’s talk about kind of exactly how it played out for you. Like what is a 10 31 and, and kind of what are the steps that you need you needed to follow? You don’t have to get super granular, just kind of big, big picture.

Barnard

Well, uh, basically, um, you have a property that you’ve held for a certain amount of time, uh, for investment purposes, can’t be your primary. Um, and you want to do what’s called a like kind exchange. You’re going to trade basically, um, an investment property for another investment property or multiple investment properties. So you avoid paying the, uh, the capital gains tax. You defer it, you keep moving it forward. So you can do this multiple times throughout your lifetime. You can, you can continue this, you know, for your children just going forward. So, so basically, once you sell your original property, you have a 45 day identification period. Um, so you have to identify, you could have multiple properties, but you at least have to identify the property that you want to purchase or properties, and you must be in contract, um, in the 45 days. Then you have starting at that initial also, when the 45 day clock starts, you have 180 day clock, and you have until that point to close on all these properties. So 45 days you must identify, and 180 days you must be closed. And then the 10 31 is basically complete.

Zach

And the whole purpose of doing this is to avoid paying capital gains, right? Like you buy a property at that’s worth $200,000 when you buy it, and then, you know, a decade later it’s worth 500,000 or whatever the case is. You have $300,000 of equity that, hey, if you would’ve sold that property, you would’ve been taxed heavily on that. But instead, and if you’ve listened to me at all, uh, I will always hit the, you know, the tax advantages of real estate investing. I mean, real truly though, this is how people build wealth, right? If you can avoid paying not only in your active income, but in your investments, if you can avoid, avoid the paying taxes, that is a significant amount of money that you can reinvest and now have an earn income on, and then additional tax benefits. It’s this repeated cycle snowball effect.

Barnard

It’s one of the things a lot of people forget too, is the tax aspect aspect of real estate versus every other investment vehicle that you could do. Like, even even I from the beginning didn’t, didn’t realize the whole thing. I mean, the 10 31 I understood, but every other aspect that you’ve tried to drill into my, into my brains act and, and my wife as well, is all the other tax benefits of real estate. And that’s what a lot of people don’t realize. And like you said, that’s where the wealth comes in.

Adam

Yeah. And I also want to point out to people who are listening to Zach’s example and have heard Bernard’s story. I mean, I don’t know where you’re living, but if you’re living somewhere with the tenant laws as they sound like they are, I mean, that $300,000 of equity probably would’ve been taxed in the 40 to 50% range. Yep. I mean, it wouldn’t be pretty, and I mean, that’s easily,

Barnard

We’re in the northeast, so yeah. Nothing is friendly for a landlord

Adam

<laugh>. So, you know, if you look at that in terms of properties, that’s easily 2, 3, 4 properties you could add to your portfolio just on the amount that would’ve been taxed, not even necessarily thinking about the full amount.

Barnard

Right.

Zach

And that’s just trading up again and again, right? You 10 31. And then as, as you mentioned, the goal next time is 10 31. I mean, and you keep trading up. How you build wealth in real estate is you just reinvest, you know, your equity. Uh, yes, cashflow is important and you can live off of your cashflow. You can reinvest it, but just trading up as you grow equity and taking full advantage of the, of the tax benefits in real estate. That’s how people build wealth in like dramatic wealth in, in, in real estate. Uh, and, and it’s cool to see you doing it like live Bernard, this is a sole reason, um, talking with you. Like I was ex excited to have you on, so we, we appreciate you coming on to, to be a guest. So we can pick your brain and quiz you a little bit. Um, but this is like, what’s rewarding for me is to see people who take, uh, my recommendations and our team’s recommendations, investing, you know, along with everything else they’re learning and they actually apply it, and then they’re, and it’s not all easy. Like we’re gonna talk about the obstacles. It’s, it takes work, but I mean, the dividends for the amount of work you’re putting in versus the output you get, there’s nothing else that compares

Barnard

And well, that, and that’s, that that’ll bring me back to the whole turnkey aspect and, and rent through retirement, um, to get into this game. I mean, like I say, like you say, like we all say it is complicated. There’s a lot of roadblocks. But again, I’ll repeat, I wanted to start off with the turnkey aspect. ’cause it’s a, it’s such a learning experience, even though it’s, you know, turnkey, there’s still a lot involved. You have, you have things to do, and as you’re doing them, you learn. It’s like when I closed on the first property, I was like, oh my God, I gotta pick property management, I gotta get insurance, I gotta do all this. And then after that, like the second, third, the fourth, it’s no big deal. Like, you build these relationships, it becomes so easy to do, but you just gotta, gotta make that initial jump, and then it becomes so much easier. But that’s with anything in life, correct? Like, he’s just have to jump.

