What if we had to do it all over again? What if, for some reason, we were told that we COULDN’T work in the land business?
What else is worthwhile in the real estate industry? What else could we actually have a fighting chance of succeeding at?
In this episode, we’re talking about what other viable options are on the table in the real estate business that we, personally, could do well at.
If you’re NOT interested in the land business for whatever reason (or even if you are and you want to pivot to something else), we’re going to cover some of the other solid options out there.
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Thanks again for joining me this week. Until next time!
Episode 74 Transcription
Seth: Hey there, and welcome to the REtipster podcast. This is a show that teaches self-motivated people how to make great money from real estate while minimizing risk and creating more time for the things that matter. My name is Seth Williams. I’m here with my co-host Jaren Barnes. And in this session episode 74, by the way, you can find show notes for this episode at retipster.com/74.
We’re talking about a pretty interesting topic. Jaren and I have both spent a lot of time in the land flipping business and a few other real estate investing business models. We know the land business like the back of our hands and we found success here for a lot of different reasons. Which by the way, Jaren does a really good job of outlining in a video he created called “Land Flipping is Better”. I’ll go ahead and link to that in the show notes. Again, retipster.com/74.
So, land is great and all that, but what if we had to do it all over again? And what if for some reason we were told that we could not work in the land business, what else out there is worthwhile? What else could we actually have a chance at success with? In this episode, we’re both going to talk about what other viable options are there in the real estate world that we personally think we could do pretty well at. If you’re somebody who is not interested in the land business for whatever reason, or even if you are, but you’re looking for a way to pivot or something else to do, we’re going to cover some solid options out there that might be worth considering.
Jaren: Yeah, man, I’m excited. It’s always fun to ask yourself these questions because it’s easy to get tunnel vision when you’re in the weeds of pursuing whatever strategy that you decided to execute it on. And for a good reason too because you definitely want to avoid the shiny object syndrome. But I feel like it’s still helpful to just kind of like really reconnect with the “why” behind what you’re doing. And I feel like that’s what we’re going to be doing in today’s episode.
Seth: I also think maybe this is just my view on the subject, but the land business is kind of a means to an end. Like it’s one step in a longer journey. It’s not the final destination of where I see my life going and my career going, but I think it is very critical maybe even the most critical step. I sort of see a real estate investor’s career going in phases.
Phase one is sort of like, we need the cash machine. We need something that’s very active, that’s going to take a lot of work, but it’s going to make a lot of money relatively quickly. For some people that might be like house flipping. It might be house wholesaling. It might be like a commercial broker or even a residential real estate agent. In my case, or in Jaren’s case too, it’s the land business. It’s something that it’s not passive at all, but it makes lots of money, way more money than just a regular 09:00 to 05:00 job would in most cases.
And then step two in my mind, again, maybe other people might have a different path, but phase two is like, “Okay, now we’ve made a lot of money. Where do we park that money? How do we start making this passive? How do we put it to work so that we don’t have to work so hard anymore?”
I think some of the things we’re going to cover here sort of fall into both buckets. Some of them are really active and some of them are more passive. And we’re also going to talk about just knowing what we know now, because we’ve been around the business for so long. Some things that we’re pretty sure we would never do because it doesn’t align at all with our strengths and what we want to do with our lives. So, Jaren for you, if land is off the table, what do you think is the first thing you would pursue outside of that strategy?
Jaren: Well, I think I have to say apartment syndications or midsize apartments because that’s what I’m actually pursuing in real life.
Seth: And when you say that, do you mean like you being the syndicator or you just throwing money into somebody else’s syndication?
Jaren: I want to be on the general partner of the deal. I think my easiest course of action is to find the deal and bring it to a syndication company that has the infrastructure in place.
Seth: You could be good at that, man. I could see you really doing well there.
Jaren: Yeah. I mean, I’m trying. I’m talking to a couple of people and I think there might be some opportunities for me to start hunting for deals. I’ve been kind of on the fence. I know if you guys have heard some of our past conversations, I’ve been on the fence about going after larger stuff versus smaller stuff. Because I feel like there’s a big opportunity in kind of the like 5- to 50-unit range, because most large syndication companies don’t want to touch that space because the property management and financing aren’t as ideal as if you go after something that’s larger than 75 units.
But I feel like there’s less competition there and there’s going to be more opportunity for truly motivated sellers of owners of those kinds of properties. So, I’ve kind of been back and forth on whether I want to pursue kind of midsize… It’s all relative. I don’t even know what to call it because to me being in the more residential space, like anything over 5-units is a big property. But I talked to a syndicator and they’re like, “Yeah, that’s small stuff.” I don’t know what the right verbiage is, but I’m kind of on the fence about what to pursue. Now that I’m talking to some people that have an infrastructure in place, I feel more comfortable going after bigger stuff, but I don’t know. I still think I might do kind of a combination of the two.
That’s something that it’s slow and steady. It’s been months since I’ve been researching and just taking it one bite at a time, one step at a time, but that’s not that interesting. I think it would be more interesting to talk about things that I’m actually not doing if I was not pursuing the apartments and I was not doing the land business. You know what I would want to get into Seth? I would really like to get into hard money lending or private money lending and triple-net.
I think that people don’t realize that being a private lender, a hard money lender is actually a really viable strategy. Technically it’s not real estate per se, but a lot of real estate investors obviously use private and hard money. But I just liked the idea of, I don’t know, maybe putting a fund together or having my own capital and being like, “Okay, I’m going to take $100,000 that I’ve saved up or whatever and I’m going to deploy $25,000 loans to wholesalers or flippers or land investors and then let them do all the hard work. And I’m just going to sit back and make money.” Especially in land because a lot of the private money guys, they lead with 50-50 splits. So, they get half the profit for just doing nothing but putting up the money.
Seth: Yeah. And if the listeners out there are hearing this and they’re like, “What is hard money lending? I don’t get it.” We actually had a really good conversation about that whole topic with a guy named Ryan Wright in episode 60. If you go to retipster.com/60 you can hear that and get a really good overview of what hard money lending is and a lot of the stuff involved with that.
Yeah. I see what you mean, man. I think hard money lending has a ton of potential if you’ve got money and if you’re able to put together an underwriting process that is efficient enough and doesn’t slow up the deal flow. It seems like it requires a lot of due diligence just in terms of understanding your borrower and also understanding what deals they’re after. Every business has things like this that are just not fun, but it seems like one of those things about that model that would be taxing on me personally, if I were to go after that.
Jaren: Yeah. I definitely think that’s the pain point for sure, it’s the underwriting. But if you can get a handful of guys, I go to like Brett Snodgrass who has a proven system and proven infrastructure in place with wholesaling. For those who might not know who Brett Snodgrass is, he’s actually my former boss over at Simple Wholesaling, which is a wholesale operation in Indianapolis. I think about finding him or finding Tyler or finding some land investors that are credible and have a good reputation and then just partnering with those guys. And then that’s why I don’t know if maybe hard money is not the right word. Maybe it’s more private money. But just having like, I don’t know, 5 to 10 buckets that I deploy cash in that I’ve vetted the person and I’m committed to the person. Even if we have a couple of deals that go south, if like the person is a high performer and they’re trying to make success happen for themselves and I just partner with that, I think you can really ride a pretty amazing wave there. I think there’s just a lot of opportunities. Yeah, there’s definitely trust and due diligence on the front end for sure. But after you’ve established that relationship and done a couple of deals, you can just rinse and repeat and it’s pretty passive.
