{"id":9048,"date":"2023-08-31T07:29:30","date_gmt":"2023-08-31T07:29:30","guid":{"rendered":"https:\/\/imsfund.com\/?p=9048"},"modified":"2023-08-31T07:29:30","modified_gmt":"2023-08-31T07:29:30","slug":"17-properties-in-3-years-thanks-to-non-stop-rejection","status":"publish","type":"post","link":"https:\/\/imsfund.com\/index.php\/2023\/08\/31\/17-properties-in-3-years-thanks-to-non-stop-rejection\/","title":{"rendered":"17 Properties in 3 Years Thanks to \u201cNon-Stop Rejection\u201d"},"content":{"rendered":"


\n<\/p>\n

Jason Lee owns more <\/strong>rental properties<\/strong><\/a> than most full-time real estate investors<\/strong>. But, he didn\u2019t do this by investing after the last housing crash<\/a>, inheriting millions from his parents, or buying a hundred-unit apartment building at once. Actually, Jason seemed like the least likely person to end up as a big earner<\/strong>. He was raised in a household where finances were a constant source of contention, and he only went to college to play sports.<\/p>\n

Jason\u2019s parents gave him one choice: become a doctor, lawyer, or other high-skilled professional,<\/strong> so he wouldn\u2019t have to struggle like they did. After scraping through pre-med classes, living in the library, and dedicating all his time to school, he thought what every real estate investor thinks, \u201cMaybe this isn\u2019t the right path.\u201d<\/strong> After having a sudden mental breakthrough, Jason knew he couldn\u2019t continue. So what did he do instead? Real estate.<\/p>\n

He was working (for free) four days a week and going to school two<\/strong> just to level up his skills so that he could finally do what he loved when he graduated. His first deal<\/strong><\/a> almost blew up<\/strong>, he almost quit, and he got six figures stolen from him<\/strong>, but Jason is now back on top, only three years after graduating, with a portfolio in the eight figures<\/strong>. How\u2019d he do it so fast? Stick around and find out.<\/p>\n

\n

David:
This is the BiggerPockets podcast coming at you from the Spotify Studios in downtown LA with episode 812.<\/p>\n

Jason:
I think it took about a thousand conversations before I actually got a really good lead. You can\u2019t take the rejection personally because every single person that gets in a real estate, you get rejected. Everyone\u2019s going to tell you no in the beginning, and it\u2019s just a part of getting into the game. It\u2019s the gate you need to walk through in order to become a real estate salesperson or an investor.<\/p>\n

David:
What\u2019s going on everyone? This is David Greene, your host of the BiggerPockets Real Estate podcast here today with my co-host and partner in Multifamily Investing, also, one of the smartest guys I know, and incredibly funny for a smart guy, we\u2019ll say that as well. In addition to being good-looking, you\u2019ve sort of hit the trifecta of what we want in a podcast host. So thank you, Andrew Cushman, everybody.<\/p>\n

Andrew:
I don\u2019t know what to say after that, man. That\u2019s untoppable.<\/p>\n

David:
I left you speechless. That\u2019s how I keep more mic time. I just say everything you were going to say, like Eminem and 8 Mile, and you have nothing you can do to reply.<\/p>\n

Andrew:
Yeah. You\u2019re out right now. I\u2019m doing well. Glad to be here in person. Glad to be back in California. Been traveling a lot so good to be home, especially since they dropped the charges.<\/p>\n

David:
Oh, good to know. And also thank you for pretending like you understood that Eminem joke, which I know you\u2019re going to ask me later, what the hell that meant.
In today\u2019s show, you and I are interviewing Jason, who\u2019s sitting here with us right now who has an incredible story that has gone from being a very hardworking student in school, to a hardworking broker, to a successful broker, to a badass real estate investor, which is why you\u2019re being interviewed on the biggest, the baddest, and the best real estate podcast in the world. So glad that you\u2019re here.
Andrew, what should our listeners keep an eye out for to help them in their own investing journey?<\/p>\n

Andrew:
There\u2019s a whole lot. Throughout the entire show, Jason dropped all kinds of knowledge and just inspiring things, but I would say two that really stood out to me, was one he talks about he just worked his tail off to get that first deal, got it right to the finish line, and then it seemed like the whole thing blew up on him, and it almost took him out of the game. It almost emotionally crushed him.
And what he did, part of how he got past that is he zoomed out and looked at the big picture and the skills that he had learned in the business and the pipeline that he had built, and that helped him carry through and make sure you listened through to find out how he did eventually end up saving that deal.
And then also in line with that, is he focused on learning the skills. He wasn\u2019t focused on, \u201cOkay, I got to get this deal.\u201d Or, \u201cI have to go over here.\u201d Or, \u201cI have to get this partner.\u201d Or, \u201cI don\u2019t have the money.\u201d His focus was, \u201cI am going to learn these skills necessary to become an investor, to become an entrepreneur, to learn real estate, and everything else will come from that.\u201d I think that\u2019s a huge part of why he\u2019s so successful at such a young age in a very difficult market.<\/p>\n

David:
There you go. So listen all the way to the end of today\u2019s show. If you want to hear more about how Jason has been able to build a portfolio with a very impressive worth, which we\u2019re not going to reveal here, you got to listen all the way to the end.
Before we get into the show with Jason, today\u2019s quick tip. Pick up the phone, not once and not twice, but a lot of times by building in the reps that you need to get the deal. Andrew, how many phone calls did you have to make before you got your first flip?<\/p>\n

Andrew:
4,576 rejections.<\/p>\n

David:
And Andrew will tell you all why that is like taking the stairs, not the escalator in today\u2019s episode.<\/p>\n

Andrew:
That\u2019s right.<\/p>\n

David:
All right, my brother, let\u2019s get into it.
Jason Lee, welcome to the podcast. For everybody listening, Jason has 119 units across 17 different properties. He\u2019s been investing for just three years. He got started in 2020. So for everybody who says all of your guests made a bunch of money in the past, well, not this one, this has happened over the last three years.
Once lost a hundred thousand dollars to a terrible contractor. And as a fun fact, he loves dogs and plans to start a nonprofit that helps dogs who need homes and veterinary care. You just got a collective, \u201cAww.\u201d From a huge percentage of our audience there. Well done, Jason. Welcome to the show.<\/p>\n

Jason:
Thanks for having me, David.<\/p>\n

David:
Yeah, so before we get into your backstory, tell us briefly how are you adapting or pivoting your strategy in today\u2019s market?<\/p>\n

Jason:
Yeah. Today\u2019s market, it\u2019s definitely tougher than it was in 2021 and 2022. It\u2019s definitely slowed down considerably in my world. So I think to pivot, what I\u2019ve been doing is reinvesting a lot of money into marketing, going all in on marketing because usually when things slow down, companies tend to shrink and lower their marketing budget. But I\u2019ve been trying to reinvest my earnings into more marketing, to try to take more market share while some people might be claiming up while the market is slow.<\/p>\n

David:
All right. And then what about the price of the properties? Are you kind of like, \u201cHey, whatever it is, is fine.\u201d Or are you really narrowing down on what you\u2019re paying?<\/p>\n

Jason:
So definitely been a lot pickier lately with pricing. I think, I invest in San Diego. So in San Diego things are very economically sound. There\u2019s a lot of great fundamentals to where nothing points to a big crash.
We\u2019re over 70,000 homes behind on being the amount of demand of people that want to live in San Diego. We have no inventory. So in that sense, we\u2019re not scared about our exit. But then again, interest rates is a huge question mark and some other global economic factors. So just because of that, we\u2019ve been definitely put a bigger pad in our underwriting to make sure that the numbers will pencil no matter what.<\/p>\n

David:
So before we move on, when you do that, that obviously means more deals won\u2019t work. Have you found that that means nothing\u2019s working or are you still finding something even with that bigger pad?<\/p>\n

Jason:
So with the bigger pad, you\u2019re 100% right. More deals are not working, but we\u2019ve been able to do four deals in the last six months. So we\u2019re still seeing deals that work in our newer, more strict underwriting.<\/p>\n

David:
Okay. Excited to get more into this real estate success that you\u2019ve been having, but before we do, let\u2019s go back a bit in time first. What was life for you like, growing up?<\/p>\n

