Navigating Real Estate Partnerships: Expert Advice for Maximum Growth

[00:00:00] Have you ever thought about using a partner or partnerships to build your real estate business and

[00:00:04] accelerate your wealth creation? If so, you need to watch today's episode. I interview Ashley Kerr

[00:00:10] who started her business in 2014 after she pushed back on her new boss saying,

[00:00:14] I don't want this stupid job right out of college. And she's built an amazing portfolio of real

[00:00:20] estate and recently wrote a book on the use of partners and how she used partners and how

[00:00:25] she continues to use partnerships to grow her business and her practice and accelerate her wealth creation.

[00:00:32] Welcome to The Brick & Mortar Money Show. The podcast dedicated to helping business owners

[00:00:38] and professionals achieve wealth, autonomy and control through commercial property ownership.

[00:00:44] Join us as we unlock the power of real estate to transform your business and investment

[00:00:49] strategies. Whether you're seeking to expand, invest or gain more freedom in your entrepreneurial

[00:00:55] journey, this is your destination for insightful stories, expert advice and actionable strategies.

[00:01:04] Welcome.

[00:01:08] Welcome listeners. Today I have the distinct honor and privilege of having Ashley Kerr on her show

[00:01:13] today. She is the co-host of the Bigger Pockets Real Estate Rookie podcast, but in addition to that,

[00:01:19] she's got a really amazing background. She purchased her first rental property in 2014

[00:01:24] and since then has grown her buying portfolio to over 30 properties.

[00:01:28] She's got experience of residential and commercial properties and she accredits a lot of her

[00:01:33] success to the use of partners on several of her key real estate deals and creative

[00:01:38] financing. And I want to dig into those specific areas today with her and I'm excited about

[00:01:42] getting deeper and learning about her story. So Ashley, welcome to the show today.

[00:01:46] Thank you so much for having me.

[00:01:48] Yeah, yeah. So bring us up to speed real quickly. I know you've got,

[00:01:52] understand you've got a farm, you're a mom, you got a lot going on. So tell us

[00:01:57] this story about how you got into real estate and kind of where you are.

[00:02:01] Okay, yeah. I graduated from college with an Accounting and Finance dual degree.

[00:02:07] I was set out to be a CPA and I had interned for an accounting firm throughout college and the plan

[00:02:13] was after college, I'd graduate. I got married the summer after college and then I'd start working

[00:02:19] full time that fall and I'd finally start making the big bucks. Well, that day came when I got my,

[00:02:27] you know, offer letter to go full time and it was extremely disappointing. It was maybe

[00:02:35] $3 more than what I was making as an intern there. And I just remember the,

[00:02:44] one of the partners at the firm just saying, you know, I don't make the money that I want either

[00:02:50] basically saying this is how life is. And I, that's just stuck in the back of my mind forever

[00:02:56] as far as well, I don't want that. So I only lasted six months and I quit in the middle

[00:03:03] of tax season. I gave my two weeks notice and they said, you know, we usually don't keep someone

[00:03:10] for two weeks, you know, once you quit, you're gone. I was like, okay, great. And then they're

[00:03:15] like, well, no, no, no, I guess we do need to stay and finish the game. So my plan was I just

[00:03:22] wanted to be a stay at home mom. And shortly after that, I went on vacation with my friend

[00:03:28] and her family. And I, you know, was talking to them about, you know, I quit my job. I don't know

[00:03:34] what I'm going to do. You know, my husband can support me. I'm just gonna stay at home mom. And

[00:03:39] so growing up, I had known the family very well in that he the dad had a bunch of businesses

[00:03:45] and did a lot of different things. I always respected what he did. And they always were

[00:03:51] very successful and had money and would take us on trips and things like that. So he said,

[00:03:56] I need help in my business. And it really intrigued me. And I said, okay, and the words he used was

[00:04:02] I need help getting organized. So that was really the job description. And I started working for him

[00:04:09] part time and what that ended up translating into was, I have a 40 unit apartment complex

[00:04:15] that I need someone to manage. And so that was my first position with him was managing

[00:04:21] a 40 unit apartment complex. The best part was the bookkeeping was easy for me, I could collect

[00:04:27] the rent tax, I could pay the bills, I could properly record everything. And so the numbers

[00:04:32] were good, I could budget everything like that. But I didn't know the first thing about tenant

[00:04:38] landlord law about leases, things like that. So I spent so much time learning and researching

[00:04:45] at that point, I didn't know anybody else that was a real estate investor or property manager.

[00:04:50] I didn't know about websites like bigger pockets. So I had to learn everything on my own and

[00:04:56] the previous person that managed this literally just used pen and paper for everything.

