Insider Secrets Podcast Episode #19

 Guest: Lane Kawaoka

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Guest Bio:

After 12 years as a Licensed Professional (PE) Civil/Industrial Engineer, I fired the boss and began to focus 100% of my time on my investing and helping others in my Passive Investor Accelerator & Mastermind. 

I began investing in 2009 in rainy Seattle, being a ramen-eating cheapo I was able to buy a property early right after college. After discovering the difference between ‘Cashflow Investing’ and ‘appreciation investing (gambling/speculating)’… I moved my portfolio into 11 single-family rentals in Birmingham, Atlanta, Indianapolis, and Pennsylvania. Today, I am investing in syndications that invest in Class C & B Multi-Family Apartment, RV Parks, mobile homes, and assisted living facilities because of this Nation’s demand for affordable housing – not rich people’s Class-A assets. My mission is to help regular people into good deals that were once only accessible to the rich. The passive income from investing in stabilized rental properties made it possible for me to move back home to Hawaii where the cost of paradise is 10%+ cost of living and -30% less pay for comparable jobs on the US mainland. There I was able to live a lifestyle where I was able to bike to work. It did not take me long however to finally quit the day job and ditch the e-bike for a Mercedes.

TRANSCRIPT

[00:00:00] Kristen: Welcome to this week’s edition of Insider Secrets. The show that turns multifamily investing into reality. Each show we interview guests who are seasoned professionals, actively closing and managing real estate deals. Your host Mike Morawski has more than 30 years of multifamily, real estate investing and property management expense.

Mike is the founder of My Core Intentions. And he’s been involved in over $285 million of transactions. Focuses on helping you create short term cashflow and long-term wealth. Here’s your host, Mike.

Lane: [00:01:00] Okay.

Mike: Yeah.

Hi everybody. How you doing? This is Mike, your host of Insider Secrets and Insider Secrets is brought to you by My Core I ntentions. The question I always ask is, have you been thinking about your [00:02:00] intentions?

Have you really been developing your why and thinking about what you’re doing and the path that you’re taking in your real estate ambition? If you’re looking for some direction and you’re looking for some guidance and help, give us a call. My core intentions is ready to help you discover your why help you build your business and live a lot more balanced lifestyle.

We know that in this industry, and we’re going to talk to somebody today who is very busy in the marketplace and we can get out of balance. What we want to try and do is see what it’s going to take for us to balance our life a little bit more. And if we can help you do that, give us a call, but let me introduce you today to my friend and real estate investor lane and lane is fro is a seasoned real estate investor who resides in Honolulu, Hawaii.

Today he’s in Dallas looking at deals, but he lives in Honolulu with his wife and their dog. Lane’s a seasoned real estate investor with a [00:03:00] very impressive history. He’s a licensed professional with a master’s degree, civil engineering and an emphasis in construction management. He’s got a bachelor’s in industrial engineering and both those degrees are from the university of Washington.

As an engineer lane has managed over $230 million capital construction projects in both the public and private sector. Aside from his day job, he controls seven multifamily or manufactured home parks and 16 apartment buildings and one assisted living facility for a total of 3000 units in eight different U S markets.

Lane’s passion. Is simply passive cashflow.com. It’s a top 50 investing podcast and an online learning resource in passive real estate investing, working on a high paid professional, working as a high paid professional in corporate America and [00:04:00] frustrated by traditional wealth building dogma lane was compelled to inspire and mentor other working professionals on how to do real estate investing and build their own portfolio.

Later does other working professionals just get started by utilizing their highest and best use their day job to save for that 20% down payment for a conventional loan to acquire a single family rental home. The simple passive cashflow method is to only buy investments with a healthy cash buffer to withstand a downturn in the mind.

So I think we’re going to get some good information from lane today. Lane’s gotten so much appreciation from his work by other by his kind audience. In addition to mentoring lane, also partners with beginning investors who want to build their portfolio, but are too busy to handle direct investments.

Here we are back to talking about the balance in your lifestyle, right? He uses [00:05:00] his engineering, mind investing knowledge and his network to crowds. Due diligence through 3,100 members in his deal pipeline club together, they have placed over $24 million worth of capital to acquire $215 million in total real estate.