Jason:
Yeah. So life growing up, I was born in Seoul, Korea. I was born in a US territory. My dad was in the army and my dad actually met my mom there. She spoke no English, was just Korean, grew up there. And then my dad, when he retired from the army, decided to move us to California, a small town in the East Bay. Clayton, California. I don\u2019t know if you know where that is.<\/p>\n

David:
Wow. I live in Brentwood, man. I\u2019m very close to Clayton.<\/p>\n

Jason:
Oh, no way.<\/p>\n

David:
We sell houses out there.<\/p>\n

Jason:
That\u2019s awesome.<\/p>\n

David:
I was a deputy in the county where Clayton is.<\/p>\n

Jason:
Oh, cool. Yeah, so that\u2019s where I grew up. I grew up in a little, you know where Ed\u2019s Mudville Grill is?<\/p>\n

David:
Yeah.<\/p>\n

Jason:
I grew up right behind there. So I lived there until I was 18 and moved there when I was seven. And my dad was a full-time security guard. My mom jumped around from business to business and then eventually her last business failed, which was kind of like a small juice shop.
And then from there she started a house cleaning business, and from that, I think that really shaped how I wanted my financial future to look and how I wanted to give back to my family, because growing up, every single conversation or every fight that my parents had, it was always about-<\/p>\n

David:
The money.<\/p>\n

Jason:
\u201cHow are we going to pay the mortgage next month?\u201d Every single month. And ever since I was eight years old, that\u2019s kind of what was ingrained into my brain. So I actually was very fearful of money and was scared to actually even do anything to make money just because I knew that money was a big trigger for my anxiety.<\/p>\n

David:
Very similar story for me. Sounds like Andrew might\u2019ve been the same case for you, right?<\/p>\n

Andrew:
A little bit different. We are solid middle class. We didn\u2019t have struggles, but we also had a tight budget to fall and pay attention to.<\/p>\n

David:
What I noticed in my childhood is that lack of money equals pain. That\u2019s what the cause the fighting, is they\u2019re scared, there\u2019s fear. Where there\u2019s fear, there\u2019s pain. Little kids don\u2019t like to be around their heroes who are supposed to keep them safe, being afraid. So you probably recognize money as the monster. If you don\u2019t have it, you\u2019re in trouble.<\/p>\n

Andrew:
Everyone says money can\u2019t buy happiness, and that absolutely is true, but it can eliminate a lot of the things that cause unhappiness.<\/p>\n

David:
Good point.<\/p>\n

Andrew:
And stress.<\/p>\n

David:
Yeah. So did you make an inner vow, \u201cI will never be broke?\u201d<\/p>\n

Jason:
No, I did not. I think the first thing that kind of really got me motivated was when I grew up and kind of grew my empathetic side of my brain, when I went to college and moved away, that\u2019s when I actually got closest to my parents because I saw how other people grew up. I saw how good some people had it, and I saw how much my parents struggled compared to some of these other families at San Diego State University.
So I just really just made a pact one day, middle college that I was going to somehow give back to my family. And I\u2019ve been able to do that, fortunately, still am, but that was kind of the first pact I made. I never wanted to be just rich for myself. That\u2019s not how it started.<\/p>\n

David:
So you mentioned going to college. What were your expectations when you first got there?<\/p>\n

Jason:
It\u2019s a great question. So when I first got to college, all I cared about was rugby. Rugby was my first passion. So in high school I started playing rugby. I played football as well, but I really fell in love with rugby. But I was excited to go to San Diego State to play for the rugby team there. And then that ended up not working out because I had about seven or eight diagnosed concussions in high school.
So I told the honest truth to the trainer at San Diego State and she couldn\u2019t clear me. So that was gone right away. So I kind of had that loss of identity when I first got to college because I didn\u2019t know what I wanted to do. I had been an athlete my whole life. All I cared about was eating right and working out and playing sports.
And when I got there, I knew no one. I just found out I can never play rugby again. And my parents were my ear saying, \u201cNo matter what happens, you\u2019re going to go to grad school for whether it\u2019s being a lawyer or a doctor or an engineer, whatever it is.\u201d So I was just a very confused kid with a lot of bad and good influences, I guess you could say.
And my expectations, I really didn\u2019t have high hopes of college. I just thought I was going to be studying all the time and going to grad school and have a normal life. So I thought I was just be going through the system like a usual person.<\/p>\n

David:
What was your college experience like Andrew?<\/p>\n

Andrew:
Mine? I was living in Texas at the time, and my parents suggested, \u201cHey, why don\u2019t you go to Texas A&M?\u201d And I quickly responded and said, \u201cI won\u2019t be caught dead at that redneck school.\u201d Well, a couple of years later, guess where I was going? And I went there, and I knew in high school I wanted to be an entrepreneur, but I just didn\u2019t know how or what that looked like, I had no clue.
And so I figured, \u201cWell, I like chemistry and I like problem solving, so I\u2019ll go get a chemical engineering degree, that\u2019ll give me a job that\u2019s tolerable and I\u2019ll always have something to do until I can figure it out.\u201d And so I did that. I went and got a chemical engineering degree, double majored in meteorology for a while, and then also decided, \u201cYou know what? If I complete this, they\u2019re going to send me to an outpost in the Alaskan wilderness, and I don\u2019t want to do that either.\u201d
So I graduated with an engineering degree and I guess it was an amazing four and a half years, but the freedom and creativity that you get to do as an entrepreneur, I would never want to go back, of just being in that environment of studying to take the test and not really to necessarily learn, and I found I was really good at that.
I could study something, remember it for two hours, write it back down, and then leave and completely forget all of it. And just looking back, that kind of feels like an empty thing to do. And I love being in this environment. Jason, you\u2019ve absorbed so much in a few years, and that\u2019s all self-taught, right? And self-learned, and from mentors, and that to me is much more exciting. So I had a good college experience, but today like what you\u2019re doing, what we\u2019re doing is just so much better.<\/p>\n

David:
Okay. So Jason, you show up at college, prepared to be a good son, get good grades, get into grad school. What was your experience like?<\/p>\n

Jason:
So my experience in the beginning, I was basically completely lost, like I said, didn\u2019t know what exactly, if I wanted be a doctor, going to med school, going to grad school, whatever it is. But I chose the path of going down biology and trying to be a doctor, a physician.
So I took all the core science classes and there\u2019s a lot of pressure on me because you have to get an A or B minimum to get to grad school, to go to med school. So I was living in the library, I was studying all the time, and there was this one class that eventually broke me and that was organic chemistry and that, if anyone\u2019s taken that class, it\u2019s the worst class I ever, have you taken it?<\/p>\n

Andrew:
I have.<\/p>\n

Jason:
You have?<\/p>\n

Andrew:
I have organic chemistry 1 and 2.<\/p>\n

Jason:
That was 1 and 2. Yeah. I\u2019ll tell you why it\u2019s terrible. So all day long, you\u2019re drawing shapes with just different chemicals like carbon and nitrogen, whatever it is.
And I just had a thought in my head one day when I was studying for four hours straight for a test like, \u201cWhy am I learning this stuff? I\u2019m never going to use this when I\u2019m trying to actually help a patient.\u201d So eventually, and it was just hard. My brain doesn\u2019t work like that. And the way that organic chemistry works, you have to just, I don\u2019t know, put different puzzles and stuff together. I can\u2019t really explain it, but-<\/p>\n

David:
Did you hate geometry?<\/p>\n

Jason:
I hated geometry, yep. It\u2019s kind of the harder version-<\/p>\n

David:
It\u2019s the chemistry version of geometry.<\/p>\n

Jason:
Yeah, yeah, yeah.<\/p>\n

Andrew:
It is. Yeah.<\/p>\n

Jason:
I hated geometry.<\/p>\n

David:
I\u2019m guessing you liked geometry.<\/p>\n

Andrew:
It was okay. Yeah. I mean, I was decent at it, but again, I kind of went into that stuff as something I could tolerate until discovering real estate.<\/p>\n

David:
Did you also have a terrible teacher?<\/p>\n

Jason:
No, my teacher wasn\u2019t bad.<\/p>\n

David:
Oh, that\u2019s good.<\/p>\n

Jason:
It was on the teacher, no?<\/p>\n

David:
I had a horrible chemistry teacher in high school and I was like, \u201cI just can\u2019t do this.\u201d I thought I was dumb. They were a terrible teacher. Then I found half the class failed. They were an intern that they stuck in there because they couldn\u2019t find a real teacher. They was not good at teaching. And that whole time I thought I was terrible.
It was that, \u201cOh no, the teacher was really bad.\u201d But sometimes that\u2019s a blessing because this opened up doors for something else. So what was the light bulb moment after organic chemistry where you realized, \u201cI hate this\u201d?<\/p>\n