[00:05:01] So I took the first couple of years upgraded everything to software streamlined everything

[00:05:05] created my systems and processes. And so I had been doing this for about a year when I approached

[00:05:12] the owner son, who would also been my childhood friend. I said, look what your dad is doing.

[00:05:18] We need to do this. And the son was in the family business that they had, but that wasn't real estate.

[00:05:23] Real estate was always just a side thing his dad did. And so I said, you know, look at the cash

[00:05:29] flow here, look at the advantages and his dad was taking an apartment complex refinancing it and

[00:05:36] using that money to buy another business in cash. And so I was just looking at how this

[00:05:43] real estate was actually helping his regular business that he was operating to. So we dove in

[00:05:51] and we bought the first duplex that we looked at. And from then I became a real estate investor.

[00:06:00] Well, it just is some funny thoughts across my mind. You know, when you're telling the story,

[00:06:04] it's like the business owner because we work with a lot of business owners and entrepreneurs.

[00:06:08] And that's kind of your typical job description, right? Come help me get organized.

[00:06:14] Unfortunately, you were intelligent enough to go in there and creative and enough initiative to

[00:06:19] actually go beyond the job description. But normally us business owners screw that up

[00:06:25] about four or five times, right? On hires until we figure out we need to define, you know, what

[00:06:29] we're looking to get actually done. Oh, and I definitely made my mistakes. And it was definitely

[00:06:34] a learning process for sure. And probably if he hired an experienced property manager

[00:06:39] right off the bat, it would have been more efficient and effective right away. And it definitely

[00:06:44] took me some time to really get it operating. But it was definitely a unique opportunity that

[00:06:51] I was able to learn all this stuff and get paid and have a great job while doing that.

[00:06:56] Plus it was very flexible. I could work whenever I needed to and I could work from home too.

[00:07:02] No, that's awesome. Well, he obviously saw something in you and he knew you've grown

[00:07:06] up and the drive and the energy and and obviously, you know, I think was a big loyalty like being able

[00:07:14] to trust me and knowing that I would be loyal. Yeah. Yeah, I mean, that's huge in business,

[00:07:19] right? I know you're going to get into partnerships. But loyalty is almost the most

[00:07:23] important thing because you can solve a lot of problems if you know that people's heart is right

[00:07:29] and they're with you long term. But okay, so you had this door of opportunity,

[00:07:33] you go to college, you get the tip, you know, you're following the quote unquote American dream,

[00:07:38] right? And then you get out and disillusionment hits and reality sets in. And I thought it was

[00:07:44] funny what you said, you know, the season the CPA says, well, you know, basically my life

[00:07:51] sucks in yours will too and just get used to it. And you're like, no, I reject that, which I

[00:07:57] love. I love. All right, so you got in, you got started in real estate with your,

[00:08:05] with your friend and bought your first property and that was was that 2014?

[00:08:11] Yeah, that's 2014 we bought our first one. Yep. Okay, so then just fast forward quickly,

[00:08:16] you know, just bring us up to speed then since since you kind of fell into it and you had

[00:08:22] this opportunity and you've done quite a bit with it. What what are some of the key lessons you've

[00:08:28] learned? And we have people that are listening that are sort of feeling that same pinch that

[00:08:33] they sort of hate their job or they want to grow their business or they want, they want to get in

[00:08:37] real estate. How did you get started and then for some of the more seasoned people, how

[00:08:40] you know, how did you just sort of see to the next the next mountain, you know, to go for it?

[00:08:46] Yeah, so the reason I got started was I picked my ideal opportunity for getting a partner. I

[00:08:54] approached the guy that I was working for his son, his son didn't have any investments. Yeah,

[00:08:59] as far as real estate and he had a bunch of cash savings that he had and wasn't doing anything

[00:09:07] with they're just sitting in his bank account. But also he could ask, you know, get a glowing

[00:09:12] recommendation from his dad about me and trusted me because we knew each other well. And so he

[00:09:18] actually fronted all the capital. I think maybe I ended up putting in $5,000 for some of the repairs

[00:09:24] that we did after we purchased it. But we set it up so that he actually got 50% equity of

[00:09:29] the property. So he was getting 50% of the cash flow and 50% of the, you know, a faked in

[00:09:35] appreciation and the mortgage pay down. But then also he actually had a note on the property

[00:09:40] where he was receiving a mortgage payment for the funds he actually put into the property.

