I forgot about a house I owned. I literally forgot about it.
was still paying the mortgage, but didn't, was not, it wasn't in my
property management software. I did. Wasn't in my mind that I owned
this house. I drove by it like every day too.
Hey guys, this is George Uno from REIClub. Thank you so much
for joining me again for another episode of First and Worst. Now
today my guest is a guy who went off to West Point then he got
deployed overseas, Iraq and Afghanistan serving our country. And he
actually read the little purple book over there overseas and got
into his mind, hey that passive income sounds really good compared
to what I'm doing right now. So while he was still on active duty,
he started building up that passive income, and from there things
just snowballed and took off. And before he knew it he was, you
know, had 60 doors of his own and was like, wow, this is amazing.
but Jimmy, let's get to know you man. How are you doing over there
in St. Louis?
Good , how you doing, man?
I'm doing great. So how many deals you guys have going on
so, we'll, we'll do 120 turnkey, and we'll do around a hundred
wholesale this year. So we got 20 to 25 deals going on at any given
That's crazy. All right, well so that's probably a lot to
manage so I don't wanna keep you too long, but take us back. Take
us back. So you're in Afghanistan, or sorry, Iraq. You read Rich
Dad, poor Dad. And how does that change the way you're looking at
life and, and planning for things?
Growing up, I thought the only way you could become wealthy
was to be like to be famous. So, you know, maybe politician, I
realized with my mouth and my time in the military politician was
out. Actor I'm not pretty enough to do that. And then athlete,
which is what I really wanted to be, but not talented enough for
that. So I was just like, oh, you know, I'm just gonna live this
like nice life, you know definitely not gonna be wealthy. But then
Rich Dad, poor dad opened me up to the fact that hey, the wealthy
don't work for money. The, you know, the wealthy create and think
and buy assets. They don't trade their time, they buy assets and
then their assets buy, essentially buy their time back. So that was
like paradigm shifting for me.
Yeah, that's crazy. I mean it's just funny that that's,
everybody kind of gets that mind shift out of that book and so many
investors have read that book and was their catalyst. You read the
book, you say, okay, assets are what it's all about. So how do you
decide on real estate and what, where'd you go from there?
And then I, I think I went home for leave and so Kiyosaki, I
don't know how my mom actually sent me the book. I don't know how
my mom found the book. I'm assuming it was when he was on Oprah.
I'd have to ask her. But, so she knew about Kiyosaki, she wanted to
get in on this, and then my brother was in medical school at the
same time. Then he read it and he is like, yeah, let's get in on
this. And I'll never forget this. So you know, interest rates were
like at six and I'll never forget my mom being like, interest rates
will never be this low, we gotta buy now. And they were at like six
and a half 🤣. So so, you know, we started doing what everybody
does. We started looking on the mls, we started walking
We didn't know what we were doing. but you know, this was like
in retrospect, this is 2006. This was the worst time to be buying.
Worst time to be buy flipping, not worst time to be buying. I think
when you're buying a long term assets and all the time's a good
time to be buying. But we can get into that later. So yeah, we
bought a rental house and then my brother lived in there and was a
tenant for us through med school. And then he got two other med
school students. So we got like elevated rent. It was like a, it
was like an Airbnb before they were invented.
Wow. Pioneering. Okay, so you got it. It was, it was a duplex
Single family. But we charge rent by the room.
Nice. Yeah, that's the way to do it. So obviously in a college
town near the med school
In St. Louis. So they're St. Louis University, not exactly a
college town. yeah, but like for these med students, they're a
little older. They want a yard, they want stuff like that. They
wanna be able to barbecue. They don't wanna live in a dorm.
Right. Yeah. The the days of Top Ramen are over for them.
That's really cool. okay, so take us through it. It did, you bought
it a good, a decent time. I mean, cuz it's a long-term asset, but
how did things play out through the great recession with you
No change no effect. Like the asset value might have died
down, but we had a 30 year fixed loan on it, so is irrelevant. And
then what has been awesome is the Fed has continued to create,
print money and so we've continued to raise rents now for the last
13 years as inflation has taken its effect.
All right. What was your cash flow on that? I mean, that's
what survived through the great recession for you. You guys didn't
run outta liquidity or anything, right?
Yeah, we had two other partners on the deal. So, you know,
that was the frustrating part in the beginning it was like 200
bucks, divided it by three. You're not exactly getting passive
income equals your expensive like Kiyosaki says.