Jason:
Yeah. So like you said, like Andrew said I could tolerate most of my classes, but that was the one thing I couldn\u2019t tolerate. And that\u2019s when I started looking around, like, \u201cWhat else could be there, what other paths are there for me?\u201d Because I never even thought about business going to college because my parents never really taught me much about business. I didn\u2019t really know what that whole sales, real estate finance world was about. I knew absolutely nothing about it.
But every single, all of my friends in school, they were all business majors. They were all finance, marketing, entrepreneurship, every single one of them. And I just started asking questions, \u201cWhat are you looking to do when you get out of college?\u201d \u201cI\u2019m looking to go into real estate, be a financial advisor.\u201d All that stuff. So I think just through networking and meeting people at San Diego State, that\u2019s what kind of got me the light bulb running around, like, \u201cWhat else could be there for me when I graduate?\u201d<\/p>\n

Andrew:
And is that how you discovered real estate? How did you, it sounds like they started kind of planting those seeds. Where did you go from there?<\/p>\n

Jason:
I mean, to be honest with you, the huge moment where I eventually found real estate, I don\u2019t know if this is PG enough for the show. It was-<\/p>\n

Andrew:
I think they can bleep things out, right?<\/p>\n

David:
I\u2019m curious how on earth you\u2019re going to turn real estate into something. PG-13, I think everybody wants to hear what you\u2019re about to say.<\/p>\n

Andrew:
Now we really want to know.<\/p>\n

Jason:
Yeah, yeah. So it was finals week, my first semester of junior year for organic chemistry. And by this point I\u2019d already been like, \u201cI\u2019m going to do something else. I have to do something else.\u201d And I started investing in stocks, a little bit of finance stuff here and there, like Forex trading, bunch of BS.
And this one before finals, we go out to a concert in San Diego, and my friends and I decided to try magic mushrooms the first time. And we went to the concert, hit me like a train, and I became like a philosopher for the night. My whole world opened up. I started telling people what I was going to do with my life, \u201cDah, dah, dah, dah.\u201d<\/p>\n

Andrew:
Just like a Binance meetup.<\/p>\n

Jason:
My left and right brain just connected. I swear. I got home. I gave my roommates a speech on how my parents are holding me back, on how science is a terrible path. I\u2019m never going to be a doctor. And I woke up, changed my major to communication, and I went to every club on campus the next week and found real estate.<\/p>\n

Andrew:
I think that\u2019s one of the more unique paths to real estate I\u2019ve ever heard.<\/p>\n

David:
You just make it sound like psilocybin was, if everyone just took it, they\u2019d immediately figure out what they want to do in life. There was nothing else that occurred in there. It was literally just left brain, right brain connect. You check every class or every course available, and then, a club you said, and then the real estate one just stood out, like, \u201cThat would be good\u201d?<\/p>\n

Jason:
Yeah. I joined the Real Estate Society. I joined the finance club, and my first event at the Real Estate Society was like a speed dating thing. So 20 professionals from San Diego met with 20 students, and we each had three minutes to meet every single professional.
And I connected really well with this guy named Brian, who was my old mentor, who hired me to be a commercial real estate agent. And he was talking numbers, talking about potential and what I\u2019d be doing. And it just really resonated with me, my personality. I have a very type a go, go, personality. That\u2019s what brokerage is. As you know David. So after that event, my first event at my school, I just started working in this company and that\u2019s how I got into real estate.<\/p>\n

Andrew:
How did you either convince him or get him, how did you go from a 3-minute meeting to working with him and his company?<\/p>\n

Jason:
That\u2019s a great question. Yeah, it didn\u2019t just happen after a 3-minute meeting. So after 3-minute meeting, after the event ended, I was extremely scared to go talk to him after the meeting, but he said, \u201cFeel free to come back and discuss more.\u201d But I was in a corner thinking for four minutes on what I was going to say, because I knew nothing about real estate at the time. \u201cWhat am I going to say to this guy when I come back?\u201d
But I basically just came back and said, \u201cHey, I really enjoyed our conversation. I\u2019d really like to work for you and see what you have going on.\u201d And he told me it was a non-paid internship, no salary, no pay. Basically I\u2019d give up my time for knowledge and skills. At the time, I didn\u2019t understand that, but I said, \u201cYou know what? I really like this guy. I\u2019m going to go for it anyway.\u201d
So he invited me to his office and I met some of his employees, some of his agents, and I really liked the company culture there. I really liked what they were doing. There was guys that were doing very, very well at the company and the rest was history, I guess.<\/p>\n

Andrew:
Awesome. Does he play any kind of role in your life or business today still?<\/p>\n

Jason:
No. After I left the company, him and I haven\u2019t really talked much. We ended on very good terms, but him and his partner, they\u2019ve kind of taught me the whole business. But since we broke up, it was a good breakup, but we haven\u2019t really talked to each other since.<\/p>\n

David:
It\u2019s a tricky thing, when it\u2019s like you bring this person into the world and then they go and do their own thing. Sometimes if there are expectations where that\u2019s going to happen, it\u2019s okay, but it can hurt also, when you get an emotional connection with someone, that\u2019s what no one talks about with partnerships. There\u2019s an emotional component to them as well. So what time in history was this when you are moving up to be an intern?<\/p>\n

Jason:
So, this was March of 2018. This was the second semester of my junior year. I just turned 21.<\/p>\n

David:
Okay. And then when did you get your license?<\/p>\n

Jason:
I got my license five months later, so in August.<\/p>\n

David:
All right. And you\u2019re still in college while this is going on?<\/p>\n

Jason:
Yeah, still in college.<\/p>\n

David:
Okay. So what are you doing there?<\/p>\n

Andrew:
Failing organic chemistry?<\/p>\n

Jason:
No. Yeah, no. Surprisingly I got a decent grade in that, but after that I changed to communication, like I said. So that was such a night and day shift from science. I didn\u2019t study at all, just got through and got straight B\u2019s. So I was focusing five hours a week on school, just going to class. And then Monday, Wednesday, Friday and Saturday, all day I would be at the office making calls.<\/p>\n

David:
So you\u2019re going to school, you\u2019re studying, you\u2019re doing your homework, and then when you have time, you\u2019re just banging out stuff on the phone.<\/p>\n

Jason:
Yeah. So I stacked all my classes on Tuesday and Thursdays, and then I would work four days a week.<\/p>\n

David:
I did that too when I was in college. Same thing. Was it difficult to accept that you\u2019re going to be making cold calls and getting rejected? How did you handle that?<\/p>\n

Jason:
Yes. It was very tough at first. I had never ever gotten rejected like that before. I had no sales experience. So when I first came into it, I was the worst salesperson ever on the phone.
I got rejected really quick. People got me off the phone really fast. They knew how young I was just by my voice. So no one took me seriously and it took a lot of reps to eventually become good at what I was doing.<\/p>\n

Andrew:
So that\u2019s a really good point. So I\u2019m in my mid-40s. I\u2019m at the point where my once unlimited potential is starting to seem somewhat limited. You\u2019re in your mid-20s, hopefully many decades ahead, which is a huge advantage, you\u2019re starting early, but a lot of people in the audience, that\u2019s one of the challenges is, \u201cWell, hey, I\u2019m young. I sound young. I have no experience. I barely know the language. How do I get people to take me seriously? How do I break into this?\u201d
So could you speak a little bit more to that? So the person who\u2019s listening who maybe just graduated college or just starting off, what did you do when you\u2019re cold calling an owner of a 5-unit in San Diego? How did you get that person to take you seriously? And I\u2019m sure a lot of them didn\u2019t, right? And so that was part of what you were talking about, just pushing through.
But what would you say to the person who\u2019s trying to do what you did in terms of having the internal strength to push through and to get people to take you seriously? Did you just own it and say, \u201cYep, I\u2019m just getting started, but if you\u2019re my first deal, you\u2019re going to get more attention than anybody\u2019s going to give you because your deal means everything to me.\u201d Or was there, what tactics did you take?<\/p>\n

Jason:
Yeah. So I think it took about a thousand conversations before I actually got a really good lead.<\/p>\n