[00:09:45] So he was getting paid back at 5.5% interest amortized over 15 years. So there was almost

[00:09:53] that extra security. It wasn't just here's the cash, I hope we make cash flow. We had run

[00:09:59] the numbers based off of him getting his principal and interest paid back. Plus,

[00:10:03] you know, there was a little bit of cash flow on the property too. So that was, you know,

[00:10:08] the biggest advantage I had was I had an opportunity to partner with someone who was

[00:10:14] in the right mindset to do was capable of doing it, but didn't have the time or the energy

[00:10:19] to actually go and buy the properties himself. So that was a huge advantage to me that I was

[00:10:25] able to bring that to the table. We still continue to partner today. He is still in

[00:10:30] the family business. There's some things that he's uncertain about. And he literally uses

[00:10:35] the real estate investments that I bring him that we partner on as his safety net.

[00:10:40] As to like, okay, this is what I have if everything else falls through, you know,

[00:10:45] my buy sell doesn't work out with my dad or whatever it may be. That is, you know, his safety net.

[00:10:51] So it's been a great partnership throughout the years. And then kind of fast forward,

[00:10:56] I've taken on a couple other partners, my sister and I bought a house that she house hacks.

[00:11:01] My brother, I gifted him a percentage of a house that we bought and then we later sold

[00:11:06] a couple years later for Christmas. And then I have had two other partners that I've worked with.

[00:11:12] One right now he does all the property management. Right now he runs and operates our

[00:11:19] property management company. And then we have a couple of short term rentals together.

[00:11:24] And then another one, we just have long term rentals together that we partnered on where

[00:11:29] everything's pretty much 50 50. And he also that partner, he also has a couple businesses.

[00:11:36] He owns a restaurant franchise five locations. And so he actually has used his real estate to

[00:11:44] fund the purchase of those franchises that he bought. And that's been a huge learning experience

[00:11:50] for me is that these entrepreneurs that have these other businesses have been able to purchase

[00:11:56] them or expand or grow by refinancing and using that equity that's sitting in their real estate

[00:12:03] to actually fund their business too. Instead of having to go and get a business loan,

[00:12:08] things like that. And you're definitely getting better rates of financing refinancing on a property

[00:12:13] too. Well, yeah, one of the things that we do a lot of is that we educate business owners

[00:12:19] that have like a business that has a need for a local presence. So whether you have employees

[00:12:24] or customers or clients or patients, or what have you in your in your it's a growing business

[00:12:28] and you've got sort of a long glide path to buy the building that your business is in. And a lot

[00:12:33] of times by larger like we have one right now he's building a 12,000 square foot warehouse. He's

[00:12:38] he's remodeling company. And he's only going to need about he's gonna take about I think

[00:12:42] 6,000 feet but he's gonna he's gonna essentially lease out the rest of it,

[00:12:46] which is going to pay the freight on the mortgage and build equity. And so in a few

[00:12:50] years the additional equity he'll be able to leverage to do like you're talking about expand

[00:12:55] his business or buy a competitor or do whatever in addition to other real estate investments,

[00:13:01] multi family and whatnot. Yeah, that's what I've seen the investor I work for due to and

[00:13:06] they're always separate entities you have your LLC for the property and your corporation

[00:13:10] for the business. And so I opened a wine and liquor store. And we bought a four unit building

[00:13:16] we rehabbed it and the liquor store is in one of the units. And what we do is we kind of and

[00:13:24] the you know, the mortgage everything is covered by three other units and there's some cash flow

[00:13:28] there. But we still have the business make a rental income payment because the rental income

[00:13:35] is a better tax advantage. So we have a triple net lease with the liquor store where they

[00:13:40] actually pay the property taxes, they paid the utilities, they paid the insurance, they pay their

[00:13:47] rent. Yeah, we try to offset that as much as possible. So that's like another huge advantage

[00:13:52] to have actually owning the building that your business is in. Yeah, absolutely. Totally

[00:13:57] an advocate for that. We always say you have a real estate holding company and operating company

[00:14:01] rent space from the holding company. And there's a ton of tax advantages as you just

[00:14:06] enumerate Ashley. So yeah, we're tracking that's awesome. So speaking of you know,

[00:14:10] you're talking about partners and you've worked with partners in different capacities. And I want

[00:14:15] to I want to dive into that a little bit. I know you wrote a book on that too. So tell us a little

[00:14:18] about the book and why did you write a book on it? And what are some of the key points because

[00:14:23] a lot of us think a lot of business owners and myself definitely and I've had to deal with

[00:14:29] this a lot in my life in terms of your were Eagles, we like to fly solo right? We like

[00:14:34] to call the shots, we're going to be in control, come good days, bad days. I've seen them both.