Right? Right. But but it worked out. And then what'd you guys
end up doing with it? I, I know you have some, you guys said it
kind of snowballed from that one rental.
We sold it and bought a lake condo for it, but then the last
two years with the, we were getting offers we couldn't refuse and
so we 1031 into a condo at in Branson and then we were getting
offers we couldn't refuse. We made like a hundred grand and we 1031
it back to a nicer four family in St. Louis, like a, a straight up
wealth builder for my family.
Wow. Now what's that? What's that fourplex look like? What's
it worth now and what's it cash flowing?
I think it's worth three and some change. And I bet you we
make 1500 bucks a month,
Man, that's, that's quite the snowball
There's one thing you have to do to look like a genius in real
Do it for 10 years.
Be patient. Huh?
If you do it for 10 years, you'll look like a genius. Doesn't
matter what happens. Doesn't matter what tenants do to the house.
Huh? So it doesn't matter what happens with the house, why? I
think you have some kind of story about a house that that kind of
got maybe, maybe fell through the cracks or something
You know, I made a lot of mistakes in real estate. Do you
wanna, so two huge mistakes I've made in real estate is one, buying
assets based off the performer of the first year pro-forma, like
buying and selling based off, that was a horrible mistake I've made
in real estate. We can get into that too, but I mean, I have, I
forgot about a house I owned, I literally forgot about it. was
still paying the mortgage but didn't, was not, it wasn't in my
property management software. I did, wasn't in my mind that I owned
this house. I drove by it like every day too.
Well, okay, so take us back to that. Why, why is it a mistake
to look at the pro-formas for the first year of a, of a house and
then sell it based on that value?
It's, I call it like the cashflow paradox. Like when you
really need it and you're white knuckling your cashflow, y you
won't get it. Like something the tenant karma will come to you for
your worrying. A tenant will smash something, something will break.
But then the, the most chill people who don't need the cash flow,
don't care about the cash flow, get it all the time. There's no
scientific statement around that. It's just, it's what I've
So basically like you look at the first year, that's not a
good predictor of how that rental's gonna pencil out in three or
five or 10 years.
Okay. That's been your experience.
So I see a lot of people looking at pro-formas for like, I
call 'em Excel millionaires. Like one of the, when I started doing
this on my own, I bought a four family for like $80,000 and like
each unit rented out at 500 bucks. Right? So I'm like, wow, that's
two grand in gross rent and my mortgage is like 400 bucks and you
know, I should be cash flowing a thousand bucks every month. And
like, so the pro-forma looks awesome. The proforma didn't mention
it was in the ghetto. The pro-forma didn't mention it was not a
good long term asset. The pro-forma didn't mention any of that. It
just said year one you're gonna crush. And we didn't crush because
we were chasing rent the whole time.
Oh, okay. So there's more to it than just the numbers. You
know, there's kind of that subjective aspect is that what you think
Like in real estate you win in four ways. So it's really hard
to lose. Like you when you, it doesn't, like we talked about my
first deal, right? Essentially me, my brother and mom were throwing
darts at the MLS, as as we didn't buy something that was massively
overpriced. There's no way we would've lost, don't touch the stock
market cuz it's so boring. It's like all you can do is buy low and
sell high. Like, I don't play a game where I can only win one way.
That's like, that's like football before the invention of the
forward pass. I, I like playing games where you win multiple ways.
Like I love it that a single family asset will keep up with the
stock market with appreciation. Then I love that cashflow from a
rental property. Like I buy rentals right now to lower my taxes. I
love it that I get to collect assets and it lowers my tax liability
and then the ability to use leverage. I love it that I borrow money
from a bank and I borrow it for 30 years and on years 15 through 30
I'm because of inflation, I'm giving the bank back garbage
No, when you put it like that, I mean, you're totally right.
We see that now, you're paying back inflated dollars on a fixed
Right, like, but I am collecting more garbage dollars in rent
and my cashflow is that ca that delta between a fixed cost of
capital and increasing rents. Like that's, that's when the cashflow
hits. It's not the first 12 months because I used to whiteknuckle
it, I'd be like, oh, I just added the pro-forma said 200 bucks. So
I'm 200 bucks closer to quitting my job. Like that's not, that's
when the assets are leveraged. It's, it's just not gonna
What's the fourth way to win
Taxes, Leverage, Cashflow and Appreciation.