Seth: It’s an interesting thing because I always seem to come across plenty of people who either are saying what you’re saying, Jaren, where are like, “Hey, I’ve got money. I don’t want to do the work. Can somebody find me somebody who’s willing to do the work so I can just lend the money?” And other people who are like, “Hey, I want to do the work. I don’t have the money.” It seems like there’s a lot of both parties out there. It’s just a matter of them connecting. I think maybe some of the friction is that the people that don’t have the money, not in all cases, but in many cases they’re also very inexperienced. Like they don’t know what they’re doing yet. So, like why would a person with money want to throw the money at a totally inexperienced person?
It’s almost like there is this sweet spot where a person has a proven track record and they’ve done maybe 50 deals or something like that. Like they get it, they can prove that, but they also don’t have the money yet. Or maybe like, they’re always willing to go after deals. And at some point, inevitably, they’re going to run out of their own money and that’s when they need the hard money. So yeah, it’s an interesting business model for sure.
Jaren: Yeah. It’s always intrigued me and there’s actually not a lot of material on it. I don’t know of any course. It’s like, “Hey, how to become a hard money lender or like a private money lender as your primary strategy?” I know there’s a lot of stuff for passive investors in the syndication world, like for apartments and stuff, there is content. And that’s a very similar model, but you’re just deploying your cash in an actual apartment deal instead of just with a land deal or several land deals or houses or whatever. But yeah, so that’s kind of a strategy that I would probably look into. We should talk about triple net, man. Because I know you you’ve been thinking about some triple net stuff too, right?
Seth: Yeah, yeah. And triple net for those out there who don’t know what that is. So, it’s basically a triple net lease is a lease where the landlord is leasing their building. Maybe it’s a warehouse or a retail establishment or something. The leasing it to a tenant. And the tenant is not only paying rent. They’re also paying the property taxes. They’re also paying the insurance and they’re paying maintenance and repairs. They’re paying literally everything. So, the landlord just sits there and collects them money. It doesn’t have to manage any of the other expenses on the back end. And usually, because the tenant is paying everything, they’re paying a discounted rent price because they’re bearing the burden of everything else. So that’s what a triple net lease is.
So, when people say the words triple net, like Jaren just said, what they’re talking about is investing in properties where it’s pretty much hands-off, maybe not 100% passive, but pretty darn close to it because there’s no management. There’s no other stuff to worry about. It’s all on that tenant to take care of it all. Yeah. I would agree. I think that’s totally something that I’m actually planning to do at some point. I don’t think I’m there yet.
Jaren: I heard a commitment from Seth Williams.
Seth: I didn’t commit. I said, well, did I commit? Because I’m planning> Yeah, maybe I do. I mean, I don’t know.
Jaren: Here’s the thing because you’re very selective on the language you use and it’s like I’m giving you some crap on there. That was a very big commitment coming from Seth to say that. Even for me, that would probably be like, “Yeah, I’m thinking about it”, but for you, that was a big one.
Seth: I can’t test that as a commitment. And to make it clear, I am not committing to doing that. Maybe to phrase it differently. It is a dream that I would love to pursue someday. Maybe that’s a better way to say it.
Jaren: Yeah, like that.
Seth: Just so people understand. I give Jaren grief about that sometimes. I’m like, “Hey man, don’t throw any hard commitments down because then if you don’t do it, you’re going to look dumb.” So that’s why he’s given me a hard time. But I think triple net is a pretty cool concept as many real estate investing strategies are on paper. To me though, it’s sort of strikes me is not an entry-level strategy unless you’re already loaded with cash and you have the right connections and you know where to find an awesome deal.
But for somebody starting from scratch like me, for example, in my early 20s where I had hardly any money to work with, triple net is not something you start with. That’s like once you’ve made your money in your active stage one business, maybe as the second or third phase, that’s when you start going after triple net stuff. And maybe if there’s a triple net investor out there who would disagree with that, let me know. Go to the show notes and leave me a comment.
Jaren: Yeah. Maybe we can have you on the show. That’d be really interesting.
Seth: Yeah. Actually, it would be really cool. Yeah. I think it’s a pretty sweet idea. One of the drawbacks or I guess, risks maybe is the word that comes to mind is one of the things of a triple net deal, it’s like, maybe it’s a restaurant building or a warehouse or some kind of a big commercial property where there’s like a tenant that comes in there and they pay a lot, obviously a lot more than like a residential house. But what if that tenant goes away and nobody else wants to rent your building? What if the market as whole changes or people move away and you’re stuck with this property that has, I don’t know, a $50,000 annual tax bill and nobody’s renting it from you?
I think a lot of the triple net investors out there are like REITs big groups that own like hundreds of these properties. So, if one does sit vacant, it’s not the end of the world. I don’t know if they’re like me where they own like one or two or three of them. So, they all have been working for you or you’re in trouble. So that’s what kind of freaks me out about that. I’m sure there’s a way around that, but I don’t know what that is exactly.
Jaren: Something that I find interesting too, is I feel like for anybody who’s been exposed to REITs your mind jumps, at least being an outsider looking in, your mind jumps to really expensive properties. If we’re talking triple net property in California or Chicago, those are going to be really, really expensive. But something that’s interesting is I think you and me, we’re looking at some stuff in the Grand Rapids area a few months back just for fun. And there was some triple net stuff that was in the $300,000 range, $350,000 range. And I think if you looked at like more small rural areas or small towns, you might have some opportunities, but you still have that risk of like, okay, you buy this triple net property in downtown nowhere-USA that the area has a declining population or maybe the main job provider goes belly up. And so, all of a sudden, the town goes desolate and you’re stuck with a really expensive property that you have to take care of. I definitely think the location is the biggest risk factor with a triple net lease.
Seth: Yeah, I think you’re right. I think another part of that, say if you were to buy a property like a triple net property. So, in the banking world, there are buildings called special-purpose buildings. And this was something I dealt with when I was doing SBA loans all the time. A special-purpose building is a building that basically can only be used for one thing and nothing else. For example, one of those tunnel car washes or an oil change facility where there are pits in the ground, you can’t use that building for anything else other than a carwash or an oil change place. So, if you lose a tenant, there’s a very specific kind of tenant that can come and replace that other one. And if you can’t find them, you’re out of luck.
So special purpose buildings require a slightly higher down payment from the borrower because it’s riskier. It’s a bigger risk to the bank because that collateral it’s not necessarily worthless, but it’s just more specialized. Like there’s only a very specific subset of buyers or tenants who would ever be interested in buying that. So I think if I ever do go that route, I would not be ever buying a special purpose building. It would be more of a white box commercial space where this building could be a store or it could be a restaurant or it could be an office or it could be a gym, like fill in the blank. There are all kinds of different things that could be here. I think that that would be the kind of property to get if you were going the triple net path.
Jaren: I didn’t officially ask you, what would you do differently if you couldn’t do land?
Seth: There’s just a small handful of things I would consider. And I sort of either have already done them or I’m in the process of figuring them out right now. Because like I said, land isn’t the final destination for me. It’s just one step on the way there. But I know like just residential rental properties. So, I think I would go that route. It’s just because I’ve owned them, I’ve seen the concept proven and I’ve also seen like the drawbacks and the places where they fall short and I’m okay with that. I’m willing to fight those battles.