So hopefully today we’re going to be able to get lane to talk about some of this strategy, some of his focus and the market conditions today and where he sees the market going in the next few months. I want to welcome you to the show. And I want to ask you to say hi to our investors and just describe to us in one word who you are and your investment strategy.

Lane: Just one word. Passive. I try to be as much as fast as I can be, buy things.

Mike: So passive investing, passive cashflow. That’s good. That’s that’s going to make for a very good conversation, because a lot of investors that we have [00:06:00] on the show I know are active and they have their hands in a number of deals and, are being busy. So what I’d like you to do is I, I gave a pretty good Backstory or introduction of you, but why don’t you tell us about that backstory a little bit and what really intrigued you and real estate investing and how you wound up getting into it?

Lane: Yeah, my story is just like a lot of folks that went to college. A lot of us were brainwashed as kids that go to school, get a good job for some peas. And I was good at math and science when I was eight or nine. So that was on the track to being an inch. That’s what I did graduated from college, worked as a construction supervisor.

And I didn’t like my job, for a lot of guys, that’s going out in the field, checking up on cured, concrete, working with like the staff doing job briefings and stuff like that. It’s not fun. It’s cold it’s long days. And I was still on the path of, the normal financial dogma, which is the goal by your primary residence.

So that’s what I did, but because I was never home. I just decided [00:07:00] to rent it out. And that was where I caught the bug. The rents for 2200 a month and the mortgage payment was 1600. So I didn’t know anything about the rent evaluational or 50% rules or any of these kinds of things that a lot of us know today, I just knew I was cash flowing, a few hundred bucks, actually five or six central books back then on that property.

And that was a lot of beer money to me back then. But I knew that was my ticket out of the rat race.

Mike: Yeah. So that’s a big word, right? As the rat race, we all spin our wheels in it daily work every day, trying to figure out what to do and how do we get out of it? And, you, it sounds like you started to do that just by accident almost.

Lane: Yeah. I was gonna buy that first property of pay it off, maybe got a 30 year mortgage on it. It was going to try and pay it off in 20 years. And I thought that was gonna be, yeah. My way to financial freedom and yeah, that, that is one way of doing it, but that’s like the slope slow and low, you’re just your money by three or 5% every year.

I’m an engineer. I can do my own math.[00:08:00] It’s a slow way of doing it. But when you’re investing in real estate, and if you’re effectively leveraging the equity, you have, you should be growing your money 20 to 30% year

Mike: after year. Yeah what’s interesting is three to 5% in the bank today would be good.

It’s not like that today though. It’s funny, but Hey, you know what, so a lot of our listeners on the line are probably active investors and really might not even understand that difference between active investing and passive investing. Why don’t you tell them your philosophy behind active and passive investing and why one is better than the other, your opinion.

Of course.

Lane: Yeah. Yeah. I Just my opinion here. And, I came from and I’m I was working professional. I made a pretty good salary. A lot of my investors are doctors, lawyers, engineers, accountants, and make well over six figures a year. A lot of those guys are, it all comes down to your, like you said, in the beginning of your what’s your highest and best use for a lot of people, et cetera.

Making money so you [00:09:00] can invest passively and yeah, they may not be doing all these crazy burrs finding these tax lien, distressed properties are being very active. Hands-on putting sweat equity in, but their highest best use is building that initial capital. And at the end of the day, this is real estate investing.

You need money to invest. If you don’t have money and you got a money problem. And I that’s where I believe now the active investing comes in. You’ve got to generate capital, but at some point. Up to that point. You’re trading your time for money know just like a day job. But at first for a lot of investors, myself included, I’m getting up to this stage, but we’re time is more valuable than money.

You don’t need to get those cutting edge returns as high returns that are very sexy. It’s more about time, a little bit of sweat equity. You put it together.

Mike: Yeah, because time is one of those commodities that we never get back. Every second, every minute that clicks

Lane: by. And everybody says, yeah, of course you want passive income.

