Well, I think so. When you're definitely the expert on this, you've
got your thumb on the economy. You know what's going on with investments and
interest rates and all the shenanigans the government's pulling and all that kind of good
stuff. I think you know, and I'm probably preaching the choir. It
really is incumbent upon ourselves to take responsibility for our own financial futures because the
government ain't gonna do it. You're listening to Carrie Letts's Financial Survival Network,
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Survival Network now more than ever. Welcome you are watching and listening to the
Financial Survival Network. I'm your host, Carrie Lots and hey, we've got
the really special guest with you for you today. Seasoned real estate investor can
help kickstart your real estate investing campaign and his name is Dave Dubo and Dave,
it's great to have you on the show. So look, you've been
real estate investing successfully for how many years now? Oh jeez, I got
started in two thousand and three. That's when it really first took a kick
at it. So I've been doing it since then. In the last ten
years, really focusing on helping other what I call mom and pop real estate
investors raise private capital so they can grow their portfolios. All right, So
first you got to start someplace. Yeah, your investors start when it comes
to raising capital, well, it all starts with having a deal or two
under your belt, so you got some proof of concept, But you don't
need to have decades of experience or hundreds or dozens of deals under your belt.
You can get started with that because the statistics I've seen carry and take
them for what they're worth, right, statistics is that ninety five percent of
the general population has never purchased an investment property. Your own house does not
count as an investment property. So if you've got a couple of investment property
deals under your belt, chances are you're far and above ahead of most of
the non real estate people that you know. So what kind of properties do
you counsel your group to invest in? I don't. I don't. We
work with people that are investing in single family homes, multifamily properties, people
who are doing flips, people who are doing Burr's, self storage facilities,
commercial, commercial, residential, you pretty much you name it. In real
estate, We've got clients that are doing all of it. So I don't
think there's any one particular category that's head and shoulders above everything else. It
just kind of depends on where you are and what your goals are. So
you're agnostic, and I got to cover my bases there carry I I cat
show preferences. I'm definitely agnostic. Yeah. Yeah, when it comes to
real estate investing, So when somebody is interested in one, do you have
geographical preference? Do you steer people to certain parts of the country? Dave,
No, Here's what I do. Carry. I help people who are
already doing deals to do more deals by accessing private capital. That's the whole
stick. That's that's how we really help our clients is to find joint venture
partners, private investors, private lenders, what have you, so that they
can scale their portfolios. They can do more of what they're already doing typically,
or they can start doing that next category. They can go from single
family homes to small multifamily properties. Or small multifamilies to larger multifamilies because they're
able to raise capital to do that. Okay, and the capital that you
raise private capital, Yeah, what is it cost? Usually what's involved in
the transaction, Well, that's all over the board, because that's the beautiful
thing. You're not dealing with hard money lenders. You're not dealing with institutional
lenders necessarily. Typically these are our clients or mom and pops who are raising
capital to do that next deal, and they just don't have any experience with
it. So you know, quite often I recommend people get started by bringing
on a joint venture partner so they've got the deal, they've got the knowledge,
they've got the expertise, and they bring on somebody who's not all that
familiar with real estate investing or who doesn't want to do the hands on work
themselves. That person comes into the deal, they bring their money, they
bring their credit, and they join forces and they do the deal together and
basically they share in the risks and in the rewards of that deal. So
the big advantage is to the active real estate investor, they're able to get
that capital without necessarily having to come out of pocket. While they're aabilizing the
property and you know, paying an interest rate, they're only paying out when
the property is profitable. Now, the disadvantages, you're giving up a big
chunk of equity typically in that kind of deal. But you know what,
half of something is a hell of a lot better than one hundred percent or
nothing. So that's that's how we recommend newer investors get stared with the raising
capital. Okay, so with your capital partners, if you will, what
kind of returns do they look for and how much do they finance of the
typical project. Yeah, so again, what we're showing our clients to do
is how to tap into their network of friends, family members, co workers,
business associates, people I have that pre existing relationship with a lot of
these folks aren't necessarily super sophisticated, accredited type investors, so they don't even
really know exactly what they're looking for. They just know that whatever kind of
returns they're getting in traditional investments suck, and you know, real estate is
a is a better option for them. So again we highly recommend you don't
you don't start off offering specific rates of return. If you bring on a
joint venture partner, you explain to them, Hey, here's what I've done
in the past, here's how it's worked out. If we were due to
a fifty fifty deal, hopefully it would be something similar to that. Every
deal is a little bit different, but this is how it works. So
the joint venture partner goes in with their eyes wide open, and typically what
they're hoping for obviously is double digit returns, but that may or may not
be direct cash on cash returns. That can be all sorts of different things
through mortgage paid down, property appreciation, depreciation, all that kind of good
stuff. So with interest rates going up and money becoming scarce from bank failures,
etc. How are you helping clients now? What are their main concerns.