I also know how to find good property management, which is really the biggest piece of the puzzle, I think. The biggest drawback to residential rentals is that it’s usually a long slow ride to financial freedom. And again, I sort of see this as like a phase two of investing. There was a really smart businessman that I met a couple of years ago, who was telling me that…
Jaren: Was his name Jaren Barnes?
Seth: Nope. But he’s another very smart one. And he told me, “You make your money in your business. You preserve it in the market, not the other way around.” And to translate that for real estate investors, it would mean that you make your money in an active real estate investing strategy, like wholesaling, house flipping, maybe being a broker, the land flipping business. That’s the business. And you park it in rental properties. That’s sort of the equivalent of the market to generate income and preserve the value of your cash. I’m not saying rental properties isn’t a business because it is. But it’s people who invest in rentals like their primary strategy is cashflow and it’s very a slow drip, drip kind of cashflow. It’s not like bam, $50,000 in one month. That’s not how rental properties work.
Jaren: When you say rental properties, are you talking like small, like 2 to 4 units?
Seth: Pretty much. Yeah. Either single-family houses or duplexes, not big apartment buildings or anything like that. So anyway, I think I still believe in the rental property model, but I think in my case, anyway, I sort of needed to find an active model first that generated the cash. Because if I was just using the money from my job or whatever, it’s going to take a long time to get there. It’s going to be just kind of frustrating if you’re expecting it to do anything big for you in the short term. Because that’s not really how they work. Unless you get totally lucky and find a cash flowing deal for $50 or something. I mean maybe, but that’s usually not how it works obviously.
Jaren: That’s one of the reasons why in the rental property space, I’m attracted more towards the commercial stuff because of the economies of scale. And the word on the street is obviously this is all theory from my perspective at this point. But word on the street is when you get into the higher above 75 units or higher range, property management is so good, it is actually really passive.
So, for people who want to have kind of the whole cash flow four-hour workweek lifestyle, it seems like even though the barrier to entry is higher because you have to figure out how to get the funds together to go after these big properties if you could figure it out and then your objective was to hold and not flip and sell in five years, but maybe like flip and then refinance out and pay off your investors and then hold the asset – You could get there potentially a lot faster because you’re just dealing with so much more units in a different tier of vendors that can help service the property a lot better.
Seth: I mean, I know one of the big drawbacks with any kind of real estate, for the most part, is that it’s just as an investment, it’s very illiquid. It’s not like stocks where you can convert it to cash today. It’s going to take some time. Possibly a long time. Is there validity to the thought that apartment buildings are far less liquid than say a single family home? Like if I wanted to just quickly sell off one of my 20 houses, that’s not that hard, but selling off a 100-unit apartment building, that’s going to take me some time. Is that accurate?
Jaren: I would think so. I mean, again, I’m very green in the space side. By no means, I want to present myself as an expert, but I would think that it would be harder to sell or you’d have a smaller buyer pool, but I know that the multifamily space is extremely hot right now. And if you’re in the right market, people are paying really dumb prices. Even right now I think that word on the street again, is that things are probably going to adjust in six months to a year. But as of right now, people are spending way too much money on deals in the multifamily space. I think that there’s a lot of really interested buyers, but it’s definitely not as easy as selling a single-family house. I would think I would imagine.
It just depends on what your strategy is and what your goals are, but I’ve always been more attracted to the idea of something that could pay me $10,000 a month, every single month for the rest of my life, versus having a million dollars in cash in the bank. Figuring out even if for the first couple of deals that I walkthrough, I do as a flip because the people that I work with or whatever want to do that model, at least I can learn the process and then pivot when I can do my own deal down the road from selling to just refinancing out and paying investors off that way. Because that’s what I want, man. I just want to take the money from land and from other endeavors and just buy something that’s going to pay me every single month for the rest of my life.
Seth: Yeah. I know what you mean, man. I was actually looking at a self-storage deal, kind of like that couple of weeks ago where the monthly after expenses after debt service income was like $8,000 a month kind of thing. It was kind of cool just to be like, “Hey man, one deal, boom. This is it”. It’s a $3 million-plus dollar deal. Well, do I have $600,000 or $700,000 cash to put into this right now? I don’t know. Not really. So, it’s like, those can be found, but you got to have something and you have to have a lot of it to put into it.
Jaren: And that’s where I think having to figure out the syndication game really comes into play. Because even though it feels on this side being still like a beginner in this whole apartment syndication journey, it feels very intimidating and overwhelming, but people on the other side say, it’s not that big of a deal. So it’s still to be determined, but having the ability and the skillset to know how to go through the process of pulling a bunch of funds together where it’s like their $25,000 buy in or $50,000 buy in, you can come up with that $700,000 down payment or whatever, relatively easy. And then as long as the deal can facilitate at means for you to increase revenue to the point where you can refinance 5 to 10 years or whatever the strategy is and then pay them off, then all of a sudden you can get into a $3 million deal with maybe $50,000 out of pocket yourself. Or maybe nothing if you’re the syndicator. There’s a benefit to that. But it’s skill set and it’s paperwork and attorneys and feels very scary on this side of the fence.
Seth: That’s really an interesting thing you said there, man. Because it’s funny how many times that has struck me in the past year or two. It’s just funny how money is such a relative thing. Like I remember the first time I did a deal that made me over a thousand dollars and it was like, “Whoa, I cannot believe I am doing this, messing around with this kind of money”. And now it’s like, “Man, a thousand bucks? What is that? Who cares? It’s a small change.” And this whole idea of how you define a lot of money is all relative to what you’ve seen and where you work in. $3 million today seems like just huge insurmountable. There could be a day where it’s like nothing. That’s like…
Jaren: Just a small deal. Yeah.
Seth: So, it’s easy to get and just be like, “Oh, I can’t do it. It’s too much.” But as we get further in life that perspective can shift quite a bit.
Jaren: Yeah, man. So, is storage units a major pursuit of yours?
Seth: Yeah. I think that is on my list of things I would do instead, or also do. So I haven’t proven the concept to myself yet. Like I haven’t done my first deal. I’ve looked at a lot, but haven’t closed on anything. So, I’m pretty sure it’s a solid approach. I know plenty of people who have done well at it, but the jury is still out on whether I can do it personally simply because I haven’t done it. I believe I can but since it hasn’t been done, who knows?
And I also kind of think it is sort of like rentals and that it’s like a phase two money preservation cash-flow vehicle unless there is an immediate opportunity to improve the facility, like by expanding it or changing the rents. Or if you’re planning to sort of flip the thing, kind of like how Mike Wagner did it when we talked to him in episode 51, and sort of how Scott Meyers does it as well. So, if your goal is to flip the thing, then that’s definitely more of an active approach. But personally, my approach is more to buy it and just keep it for the cash flow. And that’s kind of a different game you plan.
Jaren: So, to peel back the onion a little bit there, are you planning on going after a small to midsize unit size for your facility? Are you looking for, I don’t know, like a 20-unit facility or something?
Seth: I hesitate to say the word planning because that’ll be construed as commitment. No, but…
Jaren: Are you dreaming…?