[00:14:42] But now I got a partner and now I've got somebody else involved. I've got a wife,

[00:14:47] which is a great partner. So we've done well there but talk about that dive deep and just

[00:14:54] educate me and our audience on this. Yeah, so I wrote the book Real Estate Partnerships

[00:14:58] with my co-host of the podcast, Tony Robinson. And we decided to write this because this is both

[00:15:05] how we got our start. We both started with getting partners and we still continue to use partnerships

[00:15:11] today and we use very different partnership structures for you know, properties we're

[00:15:16] purchasing. So we just thought we would put all the information we know together and share

[00:15:21] experience and share the knowledge we have on creating partnerships to kind of alleviate

[00:15:26] some of that worry and that risk and to clarify something. So you know, the question we get asked

[00:15:32] most is how should I structure the partnership? And you know, we always have to give the worst

[00:15:37] answer. Well, it depends and really it's negotiable and you can structure it any way you want as

[00:15:43] long as it's illegal. But I could give you $100,000 and you go and buy a property that's

[00:15:49] $100,000 and you could say I'm only giving you 10% but we're hiring a property manager

[00:15:56] company. I'm not doing anything but I brought the deal so I'm getting 90% or it could be the

[00:16:01] reverse way. I could get 90 because I'm bringing 100% of the capital and you're getting 10%

[00:16:06] because you found the deal. There's no wrong way. It's really what is, you know, beneficial to

[00:16:12] you and your partner and what you would agree on. So starting out, I did that deal where we

[00:16:16] are 50-50 equity partners and then, you know, he got that mortgage payment back to made all

[00:16:22] of his principal outback and made interest on it plus the cash flow he made on it,

[00:16:26] plus the equity in the property in the profit when we sold the property. So that was a huge

[00:16:31] advantage and today someone offered me that structure I would say no. Like I have too much

[00:16:36] value now. I know too many things. I can find this better deal, things like that. But getting

[00:16:40] started, he put all his trust into me. I took care of everything and he was passive.

[00:16:48] He didn't do anything. He didn't second guess me and I think some of my biggest recommendations

[00:16:53] for taking on a partner is first identify why you want to partner. Is it just because you need

[00:17:00] capital? Well, then you're going to want to solicit and find a partner that is just going

[00:17:06] to give you the capital and be hands off and completely trust you. You know, maybe you're

[00:17:11] sending them a quarterly report but they're not going to be micromanaging you or try to

[00:17:15] give their ideas. Maybe you want someone who's going to come in and give ideas and things like

[00:17:21] that. So that's the first step is identifying what type of partner you actually want and their

[00:17:26] involvement. So when you gave the example and asked me the question saying, you know,

[00:17:31] like you have a partner coming in and then all these things can happen and that's where

[00:17:35] at the beginning of the relationship you set those expectations as to this is what I'm in

[00:17:40] charge of. This is what your job is and that job may just be writing the check and reading

[00:17:46] the quarterly reports or whatever that is. So being able to set the expectation in the beginning

[00:17:52] is a great point. And for me, I want to hammer that piece home right there about setting

[00:17:58] expectations in the beginning because you talked about this in your story a little bit

[00:18:02] about how your first not your first job but your job with the family business that

[00:18:07] got you in real estate was a cleanup. Get me organized. Okay. And that's a terrible job description.

[00:18:14] And that's a terrible way to go into a partnership on real estate. Right? I mean, we need to know

[00:18:19] was it Steven Covices begin with the end of mind, right? We need to know our exit plan

[00:18:23] from beginning and potential contingencies because if it goes really well, people tend

[00:18:29] to forget what the handshake agreement was. If it goes really bad, people tend to forget

[00:18:34] what the handshake agreement was. Right? So talk about setting expectations and then

[00:18:41] because you came in and set up systems and everything, but you're talking about codifying

[00:18:46] that, right? I mean, black and white and agreement and written down and signed and

[00:18:51] everyone is on the same page, I'm assuming. Yeah. Like the more detailed you can get,

[00:18:55] the better. And obviously you're not going to be able to write down every single task

[00:18:58] that person is responsible for, but also like for property management and, you know,

[00:19:04] if you're purchasing a property with someone and you decide you're going to self manage it together,

[00:19:08] you can write out a pretty defined list as who's responsible for what. So who's responsible

[00:19:13] for paying the bills? Who's responsible for doing the maintenance or contacting the vendors?

[00:19:20] Who's responsible for the rental permits? Things like that. But what you can also do

[00:19:25] is because this is a problem that I've seen in partnerships is where one part, they go into

[00:19:32] the deal 50-50 all hyped up excited. And then one partner ends up doing more work than the other

[00:19:40] partner. Then the other partners gets mad. This isn't fair or the one partner says,

[00:19:44] I don't have time to do the bookkeeping anymore. Let's outsource it. And then the other

[00:19:48] partner goes, well, I'm still doing all the leasing now you're not doing anything. How

[00:19:53] is that fair? That we're still 50-50 partners. Instead of having to go back and restructure

[00:19:58] your whole partnership has actually create a cost detail of what each job or task should be paid.