Andrew:
Been there.<\/p>\n

David:
He knows his number. Ask him his number.<\/p>\n

Jason:
What\u2019s your number?<\/p>\n

Andrew:
It took me 4,576 cold calls to get my first deal.<\/p>\n

David:
Nice. That number makes it cameo in Long Distance Real Estate Investing, and if anybody wants to check that out. So you had to say a similar experience. You\u2019re just getting rejected. Rejection sandwich every day for lunch, breakfast and dinner, with snacks.<\/p>\n

Jason:
With snacks and dessert. Yeah, but eventually, I think the biggest thing that I want to mention is you can\u2019t take the rejection personally because every single person that gets into real estate, you get rejected. So everyone\u2019s going to tell you no in the beginning, and it\u2019s just a part of getting into the game. It\u2019s the gate you need to walk through in order to become a real estate salesperson or an investor.<\/p>\n

David:
It\u2019s like hell week, but it lasts for a lot longer than a week. It was dragged out for a 4-year period of life.<\/p>\n

Jason:
Exactly, 100%.<\/p>\n

David:
I was rejected by my own hairline. I got exposed to this earlier in life. I can relate.<\/p>\n

Andrew:
Basically, it sounds like what you\u2019re saying is, is just put in the reps and you\u2019ll learn the language and you\u2019ll be able to connect with people, and then you\u2019re still going to get tons of rejection, but if you just hang in there eventually you\u2019re going to make the connection and not get the rejection.<\/p>\n

Jason:
Yeah. But there\u2019s two more things that really helped me besides the reps. The first thing was I had a really good sales trainer. I had a really good broker that was teaching me on what to say, how to say it, teaching me how to be an expert in my market and how to analyze deals, how to understand the lingo, know what you\u2019re talking about because if you sound like you know what you\u2019re talking about, no matter how young you are, people are still going to take you seriously. And deal by deal, your track record gets better and better. So you can use that to your advantage, your testimonials.
But the thing that really moved the needle for me that I think is mandatory for anyone that\u2019s young watching the show, that\u2019s graduating out of college that wants to be in real estate is you got to have an older, wiser partner to go to meetings with you, to be on calls with you in the first year of your career no matter what.
Because if you go into real estate without a team just on your own and you\u2019re trying to sell properties or buy properties and you have no guidance and no one by your side to go to those meetings to close sales with you or to close deals with you, you\u2019re going to have a really hard time compared to the person like me that had that partner by my side.<\/p>\n

Andrew:
Yeah. I mean, I would concur 100%. I had that too when I started off. It still took me 4,500 calls, but without that official mentor and my wife sitting next to me and I\u2019d hang up and she\u2019d be like, \u201cHoney, that was good, but next time try this instead.\u201d Yeah, you\u2019re absolutely right.
Finding that person, whether it\u2019s a paid mentor or you\u2019re working for free or someone in your office or even a family member, is absolutely critical. It is so hard to see yourself objectively and fully enough and develop it all on your own.<\/p>\n

Jason:
Commercial real estate brokerage is a revolving door and it\u2019s a revolving door, not because of the lack of talent, it\u2019s because the lack of mentorship, the lack of time people are willing to spend into these new agents, because if you just tell them to give them a script and a call and you don\u2019t give them any guidance until they bring you a lead, which is what most commercial real estate brokers in the industry expect, a lot of your agents aren\u2019t going to succeed.
And I\u2019ve taken the opposite approach of my agents and give them a lot of guidance, a lot of training, being on every follow-up call to make sure that they know that I\u2019m here and I care about them.<\/p>\n

David:
So what came first? You\u2019re banging the phones. Did you get your first deal or did you get a client first?<\/p>\n

Jason:
So I got my first client from banging the phones. I didn\u2019t buy my first property until I was three years in two brokerage.<\/p>\n

David:
All right. So tell me about your first client. What type of a deal was it?<\/p>\n

Jason:
I\u2019m glad you asked. It\u2019s a horror story. So the client was great. The client was amazing. It\u2019s a horror story because of the circumstance. So this was six months into the business. Keep in mind I had no money in my bank account.
I had finally got a great lead and after doing my side hustles, going to school and trying to spend time into brokerage, I\u2019d finally gotten my first really good listing appointment after six months and my senior broker crushed the meeting. We got the listing, I was on top of the world.
This was November of 2019, I want to say, no, 2018, sorry. November of 2018, four or five days after the appointment, the owner unexpectedly passes away and the owner didn\u2019t have a trust for the property. So you know what\u2019s coming next. It went into probate.<\/p>\n

David:
It goes to the state, the state has to determine where it gets messy, process takes forever.<\/p>\n

Jason:
Thank you.<\/p>\n

Andrew:
Yeah, not fun at all.<\/p>\n

Jason:
Not fun at all. So through a probate attorney, they told me it would take at least six months to a year to get it out of probate into the son\u2019s hands and to be able to sell it. And when I got that news, I went home from the office that day, cried the entire way home, and I told myself I was going to quit real estate. I was done. \u201cMy family was right, my friends are right. I should not have gone into real estate. It\u2019s way too risky. It\u2019s a terrible business. I need to get out of this.\u201d But something in my gut just told me to stay.
Something in my gut said, \u201cYou\u2019ve learned so much in these last six months. You have a great team behind you. You have a lot of potential.\u201d And for some reason I came in the office that day and just kept doing what I was doing, but I was very, very close to quitting the business forever.<\/p>\n

David:
Those are some key linchpin moments in our lives. I can look back and remember several of them. And as you were talking, what I realized with a little bit more wisdom is it wasn\u2019t just the experience that was so bad, it was my interpretation of the experience.
So what you were interpreting was, \u201cI was told not to do this. I was told to take the safe route. I thought I knew better than everyone. I told them all, I know what I\u2019m doing, get out of my way and now I\u2019m wrong. I failed. I should have listened. Why did I trust my gut?\u201d And that\u2019s so dangerous because if you lose confidence in yourself, you\u2019ll become a slave and live in the matrix for the rest of your life.
That\u2019s why that was such a powerful moment that you didn\u2019t quit because if you had quit, you would\u2019ve been empowering the interpretation that you don\u2019t have what it takes. And that would\u2019ve become your identity and maybe the story of your life for a very long time, maybe 20 years before you give it another try. Maybe that\u2019s why all these middle-aged guys end up getting Corvettes and it\u2019s because they\u2019re having to come out of that identity.<\/p>\n

Andrew:
Finally, getting out of it. Yep.<\/p>\n

David:
Yup. That they developed. But that didn\u2019t happen with you. How did you respond instead?<\/p>\n

Jason:
I showed up, put my big boy pants on and just said, \u201cI\u2019m going to keep doing what I\u2019m doing.\u201d I had a decent pipeline built, so I knew I wasn\u2019t just like, \u201cI had nothing going for me.\u201d So I knew I had something going for me. And when I talked to my mentor about it and really just ran through what I was feeling, that it\u2019s been six months I\u2019ve made a single paycheck and I just lost any sort of chance I had of making one soon. And from that conversation and a lot of upbringing from my peers, I ended up just sticking with it.<\/p>\n

David:
So your boys picked you up?<\/p>\n

Jason:
My boys picked me up, the property went out of probate much faster. They did a really good job. It was actually out in two months. That ended up being my first deal. The check was a whopping $3,000. Huge check.<\/p>\n

Andrew:
Still a check.<\/p>\n

Jason:
Still a check.<\/p>\n

David:
It\u2019s funny that that\u2019s what you were crying over, right? Like 3000 is nothing, but it\u2019s the interpretation that was causing all the pain. It\u2019s not the actual reality.<\/p>\n

Andrew:
And Jason, you said something that I think it\u2019s critical for everybody to listen to and remember and that you told yourself, a part of how you kept yourself going. You said, \u201cWell, look, I know I\u2019ve developed a pipeline. There\u2019s more behind this.\u201d And I think a lot of people underestimate the importance of that, is don\u2019t focus on, \u201cThere\u2019s just this one deal. I got to get this one deal.\u201d<\/p>\n

David:
It\u2019s zooming in.<\/p>\n

Andrew:
Yeah. You\u2019re getting too far zoomed in. You were zoomed out in the big picture saying, \u201cAll right, you know what, this might fail. It\u2019s like a gut punch, this sucks. But you know what? I\u2019ve got more coming. I\u2019m going to keep going and zooming out and keeping that perspective.\u201d Is absolutely critical, especially when you\u2019re getting started and is just build that pipeline out. So that was really good on your part.<\/p>\n