Seth: So, I’m dreaming. Yeah. So, the deals I’ve been looking at has been in this sub million dollar, like those are the ones I’ve been seriously considering. Actually, making offers on and that kind of thing. Maybe it’s one of those limiting beliefs things where it’s like that’s all I believe I can do right now. I’ll be the first to tell you. Maybe I’m just selling myself short. But I guess when I think about putting down the money that would be required to get a loan for that kind of thing. I’m not in the place where I can on my first deal ever throw like $500,000 of cash out. I’m not willing to do that. I don’t know what I’m doing yet. So, I’m sort of looking for a small pathetic for lack of a better word deal to go after, just because I want to learn. I don’t see it as being the final destination, but just sort of something that can help me figure out the business more. So, those are kind of the ones that I’ve been looking at.
Jaren: So, I’m just curious because that’s your goal. When we went to the Scott Myers event in Indianapolis together, Scott Meyers material kind of suggested that you shouldn’t go towards like rural areas. I don’t even remember the exact criteria because I haven’t been in that world for a while, but I think there was a certain amount of like traffic count that you looked and some other things. But then he had somebody that spoke on stage that did the exact opposite and the guy’s primary strategy was to buy all rural properties because he can get crazy deals on them. So, are you kind of venturing more towards rural stuff or?
Seth: Yeah, I think the guy’s name is Greg Michael or Greg Michaels. But yeah, that is kind of what I’m thinking. Actually, I thought his presentation was my favorite part of the whole thing, just because…
Jaren: Mine too, actually.
Seth: It’s like, “Hey, that’s something I can do.” So yeah, that’s sort of been my mentality this whole time.
Jaren: Yeah. I like it. I think that’s cool. Especially if your goal is to hope because at that point it doesn’t really matter. I mean, as long as you can get renters in there or tenants in there. Not renters, but if you can get tenants in there, you’ll be fine.
Seth: Yeah. I think the drawback of that is you’re not going to be able to find a property management company to handle that for you. You sort of has to either do the minimal management yourself or find somebody local who can do a lot of the ongoing tasks for you. Which I’m not like thrilled about, but that’s kind of the main drawback, I think, from what I’ve learned.
Jaren: And that’s probably why there’s less competition. So, it’s like a double-edged sword.
Seth: Yeah. I just want to get my bearings and figure out what I’m doing. If I’m going to screw something up or buy wrong or mismanage it, I’d rather do that on a cheap deal than on something I’ve dumped everything I have into.
Jaren: You’re a wise man.
Seth: I don’t know. Maybe, we’ll see.
Jaren: Don’t burn the boats, bro. Don’t burn the boats.
Jaren: Have the contingency plan.
Seth: Check out episode 72 if you haven’t, you’ll understand what Jaren is talking about. Yeah. Another thing on my list and actually I considered this for a short while is being a commercial broker.
Jaren: I could see that.
Seth: Yeah. And it’s because it’s definitely a very active strategy that it almost requires salesmanship and a lot of head knowledge and understanding what is, or isn’t a deal. And almost like salesmanship to put people together and do networking and all that stuff. So that’s a pretty solid phase one strategy. You don’t need a ton of money to get into it. It’s a way to get really smart about how to network and find the right people, identify deals, find opportunities that not everybody sees, and fund partnership opportunities.
A lot of the commercial brokers I know are partners, like maybe a five-way partnership on a strip mall or something like that, an apartment building just because they’re around that all day. They have those opportunities all day long. So that sounds pretty appealing. The downside though, is that I think it is kind of like being a financial advisor in the beginning in that there isn’t much income to start with. And until you start closing deals, you’re not going to make much money. And so, I think if you’re going to go that route, you sort of need to have your finances in order because if you don’t produce, you’re going to starve pretty quick.
Jaren: And I think that what I call the “24-month rule” is very much in play. All the guys that I’ve known who’ve gone down that route, they didn’t make money for like the first two years.
Seth: Yeah. Sounds about right.
Jaren: You got to be able to commit that somehow some way, whether it’s driving for Uber or doing something on the side.
Seth: Yeah. And on the flip side of that, when you do get through that and if you do make it work, it’s like the button guys that do really well. They can make tons of money. I think the opportunity along with the things you’ll learn and the networking opportunities, I don’t know, it’s a pretty solid approach, I think. It also seems like every commercial broker I’ve known, maybe this is just bias or something, but they sort of seem like they’re on a different level than our residential. Like they just seem to know more. I mean, don’t get me wrong. There are some resident residential agents I’ve known who are brilliant. Like they’re very, very good at what they do, but I feel I’ve encountered…
Jaren: They’re the exception.
Seth: Yeah. I’ve encountered more that are just like, “This is just kind of my side job I do on the weekends. And I like talking to people, so that’s why I do it.” Whereas commercial brokers are like, they’re there to make money. I feel like they are taken more seriously in general.
Jaren: Well, it’s funny you brought that up because I was actually going to say from somebody who is licensed, it’s very true. I feel like the standards that commercial brokerages expect, the standard that they hold their agents do is, or their brokers do is much higher than residential. And the training is a lot better. You go work for Marcus & Millichap, it’s like getting a degree man. And it’s getting a degree in a lot of things. It’s not just how to underwrite deals, how to run due diligence, understanding investment language. But it’s also cold calling and grit and hustle and salesmanship. If you come on board, it’s an incredible, incredible experience. And it’s cutthroat. That’s a survival of the fittest for sure.
But if you can survive that whole intense hazing process and overcoming your learning curve, I think it’s an incredible profession. I think that it’s a really high standard of professionalism. And I kind of wish universally in order to get licensed, you kind of had to be held to that kind of standard. I would almost say that I would rather see somebody have to get like a college degree, like a four-year degree or at least a two-year degree in real estate before they could get licensed.
Seth: There is. For commercial brokers, I believe it’s the CCIM. I don’t know what the license or what that is, but it’s a…
Jaren: It’s a certification.
Seth: Yeah. When I was looking at it, it’s like a big deal. It takes years to get the thing. You got to take classes. I don’t know if it’s on the same level of difficulty as getting a CPA license or not, but it’s not something that just anybody can without much effort. Like you really got to work hard at it and sort of earn your stripes. So, my dad, he’s worked for various nonprofits as the executive director or the CEO of different nonprofits for decades now. And he’s bought and sold and built a lot of different buildings in that process. And there is a commercial broker he’s worked with pretty consistently to do a lot of those deals. He’s telling me how this broker, his commission on one of these buildings was $30,000. And he just donated it to the nonprofit. It’s like, “Yeah, I don’t need it. You can just have it.” Seriously? How much money is this guy making? If he can just sort of like… I mean, that’s obviously very generous and nice of him, but like, this guy must be loaded if he’s like, “Whatever, you can just keep the $30,000. No big deal.”
Jaren: Yeah, man. They make a lot of money. I mean, you think about like 3,5% commission on $3 million property. Like you’re saying, you do one of those a year, you’re sitting fat. Imagine if you did $6 million.
Seth: Isn’t it like a 10% commission for commercial deals?
Jaren: It could be, I don’t know. But even if you just apply the residential standard of 3% to 3,5%, on your side of the representation, even that is a lot.
Seth: Yeah. I mean, if you put any percent on a multimillion-dollar property. Say if it’s like a skyscraper in downtown Chicago, someone’s making a lot of money on that transaction.
Seth: Yeah. Were there any other ones that you think you would go after Jaren, other than land?
Jaren: Yeah. I’m more interested in the kind of phase two type of things.
Seth: Like the passive cashflow kind of stuff?