[00:20:07] So for example, if I'm doing the bookkeeping, I'm getting paid $100 a month. And you can

[00:20:13] put it as to what you would actually pay somebody else or you could, you know, do that a little

[00:20:18] bit of a discount. But then you have this whole breakdown. So then if somebody decides I'm not doing

[00:20:24] the bookkeeping anymore, you're no longer getting that $100 and you can use what you would put on

[00:20:31] that to go and pay someone else. So that's why I actually like getting paid the fair market value

[00:20:35] of what that would cost because that's what you should have been running your numbers as anyways,

[00:20:41] you want to make sure that you can outsource everything later on down the road. And it's

[00:20:45] not going to kill your cash flow. Because you may say like, Oh no, I love it. I love doing it right now.

[00:20:50] Things can win 100% completely change in your life that you don't want to anymore. So you always want

[00:20:55] to bake it into your numbers anyways. But I like having that list of like, Okay, you're not doing

[00:21:00] maintenance anymore. We were paying you $40 an hour whenever you had to go and do the maintenance

[00:21:05] or outsourcing that now and you still have your 50% we're good to go.

[00:21:10] That's a great idea. I mean, it's fantastic. Yeah, because you quantify it. I mean, you hit

[00:21:14] a lot of gold there. I mean, you should do it at the retail price because the other thing that comes

[00:21:20] to mind is as you scale potentially and you do more and more of these, you don't want to be stuck

[00:21:25] doing the, I don't call medial tasks, but the things that you were doing before that you sort of liked,

[00:21:30] but you sort of liked them maybe because you had to do them, but then at some point,

[00:21:34] maybe you don't have to do them. And so if it's baked into the numbers up front,

[00:21:37] then you can do that. And that's kind of part of my story too, as I started out managing 40

[00:21:43] units for this investor. And then it grew to like 90 units over time. And then by that time,

[00:21:49] I had accumulated about 20 units myself. And so it was like, Oh my God, it became a lot. And I

[00:21:56] was doing all of that myself. His daughter started working for me part time. We tried out

[00:22:01] a couple other people and it was just, I was so overwhelmed. I was ripping my hair out. I was

[00:22:06] crying. Like, so I just said, you know what, let's give this to a professional. I don't want

[00:22:11] to do this anymore. It's awful. I can't handle it anymore. And so we hired a third party property

[00:22:16] management company. And that is where I learned so much. I learned that you can't just sit back and

[00:22:24] now you have a passive investment, you still have to be the asset manager. They're not going to,

[00:22:31] you know, look at your insurance bill and say, you know what, that's a little bit high. Let's

[00:22:33] quote it out. They're not going to look at your water bill and say, you know what,

[00:22:36] I think the toilet's leaking or there's water running somewhere because it's a little bit higher

[00:22:40] than last month. They're not going to want to jump into, you know, getting an eviction. They're

[00:22:46] going to want to, you know, they got other properties to manage. You're going to be placed

[00:22:51] in line as to when it's going to happen. So we actually, we did three years with them and

[00:22:57] I built out a property management company last year. And so May of 2023, we launched our new

[00:23:04] property management company and we took my properties and the other investors properties

[00:23:09] and we're not taking on any other clients. But this time around, I hired everything. I rarely

[00:23:17] have to do anything for this, you know, property management company that right now we're doing

[00:23:22] 150 units, I think. And I have a full-time maintenance guy who's boosted on the ground.

[00:23:27] I have two virtual assistants in the Philippines. And, you know, if I would have known what

[00:23:33] I know now back then and I would have made my assistants and processes, created my SOPs and

[00:23:39] built everything out so that someone else could follow it and learn. It would have been

[00:23:44] so much better, but I could, I felt stuck that I couldn't acquire any more properties

[00:23:50] because I was spending so much time in the property management business.

[00:23:53] Yeah. As Michael Gerber would say the EMIF, you're busy working in the business and not

[00:23:57] on the business, right? And so yeah, you hit your ceiling. I mean, you're,

[00:24:01] you're in this world of trading time for dollars, which, you know, Robert Kiyosaki and everyone

[00:24:06] would poo poo on, right? And because, hey, it's only 24 hours in a day. And you probably have

[00:24:11] other things with three kids and a husband that you like to do with your time and not just work,

[00:24:16] right? So okay. So so you hit two identify why you want to partner set expectations. Was there

[00:24:23] any other key points on the partner sort of advice? Yeah. So when you're building out your

[00:24:32] relationship, your structure with a partner is having alignment meetings. So I'll even mention

[00:24:39] your wife that, you know, your partner with her. So when you're partnering with somebody in a business,

[00:24:45] you're also partnering with their spouse or their significant other because a lot of the

[00:24:51] decisions they make are influenced by their significant other. So I like to give the example

[00:24:56] of, okay, we're, we're partners and you know, we're starting to build this business starting to grow.