Jason:
And I mentioned earlier, and this is when I got the best advice I ever got from my mentor is you\u2019re learning the skills now, don\u2019t worry about money. You\u2019re learning the skills right now in your career to be able to become a great broker, a great agent, great investor in order to make more money in the future.
Because in commercial real estate brokerage or in any brokerage, when you\u2019re an agent, David, your first year, it\u2019s your toughest year, right? It\u2019s the hardest year of your career, but your income can literally two x every single year just because of the skills you\u2019ve learned in that first year.<\/p>\n

David:
If you learn the skills.<\/p>\n

Jason:
If you learn the skills.<\/p>\n

David:
Yes, a lot of people focus on the money, not the skills. It\u2019s like a leap of faith. You\u2019re just constantly building skills and believing eventually that\u2019s going to turn into money for you.<\/p>\n

Andrew:
All right, so you told us the story of how you got your first brokerage deal. Tell us the story of your first investment deal, how you got it, what kind of deal it was, where it is, all those kinds of things or where it was.<\/p>\n

Jason:
So like usual, day-to-day, I was calling people as a broker, as an agent, and this was three years into the business. And I finally saved up a little bit of money to go to buy my first property. And I called this owner who lived in San Jose. He just inherited a fourplex and a duplex in San Diego. And he told me that he was listing the properties with his property manager and I give him a call, gave the property manager a call, and the fourplex was extremely overpriced, but the duplex was actually extremely underpriced.
They listed it at $750,000 and it hadn\u2019t gone to the market yet. It was a three bedroom, two bath house in the front and a little one bedroom, a studio house in the back with a two car garage in the front and a one car garage in the back. And at the time, the property was probably worth about 800, $900,000. So I knew it was a good deal and it had ADU potential because the garages can be converted into two units.
So I let the property manager represent me. He made an offer on my behalf because when the listing agent represents you, I believe at least that you have a much higher chance on getting the deal. So I let him do that and went into contract for 750. I went into contract and did my inspections, did my due diligence, and got some really tough news that the entire foundation basically had to be replaced. The electrical system was old knob and tube, which if you don\u2019t know what old knob and tube is-<\/p>\n

Andrew:
That\u2019s not good. Yeah.<\/p>\n

Jason:
Yeah. You can\u2019t get insurance. It\u2019s the worst kind of electrical, 1920s wiring and needing a new roof. It was ridden with termites and all the windows need to be replaced.
So when I got that news from my inspectors, my contractors, I almost backed out of the deal because this is the first deal I was going to buy. I was too scared to take on a massive renovation project. I was like, \u201cThere\u2019s no way I can do this. I have no idea how to manage a contractor, how to run anything.\u201d But took a risk like most investors do.<\/p>\n

Andrew:
How did you get over that fear?<\/p>\n

Jason:
I got over that fear of buying the first deal just because the numbers were so good. I just knew I trusted in the underwriting. I knew even if I was a 100K, 200K above budget, I still would make a lot of money on the deal.
So I think just the deal being so good itself made me feel comfortable that even if I screw everything up, make every mistake in the book, I can still come out of this a little bit positive.<\/p>\n

Andrew:
Did you find a mentor or someone to help you manage the contracting element of it? How\u2019d you get past that piece or did you just go for it?<\/p>\n

Jason:
I just went for it. I never had a mentor for managing contractor. I had some clients who kind of gave me some info. I actually had a client who gave me the referral to the person that scammed me, which I\u2019ll talk about later. But I have a lot of horror stories with contractors just because I learned the hard way.<\/p>\n

Andrew:
And you said this thing\u2019s in San Diego, I thought, you can\u2019t make investments in California.<\/p>\n

Jason:
I said that?<\/p>\n

Andrew:
No, no, no, no, no. That\u2019s the running narrative is can\u2019t invest. And candidly, that\u2019s one of the things I say is I love living in California and I love to live where I love to live, but invest where I get the best returns, and for me, that\u2019s not in California, but to me\u2026 So you\u2019re doing a different business model. You are making it work. And the reason I want to highlight that is because again, I think a lot of people say, \u201cOh, I live in San Diego. It\u2019s too expensive. Well, I guess if I bought in San Diego 20 years ago.\u201d Well, you live in San Diego and you just did this in the last few years.
So is there anything you think that\u2019s different that, again, it sounds like you got it at a great price, but is there anything else that if someone is trying to invest in a market like that, that they should be pay attention to or that can say, \u201cNo, I can invest here.\u201d<\/p>\n

Jason:
Well, I think when most investors who are starting out think of California, first off, a lot of people like yourself probably say, California\u2019s a bad place to invest. So they hear from all the YouTubers, people on podcasts that you want to buy in a red state. California\u2019s a blue state.
And when people think of California, a lot of people think of the strict laws in the city of San Francisco and in the city of LA. Not all of California has extremely strict laws on displacing tenants, on doing a renovation, on executing on what you want to do. And investors do it every single day. And something that California has that no other state has is we have the best weather in the country. People still want to move here. We have a great economy. Companies are still coming here. Apple just invested millions into an office park in San Diego.
So if you\u2019re not investing in the city of San Francisco and the city of LA, I think you\u2019ll be just fine. And the thing that I look for when I buy properties even in California is that I make sure that no matter what, I understand that my basis is going to be significantly lower than what properties are going for right now in my location. And that\u2019s how I\u2019ve been able to scale pretty quickly.<\/p>\n

Andrew:
So you\u2019re looking at basis versus not to say you\u2019re ignoring cashflow, but you\u2019re looking at basis which is going to create equity, which as David you say, is really what builds your wealth, not necessarily cashflow.<\/p>\n

David:
Yeah. Over a longer period of time.<\/p>\n

Andrew:
Over a longer period of time. And so that\u2019s how you\u2019re making it work, so awesome. Thank you. Appreciate that.<\/p>\n

David:
So, explain what that means by how you\u2019re focusing on basis and why you feel that\u2019s beneficial.<\/p>\n

Jason:
Yeah. I mean I actually learned a lot about it from listening to you. So in a lot of shows you say your money\u2019s built on gaining equity, not gaining cashflow. So you make your money on appreciation, and California arguably appreciates faster than any other estate in most cities.
So when I buy, I don\u2019t buy for cashflow because I\u2019m in a career that I love. You guys always talk about, you want to buy for cashflow if you\u2019re in a career that you hate because you want to get out of the career as fast as possible, but that\u2019s not the case for me. I love being a real estate broker, so I don\u2019t need cashflow. So I don\u2019t really pay attention to that as much.
I care about what am I buying it for and what can I sell it for or what can I refinance it for? What\u2019s the appraisal value after I\u2019m done? And the super simple rule of thumb that I use, is if I know I can sell a property for a million dollars, I want to buy it for 60 to 70% below that million dollar value. So I want to buy it for 700 grand or less. That\u2019s my first stress test. And then I go deeper into things.<\/p>\n

David:
So let\u2019s break down. First we\u2019ll talk about the area, then we\u2019ll talk about the actual properties, little many economic lesson in supply and demand for people who are listening that have been told, California\u2019s bad or expensive is bad because that\u2019s the objection. \u201cCalifornia is too expensive. I will go over here and buy something else.\u201d But they don\u2019t ask the question of, \u201cWhy is California expensive?\u201d Okay, so let\u2019s break into this. San Diego, is that a terrible place to live?<\/p>\n