Jaren: Yeah. From a phase one standpoint, I’m pretty biased towards land. I think that it’s the best vehicle.
Seth: But you can’t do land, remember? What else do you need it for?
Jaren: But if I can’t, I probably would look at wholesaling. Wholesaling. If you have a construction background, flipping houses can be pretty awesome. But I encourage people who do not have a construction background to be very leery about getting into flipping houses. Because if you don’t understand rehab costs and what good quality work looks like, you just don’t have that skill set, you can get taken advantage of and you can underestimate your rehab cost quite a bit and really get hurt and lose your shirt.
So, I think flipping houses is definitely a good vehicle for the right person. I don’t know if I’m the right person for that. In fact, I know I’m not because I have very little experience hammering nails and doing all that stuff. And I’m not the most mechanically inclined. I’m just having horrible flashbacks of putting up curtains.
I probably would default back to wholesaling, even though it’s not as nice as land. You have a lot of upsides because what you could do from an 80/20 standpoint as a wholesaler is you can just go to a turnkey operator or handful of turnkey operators, figure out their criteria and their desired markets, and then just get to work, finding the deals. And you could have one buyer and just build an entire business on that and be really efficient.
Seth: That’s a really good point you made about the house flipping thing. Just the ability to walk through a house and look at something and know how much it’s going to cost to fix that. And just keep mental track of that. That is huge. If you don’t know how to do that, or even if it takes you a lot of time to figure that out, that’s a serious disadvantage. And I think a lot of people that’s sort of their situation. Like that was mine. I remember after taking a couple of courses, I felt like I kind of got there, but I never was like, an “expert” at it.
Jaren: Well, and it’s so subjective too. Some people would tell me to get a water heater installed, it can be as little as $500. Sometimes as little as $250. But retail is like $1,500, a $2,500. So, it’s like there’s such a spectrum. And then if you talk to contractors, it’s kind of like the news media, like who do you believe? Who’s telling the truth?
Seth: That’s true. Yeah. And that’s the thing, like, I’m sure you can do it for $500, but only if you find the right contractor and then they got to be good too. You’re relying so much on so many different parties to do what they say they’re going to do and give you the prices they need. I’m sure it can be done. I know it can be done. But whereas like other strategies, you can rely more on software and stuff that it’s consistent. There’s no human error. You don’t have to wonder if they’re lying to you. It just is what it is.
The wholesaling thing, that was actually on my list of things that I don’t think I could ever do, or I just wouldn’t want to do. And I think that’s one of those businesses where if you are the hunter mentality, you can do really well at that. If you enjoy the thrill of the chase like it’s perfect for that. I don’t really like it though. That would just stress me out. I know Jaren, you’ve talked about just like the giant swings in revenue from one month to another, or like just the huge marketing costs. I’d have an anxiety attack doing that kind of thing.
Jaren: I remember the day I stopped working at Simple Wholesaling. Like literally the day after. I sure have had like PTSD.
Seth: Post Traumatic Stress?
Jaren: Yeah. I had a moment where I slept in because I didn’t have anything to do, right? My body jolted out of bed and I was like, “Oh my God. I got to, I got to go. I got to get to work. Well, what am I doing?” And then I realized, “Wait a second, I don’t have to do anything.” For like close to three years or three and a half years, whatever it was I mean, literally every day, all day doing nothing. Like Christmas day, birthdays, deals, all day long. Me and my wife’s like evening routine sitting there in the bed, she’s on her laptop. I’m on mine. 11 o’clock talking to buyers and like trying to move property. It’s a lifestyle and a half, man. So, it is very intense and very stressful, but it’s fun. There’s something intoxicating about it.
And to be honest, there are times where I kind of miss it. I don’t think I miss it to the point where I’d ever want to like do it again, like have that be my life again. But there is something thrilling and exciting about the ups and downs of deals coming through or falling through. And I don’t know, it’s intoxicating. I would make a case there that flipping houses is worse.
Seth: Oh, I can see that. Get all this money, sunk into a deal. Yeah.
Jaren: Yeah. I would never want to be a house flipper because knowing what I know from houses, even as a wholesaler, just getting a rough idea of an estimate, we have costs for that I could relay back to buyers, potential buyers. I mean, you can buy a house and then you remove a wall and all of a sudden you have a huge mess on your hands and you got to replace everything. And you’re like, are we actually going to even make money? And then you have to have so much more infrastructure in place when you flip houses because you have contractors and marketing. And then, I mean, I’m stressing myself out there. I’m so thankful that I can do the land business.
Seth: When I’ve talked to Danny Johnson of Flipping Junkie and I haven’t talked to Jay Scott much about it, but the vibe I get or the impression I get is that people who do well at flipping houses, they’ve got a big team in place. They’re doing like 10 deals a month. There’s like a machine, a well-oiled machine that can handle that, knows how to do it, knows how to deal with the unexpected things that come up. And if a deal does lose money, they’re making tons of money out of their deals so it’s okay. For somebody like me, I would be starting with one house at a time and it’s like this better work out or I’m screwed. And that sounds hard to me.
Jaren: Yeah. I mean, it just goes to show how much better land is, man. And it’s not that I’m stuck on that. Because again, it’s more of a phase one strategy and there are other strategies definitely that have their place. But I can make the same kind of spread on the average per property basis that a lot of wholesalers make in Indianapolis with substantially less marketing costs. Even the fact that I can have leads, go to prerecorded voicemail and then just drink my coffee and sit there and listen to voicemails. It’s just so much more manageable.
Seth: There’s a lot of luxuries to it. For sure.
Jaren: Yeah. And what were you telling me the other day that ruined you to looking at self-storage deals and other things?
Seth: It’s actually been a huge mental block. Like I have a really, really hard time. The margins are so thin in their stuff. Maybe it’s a symptom of the market I’m in right now. Or the people have been talking to you, but people are just asking just stupid prices in a bad way. Like way more than I think they’re worth for their facilities. I was talking to a guy who wants a million bucks for his existing facility that has no room to expand. Rents are almost as high as they can get. And as it is, the thing would lose me like $1,500 a month. Are you on drugs or something? What makes you think you can ask this? And so, I offered the guy $600,000 because that’s just the point at which yes, this is now a no brainer deal for me.
And obviously he just like laughed my offer off. And so that’s what I’m dealing with. And I think part of this is, I mean, I feel like I’m just sort of being smart. Like I’m just not willing to offer more than a deal is worth for me. I want a deal that there’s no question, this is a good deal. But people aren’t entertaining those kinds of offers right now. And part of it, I think is because of land. Because you can make those offers all day long and get them, but most strategies are not like that. So, it’s kind of messing me up a little bit.
Jaren: It’s just incredible. Another thing too, I noticed about the land space is that because I don’t know if it’s because it’s data-driven or if it’s like the whole chicken or egg thing, but there’s a lot of really sophisticated people in the space. For whatever reason, it attracts like software engineers and a lot of engineering minds. And there’s so much like tech and savvy strategies around land that… I mean, there are in other places too, but I don’t feel like to the same degree as they are in land. And the space is a lot smaller. So, from an 80/20 standpoint, it feels like there’s a lot of smart people doing it. So, I guess the subliminal message here guys is, if you’re smart, you’re going to go over to the Land Master Class at retipster.club and get started in the land business.
Seth: That’s right.