Everybody preaches it. Even all the shysters out there trying to [00:10:00] sell infant virtual products. But look, the way I say, you need money first dude. And like you need, you got to have at least quarter million to half a million dollars. They hit that critical mass at the very least, I would make even the argument that you need probably about a million or plus to be truly passive.

Mike: It makes a lot of sense in the beginning to be an active investor, to build that portfolio, to build your wealth so that you can actively invest. Now, I’ve heard of opportunities out there where you don’t need a quarter of a million dollars to invest in them and they exist. But you still need a good chunk of money because you don’t want to be put all your money in it.

Lane: Most of this, most of the syndication deals that I go into in the minimums are like 50,000, no syndicator in their right mind should take your $50,000. If your net worth is under 200,000, that’s like a quarter of your network. They should even take your money. If that’s 10%,

Mike: what’s a syndicator.

So I live in Chicago. You have to be careful sometimes when you talk about the syndicate, but what’s a syndicator in the real estate business. [00:11:00]

Lane: Yeah, it’s not something to mission impossible, syndicate of a crank, but so syndication is just a term. You used to pull money together to go into a larger project and it can be buying an apartment building.

It can be developing a new real estate property. It can be even pulling your money together to go buy a restaurant or go start a new group. Syndication is just a form of pulling money together. And when you started to do that, and you’re trying to bring in passive investors, you trigger securities law, so the feds get involved.

So you have to follow all the sec rulings for that, because obviously a lot of people have laundered and, stolen a lot of money in the past. So now there’s obviously a lot of bureaucracy around that, but essentially what a syndication does is it creates a situation. I like to use the analogy of an airplane, in the airplane, you have the cockpit with, a few people, maybe just one person, but you have a team of guys up in the front, flying the airplane.

Either the guys who find the deal, they find the lending, [00:12:00] they put the lending in their own, in the loans, in their name. It’s another, the passive investors have to do that. They operate the deal. They find all the investors and the LPs, the people who come in code. They just invest their money and they get to go to sleep.

Just like how I did this morning. When I came to Dallas, I didn’t find the plane. I just paid my money and got on the plane.

Mike: So the another word for syndication or for a syndicator is sponsor. How if there’s somebody listening today that says, th this is my next move, or this is what I want to do is B be a passive.

How do you choose a sponsor? What types of things do you want to look for in a sponsor to be able to choose the right ones so that you’re going to be secure, that your money is going to be safe.

Lane: Here’s how I do it. When I’m looking for deals to invest, it’s 50% the person and 50% the numbers. Break breaking that down.

The person, I don’t invest in a deal unless I know somebody personally that has put 50 grand with that guy. [00:13:00] There’s so many Daisy chain deals out there, but done by a bunch of people who can put a nice PDF or PowerPoint presentation together. I will only invest if I know somebody personally that I have organic relationship that doesn’t have skin in the game or a dog in the fight, that’s not going to get paid a referral fee or marketing fee or whatever that has actually infested with this team in the past.

And I’ve been burned a couple of times after I’ve gotten just a random person. Oh, go work with these guys. And then, yeah, come to find out that the person who recommended them, they’re not even an investor, they just happened to be wearing a suit that then, you know, at the local real estate club.

And then going through the other side, not many passive investors can underwrite deals the right way. But I mean that, I luckily can do that, so I can cut through the nonsense in a pitch. And see what kind of assumptions that are being used in a deal to spot check if I’m going to invest with the team.

So that’s how I do it. I had to go the numbers first, and then I go [00:14:00] to my network. If somebody has worked with that sponsor in the past.

Mike: So let’s say that you are comfortable with a sponsor and you got that 50% piece out of the way and you feel their character is good and you’ve been referred to them and you’re happy with the referral.

What do you look for in the numbers itself? When you start to dig into the financials on a particular person?

Lane: Yeah. So I’m going to put into my own analyzer over myself. I’m going to pull the rent rolls and the profit and loss statement myself. Now I’m saying that knowing that 95% of investors will not have access to that information to begin with.

And if they did, they wouldn’t know what to do with it anyway. But like I said, if you can analyze the deals, that’s what you do. That’s the best thing. And what you’re also doing is you’re also overlaying your assumptions. What is the reversion cap rate? What’s the exit cap rate that’s been used on the assumption of the deal?

