Insider Secrets Podcast Episode #52

Featuring Guest: Terry Hale

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Guest Bio:

Terry Hale - Episode 52 guest at Insider Secrets Podcast

Terry Hale is an author of educational curriculums, numerous trade and business magazine articles, and has presented live seminars to over 200,000+ attendees across the nation for educational advisory services. Terry has been featured on CBS Radio, CNBC, and several syndicated radio broadcast networks as the leading authority in commercial real estate investing. Terry has over 20 years of real estate-related marketing, training and teaching experience. Hale has been on several board of directories providing Real Estate Education Programs and has assisted in negotiations, with years of diversified real estate experience. Terry’s commercial real estate training provides the techniques on how to find, pre-screen, evaluate, structure and use negotiation tactics for repositioning and stabilizing commercial properties.

Shownotes:

Standout Quotes:

“Work on yourself first before you can help others” – [Terry]

“We can make millions of dollars but it’s who we become along the way and what we do with it when we get there” – [Mike]

“You don’t ask, you don’t get” – [Terry]

“Over 90% of Americans don’t have a retirement account set up” – [Terry]

“You have to have multiple exit strategies on every dealing” – [Terry]

“Statistics show that most people that win the lottery lose the money within the first couple of years because they don’t understand money management” – [Terry]

“When you can learn and execute the creative strategies, you’ll do very well” – [Mike]

“I always say you have one life to live, live it wealthy, and it’s our God-given right to live life in abundance” – [Terry]

“My most important resource is being able to duplicate myself Mike” – [Terry]

“I don’t believe that exiting always means giving up control or selling out of your deal” – [Mike]

“We’re looking for sellers who have to sell, not just sellers who want to sell” – [Terry]

“Follow through and Follow up are my insider secrets and key to success” – [Terry]


Key Takeaways:

  • Personally and professionally, Terry describes himself with the word “Integrity”.
  • Integrity is being truthful to yourself first.
  • Terry narrates his backstory, noting he did not want to join his father working in construction, but knew what he needed to do and focused on asking questions and asking for help, which he finally got from the person who introduced him to commercial Real Estate.
  • Another realization while learning was that his methods were not best suited for profits to be made in the short term, as he was taking too much debt, and could not get any more loans. This pushed him to start using non-conventional methods and strategies.
  • How to gauge your success: You have to have multiple exit strategies on every deal, and so it’s not about setting up one retirement account, you should diversify to have different types of income, called Financial Security rather than Financial freedom. 
  • Gauging success involves putting a plan down of exactly what it is that you want to achieve, and how you’re going to achieve it.
  • Making high stake decisions: Having multiple exit strategies provides the benefit of having more than one course of action when making tough decisions.
  • Our time is our most precious asset, 
  • Recommended Resources in Real Estate include the internet. My most important resource is being able to duplicate myself.
  • Terry’s Insider Secret: How to locate properties online. Visit websites like loopnet, and City feed, narrow down all the noise into a laser focus based on exactly what you want. Write down the area you’re familiar with, the property type you’re interested in, the size of the property, and the price point. Then use these to filter out the noise on the website. When you get results aligned with what you are looking for, you need to make the call, follow through and follow up.

 

Episode Timeline:

[00:30] Introducing today’s guest, ‘Terry Hale’.

[01:27] In one word, describe yourself.

[02’33] A brief history from Terry Hale.

[08:35] How do you gauge success?

[11:20] What space are you in, within commercial Real Estate?: “The two best strategies to profit with commercial Real Estate” by Terry Hale.

[15:10] What was the defining moment in your career?

[18:00] What is your process for making high stake decisions?

[20:38] Recommended Resources in Real Estate today.

[25:39] Terry discusses “Exit Plans”.

[32:34] Best book you’ve ever read: “Think and Grow Rich” by Napoleon Hill

[35:45] What insider secret would you leave our listeners with today?

[38:35] How to contact Terry. His Website (terryHale.com), Email (support@terryhale.com)

Transcript:

[00:00:10]Mike: Hey, welcome back everybody. It’s Tuesday and we’re here for Insider Secrets. Today, my guest Terry Hale, who is a wealth of knowledge. Terry, tell our listeners exactly what they’re going to hear today.

[00:00:23] Terry Hale: Yeah, absolutely. We’ll make sure you’re tuned into this because Insider Secrets side with what I’m going to be sharing, you’re going to love it.

[00:00:29] And the reason being is we’re going to talk about commercial real estate. We’re going to talk about some key identifiers on how you can get out there and take action. We’re also going to be talking about exit strategy, which is so very important. And I look forward to having you guys tune in and check it out.

[00:00:43] Mike: How about that exit strategy guys? All right. You’re going to have to tune in to hear the rest.

[00:00:47] 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 [00:01:00] closing and managing real estate deals. Your host Mike Morawski has more than 30 years of multifamily, real estate investing and property management experience.