Well, that's why it's even more important to be doing this these days,
because a lot of our clients who could qualify for traditional financing before don't
any longer because the banks have tightened things up. However, if they bring
on a capital partner who not only helps out with bringing money to the table,
but also helps out perhaps with bringing credit to the table, then they
can join forces and it's a lot easier for them to qualify. It's a
lot easier for them to make the banks happy under their current financial stringent financial
situation. All right, So kind of your specialty is helping people, helping
your network, your existing groups, and finding others who can be potential equity
partners in your deals exactly. And one of the ways that I always recommend
to people carry that you're an absolute master at is you know, be seen
to get the green. So it's like you can be a very very astute
real estate entrepreneur, but if you're the best kept secret, it's not going
to do you much good when it comes to raising capitals. So there's there's
all sorts of things that I recommend people do to number one, kind of
get out there and be seen, not necessarily just to kind of expand their
reach, but to show people in their network that they know their stuff right,
because a big challenge a lot of mom and pop realistic investors have is
their friends and their family know them as you know, John the plumber or
Jane the receptionist or whatever they do for their day job or whatever their background
is. They don't take them seriously as a real estate entrepreneur. And they
can bang their chest and they can talk to their blue in the face about
how great they are. But it's so much more effective if they get featured.
For example, if they get featured on somebody's podcast and that other person
is interviewing them, then they're automatically elevated to that status of being an expert.
So it's not just about the reach they get by being interviewed on somebody's
show, like, for example, I'm on your show right now, and
that's going to reach a broad audience, your audience. However, the real
impact, especially for our mom and pop real estate investors, is also pointing
their network to the show they've just been interviewed on as kind of like hey,
proof, here's somebody that's interviewed me. Check it out. Does that
make sense Garry? Yeah definitely. And so all right, so do you
give guidance as far as what types of deals or how to structure a deal
to bring on these outside investors. Yeah, well, like I say it
initially, my usual recommendation is to, you know, especially if you're smaller
deals, keep it super simple. I could wave the magic want to bring
on one investor partner to do the deal with you, and bring them on
as a joint venture partner and share everything fifty fifty, right, so after
their initial the investors initial investment is covered, all of the profits are shared
and split fifty fifty between the two of you. That's just the simplest way,
and it's also it's more generous for your investors, and it's lower risk
for you as well, because again, a big challenge that a lot of
people have is, especially if they're doing a flip or a burr or they
have to do some renovations on the property, is you know, they don't
want to be coming out of pocket more than necessary while they're repairing the property
and getting it optimized. Right, So this is a way to lower that
risk for them. I answer your question, Yeah, I think you covered
it pretty well. So it sounds exciting. It sounds like there's a lot
of opportunity in light of the current economic disruptions to be doing this, isn't
there Well? I think so when you're definitely the expert on this, you've
got your thumb on the economy, you know what's going on with investments and
interest rates and all the shenanigans the government's pulling and all that kind of good
stuff. I think you know, and I'm probably preaching the choir. It
really is incumbent upon ourselves to take responsibility for our own financial futures because the
government ain't going to do it. I'm up hearing candidates the same thing as
in the States. You know, too many people rely on the government,
and that's in my opinion, a very very bad plan. So again,
what I'm what I'm showing our clients, our real estate investor clients, is
how to educate their network about the big benefits of investing in real estate compared
to so many of the other traditional investments that are out there, all of
the things that are rammed down their throats that they should be doing, like
putting all their money in mutual funds with the financial planner, which I think
is is generally speaking a pretty bad idea. Okay, So yeah, obviously,
stock markets so volatile, you still feel that pretty much real estate is
the best long term investment with inflation, with high interest rates, with the
potential recession, You're still you're still allowed a real estate investor. I am.