Zach

So not to be too self-serving here, but, um, you know, if you had a few key points where you’re like, Hey, rent to retirement really helped me do this, or this was essential, and that allowed me to be successful and continue my journey. Um, could you, could you throw out a couple just points for, for people who are deciding if they wanna work with us, that we were able to help you on your journey?

Barnard

Sure. Like, let’s say you go on a lot of the forums, like BiggerPockets or whatever, a lot of the questions is, where should I invest? What should I invest in? Um, people really don’t know. They, they know they want to do something, but they, they don’t know what to do. So it’s just like, um, dealing with a stockbroker, okay, you speak to a broker, he will help you pick out some stocks, okay, in, in this way, rent to retirement is kind of like a broker. You’ll, you guide us on, okay, these are the hot areas, these are the types of, of properties you should own, and you break things down. Demographics, uh, where, uh, as you like to say, a path, a path to pro, path to progress, path of progress. Sorry. Um, where are people moving to? Where are people leaving? So it all comes down to rent to retirement makes all that research easier, and it guides you to where you should be. But if you’re doing all that research on your own anyway, and if you, if you find out these things ahead of time, you guys just reinforce it. Oh, I was right. I know that area of Florida’s good and they’re building there. They know something. It just, it just gives you a nice, even smooth flow of what you should be doing and where you should be doing it.

Zach

Awesome. We certainly like to think so. And then as, uh, if you hit a point where you’re maybe second guessing anything, we can be there in your corner to help give you that confidence and motivation to keep on track. I

Barnard

Know I drove you crazy a bunch of times, <laugh>, I know I did, but <laugh>, you were always patient with me, and I can’t stress that enough. It was ne there was never any pressure about it. That’s the, that’s the part that I felt a good connection with you and the company. It’s not, there’s no hard sell. It’s like, this is what we think, but you decide. And that, that’s, that’s the part that I always like the most about it. I, I, I don’t like to be, to be sold hard on anything. You know, like, I’m smart enough to make my own decisions. And the fact that you were able to guide, guide us in that direction is, is much appreciated.

Zach

Excellent.

Adam

And let’s be honest, it’s when you hit the speed bumps, everybody’s gonna hit ’em. So it’s, uh, a hundred percent on that. So, yeah. So what, uh, you know, I know you’ve bought a lot in Florida. Have you thought about your, your next steps?

Barnard

I’m always thinking, um, I think too much. Uh, <laugh>, I’m always thinking what’s next, what to do, how to do it. I’m, I told Zach I’m hungry. I want it, you know, um, I wish, what’s the old line? I wish I would’ve started sooner. I wish I didn’t wait till the mandate happened. I should have been doing this for years. But it’s water under the bridge. It’s never too late. So what I want to do next, I just want to keep scaling. Obviously Florida’s where we are and we like to be, but there’s other places in the southeast. I’ve, I’ve visited Alabama. Um, it’s a beautiful state. There’s a lot of parts of Alabama that are just gorgeous. It’s very landlord friendly. The people are nice. A lot of people are moving there. So that’s a place that I’d like to get to at some point with some investments. Um, so yeah, I just want to, I just want to grow. Um, so right now we’re gonna be, we have six doors. Uh, two are, two are yet to be finished. Um, I’d like to get to 10 next year. I think that’s a reasonable goal. And then after that, the sky’s the limit. Um, I just want to keep growing and growing and, and the only way to get there is to, to act. You just can’t sit on your hands.

Zach

Yeah. You got the bug, Bernard is, is quite clear, which is exciting to see. We’re, we’re clearly passionate about real estate. And as I mentioned, like, you know, the, these types of scenarios and conversations that are what, what we thrive on, and it’s, it’s reinforcing and positive, uh, reinforcement for us. But I, I, um, real estate’s a life longing journey. You know, I, I probably said that in every single podcast, <laugh>, but it’s like, it doesn’t, it doesn’t stop, right? And that’s the cool thing. Like you can create a lifestyle where you’re financially independent, but you can still also like be hyped up and excited and like continue to grow at the same time, like those worlds coexist. Um, let’s, if you don’t mind, I would love, because I, I know when I’m listening to people’s experiences and things like that, like I wanna know about the numbers. Um, and then I also wanna touch on maybe some obstacles that you hit and how you over overcome, overcame those, um, throughout the process. But let’s, uh, if, if you don’t mind, with the extent that you feel comfortable sharing, do you mind talking about like, just numbers, numbers of properties, cash flow? I would love to hear kind of like what your kind of as approximate cash flow is on a monthly basis right now and things like that. I think the audience would love to hear that too.