[00:01:10] 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.

[00:01:25] Mike: Hey, good afternoon and welcome back. And it’s Mike with Insider Secrets. And Insider Secrets is brought to you by My Core Intentions. And like I always ask, what are your intentions? What are you thinking about? And really go deeper than that. And why are you doing exactly what you’re doing?

[00:01:42] At MCI, we invest in our client’s future through an educational platform. Bringing you great content on a weekly basis. And I am really excited about my guest today, Terry Hale. Terry, say hi to everybody really quick before I introduce you.

[00:01:58] Terry Hale: Sure. And thanks for having me on [00:02:00] Mike. Hello everybody, hope everyone’s well.

[00:02:02] Mike: Hey, thanks Terry, and I really appreciate you being here. And we got to spend a couple of minutes here before we started the show. And you told me some things, that I’m going to read your bio here. You’ve been in the industry 25 years. You’ve been around with some of the greatest names that in the coaching and training space.

[00:02:19] And you’ve done a number of deals. You’re an author, you produce some educational curriculum, numerous trade shows, business magazines and articles, presented live seminars to hundreds of thousands of attendees across the nation. You’ve got a great list of accolades that you’ve done and places you’ve been, people you’ve met.

[00:02:44] Here’s what I like to always ask my guests when they come on the show is, in one word, what best describes you personally and professionally?

[00:02:54] Terry Hale: Integrity.

[00:02:56] Mike: And that’s a big word. Hey, do you have [00:03:00] a definition for integrity?

[00:03:02] Terry Hale: Yeah, for me it’s being truthful to yourself first.

[00:03:09] That’s my definition of integrity, because it’s so easy to say, right? It’s easy to throw words around, but like having respect for somebody it’s about having self-respect first. And you can truly tell if someone’s got self-respect, they got self-discipline and that’s first and foremost. I tell everybody, work on yourself first, before you can help others before you want to get out there and create different types of relationships, both personal and business, like working on yourself, loving yourself first. And that’s what I do.

[00:03:37] Mike: That’s so true. The thing I just had this conversation with somebody, I said, if you want something to change, you have to change. And I’ve subscribed from that for years, that we have to work on ourselves and who we become along the way.

[00:03:51] We’re going to make millions of dollars, but it’s who we become along the way and what we do with it when we get there. Hey Terry, what, tell us your [00:04:00] backstory. How’d you get to where you’re at today? I know you’ve done a lot of great things over the years and talk to us about all that.

[00:04:06] Terry Hale: Sure. Sure. I started out in the construction industry, and I decided quickly that it wasn’t something that I wanted to follow along with.

[00:04:17] My father was a general contractor, his entire life and his brothers as well. And I just didn’t want to swing the hammer in the hot sun. It just wasn’t my makeup, and I knew that and recognizing that again, being true to yourself. So at that point in time, we were doing some development and there was a gentleman that I had met.

[00:04:35] And I always say, if you don’t ask, you don’t get. And we all can get comfortable in our own mind. And then when we get comfortable, we put ourselves like into the show. And for whatever reason, I knew what I needed to do, and I just asked, I asked her for help.

[00:04:52] I started asking questions. And the person that I went to, quickly understood that what I really needed was [00:05:00] some guidance. So of course they put me to work, as they should. And I worked for very little, if anything at that point in time, but I got the education and we were just talking about, you can make millions of dollars, right?

[00:05:12] Everyone is capable of making as much as you want. You just need to desire it and have a definitive action plan and put that action into purpose and have positive thought and make it happen, materialize. It’s not going to fall in your lap, so you got to actually move it forward. So my self noting that, I did follow along with his guidance, made him a lot of money.

[00:05:32] He brought me into investing into commercial real estate, and then some things that I quickly realized was that maybe I was doing things in a way where it’s going to take me a long time to achieve the real results. And then what I’m getting to Mike is with being a trainer for the last 15 years in commercial real estate, it’s very easy for me to get into teaching and training mode.

[00:05:51] So I’ll just try to stay on track, but I was using these formulas. I was using something called a capitalization rate [00:06:00] formula. So you’ve got all your gross income minus your expenses equals your net income. And these investors would use this capitalization rate formula to buy property. And so if you’re using a cap rate formula and you’re buying retail, the average person, it takes three to five years until you’re even break even, and actually cash flowing unless you’re using some creative measure.

[00:06:20] And, he was my money partner after we stopped our partnership. After I stopped making him all the money and I started making some averages, use him as my money partner. And then I went to the bank, you know what they said? They said, Terry, we like you, we like you a lot, we’ve really we’ve grown over the years, but we can’t loan you any more money.

[00:06:37] And it hit me like a ton of bricks. I’m like what? I created these wonderful relationships with these people in every one of them said no. And I asked them why? And they said, because your debt to income ratio is not good. You took on too much debt and don’t have enough income to support that debt.