Right? Okay. Yeah. So we touched those. Okay. so tell us about
that house you forgot because obviously that's a giant mistake,
huge oversight, but how did that end? Like what was the, what
So the reason it happened is we were moving offices and the,
the leasing agent who took the deposit didn't get it into the
software. And when we were moving. And turns out these were
horrible tenants, these tenants spent like six, seven months there
just tearing it in half. So I, the county called me was like, you
own this derelict house. I'm like, no I don't. And they're like,
yeah, you do. And I'm like, oh, I actually do, there's like $30,000
in damages here. Like I can't do this right now. So what did I do?
I bet on this was probably, this is 2018, I bet on the market
saving me. And I just sat on the house for two years and I
eventually made, I think I made 20 grand off it. I gambled that I
won. I would not recommend that to anyone
But it's nice. It's nice you bought a good asset at a good
price and the market saved you, which you can't always count
Like, it, it's not, I could not buy a book about, hey, forget
your houses and grow wealthy.
That that sounds too good to be true almost.
I mean I bought the, I mean I did buy the house for 30 grand
with the covid kick up with the market going crazy. It eventually
appreciated to 60k.
With no work...
With rehab. I bet you it's worth 180.
That's pretty good. That's pretty good for for a forgotten
So Jimmy, what do you guys got going on today? I heard you
guys just crossed a big milestone with your students.
We got our education platform cashflow tactics where we talk
about the four ways to win and we show people, you know, all the
financial jiujitsu you can do when you're buying assets, where you
win four ways. So we show people how to acquire turnkey assets and
how to add it to their financial plan. And we have you know, our
community's bought over 2000 houses, so we just crossed that
they're getting a million. The community's collectively getting a
million dollars in cashflow now.
That's crazy. And you guys are, you guys are buying these
assets in the Midwest and flipping 'em and selling 'em his turnkey
rentals. That just makes a lot of sense for people who don't, you
know, I heard you were on a podcast and the guy was like, why
didn't you get into wholesaling right away? And you were like, well
I had, you know, I wasn't ready to make that full-time dive. I
didn't wanna be actively investing. And for a lot of people that's
kind of where they're at, right? They have a lot of income, they
have a good job, they don't feel that need to quit right away. So
this is a, you find this like, to be a safe and easy way for them
to start building that snowball.
It's the, it's the best way. I don't know of a better asset
out there that can do all that a single family house can do for
Yeah. And what's the typical process for, for taking these
people who are, you know, busy professionals and how do you guys
get them into real estate and what does that process look
You sign up for our, our course you know, it's like a 15 video
course to kind of explain the basics to you. Then we have weekly
calls cuz it, it, it sounds silly, but to buy a house, you know,
I'm trying to think for me buy reading Rich Dad, poor Dad to
actually buying a house, walking a hundred deals, all that type of
stuff. It took like probably two years. So we're able to shorten
that timeline down really to 60 to 90 days for people, and give 'em
enough education to kind of be dangerous and start learning. We
also hooked them up with a financial instrument called the Vault
probably outside the scope of this podcast. Basically we get 'em
pre-approved by a bank and once they say, Hey, I'm ready to buy,
then we just start showing 'em deals.
So you mentioned the the vault. Can you tell us how you guys
are, are teaching your students to use the vault and what it does
to their returns, their ROI.
You know, when you first read Rich Dad Poor Dad and you know,
another great Kiyosaki book is The Conspiracy the Rich, and you're
like, wait a minute, the wealthy seem to be claimed by a different
set of rules. And you get exposed to that and it it, it pisses you
off a little bit, quite frankly, right? And so when I discovered
the vault, it really pissed me off because everyone who's wealthy
has these assets and no one talks about it. So the vault's
essentially a, a whole life insurance policy and people are like
whole life insurance policy that's so boring. Like whole life is
like the backbone of, of the economy. Like all liquidity is stored
in life with life insurance companies. You could make a, probably
outside the scope of this podcast, you could make an argument that
life insurance companies in 2008 crash kept the economy solvent
because they had liquidity. They were, you had drug dealers and you
had life insurance companies who were providing liquidity to the
Yeah. So you're talking about cash value life insurance,
We teach a strategy that you put your money in a whole life
policy, you get a 5% tax free return. So 5% tax free is really an
8%. Then you borrow against that life insurance policy for your
down payment of the house. So you're still getting 5% tax free the
return. And then if you look at a single family asset, generally
you get a 30% internal rate of return. So we're just showing our
students how to increase the velocity of their dollars.