[00:25:03] It will maybe your wife is getting excited like three years, like we can move to the beach,

[00:25:09] like let's sell this, like I see how much, you know, money this is making, you could sell

[00:25:13] this for a lot of money, blah, blah. And then you know, me I'm thinking I have five kids in private

[00:25:22] school, I've got to save for their college, you know, I have all these high expenses where I need

[00:25:28] to keep rolling in this business because I just am, you know, spending more than I'm even

[00:25:35] making right now on all of this stuff. And so if we're not aligned, it's going to get to

[00:25:40] the point where there's the fork in the road, where it comes to the point where you could sell

[00:25:44] the business. You say no, like my, I promised my wife that I would grind for three years and I'm

[00:25:50] out and we're moving to the beach, like what I need to sell. And your partner, me says,

[00:25:57] I can't buy you out. I don't have the money. It's just not in the cards for me right now.

[00:26:04] I thought we were like in this for the long haul, the grind. And then it comes to the

[00:26:08] point as to, okay, you stay in the business or you sell to somebody else. And now I have to be

[00:26:15] partners with someone that I may not want to be, or even if I do, it's, it's not going to be the

[00:26:20] same and it's still going to be a significant change. So that's where, you know, involving

[00:26:26] what's going on at home into those alignment meetings is I think really, really beneficial.

[00:26:32] Maybe that's even just once a year, but also quarterly, you know, things too. And I

[00:26:37] think it's important for your spouse to know what's going on in your business too, to just kind of

[00:26:43] their pulse on the situation of what's going on. Yeah. Yeah. No good point. I mean, a lot of this

[00:26:49] boils down to clear communication and regular communication, right? Yeah. From the beginning

[00:26:54] and then throughout the process, it sounds like, okay, yeah, great alignment. That's a really

[00:26:58] good point. Anything else? I guess the last thing you kind of touched on right there is

[00:27:04] the communication piece as to James Danard, who's a real estate investor out of Seattle. He does this

[00:27:11] very well with his business partner as far as they each have their roles in the business

[00:27:18] where decisions are ultimately their decision if it's in their wheelhouse. So if it's in the

[00:27:24] brokerage side, it's James and if it's in the property management side, it's his partner's

[00:27:29] ultimate decision. And what they do is they'll discuss, you know, issues that come up or things

[00:27:35] like that and they'll give each other feedback, but no matter what, whoever is the, you know, their

[00:27:41] department, they're making the final decision and they have and they've learned to trust each

[00:27:46] other over the years. And he said it also makes things move a lot faster where it's not me,

[00:27:52] I don't know the day today. I'm not continuously questioning him trying to figure out if I

[00:27:57] can find the right answer. You know, it's just we're there as sounding boards to each other,

[00:28:01] but also it's the other person's ultimate decision. So I think having that trust and

[00:28:07] my newest partner that's, you know, kind of taking over my property management company

[00:28:11] right now, he that is like the most beneficial thing with him is like, I have such trust

[00:28:17] that he is making the decision in the best interest of the property, the tenant, the business.

[00:28:26] And I even if it may end up being the wrong decision, it's still he knows more than I do

[00:28:33] in the day to day. And that I think is just like so valuable that you don't feel like somebody's

[00:28:39] trying to make a decision based on what's easy way out or, you know, things like that. But

[00:28:46] that would be my last piece of advice there. So basically you're saying, you know, this partnerships

[00:28:52] goes beyond I mean real estate investing this this overlays a lot of things. I mean, you're

[00:28:58] essentially building a business when you buy a piece of real estate, right? And you continue to buy

[00:29:02] real estate. And if you have partners and everyone has a defined role, it's not unlike

[00:29:07] building a company where you have certain defined roles where you might have, you know,

[00:29:11] for you the CPA, the accountant, you have the, you know, the sales manager, director or whatnot.

[00:29:17] And everyone may have they have a voice but really ultimately at the end of the day,

[00:29:22] you know, if you're the CPA and you're the accountant in the company, you're going to

[00:29:24] know the books a lot better than me the sales guy, you know, like, Hey, you need to raise your,

[00:29:29] you know, raise your prices because we're a profit bar is not far enough.