[00:06:53] So I basically rolled over and I had property that were income producing, but then I took on too much debt. And then all of a [00:07:00] sudden it was like one of these things where I was risk. And so they weren’t loaning money to me. And I remember one day I was looking at this one partner building, it was a 23 unit, I’ll never forget it.

[00:07:12] And the seller was motivated to sell. And I let them know, Hey, I’d love to buy it. I’m the guy that knows how to do it, but the bank’s not going to give me any money. And then they said, we’ll become the bank. Then that changed everything. And I started and using these non-conventional methods, these tactics and strategies, and I started putting them into play.

[00:07:31] This was prior to me ever teaching anybody, anything. Like remember working on myself, getting myself stuff straight, making sure I have proven tactics and strategies. And then zipped forward, another five years into doing nonconventional methods. I met someone who was an information marketer, and they said, Hey, author a book with me, which I decided to. They showed me how to put the material together in a systematic approach so people can digest it and then apply it.

[00:07:59] And then [00:08:00] I went and started speaking on stages and doing all this, and it was great. The problem with all that. It’s great to get the message out to the marketplace, but when you cannot gauge someone’s true success, then in a point it’s like my self feeling failure because I’m not there for the support.

[00:08:16] And that was really important. It was really important for me to make sure that back to integrity. Making sure that I’m true to myself and that I can go ahead and share my strategies and techniques in a hole with somebody versus just piecemealing information. Because if you piecemeal information to folks and they don’t have a clear picture, they can fall into traps. So I wanted to make sure that I could deliver and over-deliver, and it’s not a charity event. I started doing the same thing that my beginning life mentor did for me in my career, which was mentoring people and getting a piece of the pie. And that’s what I do today. Yeah.

[00:08:49] Mike: Yeah. Very interesting. And you mentioned something about creative financing, where the owner became the bank. I’ll tell you what, in somebody’s investing career that can [00:09:00] change where you go. If you put those strategies in place and learn those strategies and systems and become creative, it’s about you coming out of your shell, Becoming something different. Which is what happened to you, you opened up and went, Holy cow, this changes everything. And it does. And all of a sudden, you see this whole world that you didn’t see before, which is really interesting. And sometimes it’s hard to teach somebody, they can’t understand that.

[00:09:26] And I think that you come from a coaching training space, that’s what I do. And it’s when you can teach somebody those strategies and those systems and they go implement them, you’ve done well. Hey, you mentioned something interesting. You said gauge their success was the comment that you made. How do you gauge somebody’s success or how do you teach somebody to gauge their own success?

[00:09:53]Terry Hale: Very important. So when I was saying I was unable to gauge her success is because I’m not there to [00:10:00] support them in their dealings. And if they go and they move forward and they try to locate a project and let’s say they fail because they don’t understand how to pre-screen it.

[00:10:10] Or they don’t understand how to do the evaluation or the underwriting from the finance aspect, then I can’t gauge their success. But how can someone to just flip that over? How can somebody actually gauge their success? The first thing I think is what’s so important and there’s statistics that show that over 90% of Americans don’t even have a retirement account set up.

[00:10:32] There’s something really important in my role, which I refer to it as the exit. You have to have multiple exit strategies on every dealing. And so it’s not just about setting up one retirement account, you should diversify and be able to do things in a way where you have all types of income, which I refer to as financial security.

[00:10:51] I love the term financial freedom. That’s great. If someone wins the lottery and they get, whatever $500 million, maybe they’d have financial freedom. Unfortunately, [00:11:00] statistics show that most people who win the lottery spend the money within the first couple of years, because they understand money management.

[00:11:07] To gauge someone’s success, I think what’s important for that exit is really just to put a plan, a definitive plan, put a plan down of exactly what it is that you want to achieve. Everyone’s doing themselves a disservice when they don’t do that. And then just a lot of the mindset greats talk about, you have to put that into your subconscious mindset of how you’re going to achieve it.

[00:11:27] And bags of money are not going to fall out of the sky. I tried that the other day, Mike, I was sitting on the couch, I’m like, hundreds of millions are going to fall out of the sky. Never did. if you have these correct positive affirmations for your actually knowing it, you feel it, you believe it.

[00:11:41] And you just like the great Napoleon Hill says, if you can see it and believe it, and you can achieve it, and that’s so true. But we have to make sure that we also put ourselves in the check. How are we going to be able to do that? You have to have that plan. Nothing is for free.

[00:11:55] Whether it’s going to be giving up your time, you’re going to be fully dedicated, have relentlessness for success, [00:12:00] whatever it’s going to take for put yourself there. And you got to stay dedicated and focused and that’s it.

[00:12:07] Mike: Good stuff. Good stuff, that’s for sure. So you talk about commercial real estate.