What is being assumed for [00:15:00] rent increases per year? The annual escalator, what has been assumed for full occupancy? I’m overlaying my assumptions, right? Like I’m not assuming that property is going to be 95% occupied. I might think it’s going to be 90 or 92% occupied, and then I’m going to use my assumption.

And figure out what comes out at the bottom of the page in terms

Mike: of numbers. Yeah. Yeah. I’ll never forget the first deal that I ever tried to analyze. And I don’t mean try, I did analyze, but I took two legal pads and I filled two legal pads on a car ride back and 40 minute car ride back from a deal that we were looking at and I analyzed it on by hand and I said, Man.

I got to ever get somebody to write an Excel spreadsheet on this deal. But I never did buy that one because it wasn’t. So I want to back up for a minute and talk again about the the hands-on investor. So if you’re a new investor or even a seasoned investor, how w how can an average real estate investor build a portfolio with little or little of their own time?

Lane: My [00:16:00] progression is I bought 11 single family homeless on my own, and I got my net worth at least up to half a million dollars. At that point was when I pivoted where I sold the single family homes off, because I realized single-family homes just aren’t scalable. I think a lot of your students are starting to, that’s why they find you, right?

They realize that they come to that same realization that you know, that once the dream of getting 10 Fannie Mae Freddie Mac loans, it was a dream. And then the someone gave you this crazy idea to go get 10 and your spouse’s names. So you have 20, but then you wake up and you’re like 20 rent rental properties at a few hundred bucks of cashflow.

Each is only a measly $6,000 a month. Now I’m not, I don’t want to be facetious, but that’s just not enough. Yeah. And that’s a painful job to manage 20 to 30 houses. Even if you have a property manager it’s just not scalable. And when I started to join different masterminds, I started to discover that these higher net worth accredited investors, they didn’t own these rental properties outright.

There [00:17:00] were LPs and dozens of deals at 50,000, a hundred thousand dollars positions. That was the way the affluent Fs.

Mike: So it’s interesting you bringing that up because when you deal in scattered site housing, Your economies of scale, aren’t there and you wind up losing money. It costs you more money to manage because you’re running around to so many different places where, you know, if you have an, I always teach, this is that if you have an apartment complex with 25 units in it, but you own 25 single family homes, and you’ve got 25 roofs and 25 furnaces, it’s costing you a lot more money, a lot more time than it is.

If you just have all that in one place.

Lane: Exactly. Exactly. And, also to your point, just from a competition standpoint, every there’s so many mom and Paul unsophisticated investors out there buying single family homes, duplexes quads, eight plexes, 16 Plex to me. They say you want to be over on what, 50 or [00:18:00] 60 units to get above, to get that property manager, just sit in the office.

But, after owning a few 50, 60 unit properties, to me, the big threshold is getting that bad. A handyman who drives around in a golf cart and you don’t get that until you get about a hundred, 120 units.

Mike: Yeah. And it’s like one of those things, you know that you bought a good deal when you bought a deal that it owns a couple of golf carts that come with it,

Lane: Other property. But let’s face it, that property manager is just the 30, $40,000 employee that just is going to play candy crush in that office all day long. The real cost savings is going to come with that. That guy who drives that golf cart around take knocking. Plumbing jobs that you would pay a third party plumber, $900.

They knocked that out on salary before lunchtime.

Mike: So one of the things that we’ve talked about in the past is that there’s three rules of investing and those are income leverage and tangible value. Why don’t you, why don’t you talk about those to our listeners a little bit on, on, your concept [00:19:00] behind those three rules.

Lane: Yeah. I, so I run a mastermind of accredited investors and they always come back to these wild off the wall investments. And I’ve first. I always get frustrated because I’m like, dude, why would you just not want to go into something as simple as an apartment deal with value? Add like what’s w what better sharp ratio risk just to return.

Can you get, so I developed these short rules to like quickly next week. I don’t think that deal, that they’re presenting is a good deal. And that’s just the best that I’ve discovered so far without just my head exploding for just some crazy deal that somebody finds. So again, those three are, it needs to be leverageable, right?