Barnard

Well, yeah, that’s something I, I don’t want to get too deep into. Um, but let’s, I’ll put it, I’ll put it like this. I will, I’ve, I’ve, I’m comfortable right now where I’ve replaced income from my old work.

Zach

Um, and you’ve been able to do that with just a few, a few properties,

Barnard

Correct. The 10, the 10 31 help that, um, definitely. Um, it hasn’t replaced my overtime. Overtime used to, we used to really bring in some good numbers, but I have been able to comfortably replace my, my income from, from my old job. And that, for me to do that within, you know, a year and a half, I’m, I’m, I’m happy. I’m very, I’m very happy.

Zach

So let me just make sure the audience heard that though, without giving away specific the detail. Like, you were able to, um, within less than two years of dedicated investing, and yes, this took work and you went through a 10 31 exchange and you did it, like you were, you’re making moves, but within less than two years of investing, you were essentially able to replace, replace your active income, and you’re still on the path of like, growing. That’s not the end, right? Like you’re, oh, no. Growing a portfolio,

Barnard

I’m, I’m, I’m not comfortable enough where I can just lay back and say, you know, that’s it. I don’t have to do anything else. Absolutely not. Like I said, I replaced my income, but I replace my overtime. So the next goal is let’s replace the overtime and let’s just keep going. Because at some point I just don’t, I do wanna look back, take a break and say, wow, you know, look, look what we’ve accomplished. But like you said earlier, that’s not the end. That’s just a, a, a step to a new beginning and just to keep growing and scaling. Um, because again, the numbers, numbers are numbers, but it’s just that feeling of being comfortable, not having to worry about, you know, what’s gonna, what’s gonna happen next? What, what’s next? What’s the shoe? What’s the next shoe that’s gonna drop? You know, like, just having that, that ability to, you are always gonna have worries. But to, to lessen, to lessen that fear of the what if is, is priceless to me.

Zach

So there you have it, people, um, it is, it is possible. I know sometimes it seems farfetched in the beginning. Um, I mean this, there is no overnight success, but it also doesn’t take a lifetime to create financial independence and everyone’s in a different situation. But with a few years of dedicated investing, you can make big moves happen. And it’s really about your, your education and your motivation, just as Bernard mentioned, to go on and do the next thing and scale. And like, you know, you reach one goal and then you’re onto the next, right? And sometimes you can’t see, like, your mind won’t let you see past that first goal. ’cause it maybe it seems unattainable or, you know, it’s, it’s just hard to really, it’s not untangible, but trust me, once you reach that first goal, it’s the next goal and the next goal. I’m still going through it myself. Um, you know, and it’s, it’s a cool journey. So, um, let’s talk about obstacles. Bernard, is there anything that comes to mind as far as like, challenges that you experienced? Um, just in with, with whatever it could be mentally, emotionally, it could be financially, it could be logistically with going through the property closings. And how did you overcome those?

Barnard

Well, uh, I guess originally it was, like I said, that analysis paralysis too much information from every angle, uh, websites, forums, um, it’s just, it’s just a lot of stuff to process. So that would be a, a major obstacle. And because that holds you back from actually doing something. I mean, you could overlook, you could keep looking at things for months and months and you haven’t done anything. What’s the point? You, you gotta start quick. So I would say focus, focus on one or two things. Whether it’s, you know, you’re like short-term rentals, long-term rentals, you’re good at construction, you can work with your hands. You want to do flipping pick something and do it. So that, that would be an obstacle in my mind is, is that what do I do? You know, how do I do it and what do I do? So that’s one thing.

Barnard

Um, the other thing is, is always gonna be money. Um, at some point you run out of funds. So you have to, you have to, um, get creative. Like we’ve, we’ve talked about many times, Zach, how to get creative with lenders and, and different aspects. And we’re gonna, we’re gonna be doing that going forward, hopefully, um, to try to scale. Because again, you don’t have infinite amounts of capital to, to utilize. Um, ’cause you know, we’ve spoken about also before, you know, I’m like, Zach, how do these people have a hundred doors, 200 doors? And it’s very simple, like you said. Well, they have partners, you know, like you said, you need to network. You meet people, you partner up, you, you build relationships. And eventually, yeah, you can start building these multiple doors because it all comes down to capital. Correct.