[00:12:11] So let’s drill in a little bit. What space are you actually in when you look at the promotional real estate space?

[00:12:18] Terry Hale: Great question. So I have, this is just a book that I put together. I’m just mentioning it on the two best strategies for profit with commercial real estate. Those strategies, Mike, they give me the ability to do all types of commercials.

[00:12:32] There are specialists out there that just train on multifamily or just self storage or just mobile home parks. But I do things a little different. Remember, I’m the guy that reverse engineered my thinking towards finance so I can get out there and do more business and become what I am today, which is a successful real estate investor that teaches and trains people.

[00:12:50] But with commercial estate space, there are two strategies. One is a buy and hold strategy. And for that buy and hold strategy, I only work with [00:13:00] recessionary proof property types. If someone loses their home, it’s an unfortunate event, where do they go? They go into basic affordable housing, which is multifamily.

[00:13:07] That’s why it was designed, It’s more or less expensive than purchasing a home. And you’re obviously paying rent, so multi-family. When people downsize, businesses shut down, we got 50 million people unemployed right now, a lot of businesses have shut down. A lot of large corporate conformance is shutdown.

[00:13:23] What happens to all this stuff. People need a place to put it to self storage, that’s another property type we hold on to. And then mobile home parks, as I just mentioned earlier, which basically is less affordable housing than some of these new apartments. So those three primary property types, multifamily, self storage, and mobile home park.

[00:13:39] That’s one strategy that I hold. The other ones, then what I do is I reverse engineer my deal. And I do some wholesaling, which basically is to bring in a lot of product like shopping centers, big box warehouse, ambulatory care, congregate living, assisted living, senior living facilities, all these properties that have an [00:14:00] element of risk because you’re dealing with people or you’re dealing with companies, retail, office space, all that stuff.

[00:14:06] But what I found is that I have a lot of people that come to me because I attract that in a positive way. And when these people come to me, like I showed you before we have people on our board, we have dozens of people that we understand that they’re the buyers for that product that we don’t want.

[00:14:22] So now when that product comes forward and we can cut great terms, we just park that deal with that buyer and we put ourselves in there for a check. Like this deal right here in Jonesboro Arkansas, this particular project requires 200,000 down and the seller’s willing to carry a $650,000 note for 36 months. Three years at 4% interest, the property has a net income of up just shy of 80,000.

[00:14:48] So at 4% interest at 650 is basically a $2,200 a month payment. This thing’s cashflow positive $5,100 a month at closing for someone. And where I have this [00:15:00] deal tied up, I actually tied it up for 750 and I’m selling it for 850. And so that 200,000 down at closing, I’ll make a $100,000.

[00:15:13] Mike: Again, I go back to what I said, when you can learn and execute the creative strategies, you do really well.

[00:15:22] And I like what you talked about those three product classes. Cause they all fall under the multifamily category. Self-storage, multi-family, they’re in that space. And the thing that I like about real estate is there are so many options, right? There are so many places that we get play.

[00:15:39] And I always liked multifamily. I started out in the residential side, but got into multifamily and I liked the market rate rent space, because I can walk away from closing, earning money the next morning. And I think that you have that same philosophy is what I can tell.

[00:16:00] [00:16:00] Tell me this, what was the defining moment in your career? What something happened that caused you to say, aha, the light went on?

[00:16:09] Terry Hale: There’s two chain of events. I went into semi-retirement and at one point, just before I was 40 years old, and I felt really good because, I didn’t have any children, my loving wife that I’ve been with since 1999, and we live out here in Malibu, California. Got a beautiful state property, overlooking the water, like life is so great. And got a little private beach key, but I’m at a private beach, everything’s great.

[00:16:38] And then, I went on a personal trip and I came back and I went by myself with a business associate of mine. And when I came back, one of my master bedroom walls was painted like an accent wall and it was painted this really soft pink.

[00:16:54] And I said, Oh, that’s so nice. It’s pink but it’s nice. Whatever, happy wife, happy life, [00:17:00] it’s okay. And then, shortly thereafter I was on another business trip and I came back and it was like they were having this Rosey party, her and all of her girlfriends drinking, Rosey champagne.

[00:17:10] And I look at the wall now the wall is like a very pale, light blue. And I’m like, wait, what’s going on here? And I looked at my wife and I said, do you want a baby? And she didn’t even realize it. It was like in their subconscious mind, she was prepping. And so we went through nine rounds of IVF.

[00:17:29]Which is in vitro fertilization, very expensive. It’s not covered by insurance. And we ended up having my son Kash. And that was like a huge moment for me. And I understood that period of time that it wasn’t just about me, because when most people have children, it becomes about them. And I knew right then and there that it was about putting forth a legacy and making things happen in that regard.