Jaren: Yeah. One other strategy too, that is very intriguing to me, even though it’s not passive. And from a logical number standpoint, I don’t know if it’s necessarily the greatest strategy out there, but all the same, emotionally I’m attracted to the concept of short-term rentals. I like the idea of having places and all these exotic locations, condos that are beachfront and Florida or like Savannah, Georgia again. If I don’t think about Savannah, Georgia on a daily basis, it’s at least every other day. Like I love that place so much. And I dream about having short term rentals. And I don’t know if it’s like Airbnb or if I go through the syndication stuff and eventually get into syndicating hotels or resorts or whatever. I think about Savannah, Georgia and I think about Belize all the time. And my wife is sick of it. She hears about Belize every other day and Savannah every other day. So that’s something that, again, it’s in my logical brain of like, what’s a good strategy, my brain doesn’t go there, but the heart Jaren definitely finds that really fun and potentially an option in the future.
Seth: Yeah. I’ve always been fascinated by that and it seems really appealing for a lot of different reasons. In normal times I think people can make pretty good money from those and it would be fun. I think it’s fun to decorate a space to look… I don’t really have a good eye for interior design, but I know when it looks good and I like that. And I like how short-term rentals it’s like if you’re dealing with nice properties in nice neighborhoods and you’re making a lot more from the deals. And it’s one of those things like I’m sort of spooked by it now though, because of COVID-19. I saw an article on the Wall Street Journal just earlier this week, talking about how short-term rental investors are getting killed right now. And you can imagine why. If nobody’s traveling and these things are like worst luck ever. Because they didn’t do anything wrong, it’s just happened to them. It’s not like they made a bad buying decision. This is just this bizarre event. And so, it’s like, I don’t want to make a fear-based decision on something that is probably never going to happen again in our lifetime. But still it really spooks me now. That’s like, man, I’m really glad I’ve been too busy to try that out because I could be totally screwed right now if I did.
Jaren: Yeah. Especially the guys that went all hard on leveraging it or are doing the Airbnb arbitrage thing where they have a bunch of leases, like their tenants everywhere. And then they’re subleasing to Airbnb. Those guys, I saw some articles they have like a $50,000 a month bill. They have no attendance to cover. They’re just straight-up going to have to file bankruptcy. A lot of them. It’s intense. But you can do it in a way that’s conservative, right? Like if you buy in Belize, I’m assuming that you could keep costs low. If you buy tiny houses or alternative housing stuff like houseboats, or I’ve been looking into bunkers. There’s actually a whole world of, you can buy really cool houses that are just like tanks in the ground. And that would be really cool.
Seth: Yeah. I’ve looked into that, man.
Jaren: Yeah. That would be a really cool Airbnb experience. I’m just going down in the dirt and I’m going to spend a night down there. That’d be super cool. Condos, if you’re in the right area, like in the South, like Myrtle Beach, South Carolina, you can get really cheap beachfront condos and in the on the season. It’s awesome.
Seth: Yeah, man. The underground bunker thing and like earth-bermed houses. Like I don’t even know why I think that’s cool, but I do.
Jaren: I’m totally telling my wife because she’s been thinking I’ve been off my rocker man. Like she’s been giving me so much crap for getting all geeked out about it, but I think it’s really cool.
Seth: Yeah. You can get these, like you were saying, these big tanks you can put underground and connect it to your house. So, there’s like an underground tunnel to your bunker. And you can even hook up like a network of bunkers underground. So, there’s like multiple rooms that are all like, nobody would even know are there because it’s underground. If I ever did that and installed those, I feel like I’d be praying for a nuclear bomb to go off. The zombie apocalypse. Just to be like, “Yes. See, I was smart.”
Jaren: There’s a YouTuber named Collin something. He’s from the UK. He actually has been on YouTube for years and he has a pretty big following, but he installed a bunker in his backyard.
Seth: I think I saw that video just a little while ago.
Jaren: Yeah, it’s awesome. It’s like an epic man-cave. He goes down there and he has a drum kit and he’ll like go just have a blast and nobody will hear them. It’s awesome, man. I think it’s really cool.
Seth: If you’re an introvert, that’s probably like, a really good idea. Are there any strategies that you would never even think twice about pursuing just because they’re so bad and so hard?
Jaren: Like stuff that I would not pursue?
Seth: Yeah. I had one more on my list and it was residential property management. There’s just…
Jaren: Yeah, never.
Seth: It sounds like an absolute nightmare in every way. And of the managers I’ve talked to, they can confirm. Yep. It is.
Jaren: I don’t know why people do it though.
Seth: I think if you have no money and if you’re willing to do just the horrible work involved with that, it can be a good way to make money from other people’s properties. And admittedly, there are some times, even months when a property doesn’t require anything. So, I see why people do it. But some people might enjoy that kind of stuff, honestly. So, I don’t want to speak ill of that if somebody legitimately likes those challenges. That’s possible. But me personally, if I didn’t have two pennies to rub together and I wanted to start it in real estate and get experience, I could see that being a good way to do it. It’s not a pleasant way to do it, but you can make money from other people’s stuff. And in most states, I think you have to be a licensed real estate agent to do the job above board. So, you’d have to do that too, probably. I don’t want to say never, but just knowing what I know about it and where I am now, like never. Never, ever, ever would I do that.
Jaren: Yeah, man, I think a kissing cousin to that for me would be turnkey operations because it’s kind of like joining a flipping operation with a property management operation.
Seth: Can you clarify what you mean when you say turnkey operation?
Jaren: Yeah. There is a business model in real estate where a company will find the property. They will employ outside investor cash, so they’ll sell them off the property. So, let’s say, I guess the best example would be like Indianapolis is a lot cheaper than the San Francisco Bay Area. If I had a turnkey operation in Indianapolis, I could attract buyers from California who see the types of properties in Indianapolis. I could charge them market value or higher because to them they’re used to a market that’s way more intense and has fewer returns than Indianapolis. And then I can manage the property for them. So, I make money that way. I can buy the property, renovate it for them or buy the property, renovate it and then turn around and sell it. And it’s just a lot of moving parts.
Essentially turnkey is this concept where you set it and forget it as an investor. So, I could just buy a property from a turnkey operation and it’s 100% passive. And I’ll make 12% or whatever it is on my rent. And I’m good to go. And now I’m a real estate investor. It’s a great service I think if you are the right buyer. I really think that there’s a lot of value because if you have an ethical turnkey operator, you can literally just start buying properties in your retirement account. And then just ride that out. And I think that’s really cool.
But from an operation standpoint, they have to buy so many deals. They have to rehab so many deals and then they have the property management side where they’re dealing with all the tenant stuff. So, it just seems like it’s all the worst aspects of real estate to me all join together in one big monster.
Seth: Yeah, man.
Jaren: There’s a lot of money in it though. That’s why people do it. Like there’s a lot of money in it.
Seth: Is it, really?
Seth: That’s if you can build the big business and team and operations to make it all happen.
Jaren: Yup. But because you can charge a premium for it. Because it’s kind of like the CarMax model versus going to used cars dealership. You might be able to get a better deal at the used car dealership, but because it’s plugs and play…
Seth: It’s the perceived ease of it. Yeah.
Jaren: Yeah. People will be happy to pay. Especially if you’re dealing with people from New York or California, because to them they’re still getting a huge, amazing deal. So, it’s a win-win.