Wow, that's, I need to do that because I've got some deals I
wanna do, but you know, I don't wanna just spend the cash that it's
gone forever, right? With these cash value it sits there, you
borrow against it and it keeps compounding. Is that right?
So the cash is working in two assets at the same time.
That's yeah, that does seem like a different set of rules for
And if you look at like every politician, if you look at their
tax return, they all have massive amounts of cash in these
How fast can you get your students from not having one of
these to getting it set up and ready to deploy the capital.
Just a 90 day seasoning. That's it.
Day one, let's say I put a hundred grand into a vault day one,
80% of it's liquid it can be borrowed against.
Okay. I actually need to come and talk to you guys because
this is perfect for me right now.
Yeah, it is. Ryan will set you up a vault.
Cool man. Well Jimmy, thanks so much. do you have any part and
words for our audience, any advice you wanna give them? Somebody
who's, you know, kind of been looking at that house kind of been,
you know, throwing some darts at the market but not not quite ready
to go. Is this a good time to buy or is this kind of, should we be
all be sitting on the sidelines a little bit scared
Every, my philosophy is it's always a good time to buy. Your
reasons are just gonna change. Now is the time to buy because deals
are opening up. Like, so the turnkey deals, like for me to find
turn, like I'll never forget I was at the collective genius with
Lee , spring of 2021, you know when the market was just red hot,
right? And everybody was like crushing on flips and like I was
having trouble with deal flow and he was like, Jimmy, that's
because turnkey is great when it's hard to find buyers. It's not
hard to find buyers right now. So there were, there were few and
far between on deals on turnkey and then all the students, guess
what their main complaint was? Deals. And so right now we're like
in this perfect spot where at least in the Midwest, prices aren't
dropping but deals are opening up.
And so now you can get that like better three, two asset that
you couldn't necessarily get the last two years. And then, you
know, if people are like, Hey, I'm gonna wait till interest rates
will go down to start buying, it won't work because soon as rates
go down, the funds are coming back in and taking everybody's
opportunity. The play right now is to buy a great asset that is
going to benefit from inflation and you're gonna get your cash flow
from the inflation even at a high interest rate. And then when
interest rates dropped, refi 'em amount.
Yeah, that's super smart. You're locking in that purchase
price right now and the deals are kind of, kind of coming
Locking in your, because of inflation prices are leveling but
rents are rising. So you're locking in that leveled up price. And
you know, I learned fun history fact in the late seventies when
interest rates doubled, you would've accept, you would've thought
the real estate market would've taken a bath, right? Rates doubled,
asset prices tripled.
That doesn't make any sense based on what everybody's saying
right now, but I'm gonna have to go check that out.
Econ 101, you would think, hey, cost of capital's up so demand
will go down, right? Yes. Demand has gone down, but two years ago
or a year ago, we had an insatiable demand. There was no inventory
to supply all the demand. Right? And so now yeah, demand's low, but
it's not low enough that inventory's sitting.
Yeah, that's true. I mean we're just seeing like you know, a
little drop in prices, a little increase in days on market, but
nothing, nothing crazy,
Right? And so the other, the way I can explain why prices
tripled when rates doubled is because why did rates double? Because
they were in inflationary period. Where do people flock to an
inflationary period? Hard assets.
Yeah, I mean there was a huge lag before we even saw the first
price decreases after the interest rates started going up. Cuz you
know, investors are watching the numbers straight from the Fed and
homeowners are still looking at their Zestimate, you know, in two
different worlds, two different, you know, timelines. Very cool.
All right, well don't sit on the sidelines in 2023 guys. That's
what Jimmy's saying.
Yeah. If you wanna sit on the sidelines at 2023, just expect
to sit on the sidelines for 2024 and 2025 cuz there won't be
Yeah. It's gonna be impossible to time that, that shift when
the, as soon as the rates drop, you're just not, you're gonna miss
it guys. You just will. So Jimmy, thanks so much for all that
wisdom, man. You are, you guys are crushing it over there. A
million dollars in passive cashflow for your students. That's gotta
feel amazing. You're changing a ton of lives and I'm gonna be
reaching out about that vault cuz man, I need one of those right
now for sure.
Sounds good, bro.
All right guys, it's George Uno with REIClub, Jimmy Vreeland
with Cashflow Tactics. I'll catch you guys on the next episode. You
guys can check out Jimmy at REIClub.com/cashflowtactics. Talk to
you guys soon. See you later.