[00:17:55] So I really started working much smarter. And I started leveraging [00:18:00] and I went back into it and started personally mentoring people and doing 50 50 partnerships and my business from that period of time until today, over this last seven and a half years, I’ve actually dwarfed my entire income from my previous existence as an investor.

[00:18:17] So how can things happen like that and evolve like that? Again, it’s the plan of action and purpose. And I always say you have one life to live little wealthy. It’s our God given right to live life in abundance.

[00:18:29] Mike: Yeah. Very true. Great comment too, I love that.

[00:18:32] Terry Hale: Yeah.

[00:18:33] Mike: So a lot of times in people’s lives in business as an entrepreneur and as a CEO of a company, people get wind up in situations where they’re faced with decisions.

[00:18:43] They have to make high stake decisions. How do you, what’s your process for making high stake decisions? If you find yourself in situations like that?

[00:18:52] Terry Hale: Yeah, fortunate for me because of the exits and I have multiple exit strategies. I have the ability [00:19:00] to take more than one course of action, and I think that’s important for everybody. If you’re able to do that in your business structure, because some of those people that are not in the commercial real estate space and they’re in another line of work Mike, like another business, sometimes they’re forced to make those kinds of decisions. I recently had to make a decision. I went away on a family vacation out to Colorado from California, and this was within this last year. And while I was absent, I have a team underneath me that works with me and they made a wrong decision.

[00:19:35] They decided to move forward with a letter of intent, meaning a letter of interest. Versus putting a contract. And I always tell folks, look, put a contract on it. We always have a clause that we can cancel the contract. Don’t mess around with the letter of intent, because I would say you can’t steal in slow motion.

[00:19:49] Not that we’re stealing anything, but just the visual you can’t steal in slow motion, right? Someone else had already known about the deal. And while I was gone for that week, we actually lost the deal. [00:20:00] So when I came back, of course they pointed fingers at me saying, Hey, we should have done this and you were gone.

[00:20:08] And I said, look, I gave you direction on what to do. And you took a different course, so this is the end result. When people disrespect, as I say, if you have one bad one in the bunch, they’re all bad. So I had to let that person go. And I didn’t want to, but it was a decision that I had to make.

[00:20:29] And that was a hard decision because I actually liked the person and I respected them and I appreciated them. But when someone shows you disrespect in your business, then you have to make a conscious, educated decision for everybody.

[00:20:40] Mike: Yeah, and those can be tough decisions from time to time. They can call us not only outer conflict, but inner conflict.

[00:20:49] And sometimes when we’re in that place where we have that inner conflict going on, it’s how do you function now at a higher level? And I think that’s something that I’m [00:21:00] listening to you saying, Hey, I got a handle on this over the years. I’m not the best at it, but I certainly know how to deal with these situations.

[00:21:09] And that’s good. I think that comes from experience and timing in business.

[00:21:17]Terry Hale: It does.

[00:21:18] Mike: How about resources, talk about some of the best resources you use in your business today? Technology systems, people, what are some of those that work well for you?

[00:21:30] Terry Hale: So absolutely technology is great. I always say technology is wonderful when it works.

[00:21:36] And so there’s a lot of different angles that one can take. And a lot of I call them small businesses within the big business. And you know what our most precious asset is our time like for us personally. So our time is really important. We have all of us have the same amount of time in a day, a week, a month in a year.

[00:21:54] So we have to put together the right resources that we can leverage and we can actually produce [00:22:00] results with. So we constantly use the internet. That’s one actual resource that we do use. We go to various websites, we also use a company that can get in touch direct with cell phone numbers for both owners of all different types of property.

[00:22:15] And we can reach out to them directly. And respectfully with integrity, respectfully talk with them about their property and see where they’re at. And we look for key identifiers where they’re actually in a world of hurt financially. So much the person that’s distressed is the property that’s distressed because of the lack of energy.

[00:22:34] And we can seek those people out. So here we’re finding these off-market projects and people always wonder, how do you get them? How do you get them? It’s about having those systems in place. And we leverage that. But my most important resource is being able to duplicate myself, Mike. And that’s exactly what I do.

[00:22:51] I sit here and at any given time, I’ll have a dozen people that I work with personally. They all have my personal cell phone. I give them that level of [00:23:00] support, where I can gauge their success. And we have that plan of action and we move forward every single week. And what we’re doing together with these dozen people is we’re able to identify projects both online, offline. Go through them and understand the dynamic of if there’s money in it.

[00:23:18] And then I jumped on the phone and I orchestrate the negotiation with them so they can learn from me. And I just mentioned this, I have three sisters and one is very independent, like myself and the other two are very codependent. And so I have that belief that if you’re out there and you only give somebody just enough to get excited and you don’t give them everything that they need, you’re doing a huge disservice.

[00:23:42] You’re making them codependent. And people do that for business because they create a continuity program. And then they have, membership sites and all this type of stuff, which is business. But what I’m saying is the individual person and working with them towards their goal, making sure that they actually have a chance [00:24:00] at designing their wealth, just like my podcast, by design, right?