Seth: Yeah. That makes sense. There are some things out there that I sort of like have always been curious about, and I don’t know enough to say whether I would or wouldn’t even consider it. But things like mobile homes and parks, that’s always seemed interesting to me, but I just don’t know enough if I would be good at that or not. Note investing, hard money lending was one of those for me. Apartment investing and syndications. I know Jaren, you’re more into that stuff than I am. But I guess the cool thing is though like there’s a lot of different ways you can go. It’s just a matter of what you want to spend your time learning about and what things you feel like you’d be competent at dealing with.
Jaren: What would you say to somebody who’s listening right now and trying to figure out what the most optimal route to go in real estate is? Because I know the way my brain thinks where my paralysis of analysis comes from is like, I want to pick the best route. And there are so many good routes, I don’t know which one is the best for me.
Seth: Yeah. That’s a really interesting question. Something I’ve actually been doing in the past week. Are you familiar with the Kolbe personality test?
Jaren: I am actually. Yeah.
Seth: I don’t know if it’s a personality test or what that is. The idea is to figure out how a person deals with problems. In what ways are the most proficient or good at dealing with problems and like why they do it that way? So, disclaimer, I haven’t taken it myself yet. Actually, I have it on my to-do list today to take it so I can experience it and understand what my score even is. But there’s a Kolbe index A where a person can figure out how they operate. There’s also something called a Kolbe index C, which the idea behind that is to figure out what does it take to succeed at a certain job and that how does the person score within that framework?
If a job requires certain attributes or certain ways of handling problems, but the person scores very low on those attributes, you can sort of understand, “Oh, okay, this person’s not the right fit for this job. Or yes, this person would be perfect.” But it would almost be interesting to come up with a Kolbe C index test result for each one of these strategies to understand like, “Hey, this is what you got to be good at if you want to do this profession.” And the person could take the Kolbe A and figure out how they score in relation to that strategy. I just had this idea as we’re talking now.
Jaren: No, that would almost be like a real estate strategy personality test product that where people could buy and have a questionnaire and then figure out, “Hey, based on your personality, you’d be good at these strategies.” Yeah. It’s on the list, Seth. The other bajillion things.
Seth: Yeah. I don’t even know if Kolbe is the right thing to do this, but I just thought the concept was interesting how you could sort of finding a way to distill, “Here’s what you need. Here’s what you are. Does it match up? Yes or no.” So anyway, I’ll let you know Jaren, I’m talking to you right now. I will let you know what my results are.
Jaren: Yeah. If you want me to take it too, I’ll take it.
Seth: Haven’t you taken it before?
Jaren: I have but I don’t remember what my results were. But you said an answer to the question for the lonely guy in the audience. He’s crying right now. Don’t leave me to abandon. I need the answer to that question.
Seth: What should people do?
Jaren: Yeah. Because that test doesn’t exist yet that we know of.
Seth: Well, yeah. I think sort of the reason I even mentioned that is because it is helpful for a person to understand what they’re good at. And a lot of us don’t really know. Especially I think maybe younger people in the audience, like in my 20s, I didn’t know. I just kind of did stuff and sometimes it went well and sometimes it didn’t. But the more I’ve tried to understand, okay, I probably should do this because I will probably be good at that because of this. Because of these tests I’ve taken and I sort of know where my strengths are. The more I know about that, the more it can inform what things I should or shouldn’t go after. So, I think if a person has taken a few of those and they sort of understand their natural gifts, it’s a good idea to pick something that is in line with that.
And how do you know which things line up with that? Probably just getting educated about what does this business involves? What do I have to do? Do I need to be an extrovert? Do I need to be a hunter who likes chasing down deals? Do I need to be a super-organized person or not? Where do my strengths need to lie in order to succeed at this? That’s one of those questions that’s like, it’s easy to ask, not always easy to answer. And sometimes you just have to start working in the business to really figure what that is.
And so, maybe pick three that you think you might do well at and then start working on one or maybe even two of them. And give it a few months and try to do what you’re supposed to do. And is it going well? Yes or no. I mean really, I think the only way to ever know what you’re going to do well at is to do it. And short of that, it’s all kind of just theory, which there can be something in that, but the only way to really know is to give it a shot. So maybe just distill it down to three and then pick one or two of those and go after that.
Jaren: That’s a really interesting piece of advice that you just gave. I want to ask you one follow up question related to it. Most people are afraid of failure, but you pretty much said, “Hey, pick three with the expectation almost that one or two of them are not going to pan out.” So, test the waters and intentionally be aware that you’re testing the waters, knowing that this may not end up being the right fit for you. And I think that’s super healthy. And I think that that’s a very different advice in what most people receive, because most people say like burn the boats.
Seth: Or do what I’m doing. Like this is the right thing for you. Even though I don’t know you or what you’re good at, do the thing I’m selling you.
Jaren: What would you say to somebody who’s afraid of failure or they’re in a position where they need to figure out a way to start making money sooner rather than later, because they got family obligations or whatever, and they are having anxiety. They feel like they might not have the luxury to pick three things and then fail at two. They kind of have to land on one.
Seth: Well sort of like what we talked about in episode 72 – retipster.com/72. I wouldn’t put unnecessary pressure on yourself. Don’t feel like you need to figure this out next week. Because you’re not going to. It’s just going to take time. That’s how things work. But I think part of the challenge in what I said a few minutes ago, pick three, try one or two and see what works. Part of the challenge is just getting the information and understanding like, “What does it really take to do this?” Because that’s not always very clear when you’re just reading the blog posts or watching a video. You’ll hear the highlights, but you won’t hear like the actual, really hard stuff about it. I’m reviewing a course right now about billboard investing. Basically, starting a billboard business where you’re advertising signs on the side of the highway.
I’ve always thought that was a fascinating business model, but not knowing anything about it or how it works, it’s kind of like, “Yeah, I’d love to do that someday.” But it wasn’t until I went through this course that it does a really good job of like laying out all kinds of information. Like what does it really take? What does the property have to be like? What does the zoning have to be? What are the state and city laws have to be like? There’s a ton of stuff that goes into it that I didn’t realize until I took this course. And as I’m getting through it, I’m realizing I don’t want to do this. This is not for me. And without that course, I wouldn’t have known. I might’ve even tried to do a big direct mail campaign chasing down something that was not smart. But by getting educated through this course, I’m realizing, “Oh, okay, well, I don’t want to do it.” But I’d rather pay some money and figure that out and stop wasting time there than wasting a lot more money chasing after something I don’t understand and realizing like this isn’t the right fit.
If you can get all the information quickly or as quick as possible without spending thousands and thousands of dollars to fail and figure it out the hard way. It’s really just about getting the information. Understanding what is really required to do this, whether that’s by job shadowing somebody or taking a course or reading a book or reading several books. Whatever it takes to get that information I think it is kind of the ticket.
And I think kind of what messes that up sometimes is that it can be hard to get that information. Like sometimes you’ll take a course and it still doesn’t give you all the information. It’s kind of missing part of the story and to really get it all, you just have to implement it and realize, “Oh, okay, there’s even more beyond what I was told.” And it’s one of the difficult things about business, I think is that it’s very rarely are you going to be spoon-fed every possible thing you’ll ever have to know. You sort of have to get your feet wet.