Zach

It’s most limiting factor. Yeah, absolutely.

Adam

Yep. Yeah. All the people who own a hundred doors don’t really own a hundred doors. Most of the time they share it, they share a hundred doors.

Barnard

I’m sure there’s plenty that do, but for the most part, you’re right. Yeah. They have to, there’s other ways of doing it. And they’ve, they’ve discovered how to do that with, and with help with other

Zach

People. And I’ll say this also, like, you don’t need to own a hundred doors, right? Like Right,

Barnard

Sometimes

Adam

Not. It’s not the answer. Yeah. So what you need is enough, right? You just need Yeah,

Barnard

Yeah. Like with what, with what we have now, I mean, comfortably, you know, I like, I, like I said, I’m comfortable. My, my mom is comfortable. My wife still still works. She has a very good career, but eventually she’d like to do her own thing too. So that could, that could be a goal for us as well as we scale, is try to see if we can get her off of her W2 and have her working for herself as well, whether it be real estate or something else that’s related to it. But again, once you get to a certain level, yeah, you get comfortable. But now, reevaluate where you want to be next and try to get to that next step and just keep going up, up and up.

Zach

I want to definitely touch on advice that you have for someone that was in your shoes a couple years ago, Bernard or someone that’s looking to get started. But before we do that, um, and you don’t, you don’t have to go into this at all, but I think if you’re comfortable to some degree, it would be worth sharing. Like, and, and I know this in my conversations with you, but a lot of, like, your why is not as motivated to take care of your family, uh, you know, your mother or your wife. Um, it’s not, it’s not about, you know, just, Hey, let me just earn money and, you know, live a good life. It’s, and I think many people can relate to that. It’s like, let me take care of people I love. Um, do you care to, to touch on kind of the why at all with, with some of the things you’re doing with, with your family or,

Barnard

Well, yeah, I mean, uh, <laugh> without getting emotional, because I, I love my family very much. Um, I just want to, I want to be there for them, you know, being where, where I, where, where I used to work, I was on call constantly. I always had to be around. I had to be available for work, holidays, Sundays, whatever the case is. So now I’m more available for family. I don’t have to worry about, oh, I gotta work. So that’s one thing. There’s a free, there’s another part I should have said earlier about freedom. Well, this is part of it, which is the ability to just be with your family, not miss out on things, you know, be there for them if they gotta, you gotta take them somewhere or, or even just a family event, whatever the case is. So there’s that. Um, but yeah, like my, my father passed away.

Barnard

It’s gotta be 14 years ago now, so I know my, we all took it really hard, but my mom took it especially hard because he handled everything for her. So it’s nice now that I’ve shown her, and I’ve been doing this throughout this time, but now, not only am I there all the time for her, if she needs me, it’s also the aspect of I’ve handled, you know, the family, uh, building that we had, you know, like I said, it was being let go. It wasn’t run properly. So finally we turned that around and turned it into something really special by 10 30, wanting it, uh, 10 31 into properties, brand new properties in Florida. So it’s like we took something old that was part of the family that’s been there for a while. We turned it into something new and now it’s, this is part of the family too.

Barnard

And she’s, it’s like, it’s revived her as well, because she was part of the reason we, we, we also didn’t want to get rid of the property was she felt a very big emotional attachment to it. You know, it’s been there forever, you know, daddy got it so many years back, you know, she felt weird about it. But once we finally had the talk and we ended up doing it, and I’m showing her the pictures and I’m showing her what we did, it’s so, it’s such a happiness to see her like that. Her face lights up. She doesn’t have to worry about this old building anymore. We have these new properties. She’s, she was very worried when the situation happened to me with the mandate, and I told her not to, and she believed in me. And sure enough, that’s another aspect of it. She gets to see, wow.

Barnard

You know, he, he stood by his principles and he was able to turn it into something. And now he, now look, he’s going. Same thing with my wife. She supported me from the very beginning of this. And she, she told me, I, I believe in you and you’ll, you’ll get it done. And sure enough, like I said, it’s, things are happening. I’m not where I want to be, and I’m not gonna pat myself on the back for it. But I think I’ve, I’ve done pretty damn well for the amount of time that this journey has began. But this, again, I keep repeating, this is not the end, it’s just the beginning. I wanna keep going. It’s, it’s, it’s very addicting when you have a little bit of success like that and you, and you’re able to do it on, on your own, that you, you just want more of it. There’s not, there’s nothing better than that. And having your family appreciate you, ah, you know what, what can I say?