That’s why we love real estate and it needs to be producing income and cashflow. That’s how we all got into this business in the first place. So we said, so I did so I can quit my thinking. And I can put food on the table today, as opposed to hoping and praising praying I have money in the future in retirement, but the last thing it’s like, it’s a fixed commodity.

It’s a [00:20:00] commodity it’s real, it’s a real, tangible assets. So when the fed starts printing your money, like how they are with the stimulus and they’re going to inflate the money supply. I have a commodity, I have real value and I lock into debt, but I also have a real asset. So people will say gold, booleans.

It’s a real asset, but I’m like it doesn’t produce income and it’s not really leverageable unless you do some mining stocks there. It’s not all three. And then, these, the kids, they always like this like Bitcoin stuff. I’m like all right, maybe I’ll give you the fact that it’s a currency.

It is crypto, but it doesn’t produce income that you can’t eat that thing. It doesn’t produce income. And technically there’s a futures market, but man, I think it’s up and down, but. It was very rarely things that are, like real estate, they hit all three of those.

Mike: So one of the things I really like is the leverage ability, and I always tell people, I say, look, if you’re going to go buy a million dollars worth of Google stock, you need a million bucks. [00:21:00] But if you want to go buy a million dollar piece of real estate, You only need 25%. You only need 250,000 and you can leverage the rest. And that’s the power behind real estate, I think.

And I think a lot of people miss that sometimes because they don’t understand that concept. And you, because of the leverage, we tend to be able to make a little bit more money at times as well. Can you talk about some of that math behind some of that philosophy and those strategies?

Lane: Yeah. Especially if you’re investing in like stable assets, stabilize things, you, you may not make a super high return on investment, maybe 10 to 20%. know, It’s not going to be like a virtual car venture capital startup. But I think also what, my more higher net worth accredited, especially the guides making over 350,000 a year with the adjusted gross income was in that highest tax bracket.

Yeah, this game is almost more of a tax game. It’s shifts. It’s like wealth building [00:22:00] 3.0 right. First. You’re trying to, we were talking earlier about going from active, whether you’re working at a job or you’re flipping houses. So being very active to giving more passive, but I think once you get to being in the next step is going from passive to being investing smart, with being good with taxes.

Using the real estate professional status to drive your income down to being smart when you pay taxes. And when you don’t.

Mike: While we’re talking about taxes for a minute, let’s talk about, tax consequences a little bit say, you get in a deal, whether you’re active or passive investor, and you’re five years down the road and you’re going to live.

And you liquidate out of that deal. There is some tax consequences. One of the things I always teach about is exit planning, right? Is we should plan this strategy when we buy the deal or go into the deal so that we know what’s going to happen in five years. And how are we going to handle those tax consequences at that point?

You want to talk about that a little bit?

Lane: Yeah, sure. Yeah, you’re right. You’re [00:23:00] completely right. When you exit a deal, you’re going to have to pay the capital gain. Yeah. But, you’re, if you’re exiting daily, you should be more than happy that you probably made a pretty sweet return on your money.

But still yet the taxes. So let’s talk about that. Hopefully this deal, isn’t the only deal you’re in, right? We’re talking about accredited investors here. Most of my guys are going into a few deals a year and if deals lasts maybe every three to seven years, let’s just call it five years on average at any one time you should be in.

A couple dozen deals, right? And you should be walking around with a pretty fat amount of passive losses that you got from the beginning of the deal the first year, if you have the cost segregation and bonus depreciation. So as the deal exits, you reach out of that cost segregation bucket, or the passive loss bucket, and you pull out of that.

So here’s a good example. In 2018, I had sold seven on my single family home run. As I was transitioning [00:24:00] more into the syndication world, I had a $200,000 capital gain, but I had about three or $400,000 of passive losses to offset that. So I use $200,000 of it and I just knocked it out completely zero.

And this concept of being a drug addict, I had Tommy right on my podcast and he’s this term, not me, but. You want it’s like a drug ad. Maybe people listening. Haven’t been a drug addict. Neither have I, but the way I’m thinking it works is you got to take a much drug T so you don’t go into withdrawals.