I'm I'm a long personally, I'm I'm more of a long term,
buy an old kind of guy. So if you just look at it historically,
if you if you buy a piece of a good piece of real estate,
you'll hold onto it long term, you know, unless you're in an
absolutely disastrous area. You know, even if you look at the markets that
took the biggest hits in oh seven o eight, you know, if you
if you held onto those properties long enough, they would get turned around.
So really depends on what you're doing, how you're doing. But I'm such
a big fan of real estate carry because they're just with a good deal,
there's so many different ways you and your investor partners can make money, and
there's so much more control, relatively speaking, that we can exercise over this
asset versus pretty much anything else out there that I'm aware of, at least.
So, I mean, we control what we buy to a certain extent,
how we buy it, We can negotiate the price quite often to a
certain degree. We determine exactly what we're going to do with that project,
whether property, how we're going to make improvements. We determined to a large
degree, who we're going to get in there, how we manage that property,
how we exit it, maybe not exactly when, but how we exit.
We could have multiple different exit strategies for that property. And then you
and your investor partners you benefit from all depending on the deal. I'm aware
of up to eight different profit centers in a real estate deal, like cash
flow as king. Everybody knows that one. That's a cash on cash return
that you get monthly, the jingle left over in your gene so to speak.
You've got property, you know, you've got mortgage paid out, You've
got forced appreciation. If you get a good deal on the property, you
get instant equity in that deal. You buy it on, you buy it
at a discount, find a motivated seller, Lots of people do that kind
of stuff. You've got depreciation, You've got you know, all of these
different with leverage, massive leverage with real estate, I mean many investments.
If you want to buy half a million dollars worth of gold, well,
I guess how much that's going to cost you half a million bucks. Want
to buy half a million dollars worth of real estate. You can typically get
into that with between twenty and thirty percent down, so the bank will will
finance the rest of it. So just in my mind, so many big
benefits to real estate, right and not to mention the inflation protection aspects of
it, right, Well, you're definitely the expert on that, that's for
sure. Yeah. Well that's one of the reasons I like it. Yeah,
So any red flags that you tell people when you're bringing on an investor,
if you see this, don't do it. Well. The red flags
are usually the person trying to bring on the investor, right, So I
see lots of people making all sorts of mistakes around that. And I'm going
to cover my butt here carry and say, I'm not a lawyer, I'm
not a securities guy. I'm a real estate investor and a marketer, and
I'm just sharing my understanding of things. So get your own appropriate legal advice.
So I'll let cover my butt stuff. But bottom line is what I
see so many people making mistakes because they're you know, they're a mom and
populistic investor, and they're soliciting capital online like they're posting on Facebook, Hey
I've got this great deal guaranteed fourteen point seventy five percent DM me for more
details. Well, that is so many people do that. Everybody else thinks
it's okay, but it's not. I mean, that's that is that is
illegal, and if you get caught, it can be very very painful.
For you with a security and exchange commission. So that's a big mistake.