Jason:
Horrible.<\/p>\n

David:
Do people hate it?<\/p>\n

Jason:
They hate it so much.<\/p>\n

David:
Absolutely. I don\u2019t know anybody that sticks around in San Diego. They\u2019re like, the running joke is I called the Bermuda Triangle, because all my buddies from high school that moved to San Diego to be bartenders and stuff, they never came back. I don\u2019t know what they\u2019re doing or where they are now, but no one does. You go to San Diego and you just get stuck there. It\u2019s very, very difficult to live anywhere else.
It\u2019s some of the best weather, some of the best locations of anywhere in the entire world, first off. There\u2019s also only so much land out there. So you have a constricted supply because it\u2019s a very small area, which is something people fail to look at when investing. Yes, you can get a cash-on-cash return if you go buy a single family house in Kansas, you\u2019re never going to have a constricted supply in Kansas. They can just build houses ad nauseum forever. So the prices can\u2019t go up.
One of the first things I like is a constricted supply. Austin, Texas has a constricted supply. They\u2019ve got a river that runs through the city. There\u2019s only so much within that river. It\u2019s not shocking to me that you get appreciation there when everyone else talks about it, like \u201cAppreciation is just luck. It might happen, but you can\u2019t bank on it.\u201d
Well, we can\u2019t bank on cashflow either, but the odds are, if a property is newer, in a better location, has wages that are rising, in better condition, it\u2019s going to cashflow better than a property that you have no idea. You can still put the odds in your favor. So constricted supply, you can build more, and a rising demand as more and more people want to go live in San Diego and people that go there don\u2019t want to leave. That is a formula for appreciating assets, first off.
So you\u2019re going to make money in equity investing in a market like that, but you might have to wait because everyone else wants to buy it. Cap rates are going to be very low in areas that everybody else wants to get into. If you look at that and say, \u201cOh, it\u2019s too hard to make money here, I\u2019ll go somewhere else.\u201d You\u2019re missing out on why everybody wants to be there.
The other area we have to look at is cashflow. Of course, it\u2019s not going to cashflow super strong because cap rates are going to be low. Demand is going to be very high to get into that space. There\u2019s going to be a lot of competition for every building because it\u2019s desirable. But what do rents do in an area with constricted supply? It\u2019s very difficult to find somewhere else to rent and wages keep rising because tech companies and other wealthy people keep moving there. Do they go down or up?<\/p>\n

Jason:
Up.<\/p>\n

David:
Right? So if you wait long enough, rents are going to be going up. The properties you buy in San Diego, 10 years ago have insane cashflow versus the stuff that everyone was saying, \u201cIt\u2019s too expensive. You don\u2019t get any cashflow. You have to go to Wichita, Kansas if you want to get cashflow.\u201d Wichita, Kansas cashflow, and I\u2019m generalizing right now, is roughly the same in 10 years as what it was when you bought it versus that San Diego property. You look like a brilliant genius.
It\u2019s that to me, my perspective is how much gratification are you willing to delay? Does it need to make money now or can it make money later? Now, part of that\u2019s the model. If you\u2019re raising money as a syndicator, you\u2019re on a timeline maybe five years before you got to pay back your LPs. You do not have the, what\u2019s the word I\u2019m looking?<\/p>\n

Andrew:
Luxury?<\/p>\n

David:
Yes, thank you. The luxury of delaying gratification for 10 years. So that property falls outside of your buy box to no fault of yourself, but if you\u2019re buying it for yourself, you\u2019ve got some other partners that are involved in this that don\u2019t need to pay off really well, it can work. So are you using some of those ideas to find inefficiencies in the market to make these deals work that other people miss?<\/p>\n

Jason:
I think one thing to note is that right now in the market, it\u2019s much less competitive than it\u2019s been in the past five years, six years I\u2019ve been in the business in San Diego. So there\u2019s a lot less buyers that are sharpening their pencil in San Diego right now.
Competition has gone down, but inventory\u2019s still gone down. But the inefficiencies in San Diego are that everyone just looks on the market and thinks that that\u2019s what San Diego is and there\u2019s no better deals.<\/p>\n

David:
Oh, I see where you\u2019re going. You got that superpower of being able to call people on the phone.<\/p>\n

Jason:
Yeah. And I\u2019ve been able to find my clients some very good deals and myself by just picking up the phones, doing marketing, sending postcards, doing a lot of social media, digital marketing and bringing leads to me.
So you have to find leads in a competitive market before they get listed in order to have a chance at getting a deal that pencils, because I\u2019m telling you right now, if you look at every property in San Diego right now, none of them are buys on the market, but there\u2019s a lot of buys that are potentially off market right now.<\/p>\n

David:
Buys by your metric of 70 cents on the dollar or buys period?<\/p>\n

Jason:
I personally think buys period, I think a lot of I mean, no, I mean, everyone has different goals. So if you\u2019re looking for a buy and hold, a very stable investment and you don\u2019t need to get that uptick in equity right away, it\u2019s a good investment.
So it\u2019s a lot of old money. A lot of people are going to park cash into San Diego, but I\u2019m not that kind of investor. I\u2019m looking to grow the portfolio. I\u2019m young, I don\u2019t have that much money yet. So I\u2019m looking to early quickly-<\/p>\n

David:
That is a good clarification. And the reason I ask is when people hear that, \u201cOh, it doesn\u2019t make sense to buy there.\u201d And they just take it at face value, they expect prices will have to come down. Because if it\u2019s not a buy, no one\u2019s going to buy it. So they\u2019re going to have to drop the price and then prices don\u2019t drop.<\/p>\n

Andrew:
Right. And I think another key point, and you mentioned this earlier Jason, is you have an income from something that you love to do. So you\u2019re okay buying something that maybe doesn\u2019t cashflow. So that helps enable you to do that.
One thing I don\u2019t want to miss is you, I think you mentioned something about getting scammed by a contractor. Could you dive into that? Tell us about what that was, how it happened, what you learned?<\/p>\n

Jason:
Yeah. So like I said, the contractor referral was a referral from a client of mine in the business. But after I bought that first property and a couple months went by and I actually bought four more properties in the span of three months when I bought my first one. And all five of those properties, me and my partner, they were complete full gut renovations and I was really dumb. I was young and stupid, still am young and stupid.
But I trusted this contractor to take on all of these five properties at once and no work was being done. He didn\u2019t have a contractor\u2019s license, he wouldn\u2019t put anything in writing really, and I didn\u2019t know if that was a good thing or a bad thing at the time. It\u2019s the worst thing you can do is not put things in writing as you guys know.
So nothing was in writing, didn\u2019t have his license. I later found out that he lived in, I mean we\u2019re close to Mexico. He lived in Tijuana, so didn\u2019t find that until deep into the process. So basically-<\/p>\n

David:
Was he licensed in America?<\/p>\n

Jason:
No.<\/p>\n

David:
Okay. So he was using the phrase contractor, but he\u2019s like a contractor in Mexico.<\/p>\n

Jason:
He\u2019s like a handyman.<\/p>\n

David:
Yeah.<\/p>\n

Andrew:
Yeah. Here you go.<\/p>\n

Jason:
Yeah, he had a crew. He had a crew of people. Now they did do work. They did try to get things done but didn\u2019t have the manpower, didn\u2019t have the skill sets to do all the work that we required. And eventually I think he just blew up one day and just started covering up stuff.
Didn\u2019t do the plumbing right, put drywall over it, kind of put crappy showers in. Didn\u2019t do any of the plumbing, didn\u2019t replace the electrical. He said he fixed the foundation, but all he did was stick a wooden post and pier under it. That\u2019s all he did.<\/p>\n

Andrew:
Might not pass code.<\/p>\n

Jason:
Might not pass code. Yeah. It was actually worse than if he had just left it alone. It would\u2019ve been better than what he did.<\/p>\n

David:
He\u2019s like, \u201cThrow a two by four in there and we\u2019ll say that it\u2019s braced.\u201d<\/p>\n

Jason:
Yep. That\u2019s what he was doing. He said everything was getting done. I didn\u2019t know how to, at the time I didn\u2019t know what was right and wrong. So I just kind of believed that at face value, I was just cutting him checks left and right. $25,000 check here, $40,000 check here.
And eventually if you add up the work he did versus what I paid him, I was probably at like 125, $130,000 loss on what he did before he just walked away and just ghosted me. So one day he just stopped answering his phone, stopped talking to me and just fled.<\/p>\n

Andrew:
I bet a hundred grand goes pretty far in Tijuana.<\/p>\n

Jason:
Probably does.<\/p>\n

David:
That is a scary thing. You learned a lesson there. Definitely. When I wrote Long Distance Investing, one of the things I said is you can give your contractor a little bit of money up front to do the work, but then you don\u2019t want to pay until it\u2019s been done and you just probably didn\u2019t have the experience to look and see that the work is being done right. You\u2019re like, \u201cYeah, that looks like plumbing. I guess,\u201d You had a person-<\/p>\n

Andrew:
I wouldn\u2019t know either, right?<\/p>\n

David:
Most of us don\u2019t. But if you had a person with a little more experience involved, kind of like you said, brokers that are helping out newer agents, they would\u2019ve said, \u201cYeah, that rough and looks terrible. We\u2019re not going to move forward with this.\u201d Or you\u2019d recognize you were scammed.
Luckily it didn\u2019t stop you because you haven\u2019t quit. That\u2019s the story here is you just paid a hundred thousand dollars to get a very, very, very valuable education that you\u2019ve now turned into much more money in the future, which has allowed you to help your parents out. So tell us about how you\u2019ve been able to help your parents out with your success.<\/p>\n