Are you getting kid got to keep that good times rolling. So you always need to have enough passive losses in your buckets, so you don’t pay the tax man. And unfortunately it sounds like you’re just kicking the cans down the road and then. But if you’re keeping investing in, keep increasing your cashflow, then what’s the census, the whole refinance to your die strategy.[00:25:00]

And at some point maybe you have a big fender and you go, you lose, you don’t have the passive losses to cover you. You know what, look how long you’ve delayed taxes. That’s the whole game. Time, value of money. If you didn’t have to pay the tax man for 5, 10, 15, 20 years then.

Awesome. You just have to make it long enough till you die. But even if you only make it halfway there, you’ve got so much benefit by not paying the taxes.

Mike: So the other thing that you mentioned was avoiding, not avoiding those taxes by kicking the can down the road. And we can do that by refinancing.

If we’re in an active deal, or if you’re coming out of a passive deal or an active deal, you could do a 10 31. Those are other options that,

Lane: that kind of, I really don’t like 10 31 exchanges though. Your basis always keeps going up in those deals. Or your basis always stays the same, but your capital gain always keeps going up.

And me personally, if I’m buying like a 1960s, 1970s property, I don’t want to hold on to that property more than 10 or 20 [00:26:00] years. No way Jose, because these especially commercial buildings, these things, they have a serviceable life where at some point you just got to get rid of it. It’s like a 1997 Honda.

Yeah, those things don’t last forever.

We all did at one time. That’s why we’re here right by assets. Not liabilities.

Mike: That’s interesting though. Talk about your buying standards when you’re out. You’re in Dallas today, you’re looking at deals. Tell me what you’re looking for. What are your buying stands?

Lane: Yes. I like to focus on stabilized deals.

So that’s defined from Fannie Mae. Freddie Mac is 90% occupied or more so pretty, pretty decent running properties partially. So I can get the non-recourse. Which initially that’s what I couldn’t understand. Why would the government give these sweet loans to these rich syndicators, but Hey, that’s just what the government does is doing.

And they’ll continue to do that because that’s the only way that they can satisfy that workforce housing demands as [00:27:00] opposed to turn into government housing. So non-recourse debt 90% occupied. The biggest thing is I want some room to move the rents. So I want to buy a deal where it’s at least 50 bucks under market today.

And if I want to put in new flooring, new appliances, nothing crazy, maybe three to $6,000 or rehab per unit, but that can give you an additional 50 to a hundred dollars lift on the rents. So I’m looking I guess I prefer felt dimension B in a class type of properties in better areas to be in a class areas.

I’ll do a class seat building, but it needs to be in a better area, but pretty basic. I don’t like the heavy value add and on the stabilized properties, that’s not in my box.

Mike: How about all metropolitan areas or were you going to tertiary mark?

Lane: Yeah, so secondary and tertiary [00:28:00] markets, mostly in the south Southeast following population growth and job growth.

I don’t know which of the two leads each other, but that’s, those are the two biggest factors I see.

Mike: Okay. Hopefully going in a positive direction on both of those.

Lane: A lot of times. I personally think it doesn’t matter what market you’re in, as long as you’re an uptrending market, where the population is going up.

And of course you’re buying in better sub market. Yeah. And make that very clear, you can be buying at a decent market, you’re trying to find a good sub markets, right? Dallas has dozens of sub markets.

Mike: Yeah. Yeah. I had a pretty big footprint in Dale, in the Dallas market.

I don’t know about 2,700 units there. And the sub-markets are really good. I like that market around Bedford and Hurst useless at try my, that try market there. It’s a good market here. So one of the things that we’ve talked about too, is that you have a 5% net worth investment rule.

Can you talk about that a little. [00:29:00]

Lane: Yeah, I give a, people are always looking for rules of thumb how much should I invest in a deal? Not more than five or 10% of your net worth for beginners. And this is why I mentioned like a guy who’s quarter million dollars net worth or below has no business putting a 50 grand into one deal.

It’s just too much. And then people are like how can I invest? I’m like, yeah, you can invest. Your network is too low. It took me seven years to get up to 11 Reynolds myself, to get my network up to a decent point. Yeah. This is not a get rich, quick thing is to get rich truly thing.