I see people making. The other mistakes I see people people making are of
ignorance more than anything. And I've made these mistakes myself. So when I
was first trying to raise capital, I would show a potential investor my best
deal ever. Why because I was so damn proud of that thing, right,
So I'd I'd show this, Hey, here's how smart it was,
here's how great we did, Here's how much money we'd made, and it
was so profitable, and you know, I was kind of beating my own
chest, you know, showing by yeah, my prettiest baby, so to
speak. However, one or two things would happen. Either number one,
the returns would be so much higher than a than a non investor type person's
accustomed to that their BS motor meter would go off and they say that this
guy must be full of crap. There's no way, you know, I'm
only getting three percent on my money in mutual funds. There's no way you
can be getting twenty thirty returns kind of thing. He must be full of
crap, or it would set up very unrealistic expectations, right, so now
they're now they're pinned in at this expectation of the kind of returns they should
be getting they invest with you, and if your deal doesn't bring those kind
of returns, then you look like a schmuck, even if the deal did
pretty well overall. So what I always recommend to people is don't show off
your best deal ever. Show off kind of a plain Jain type of a
deal that's got decent returns but nothing too crazy. And then, due old
Tom Peter's advice, there under promise and over delivered. So if you're showing
people that, hey, we're thinking we probably will be able to get you,
you know, ten or eleven percent return on your investment all in not
cash on cash, but if you look at everything over this timeframe, should
be able to do that. Well, then if you're able to get them
actually fifteen or twenty percent, you're going to look like an absolute rox star.
Yeah you're a hero, right, and they're going to reinvest with you,
and they're going to refer you to the friends and their family and all
that kind of good stuff. I gotcha. It's fascinating. And yeah,
so to give us an example of an average deal that you pulled off recently
that you've helped facilitate. Well, it's kind of interesting. Yeah, not
one specific deal, But I've got a couple that pops into mind. I
just interviewed the other day. They took some of our training and then applied
it, which is the most important important part. And they basically the big,
the big light bulb moment for them, Gary was how they were bringing
investors on board. Because here's my philosophy. All of the real estate gurus
out there say, hey, just find a good deal and the money will
find you. And I say, that's our croco or scooky right, that's
that's that's bull. What you want to do is you want to get investors
lined up first, then go finding deals and then that way you're not scrambling
for the cash last minute. Because if you're scrambling for the cash, that
no matter how good the deal is, the desperation oozes out of you and
it actually turns people off. So what this couple was struggling with was they
were connecting with potential investors, but they weren't getting any real bites. Right.
They're getting a lot of people saying, hey, yeah, sounds good
when you got a deal let me know and I'll take a look at it.
Well, guess what. Then they go out and look for deals,
and these people would all flake out, They say oh nos, or I
can do it blood all the So what they learned, what right, what
I showed them on how to do is instead of just getting a soft verbal
commitment, what you want to do, you, guys, is get a
signed expression of interest assigned expression of intent of interest. This is a non
legally binding document. But I tell you what the difference between somebody signing off
on a document that says something like this, I Dave and ready willing and
able to invest the sum of up to one hundred thousand dollars with Kerry if
he finds me a real estate deal. Sometimes it was in the next six
months. I date it, I sign it, you sign it. The
chances of me coming through when you bring me a deal rise exponentially. So
these folks implemented that, and within a couple of months they got over six
hundred thousand dollars worth of capital committed, and they were able to do their
next two deals because they pegged people down with these expressions of interest. I
like it, I like it all right. Well, Dave, it's been
a pleasure speaking with you. Why don't you tell us where we find you,
how we connect with you on the web. Oh, thanks, Garry.
So what I'm looking for is I'm looking for other real estate investors who
are interested in gaining some exposure by being interviewed on a podcast. So I've
got a long running podcast called the Property Profits real Estate Podcast. So I
would like to invite your real estate guests to be interviewed by me on my
podcast. And that's a great way for them to number one, get exposure,
but more importantly, number two, to be able to kind of indirectly
strut their stuff and be seen as a legitimate real estate professional in the eyes
of their network. So if any of your folks are interesting being interviewed,
love to do that, they can check that out at Dave interviewsu dot com,
Dave Interviews You dot com and as a link to that in the show
notes on Financial Survival Network dot com. Make sure you go there sign up
for your free newsletter. Dave, been an absolute pleasure, Thanks for stopping
by. Thank you, Kerry, Thanks for listening to Carrie Lets's Financial Survival
Network. Your solution to today's trying times for the latest go to Financial Survival
Network dot com. Financial Survival Network now more than ever,