[00:24:04] So it’s about designing their wealth. It’s about understanding what they want. Not everybody wants to do a hundred million dollars in business. Some folks that I talked to they’re like, I just want to do one deal. I want this time, $20,000 a month coming in and I’m happy.

[00:24:17] Mike: And everybody, I like the name of your podcast, “by design”. Everybody has their own vision of what they want. And who are we to judge that or try to push somebody to a different space that they might not want to be. You’ve talked about a couple of things that I’m really passionate about.

[00:24:34]One you’ve mentioned a couple of times and that’s exit plan. and I don’t know if you know this or not, but I just released a book called “Exit Plan”.

[00:24:41] Terry Hale: Oh, nice. I did not know that.

[00:24:46] Mike: And you can get a copy for sure. But it’s your complete guide that multifamily investing? And why you need an exit plan before you buy. And you’ve alluded to that and what’s interesting is you didn’t even know I wrote that book and you’re saying [00:25:00] it. And so my listeners are going, wow, listen to this.

[00:25:04] So exit plan is important. But here’s where it came about, and I think you’ll relate to this because of your associations with trainers in the past. Hundreds of thousands of dollars I’ve spent on coaching and training over the years. And I’ve always left these session finished reading a book, or listen to a set of tapes, feeling empty, something was missing.

[00:25:27] Because everybody teaches you how to get in a deal. Everybody teaches you how to find a deal. And that’s really important too, and teaches you how to operate a deal. Nobody teaches you how to get out. I just finished reading a book. It was like 379 pages from a really well-known author.

[00:25:47] And I got to like page 370 and there’s a little eight line paragraph. The title of the paragraph is exit plan. And he says now after all the hard work, and I thought after all the hard work, he should have done this before you got [00:26:00] to the closing table. So I think it’s a whole different process.

[00:26:05] So I bring it up because you said you have some exit plans that you like to talk about. So mention a couple of those and talk about something that’s because I don’t believe that exiting always means giving up control or selling out your deal.

[00:26:20] Terry Hale: Yeah. Yeah, absolutely. So all since I got this deal, the reason why I was working in is because, it’s actually for sale and I was servicing a call just before I jumped on the podcast.

[00:26:30] So it just happens to be in front of me here. But for this deal, there’s multiple exits. I’ll give you an example, Mike. So it there’s a 36 months seller finance note that’s on it at 4% interest. Obviously the debt service to the seller is very low. There’s also very low cash outlay at a couple of hundred thousand to get into it.

[00:26:49] And the future value is about 1.4 million. This particular deal, someone sits on it for a minute. And I was talking with this guy earlier today and he said, you [00:27:00] know what happens after the 36 months? I said, that’s part of the exit. I said, you have multiple exits. He says, tell me what my exits are.

[00:27:08] I said one, you’re going to create all this value and you can sell the deal. The second way you can have an exit is you can bring in an actual money partner, sell some of that equity, get your $200,000 back. Even if you did a 50 50 deal this property at its highest and best, it’s going to be yielding, about $10,000.

[00:27:27] So you’re still going to get the original 5,000 that you got on the way in. So you keep having that 5,000 plus you’d grab it 200 or 250 and you sell it, sell equity of your LLC. It’s not co-mingled with any other businesses. It’s an empty shell LLC, when you take it down. So just sell shares of it. That’s an exit I said.

[00:27:44] But here’s the best exit. The best exit is not to bring it apart. The best exit is to understand that there’s cheaper money out there. And there’s, basically three things that any lending institution wants to see. They want to see a rent roll. We want to know who’s renting. They want to see a profit and loss. They want to [00:28:00] make sure that the itemized expenses are correct.

[00:28:01] And they also want to see a T 12, which is a trailing 12 months of income. So if you were to take this project, by the way, this one’s at 93% physical occupancy and 74% economic occupancy. So by around 50, so in change, people are not paying. So you do a 90 day collection. And that 90 day collection, we do a call fire blast, text blast, and direct mail campaign, letting them know that we’re going to go ahead and evict them if they don’t pay.

[00:28:28] And people jumped through the phone to give you a credit card because they don’t want to get evicted and lose their stuff. This happens to be a storage facility. So the best exit on this, I was explaining to them. I said, look, there’s LTP, which is loan to purchase.

[00:28:40] And there’s LTV, which is loan to value. We’re taking this project today. And once you fill it and stabilize it with that T 12, let’s say it took you 18 months, right? Now you have that T 12 rent roll and profit loss, walk into any institution, the cost of money at 3%. And then what you do is you put a ten year permanent low [00:29:00] interest debt on it.