[00:29:34] So and I did spring up one other question. In terms of like you mentioned your, your

[00:29:40] newest partner on a property property management company that you have. So I want to make sure our

[00:29:46] terms are defined now you, you're saying partner now, are you and I know in the real estate sense

[00:29:52] you're generally there's going to be some kind of an ownership component for the partner. So

[00:29:56] they have skin in the game of some type. Are you suggesting that like your property management

[00:30:02] partner are you when you bring on a partner this is somebody beyond just a like a paid employee

[00:30:07] this is someone that is that has some skin in the game and some success, you know, their success

[00:30:14] is tied to the success of the enterprise. Yeah, so all of my real estate partnerships are LLCs

[00:30:20] and then I'm in one joint venture right now for a flip I'm doing but with the property

[00:30:25] management company, I own the majority of that and then the other business owner

[00:30:31] that I'm managing his properties he owns a small percentage of it because he brought

[00:30:35] his properties into it. Other than that my partner that I talked about that oversees the whole company

[00:30:42] and runs it he is my partner on real estate deals. So we have real estate deals together

[00:30:49] but as far as a property management company, he doesn't have any ownership into that. He is

[00:30:56] on salary for being the you know the manager of it and then also he does a lot of the

[00:31:03] maintenance requests too so he'll get paid an hourly rate for that but the goal is to actually

[00:31:10] give him a percentage of it to actually take full control. So we're kind of you know having him

[00:31:17] learn the whole business and going through it but I would love to be as hands off as possible

[00:31:23] and just you know collect some you know money coming in just being a passive investor

[00:31:30] that passive investor thing right yeah well but you learn but you talked about trust in here a few

[00:31:37] times and partnership it's obviously clearly important to you as a theme. This particular

[00:31:43] person that is your partner for the property management you said he's a partner on other

[00:31:47] real estate deals so you guys have built this trust and relationship through true partnerships

[00:31:52] and now you're giving basically another opportunity to become a partner in another space.

[00:31:58] Yeah and he's the first person that I partnered with that I didn't know for like years that I

[00:32:04] partnered with and I knew each other for about four months before just casual friends not we

[00:32:11] didn't really hang out that much but when we would he would say how much he hated his job

[00:32:17] and he was worked in construction he was a foreman and it just kind of got my mind going

[00:32:21] like I actually need a project manager maybe he would be good so he's laid off in the winner

[00:32:26] so that winner he worked by me side by side every single day while he was on unemployment just learning

[00:32:33] basically job shadowed me and you know everything that I did just learning and consuming as much

[00:32:39] as he could and then when it came time for him to go back to work we ended up purchasing a

[00:32:46] property to get there and we set the partnership up as far as he was getting paid now really

[00:32:52] great to actually do the renovations on it and he owned a percentage of the property so that way

[00:32:58] if we did hire out things it wasn't you know a big deal like we were hiring everything out

[00:33:02] including him doing the work instead of him just putting in sweat equity to the property so

[00:33:09] then he ended up putting his job and he's never gone back and we just bought properties and

[00:33:13] rehabbed him and now he does work for the property management company full time but I will say

[00:33:20] like one thing that I have learned is that my very first partner so he was already entrepreneurial

[00:33:26] you know his dad was he went into the family business so he's already had that kind of mindset

[00:33:32] where this other partner he came from working W2s his whole life and he you know kind of

[00:33:39] lived paycheck to paycheck and making that transition of now you're not getting a paycheck

[00:33:49] every week like you have to budget to know that you know maybe once a month or you know when we

[00:33:54] sell a property that you're getting a big chunk and you got it and so part of the reason that

[00:34:01] he doesn't have ownership of the property management company yet is because he depends on

[00:34:08] that salary and depends on you know making that routine money where he doesn't want to

[00:34:16] he doesn't want to I'm trying to sound this in a nice way as to say it as a negative thing it's

[00:34:23] just a mindset that so many Americans have been taught as to how they learned but he doesn't

[00:34:28] want to give up something to have the reward later on in life such as you know I will

[00:34:35] I'll gladly give somebody you know a big chunk of money and know that you know it's not going

[00:34:40] to be a great return until a year later or something like that like not willing to make

[00:34:44] the sacrifice for that investment I guess I would say no I get it you you um you did that in a very

[00:34:53] a very gingerly manner um it's been it's been hammered the system has been hammered into us

[00:35:00] sent for generations now and you know people are starting to realize that the system is flawed

[00:35:07] but you know but it takes a while to to get you know sadly many people never escape that

[00:35:13] you know the gravitational pull of all that you know training and the culture and all that but

[00:35:18] more and more people are waking up and people like you Ashley that have the have had the you

[00:35:24] know the courage to step out and make those risky choices early on and to basically push back I mean

[00:35:30] that first courageous decision on the job right out of school um inspires people to and with

[00:35:36] your podcast to make that step because we both know that um whether it's business or real estate

[00:35:42] or something where you're out on there sort of trusting your abilities that first step you know a

[00:35:46] little bit of taste of success is is goes so far you know building your confidence to you know

[00:35:53] you can crawl and then maybe if I'm crawl I can maybe actually stand up some time and walk I might