Adam

Well, you may not be patting yourself on the back, but if I were there, I’d, I’d give you a little pat on the back. I mean..

Barnard

I’d give you a hug, Adam. You look, you’re very huggable, Adam. I gotta say <laugh>. I,

Adam

I have, I have a huggable face better than having a punchable face. Like some people tell me I have,

Zach

You should see the Lego version of Adam. Do you have that there? There’s a

Adam

I do, I do. Yes. This is, uh, this is how my family views me. If anybody wants to see it’s on YouTube <laugh>. If

Zach

That’s not huggable, I don’t know what is, right.

Adam

Oh boy.

Barnard

Oh my God. He sits,

Adam

I gotta one of those.

Barnard

I gotta go one of those.

Zach

Let’s, um, uh, thank you for that, Bernard, because man, I think it’s just important to take a step back sometimes and like, you know, the why is a motivation, right? And each of us has it. Um, again, we’re not real estate is, it takes work, it takes time. Sometimes it’s not pretty, uh, you know, and it’s like, it adds stress. Like don’t, don’t get me wrong, it’s not all sunshine and rainbows, <laugh>, but Right. The, the, uh, the benefits are there. And I think, you know, we, we have to stay focused on that and the long-term play, um, to really be successful. But the outcome that we can accomplish is, is so powerful for ourselves, for our lives, for our family, uh, for future generations, right? And it’s just like, you gotta stay nose to the grindstone and just do it. You gotta take action initially. Um, and I just, I love hearing stories like this, um, from a per like a personal level. So thank you for being open enough to share some of that. Um, and I think a lot of people will, will relate to that.

Barnard

Let’s, I hope so. I hope so. I hope so.

Zach

I know they will a hundred percent.

Barnard

Again, I may, you know, I, maybe I sugarcoated, it wasn’t easy at first. I mean, like I said, I don’t want to get emotional because it really, it was, it was a rough, it was a rough time in the beginning, but, uh, just fortunate enough to have a piece of property in the family to able to do something with. And then on top of that, have, have a supportive wife who also sees your vision and says, you know what, okay, let’s fine and we’ll do the 10 31, but there’s other things we can do. There’s more we can expand on that by doing some more things. And just having that, that support system is, is, is absolutely priceless. Um, but yeah, but it was, it was very rough. And I, and, and, you know, my situation, I could have easily just, you know, did what they told me to do, and I would’ve kept my job no problem. So I’m no hero, I’m nobody special. There’s people with a lot worse situations than me, like we talked about with health issues and family issues, god forbid, accidents, things like that. So I’m nobody special. There’s people with a lot worse situations, but I have a feeling that when it all comes down to is what you have inside. And if you believe in yourself, you can do anything. You can move mountains. So I, I really want to get that across to people. That doesn’t matter what your situation is, it can be done.

Zach

Thank you for that. That’s, that’s very powerful. Um, I want to ask you about vetting, vetting teams coming into this. And this could, like, rent, retirement would be included in this. Property managers would be included. And this lenders, um, you know, you have a lot of choices and, and it’s, it’s too much noise when you first, like, where do you start? Who do you work with? This guy’s telling me to do this, this guy’s telling me to do this, and you know, my friends telling me to do this, and it’s just crazy. But like, how did you narrow in and focus on your decision that you made? But more importantly, how did you, how did you vet and decide on working with the people that you did?

Barnard

Okay. Well, initially, on the first, on the first closing, when we got close to it, um, I think I, one of your guys reached out. I, I forget who it was, but I also talking to you that it was time to interview some PMs and, uh, insurance agents. So I know you guys gave me your list. Um, so I figured, you know, let me stick with people that they know they’re comfortable with good, uh, results with. So I interviewed a couple of property managers, um, and I, I would say one was more expensive than the other. Um, but when you interview them and you speak to them on the phone, you wanna know, are they investors in that area? Do they own property in that area? Um, what are their marketing, uh, levels at, you know, there’s a lot of questions to ask. So when it comes to choosing one, I found it easier, um, just to choose by, um, how I felt, uh, speaking to them relationship wise, if they, if they were gonna look out for me rather than just price.