[00:29:01] And you take out the seller. And then you rotate right out of that. Now you can ride the deal for 10 years, you play appreciation depreciation and cashflow. Plus you can do it cash because there’s so much value. You can even take your $200,000 as a cash out refi and put that 200 grand and you hip national bank and you don’t even pay tax on that money because you haven’t sold the property, right?

[00:29:23]Mike: I love that hip national bank. And, so right there, when you first talk about that deal and thought let’s of 4% interest rate, it’s great for the seller. It’s a win-win for the seller and the buyer. But I thought, man, there’s better data out there than that tape.

[00:29:40] And you can go and get stuff free, but you’re right. If you walk in, you hold it for a year, you increase the value a little bit, walk in your coat, pull your 200,000 back out, put it in your pocket. Tax-free you still hold the deal and you’ve got all your debt and create created more cashflow. And now you do the cycle again.

[00:30:00] [00:29:59] Terry Hale: It’s a, win-win.

[00:30:00] Mike: It’s a win-win all the way across the board for everybody involved.

[00:30:04]You know what I really liked that I don’t like doing deals that are not win-win deals. And you talked about this early on too, and I wanted to make a comment, but if you find a seller who’s got pain going at it and their white, you can help their pain go away. It’s a great deal to buy.

[00:30:26] And you only find sellers like that by being out there looking for deals. So I don’t care. I was a real estate agent and I sold hundreds of houses on an annual basis because I went and looked for sellers. So I don’t care if you’re in that space or in the investment space.

[00:30:43] Go look for the seller, look for the seller that’s in pain and solve the seller’s pain, but do it win-win. Don’t take advantage of anybody because there’s no need to, there’s plenty of deals out there and you can structure something that everybody wins out.

[00:30:58] Terry Hale: Yeah. I’ve always [00:31:00] coined the phrase that we’re looking for people that have to sell, not just want to sell. And that’s true because people if they’re not, it’s all comes down to the story. And this is kind of stuff that I teach. So it’s like, when it comes to the story and we say, why is the seller selling? What’s the story? And I agree with you 100%.

[00:31:17] And that’s such my high level of integrity, my code of ethics over here and my whole entire team and all my clients, we all follow all my associates. We all follow the same purpose and that is to work towards a mutual benefit because we are problem solvers. And that’s exactly what we’re doing. Why is this person selling on a seller finance note?

[00:31:35] They don’t want to pay the capital gains tax and they’re basically selling for what they owe.

[00:31:40] Mike: Capital gain. So we bought a deal one time where they had just refinanced and they had a pre-payment penalty. We’re providing financing to save them the pre-payment penalty, like 600 grand. So that was a big deal.

[00:31:55] So again, that goes back to that whole win by design. I love that. [00:32:00] So let’s move to what I like to call some fun questions. You’re out in Malibu, love Southern California. But I’ll get there one of these days. I go there all the time. Some of my best friends live out there.

[00:32:17] Anyhow, tell me your most favorite tourist attraction out there?

[00:32:21] Terry Hale: My most favorite tourist attraction. Let me see. I was born and raised for the most part out here. And I was born at St. John’s hospital in Santa Monica. And I think the Santa Monica pier is a great attraction.

[00:32:37] People go there. It was in the Titanic that showed her as part of like on her bucket list. She wanted to go there. And this was obviously back in the day, but even now it’s still just such a beautiful place. You’re basically in the center of the Bay. There’s a lot of pretty places out here and great places to visit, but that’s definitely one that I can resonate with being the fact that I was born to, so yeah.

[00:32:57] Mike: Loved the walkout Santa Monica pier. It’s awesome, [00:33:00] beautiful. How about best book you’ve ever read?

[00:33:04] Terry Hale: The best book I ever read? And I know this is going to come across. Like I haven’t read a lot of books, but I have. I still read once a year “Think and Grow Rich”. I think it is so important by Napoleon Hill.

[00:33:17] And putting everything into play and understanding and listening to those stories and seeing how you can overcome all these issues and all these situations by being focused and being conscious and understanding that if you start believing in yourself and you start really becoming a winner in the side, people will be attracted to you and they want to be a part of that.

[00:33:44] It’s so true. And I’m not talking about being loud and are not talking about being cocky or anything like that. I’m just talking about to build inner confidence and to understand what your plan and purposes.

[00:33:57] Mike: Yeah, when you know where your identity [00:34:00] is. And where what’s really important in your life, people are attracted to that. That’s really cool. Not only do I do this Insider Secrets  podcast that we’re on but on Saturday, I do a show with a guy and it’s we just call it wrong unscripted multifamily conversation. We go live on Facebook. It’s at 10 o’clock on Saturday morning Chicago time. But he teaches he’s certified through the Napoleon Hill foundation and he teaches those 13 principles in the book.

[00:34:35]He talks about some things it’s man, how do you get there in your life? Just some of the higher level consciousness things that yeah, I think that we all subconsciously or even consciously strive for in our lives. How about this, favorite restaurant?