Mike: Yeah.

That’s a great point. As this isn’t get rich quick, it’s get rich over time. And I think that there’s a strategy behind creating short-term cashflow and long-term wealth, and you can, there’s a gentle balance there that you can really build a lifestyle and build your portfolio as a result of that.

Who does your property management?

Lane: Third party, property management. I want nothing to do with that. Okay.

So

Mike: do you all use the same people all the time or do you pick new ones based on the market? You’re in [00:30:00]

Lane: Chile, different ones, but usually we’ll go after guys that are more regionally located. So no national property managers and none of them that just have one little shop in some, a few submarkets or more.

Okay, that makes sense. So like guys who, and they might work regionally over a few states, they have a decent size, but they’re not big enough where I can’t have a conversation with the upper management.

Mike: Okay. So one, one thing that would keep you away from a property management company. So what would turn you away from not using stuff?

Lane: I think it’s just like picking sponsors, just referrals, right? It gives us that referred to me. It’s cold. It’s a cold referral. Yeah. I think referrals mean so much. Whether you’re buying single family homes or apartments or working with a lender or an HVAC guy, just don’t go whatever you do.

Gloss referrals. [00:31:00] Yeah.

Mike: All right. So one last question I have for you. But talk about using your retirement funds for investing. So specifically a 401k or some type of an IRA. How do you as an investor utilize those funds that you may have put up?

Lane: Yeah. So I personally don’t have any retirement funds because I’m on the younger side of most investors.

I am going to probably want to start eating that money before. Before I’m 45. So to me, I don’t want to lock my money up into any government sponsored retirement. And be forced to take it out when I’m 60, 65, who knows what that age is going to be. It’s only going to get older. But I also recommend that for most people, even if you are over the age of 40 50, because first reason taxes, you’re going to [00:32:00] pay taxes in the beginning or the end one or the other, I personally would rather pay taxes on it.

Because my hunch is taxes will be going up in the future. How else are they going to pay for all of these entitlement programs? And secondly, how else are they going to or, you’re going to want to pay your most conventional wisdom says that you’re going to be in a lower tax bracket in the future.

But not if you’re a real estate investor, I’m going to be living large, man. I’m not having that. Was it? 97 civic anyway. No we’re all Bentley and Benz. And by that time we don’t have it yet, but I’m gonna be top tax bracket for sure. Sure. That’s why I want to be paying it now. And the way the government works retire, the money into retirement accounts is they’re probably number one, potential revenue source.

They can tweak the rules whenever they want to get at that revenue. So I want my money out.

Mike: Yeah. [00:33:00] Yeah, understandable. Lane. I just want to thank you for being here today. Some great information. I’m sure that we’ve overloaded some brains that are listening in today, which is okay, because this is how we grow, we all learn by listening to other people and picking up new ideas. But if people want to get ahold of you or they want to listen in on your podcast, can, why don’t you tell, give them some information on how to do it.

Lane: Yeah. If you want to check out, my podcast is on iTunes. Google play on simple passive cashflow is how to find out my Euro’s simple, passive cashflow.com.

You guys check out the first 12 podcasts, learn a little bit more about me. I’m totally willing to get on the phone with anybody. Emails laying at simple passive cashflow.

Mike: Okay. Perfect. Thanks lane. It was really good talking to you again today. I hope you have some great success in Dallas there and travel safe in the midst of this coronavirus and everything.

Hopefully this is all gonna be behind us soon here and we’ll be back [00:34:00] to some kind of normal normalcy in the world.

Lane: Yeah, we got our mass here.

Mike: Yeah, everybody. All right. Thanks for listening in today, everybody. And I will definitely be listening for your call coming in, and if we can help you with anything or help you design your business plan or direction, whether you’re actively investing or passively investing, give us a call.

Look forward to talking to each of you soon. Have a great day.

Kristen: Thank you, Mike, and thank you for joining us for another great episode of Insider Secrets. As always, Insider Secrets is brought to you by My Core Intentions. Join us on social media and visit mycoreintentions.com where you can get expert coaching on all things, multifamily investing in property management.

We’re looking forward to having you back again next week for more Insider Secrets.