Barnard

Because honestly, the, the person with the lower price, I felt like, um, it was very robotic, you know? And I didn’t like that. I mean, I, I guess you can gather, Zach, you know me for a while now, you know, I’m very much a relationship type person. I like to know the person, I like to, you know, share a laugh, things like that, and get a good feel. So that was, that was my main decision. And, and, um, for them, and they’re very good in that area. And they were able to, to rent within, uh, I think it took a little bit more than 30 days. That was the property in, uh, Ocala. But it’s rented, it’s done. And that’s taken care of. Um, the other properties in Northport, um, the builder happens to be the property manager. So during the process of, um, of the build, we would be in touch.

Barnard

He and I, and again, we start building a relationship with the person. So I, I didn’t have to choose him for the, the pro the property manager. I could have chose anyone, but it w it, it turned out that the guy was a great guy and they run their business the right way. So that was an easy decision. And the same thing with the insurance, uh, agent, uh, interviewed a couple different ones, but it turned out again, the, the girl was really nice, knew the area, knew what I wanted to do, wanted to save me money. Just, you know, not, wasn’t offering me the world as far as insurance, just what you need and if there’s anything else above that, you know, if you want to do an umbrella, whatever the case is. So that’s up to you. But I felt comfortable doing that. And then the only way you do that is, is talking to people. You have to interview them.

Zach

So you took our recommendations, um, because we do, I mean, this is part of like our processes. We have all that, this network, you don’t have to use all these people, right? Right. But we have built this network of people that we vetted and, um, that we feel offers the best opportunities and, and rates for insurance and things like this. And then, but you took that and personally vetted them. You spent time on the phone with ’em, made sure that they’re who you wanna work with ’cause you’re the owner, right? You’re gonna have to work with ’em directly and then made your decision from there, right? Yeah.

Barnard

That’s, that’s one of the things, um, that I liked about it. It wasn’t just, you know, you guys pick who I’m gonna work with. I get to decide that. And that’s very important because you know, when things happen, you’re not gonna be calling them. I have to call them, you know, you know, they’re gonna call me, they’re not gonna call you. So I have to deal directly with them. So that was, that was important to me. And I, and I, I did like that part of it.

Adam

So you mentioned that you had analysis paralysis. A lot of new investors have analysis paralysis. So if you were giving, you know, one to two pieces of advice to someone who is sitting around, or maybe they’ve, they’re under contract and about to close, what’s, you know, one or two pieces of advice you would give to a new investor?

Barnard

Find something that you really like, find something that you think you can be good at. Again, on, on, on a flipping side, if someone’s into flipping, I mean, if they’re good with their hands and they’re gonna work in their local area, then that’s something I highly recommend. If that’s what they want to do, they need to jump into that because that’s probably something they’re gonna be good at. But if you’re looking to do stuff outta state, your local area, like mine was not, uh, landlord friendly, but you know that the path to, to wealth is real estate. You wanna own some long-term rentals, then focus on an area where you think you want to be. So do your own research, find those areas and try to try to see who’s out there. You could reach out to real estate agents or you could real reach out to a company like yours.

Barnard

Um, and there’s plenty of turnkey companies. I’ve seen a lot of them. Um, they’re all over the place. They’re on BiggerPockets, but you guys stood out to me, um, especially from the initial phone calls. So that’s what I would recommend. I would recommend just to focus on one or two things that you really think you can be good at, that you really like. Like for me it was outta state, uh, new construction and just to be a turnkey model where, okay, yeah, I’m gonna be involved. But a lot of the, the, um, a lot of the process is very streamlined and smooth. So initially when you want to get into something like that, you don’t have a thousand things coming at you, you know, there’s gonna be enough coming at you as is. So why not just, you know, take a step back and have some professionals who’ve done this a thousand times guide you. And again, like I said earlier, if once you do that and you get comfortable, sure, jump out on your own. You could do, there’s a thousand things you can do, but initially the analysis paralysis, gotta get that outta the way. And you got, you gotta go for it. You just gotta roll the dice and go for it.

Adam

All right. Well, Bernard, thank you so much for joining us today. Um, appreciate your trust that you’ve put in us. Uh, if you wanna schedule a call with us, head on over to rent to retirement.com. You can, you know, just find a time to talk with us. We’ll walk you through what we do and see how we can best help you. That’s at rent to retirement.com. And of course, if you’re listening to this, then it’s still 2023, you can, uh, get a copy of Zach’s Top 20 Markets to Invest in, in 2023 by emailing [email protected]. That’s [email protected]. Really appreciate the time you spent educating yourself today, and we’ll talk to you on the next episode.