[00:35:57] not see myself as you know the Donald Trump of real estate but right but but maybe you know maybe

[00:36:04] one day possibly we're making progress and um when I can hear from people like you and read

[00:36:10] your books and that sort of thing um it inspires me to say okay yeah maybe I can take that next

[00:36:14] step and then the next step and especially with long-term rentals too which is what we do buy and

[00:36:19] hold not usually a ton of cash flow up front like we have a couple properties that have hit but

[00:36:25] you know it's it's taken time like as over the years like okay we have a bunch of equity we

[00:36:30] can refinance this one to buy this one and then you know we're paying down stuff and we're

[00:36:34] leveraged there's more cash flow but it has taken time it was you know when we first started we were

[00:36:40] getting you know we were leveraging basically 100% doing the burr strategy of what we put into it

[00:36:47] getting all our money back so it was zero money out of pocket basically once we started doing

[00:36:52] the burrs but it still it wasn't a ton of cash since we weren't leaving any cash in the deal

[00:36:58] for the cash flow so those first couple properties can seem like not that exciting but as time goes on

[00:37:06] and like in um 2021 I sold a ton of properties I bought for like 20 000 dollars I sold them

[00:37:13] for like 60 000 that's a great return but like I held onto them for you know you know several

[00:37:20] more than several years they was like five or six years but yeah so it's not always super exciting

[00:37:26] and flashy at the beginning either well my favorite book says do not essentially paraphrasing

[00:37:33] do not look downward on small beginnings because you have to start somewhere and this whole idea of

[00:37:40] I'm getting rich immediately or overnight in anything is a sure way to failure in anything

[00:37:47] and real estate you can certainly can build amazing wealth but it takes time it takes

[00:37:51] learning it takes investment and that's the thing it's wealth that you're building it's not

[00:37:54] getting rich quick right right well actually this has been awesome tell me what what have we missed as

[00:38:01] we wrap up is there anything else that uh we want to talk about I want to hear the name of your

[00:38:05] book again and where people can get it for sure and get more of of your um great information

[00:38:10] where to find your podcast and all that sure so you can find the podcast real estate rookie

[00:38:16] it's on Spotify apple podcast wherever you listen to podcasts you can find it there

[00:38:21] and then I wrote the book real estate rookie and real estate partnerships with tony robinson you can

[00:38:27] find that on biggerpockets.com they have a bookstore you use the code ashley you get a 10

[00:38:33] percent discount and then also you can find it on amazon too if you love that prime fast

[00:38:38] shipping you can get it there and then I also host a rookie boot camp so if you're looking to

[00:38:44] get started in real estate you go to biggerpockets.com slash boot camps and I basically over the

[00:38:50] course of eight weeks take you through getting your first property um feeling comfortable comfortable

[00:38:56] and confident in making offers on your first deal well that's awesome we'll get all that in the

[00:39:02] show notes and everything um ashley this has been great what a great story you're doing amazing things

[00:39:06] that I have this feeling like you're just getting started I feel like it I feel like it's

[00:39:11] been so long I've been messing but it's like every year there's something new and exciting

[00:39:16] and something to add and grow so thank you so much for having me I'm sure yeah and I've never

[00:39:22] been a cpa but I guarantee what you're doing now is a lot more interesting and fun than being a cp

[00:39:28] I think so too my god I think about it sometimes and I just don't think I went to like a workshop

[00:39:36] retreat thing recently where we had to sit in like a session like one session for a full day

[00:39:42] like at your computer and I was just like I don't think I could even sit at my desk for a full day

[00:39:47] I have a walking pad I walk and everything and then I like go outside and I do or think you know it's

[00:39:52] very rare that I'm at a desk all day long and I just I don't think that I could do go back to that

[00:39:57] either awesome well great choice we'll have an amazing day and thanks again for being on the

[00:40:02] show it's great thank you hey gang just winding down here today thanks for listening to the show

[00:40:07] and as always if you need capital to grow your business you're looking to purchase commercial

[00:40:15] real estate or build build a building or invest in commercial real estate you're looking to to acquire

[00:40:20] a business or a competitor or just need growth capital we'd love to talk to you we fund businesses

[00:40:25] all day long our mission is to help entrepreneurs win and to fund their businesses and fund their

[00:40:31] dreams so that they can make an impact in their community reach out to me today go to our website

[00:40:36] click the button to schedule a 20 minute conversation discovery call we'll have a quick

[00:40:40] conversation see if there's a need see if there's a fit and we can take it from there the website is

[00:40:46] vpc victor paul charlie dot capital that's vpc dot capital all right there's no dot com on that

[00:40:57] it's vpc dot capital as always keep crushing it and hope to see you soon around here take care