Jaren: Yeah, I like that you’ve made it so that failure is actually kind of a good thing, but you just want to minimize it. I really liked your advice there because if somebody brings down the expectation and they say, “Okay, like I don’t have to have it all figure it out tomorrow. I can explore.” And even going back to kind of our banter about commitments, like if that is your expectation, then when you’re talking to people, you’re not committed to anything, you’re just exploring. And it keeps your reputation intact and it doesn’t present this, “I’m all in. I’m going after it.” And then you fail radically and look like a flake. It’s a good way to approach it.
Seth: You look at any successful person. I guarantee it, they failed like crazy and they probably quit all kinds of stuff. I think Seth Godin has a book where he talks about how successful people quit all the time. They just quit the right stuff. They don’t keep trying to beat a dead horse and make something work that clearly is not for them. So yeah, I mean, dispel the myth that failure is bad. It’s obviously not what everybody’s looking for, but it is a necessary step to any end that’s worthwhile. Like it’s going to happen. So just embrace that. And if you’re going to fail, try to fail quick and don’t spend years chasing around circles.
Jaren: Yeah. It makes total sense. This was a good episode.
Seth: Yeah, it was good. It’s funny. Before we started this, I sent Jaren a message. I’m like, do you think we’re going to have much to talk about here? What would we do other than land? I mean, is there, what? Like a couple of things. And I thought this would be like a five-minute episode. But I guess, what do you think? Should we ask one of these closing questions like we always do?
Jaren: Yeah, man.
Seth: So, the question is this. In your opinion, what is the best piece of music ever written?
Jaren: Man, that’s tough.
Seth: That’s kind of one of these impossible to answer questions because there’s no way to adequately account for the best music ever.
Jaren: Yeah. It’s super subjective because there’s so many genres. And I mean, if we talk about technical skill, most pop music is not technically difficult.
Seth: It’s almost more like production to it. You can take a person who really can’t sing, but if the producers and editors are good enough, they can make it sound pretty cool. But it’s not the talent of the artist necessarily, it’s more of the production value to it.
Jaren: Whereas if you talk classical music or jazz music. And it’s interesting because sometimes it doesn’t even really sound that good, especially in jazz, but it’s so technically superior than any other form of music that it’s intriguing. So, I don’t think I can answer that question.
Seth: Well, you have to. Sorry. It’s a very subjective thing for sure. I think anything you say, there’s going to be thousands of other brilliant things that could also be said, so there’s no way to really adequately answer it. But I will say this past December, my wife and I took our daughter to go see the Nutcracker. Like the theatrical performance with the symphony orchestra playing along in the background. And I got to say that for me classical, it’s probably not my favorite genre, but it’s out there. It’s probably like number three, maybe, because there’s a lot of brilliance in the writing of that and just the way it’s all composed.
And I got to say that the guy that wrote the Nutcracker and I can’t even pronounce his name, it’s Tchaikovsky, I think is the correct pronunciation. But if you just read the spelling of it, it doesn’t work well in English. But it is just a masterpiece. There are several songs in that whole arrangement that everybody recognizes. They’re very well-known tunes. And I had never spent a whole lot of time dwelling on his music. But when I heard that it’s like, man, this thing is just amazing. Like he really wrote a great piece of work here. I don’t know if it’s the best ever, but what stuck out to me is, this guy did an amazing job.
Jaren: Yeah, man, I really love classical music for that. I feel like it’s on my bucket list to go to a live orchestra. I’ve never been.
Seth: You have never been?
Jaren: No, I haven’t. And I always tell my wife every year for my birthday, that’s what I want to do.
Seth: You got to come to the Grand Rapids symphony orchestra. It’s an unusually good group of performers for the size of Grand Rapids. Usually like cities like Chicago and New York will have these kinds of things, but not a Grand Rapids size city. But yeah, there’s a symphony that plays pretty regularly. Pretty good.
Jaren: Man, I’m totally down. We can double date or something.
Seth: Yeah. I feel bad about this, but every time I go to one of those performances, I get really tired and almost fall asleep in them. It’s weird. Because it’s really good music, but just the nature of just hearing classical with no lyrics, not like a steady beat, like a rock song. It just sort of puts me to sleep.
Jaren: Interesting. Yeah, man. But I would totally be interested to see that. So, I guess to answer the question on my end, for whatever reason, Bob Marley’s Redemption Song came to mind. I don’t know if you’ve ever heard it.
Seth: How does it go?
Jaren: Do you want me to sing it?
Seth: That’s what I’m asking right now.
Jaren: No, this just got really awkward.
Seth: I’ll find a YouTube video for Bob Marley Redemption Song and I will link it in the show notes in case people want to hear what Jaren is talking about.
Jaren: Yeah. I just really like it because it encapsulates kind of that whole like the 60s-70s vibe of fighting against the establishment for the good of mankind. He was a pretty significant political figure in Jamaica. I don’t know all the details, but there were like two rival political parties that he helped bring a lot of unity to. And so I don’t know. I like reggae a lot. I pretty much literally like every genre of music now. I used to say, I don’t like country. And then I went to Nashville with Seth and got turned on to country music. It finally clicked and I got it. And so, I’m all about the country now. A particular kind. I don’t like pop country, like commercial stuff. But there’s a guy named Tyler Childers that I really like a lot. I don’t know. It’s hard on that one, man. I like music and I appreciate all aspects.
Seth: Yeah. It was crazy in Nashville how much talent is there. Man, I mean just everybody, every performer you hear is amazing.
Jaren: Yeah. It was sounded like we were listening to CDs and they are live. And a lot of pop artists, they can’t sing live. They sound terrible. But all these country artists they actually know how to sing like for real.
Seth: Yeah. That one, were they called Charlotte or something? That band that was playing at that meetup thing. The guy had perfect pitch. I don’t think his voice ever was off key. I don’t know. It’s unusual to see people who, well, maybe not Nashville, but in most places it’s unusual to see people who are that good.
Jaren: Yeah. It’s really intense, man.
Jaren: I mean, I like all kinds of music. I’m really getting into lo-fi hip hop right now because it really helps me concentrate and it is good background music. And it’s kind of interesting because it’s like jazz or classical with like a hip hop beat to it with some weird ambient noise layered on top. And I like it. I don’t know why, but I’m really getting into that, that scenery right now.
Seth: Yeah. I agree. I hadn’t even heard of that until you shared that video. By the way, Jaren started an interesting thread in our new forum by the way. I’ll link to it in the show notes, but he was asking what music helps you concentrate. And he posted a YouTube video of this lo-fi hip hop music. And it’s pretty cool. I can totally see how that would help me focus in and just kind of does something to your brain I think when you can find the right music.
Jaren: Yeah, man.
Seth: Cool. Well, I think that’s pretty much it. Again, if you guys are listening to this on your phone, take that phone out and text the word FREE. F-R-E-E to the number 33777. You can get access to some stuff that we don’t normally talk about here on the podcast or on the blog. It’s kind of like top secret members-only kind of stuff. So, no pressure, but just putting it out there. That’s there for you if you want it.
If you want to check out the show notes for this episode, you can find them at retipster.com/74 because this is episode 74. I know we mentioned all kinds of stuff in this conversation and I’m going to have links to everything. And you can also see transcripts if you would rather go back and read this instead of listening to it again. That’s there too.
Seth: But again, thanks for joining us. I hope you guys enjoyed it and we’ll talk to you next time.
Jaren: Later guys.