Jason:
Yeah. So that was the big why on why I got started in real estate and it\u2019s amazing to say I\u2019ve come full circle with it. It\u2019s probably the biggest accomplishment in my life so far. Like I said, my mom was a struggling immigrant that came to America, had a lot of failed businesses. And the last two Christmases, I think altogether I\u2019ve given them about over $200,000 just as like a thank you card, and also I bought them a triplex in Oceanside, North County San Diego.<\/p>\n

David:
Awesome.<\/p>\n

Jason:
So they cashflow a little bit off that each month too. But I\u2019m looking to buy my mom a house here in San Diego next, coming up soon.<\/p>\n

Andrew:
All right. So you told us about the first brokerage deal. You told us about your first investment deal. You certainly had some tough challenges in those first deals, which both cases you very much overcame.
Where are you today? My understanding is you\u2019ve done quite a lot since then. So give us a snapshot of what your portfolio and investments and business looks like today.<\/p>\n

Jason:
Yeah. So on the real estate portfolio side, I\u2019ve acquired a total of 26 properties. I\u2019ve sold off about-<\/p>\n

Andrew:
All San Diego?<\/p>\n

Jason:
All San Diego, yeah. When I first started it was all small, like two to 4-unit buildings, but a year or two went by and I 1031 those buildings into larger assets. So I\u2019ve done about 26 acquisitions, sold a good amount of them to trade up into bigger assets.
Now we have 17, so we\u2019ve never actually cashed out on a property except one. We\u2019ve kept reinvesting the profits into larger assets. So that\u2019s how I was able to grow pretty quickly. A lot of people ask me if I raised money to start and because I bought a lot of properties quick, but I\u2019d actually just saved up a good chunk of change and I had the perfect partner to start with me.
So I was the deal guy, I was the front lines guy and my partner, he had a debt fund, like a private money, hard money fund. And me and him put 15% down, 50\/50, got debt, renovated it quickly, and then refied out or sold it. So we just did that over and over again in 2020 and 2021 and eventually built our portfolio pretty quickly without outside capital from LPs.<\/p>\n

Andrew:
Quick aside, how did you find that partner and how did you, for lack of a better term, convince them that you were investible?<\/p>\n

Jason:
Yeah, so here\u2019s why I think being a commercial real estate agent is so valuable. If you want to get into multifamily, if you specialize in selling multifamily investments to clients for a living, eventually you\u2019re going to get pretty damn good at underwriting those assets and know your area pretty well.
And eventually you\u2019ll develop some really good client relationships where you do deals with them over and over and over again. And when you build that trust with a client and you build a good friendship, like I did with my partner. After we built that friendship, I had four or five properties tied up in escrow that I couldn\u2019t buy on my own.
And he actually offered me to, he asked me to partner with him. I didn\u2019t even ask him because he knew I was a hard worker. I sent him deals every single day. I\u2019m on the phone with him constantly, so he knew I\u2019d get it done. So I built that relationship with my future partner just by being in the business as a broker.<\/p>\n

Andrew:
What\u2019s the, back to your portfolio, what\u2019s the current value? What would you estimate is the current value in today\u2019s adjusted market and cashflow?<\/p>\n

Jason:
Yeah. I mean we\u2019ve sold some stuff and prices are still steady, but right now it\u2019s like I sent an REO to a lender. It was about 48.9 million portfolio value and we have 117 units, 119 units around town.<\/p>\n

Andrew:
Nice. Well done. So you mentioned getting to know your market, underwriting deals as both a broker and an investor. Can you share your formula for underwriting deals?<\/p>\n

Jason:
Yeah. I can share with anyone. It\u2019s an easy one-page sheet. So if I\u2019m buying a property, I want to know the current cap rate, what the cap rate can be after I\u2019m done with it.
So I have the current rents, the pro forma rents, which is the market rents after I\u2019m done rehabbing it. And then I have the GRM, which is a gross rent multiplier. And I like the gross rent multiplier a lot more than the cap rate just because a lot of brokers can mess with the cap rate because you can lower the expenses to make it look like the building\u2019s actually operating-<\/p>\n

Andrew:
David can do that.<\/p>\n

Jason:
\u2026 better than it is. And a lot of the times when you get these offering memorandums and marketing packages from brokers, a lot of the times the expenses are estimated. So I like going off of GRM because it\u2019s just the rents and that\u2019s the metric that I go off of because you can\u2019t really mess with it.
So I go off the GRM cap rate. If I can stabilize at a cap rate that\u2019s two points above the going cap rate, I know it\u2019s going to be a pretty good deal. And if it fits that 70% or 30% below market value stress test. So if I buy a property for a stabilized seven cap or I can get it to a seven cap and the market\u2019s selling for a five cap or under, I know the deal is going to pencil. So I\u2019ll make an offer at that point.<\/p>\n

David:
All right, Jason, what advice would you give investors who are experiencing how hard it\u2019s gotten to find a great deal right now?<\/p>\n

Jason:
I think, I mean myself, a lot of people are struggling with this. Are you having a tough time finding deals?<\/p>\n

Andrew:
Absolutely. We\u2019ve only closed one large acquisition this year and we\u2019ve underwritten probably 400.<\/p>\n

Jason:
Got it. I\u2019m excited. I want to hear your take too. But my take is I\u2019m not super technologically fancy. I\u2019m very simple and I just think for me to get more deals, just because there\u2019s less inventory, the market\u2019s not moving as much. You just got to put in twice as many reps as you were before.
And one of my mentors told me it was one of the best advice I ever got was in a great market, any average person can make money. But in a slow market, in a down market only the superstars can make money and the superstars emerge in markets like this. So I think that if you\u2019re telling yourself there\u2019s no deals, there\u2019s deals closing every single day in every state, in every city.
So if you tell yourself that deals aren\u2019t going to move, then that\u2019s what the world\u2019s going to give back to you. But if you tell yourself that the market\u2019s still moving, I\u2019m just going to work harder to get a deal and do what I\u2019m doing because it works, eventually you\u2019re going to make it happen.<\/p>\n

Andrew:
Yeah. I was in the airport this weekend and cross country flight, got off the flight with tons of people and this is LAX coming back to California. You got off and you come to that place where you\u2019re on the ground floor and there\u2019s just this massive escalator up to the second floor, and for some reason the airports, each floor is 30 feet tall instead of the normal amount.
And so I\u2019m standing there looking and I see seriously probably 120 people on the escalator and on the set of stairs right next to it, zero, not one person. And I stood there and I thought, I\u2019m like, \u201cOkay, that escalator represents the real estate market for the last 10 years.\u201d If you basically had the courage to at least get on it, you probably had a fairly easy ride to the top.
Now, we\u2019re in a market where you got to put in, you got to take the stairs, you can still get to the top, but it\u2019s going to be a whole lot more work and a whole lot more effort and doing the kind of things that you\u2019ve been doing and are still doing.<\/p>\n

Jason:
It\u2019s a really good analogy.<\/p>\n

David:
Yeah. And you\u2019ll be better off for it, right? Taking the stairs is healthier.<\/p>\n

Andrew:
Absolutely.<\/p>\n

David:
Even though you sweat a little bit.
All right, so any advice on turning leads into deals once you find a lead?<\/p>\n