[00:34:55] Terry Hale: Favorite restaurant, which is right around the corner from [00:35:00] where I’m at. I love this restaurant is called sunset. And the reason why it’s sunset is because of its position. It’s not the best food. That’s not why I love this place. I love this place because there’s friendly staff, everyone there, it’s like one of those things, they know my name, I walk in, I don’t even need to make a reservation. The whole house can be packed and it’s like Goodfellows when he walks in and he brings in the table and put the lamp, they turn the lamp on for you. It’s like that feel of the place is just right on the sand, right in Malibu.

[00:35:33] And it has the most gorgeous sunsets that come down. And I have myself and one of my neighbors. Who’s a good friend of mine, his little daughter’s really good friends with my son Kash, they’re like seven and a half year old. They go run out on the beach and have fun. We got lifted up and golf carts and stuff with surf racks on it and the whole to-do.

[00:35:51] And we’d go and park them on the sand and you get the vibe like where I’m going with it. So it’s not the best food in the world. But, I [00:36:00] also like Nobu, which I’m a big sushi fan and Nobu is literally right across the street from where I’m standing right now.

[00:36:06] Mike: I’ll be out soon.

[00:36:07] Hey, this show is called Insider Secrets terry. What insider secret would you leave our listeners with today?

[00:36:15] Terry Hale: The insider secret? Let’s see. I would love to drive these people to looking to focus on commercial real estate. So I think the insider secret that I’d like to give is something which is dear to me, if you don’t mind me just going off here for two minutes or less. One of the things that I looked for on property and everyone can do this. Mike, everyone can get started. And what you can do is you can go to websites out there. If you’re looking for self storage, you can go to a website like LoopNet, you can go to city feet, you can go to those types of websites and start looking.

[00:36:50] One of the secrets like on LoopNet, which is a very high traffic site, they actually own CoStar and several other websites. But if you go to the filter section and you go inside the filter section, there’s [00:37:00] a little area which says keywords. And if you go ahead and put in certain keywords, like seller financing or value add, some type of meaning in your head, okay, I’m gonna look for these value properties and maybe look under the cap rate area and put eight cap to 12 cap or 15 cap and click go.

[00:37:18] You’re going to see that there is plenty of product out there. We can find these types of products by as I said before, reverse engineering, our thinking instead of just going aimlessly and just looking at all this noise. The key is, and here’s an insider secret, narrow down all that noise into a laser focus and know exactly what you want.

[00:37:37] So write down on a piece of paper and an area specific that you’re familiar with. Write down the property type that you really want to look at. Right down the net rentable square feet, like the size of the property that you’d be comfortable with and also the price point. And then when you go to that key search field, start putting in all of that detailed information and it will quiet that entire site down to just a handful of opportunities.

[00:37:58] And then at [00:38:00] that point, you got to pick this thing up and you gotta make the call because this is making the connection, right? This is what’s gonna make bags of money fall out of the sky. The connection that you make, you’ve got to actually pick up the phone and do it. And follow through. That’s super important follow through and follow up are my insider secrets and key to success.

[00:38:19] Mike: I feel like we could talk for hours, but that was really good stuff. And I hope people take that there was a lot of good in there to unpack. And to be successful with, but you’re so right. The telephone piece, I think people have to pick the phone up and actually physically make the phone call, do the research, make the phone calls and things will happen.

[00:38:41] Terry, you’re a wealth of knowledge. And I love doing this because I learn something all the time too. And you taught me some things today and I appreciate that. How do people get ahold of you if they want to talk with you and pick your brain a little bit more?

[00:38:54] Terry Hale: Sure. Yeah. I welcome anyone that wants to get in touch with me, I’m very easy to get ahold of.

[00:39:00] [00:39:00] You can go right over to Terry hale.com. That’s T E

[00:39:04] R Y H terryhale.com if you scroll to the bottom, there’s a phone number right there. You can call the office, or you can simply send me an email. I read all the emails that go to the support. So I’m huge on support, Mike. So my email is very simple support@terryhale.com.

[00:39:22] Feel free to shoot me an email. If you wanna jump on the phone and chat, I’d love to have a little strategy session and talk about commercial real estate and see if we’re a fit.

[00:39:29] Mike: Awesome. Thanks Terry. And I really appreciate you being here today. It was good to get to know you and learn about your thought process and philosophy. Thanks.

[00:39:38] Hey everybody, thanks for being here today. Remember go to YouTube and go to Apple and iTunes and Spotify and like us and love us and subscribe and help our ratings go up and we’ll be here next week. Have a great week.

[00:39:54]Kristen:  Thank you, Mike, and thank you for joining us for another great episode of Insdier Secrets. As [00:40:00] 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.

[00:40:12] We’re looking forward to having you back again next week for more insider secrets.

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