Jason:
I think one of the highest paying skill sets is being able to close a lead because you can hire people to find leads for you. You can have a marketing budget and get leads, but when you actually have to convert the leads that come through your door, that\u2019s what separates a great business from a mediocre business.
And the thing that\u2019s worked extremely well for converting leads in my brokerage business and in my investing business is that we always lead with credibility. So we always lead with, here\u2019s what we\u2019ve done, here\u2019s our track record and we have a nice little package on our reviews, 5-star reviews work extremely well for us and our deal history works very well and we lead with that.
But then after we kind of say who we are, a huge mistake that a lot of salespeople make because in real estate we\u2019re all in sales, is that they do a lot of the talking like me as the professional, a huge mistake that people make is you do 80% of the talking. But the University of Harvard did a study that the best salespeople actually only spoke 20 to 30% of the time and the client spoke way more. And it\u2019s your ability to ask the right questions that actually lead you to your destination much faster than you just blabbering along.
Asking the client from a place of caring on how you can help them, what their goals are. \u201cIf we did this for you, what would your dream place be looking like?\u201d So asking tactical questions. A question that works really well for me is when a client kind of comes to us and says, \u201cI\u2019ve been thinking about selling.\u201d I always ask, \u201cWe don\u2019t want to waste your time. What would be the perfect scenario for you if you were to sell your property? And what would you do with the money?\u201d
Because in the real estate world, whenever you sell, no matter what, the biggest issue on why people don\u2019t sell or do sell is, \u201cWhat am I going to do when I sell? Am I going to cash out? Am I going to exchange? What am I going to do with it?\u201d So if we can tailor the process to where their goal is matched with the actions we provide.
For example, if a client cashes out, they want that money as fast as possible. So we want to try to find a buyer listed as fast as possible and do a quick close. But if they want to do an exchange, which is a huge rebuttal, a lot of clients don\u2019t want to sell because they\u2019re scared of not finding a property, is that the huge thing that we do that benefits our clients is that we bill in two to four 30-day extensions after the close of escrow, after the actual close of escrow.
So if escrow is 30 days, if the buyer removes contingencies in 17 days, the seller can exercise two to four depending on what we can negotiate with the buyer, 30-day extensions to have more time to go shopping for a property.<\/p>\n

David:
That\u2019s smart.<\/p>\n

Jason:
So that is just two examples of how we can cater a scenario to what our clients are looking to achieve. And that\u2019s really helped me convert leads is coming from a place, like, \u201cWhat can we do to help you?\u201d<\/p>\n

David:
Solving problems.<\/p>\n

Jason:
Solving problems.<\/p>\n

David:
That\u2019s what we\u2019re here to do.<\/p>\n

Andrew:
That\u2019s what you get paid for.<\/p>\n

Jason:
Yeah.<\/p>\n

David:
Awesome man. Well, we appreciate you sharing your story. I\u2019m very glad you didn\u2019t end up an organic chemist. We would all be worse off for it. Same for you Andrew. Glad that you\u2019re not still a, you were a-<\/p>\n

Andrew:
Chemical engineer.<\/p>\n

David:
Thank you. I think word chem was in there, but I realize it wasn\u2019t the same type. Yeah, chemical engineer, this is great.
Where can people find out more about you if they want to follow up?<\/p>\n

Jason:
Easiest way is to find me on Instagram or YouTube. It\u2019s just jasonjosephlee, and then I also have a free multifamily investing course if anyone\u2019s interested in hearing about it as well.<\/p>\n

Andrew:
And should also point out if anyone\u2019s just trying to look up Jason Lee, this is not the Jason Lee who starred in My name is Earl back in the early 2000s.<\/p>\n

David:
That was a great show though.<\/p>\n

Andrew:
It was a great show.<\/p>\n

David:
You don\u2019t remember that, do you? Not old enough.<\/p>\n

Andrew:
He doesn\u2019t, he.<\/p>\n

David:
It was funny.
All right, so reach out to Jason if you are in the Southern California area and want to buy commercial real estate and reach out to me if you\u2019re in the Southern California area and want to buy residential real estate and reach out to Andrew Cushman, if you\u2019re just in Southern California. Where can people find out about you?<\/p>\n

Andrew:
Go to BiggerPockets and give me a colleague request so we can connect there and then follow me on LinkedIn and of course, just look up Vantage Point Acquisitions and there\u2019s a handful of tabs there to connect with us that way.<\/p>\n

David:
That\u2019s such an Andrew thing to name your company. Vantage Point Acquisitions. Have I ever told you this?<\/p>\n

Andrew:
No, but I have a follow-up comment. Go ahead.<\/p>\n

David:
It\u2019s so accurate but yet incredibly hard to spell. And you never thought about the fact that most people are not going to know how to spell acquisitions perfectly and they\u2019re never going to find you.<\/p>\n

Andrew:
Well, and also it shows that what shows when my early mistakes, and this is something I think most beginners make, I was too focused on. \u201cI got to get a deal. I got to get a deal. I got to get a deal.\u201d So I named the company, it should have been Vantage Point Capital, not acquisitions, right? But, so every time I say Vantage Point Acquisitions, I think I\u2019m like, \u201cOh, it should be capital.\u201d<\/p>\n

David:
I made the same mistake with my social media. I called myself davidgreene24 because that was my high school basketball number and there was already a David Greene. Looking back, people are always like, \u201cWhy do you call yourself that?\u201d I have no good answer. It was just pure laziness, because I had no idea that it was going to become this big of a thing.<\/p>\n

Andrew:
Yeah, I just wanted to acquire deals, so there you go.<\/p>\n

David:
So speaking of that, you can find me on social media @davidgreene24 or check out my website, davidgreene24.com. I put a chat feature on there. So people don\u2019t realize this, but they can actually chat with me directly going to that site. I talked to some of them and then I\u2019ll pass them off to the right team members.<\/p>\n

Andrew:
So it\u2019s not David GPT. It\u2019s actually David?<\/p>\n

David:
Yes. I am going to have some kind of a stamp of guarantee that you will never get. You may get a form of AI at some point. I can\u2019t say it will never happen because it works into operations, it works into things. And I even think that that chat system has AI that starts the conversation, but I get a notification on my phone and I will talk.
So at some point I\u2019m going to have a little cheesy seal that\u2019s like, \u201cIt will always be a human that you talk to, not a bot pretending to be human.\u201d Because-<\/p>\n

Andrew:
I like it.<\/p>\n

David:
\u2026 everyone\u2019s excited about AI, saving them time and no one\u2019s thinking about the customer. I\u2019m not super excited for AI to take over all the conversations I wanted have with Jason and instead I\u2019m talking to a computer that\u2019s telling me what I want to hear. So you still talking to your own clients?<\/p>\n

Jason:
I am.<\/p>\n

David:
All right. You hear that. Andrew, Jason and David all talk to real people, so.<\/p>\n

Andrew:
Yep. No chat functions here.<\/p>\n

David:
There you go. So check out that site. Go give me a follow and check out BiggerPockets on YouTube. If you\u2019re not listening to this on YouTube, you could be and you can see three very good-looking guys, or at least two good-looking guys and me on YouTube here for your viewing pleasure. Let us know in the comments what your favorite part of today\u2019s show is.<\/p>\n

Andrew:
Well, they say handsome guys are eye candy. I think that puts you and me more in the category of eye broccoli.<\/p>\n

David:
That\u2019s right. This get your visual vegetables here on BiggerPockets, cheese scoop. Jason, you\u2019re like the cheese whiz to put on the broccoli man.<\/p>\n

Andrew:
Yeah. There you go.<\/p>\n

David:
You make us look good.<\/p>\n

Andrew:
You make us look good.<\/p>\n

David:
Yeah. That\u2019s how we eat it.
This is David Greene for Andrew, my partner in Multifamily Investing, Cushman signing off.<\/p>\n

\u00a0<\/p>\n<\/div>\n

Help us reach new listeners on iTunes by leaving us a rating and review! It takes just 30 seconds and instructions can be found here<\/a>. Thanks! We really appreciate it!<\/p>\n

Interested in learning more about today\u2019s sponsors or becoming a BiggerPockets partner yourself? Email <\/em>[email\u00a0protected]<\/span><\/em><\/a>.<\/em><\/p>\n

Recorded at Spotify Studios LA.<\/strong><\/p>\n

Note By BiggerPockets:<\/b> These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.<\/p>\n


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Jason Lee owns more rental properties than most full-time real estate investors. But, he didn\u2019t do this by investing after the last housing crash, inheriting millions from his parents, or buying a hundred-unit apartment building at once. Actually, Jason seemed like the least likely person to end up as a big earner. He was raised […]<\/p>\n","protected":false},"author":5,"featured_media":9049,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"fifu_image_url":"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/08\/REP_812_WEB.jpg","fifu_image_alt":"","footnotes":""},"categories":[9],"tags":[],"class_list":["post-9048","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/9048","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/comments?post=9048"}],"version-history":[{"count":1,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/9048\/revisions"}],"predecessor-version":[{"id":9050,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/posts\/9048\/revisions\/9050"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/media\/9049"}],"wp:attachment":[{"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/media?parent=9048"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/categories?post=9048"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/imsfund.com\/index.php\/wp-json\/wp\/v2\/tags?post=9048"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}