Victor Leite 00:00
In order to be successful and to have this level of growth, and to really not do what’s easiest, but what do what’s best for you, you need to be a ninja and try to figure out ways to make it go in the direction that you envision it going. Welcome
Greg Lyons 00:14
to the passive income brothers
Tim Lyons 00:16
podcast. Here we take the fear out of real estate investing use real life stories of everyday successful investors. Let’s go. Welcome to another episode of the passive income brothers podcast. My name is Tim Lyons and today I am joined by my brother Greg, why don’t anybody
Greg Lyons 00:32
Jim doing fantastic and we have a timely guests on today, because of what he does in a previous life internal medicine. Everyone is sick right now everyone has the flu, the sniffles and everything. So we may not get into holistic medicine. But I think Victor is going to be an absolutely great lesson today. Dude,
Tim Lyons 00:52
you’re not kidding. So I had an opportunity to meet Victor and his wife a couple of months ago now. And we ended up being in the same kind of mastermind program. And this is actually the first time I’ve actually got a chance to really dive into his story. So I’m really excited for you guys to hear the story to hear about the husband, wife team to hear about real estate here about medicine. I don’t want to give everything away. So without further ado, here is Victor Leite. Hey doing Victor.
Victor Leite 01:18
Guys. I’m great, man. Thank you very much. I’m very, very happy and grateful to be on this platform of yours. I love listening to you guys. Look your listeners. If you guys haven’t given these guys a five star review yet you better jump off and do it now. Because this is liquid gold these boys are putting out we’ve paid 1000s of dollars for this information. And they’re giving it to you all for free on a listen. So y’all, thank you for having me on. I love
Tim Lyons 01:42
that. So, Victor, thank you, man. Because listen, at the end of the day, we didn’t invent real estate, Greg and I we didn’t invent raising capital. We didn’t invent syndication. We didn’t invent any of this, somebody before us did it. So we had to learn from somebody we had. And it just makes sense, since we believe in it so deeply. And it’s worked and changed our lives that we can spread the word to others to try to help somebody else out. So thank you for that. So Victor, I love your mindset. I love your story. But I want you to tell the listeners a little bit about who is Victor, how did you get started? What do you do in a previous life and kind of where are you now? Sure, yeah,
Victor Leite 02:18
I’ll try to summarize it as best I can. I was born in Brazil, I emigrated to the States as a young man, right? So I didn’t not speaking the language, not understanding the culture. I just focus like everybody else on trying to focus on chasing that American dream, right? We follow the traditional path as others around us tell us to follow, right? I grew up in the Southern California area. So I went to good schools. I did endless hours of studying, I got good grades, I worked multiple jobs to get me through school. And that now was in healthcare focus. So Tim, I can relate to you know, as a medic for four years in LA County, so and I worked in the ER endless hours on to get through school. And I thankfully was accepted to the George Washington School of Medicine, and receive my training my medical degree as assistant soaps, internal medicine. And when I began my path and practicing medicine, I really thought that I had reached that level of financial independence where American Dream that I’ve researched, right, but five years into it working private practice 60 hour plus long work weeks, on call overnight call, right? Dealing with the corporate structures of the medical business world, right. It started to take a toll on me, I really felt that burnout coming right most health care professionals who would listen to what I’m saying have dealt with this before at some point in their career, and especially since COVID has hit right. And so my wife who also practice medicine, we went home one day, and we had both had really, really difficult days, dealing with people dying people with cancer these long days, and we have strong conversations in our lives and really got down to focusing on our Y. Right. And we started focus on our y we said, You know what, we need to press the reset button on this. Right. And we did and so, we took sabbaticals away from our profession. We packed our lives into two backpacks, and we took off traveling for over a year Nomad style, okay. And during our travels across the world, we did a lot of things we we obviously saw a lot of things we learned about a lot of cultures, but we did a lot of self reflecting soul searching. Right. And through that process of soul searching, we did a lot of reading. We did a lot of mindset, we did a lot of listening to podcasts, just like you guys given us that guidance of what to do, what else we can do. And what really started resonating with us was that that real estate started coming up as a regular topic. And in real estate, you can really get started without any major experience without much money and it could bring some form of financial independence and financial freedom. And so we got back from our long travels and we had a little bit of money saved up and we got our start in fix and flip. So we were able to complete a project pretty seamlessly and we had strong returns then. And so we got a little bit of the taste for it, right? We didn’t have that as a focus we a little bit of taste for and we said, Well, why don’t we give it just another shot. And so we did another project and then we do another project and for became eight and eight became 16. And now you know, we’ve done over 200 fix and flip projects already. And with that extensive knowledge of systems, renovations operations, were also at the same time able to create a large burr portfolio of single family rentals. Ryan, I don’t know if your listeners know anything about the burr method, but buy, renovate, rent, refinance, repeat, right. So that finally gave us that taste for it. I call that cashflow life, that passive income life, right. And so we’re like, wow, this is amazing. We need to really focus on scaling this. And so we started focusing and tradition, our focus and our skill set towards the multifamily space because of the economy of scales. And so we knew we can use our value add systems from the residential side and transition over to the commercial side. Obviously, we had to learn the ropes, right, especially with the deal sourcing, the broker relations, the underwriting acquisition, the due diligence, etc, right? We leveraged our relationships, we leveraged our education, we connected with so many people. And well after our first multifamily deal, which we source completely off market, a 65 unit distressed property, we completed that entire business plan in less than a year, we forced the appreciation, we added the value, we raise rents over four and a door. Right? And so that
Tim Lyons 06:36
I have to call a timeout, because I’m ready to do some push ups in the Ioway here like air squats, push ups. I mean, he just you know, I don’t know if everybody caught this. I’m over here. If you’re watching on YouTube, you can see me I am scribbling notes on my paper, like there’s no tomorrow, when you do. I love how he just glossed over the fact that he’s a doctor. Okay, he married a doctor, they have this American Dream. He’s a Brazilian immigrant, right? He has, we can do a podcast just on those topics right there and call it a day. Right. And here’s Victor. Without getting into politics or medicine, medical politics, there’s a real problem with physicians and how they get paid. I know everybody thinks they’re rich, right? And they make all this money. And but when you’re dedicating your college life, four years, four years of medical school, and then a minimum of three and training, if you don’t do any sort of extra fellowship or anything else, right. And then you have to do a residency, right? And then a fellowship, and then all the stuff. It takes years and years and years, and then all of a sudden they get there. And I might be putting words in your mouth, Victor, but it could lead to burnout very quickly, right? You’re trying to start after all your colleagues who went to Wall Street at 22. Right? Have this big, fancy house and the Mercedes already, and then now you’re just starting out, right? So I can’t believe the amount of physicians, dentists, orthodontists, you name it, that are in real estate. And I’m like, wow, I always thought dentists and doctors like this six, figure seven figure salaries like whoa, like, why would they ever? And I really want you to dive into that in a second. But let’s keep on going fix and flips. I mean, Greg and I are allergic to hammers, right? Like, my wife won’t even let me hang up picture on the wall. That’s how bad I am. Right? And I’m almost ashamed to say that because I’m in New York City firefighter, right? I should be good with tools. I’m not, but not one fix and flip Greg, over 200 fix and flips. I mean, that is incredible. And not to mention that he hasn’t he mentioned his two kids were a little right. So with that, there’s a couple of things that you said you have systems processes, right. And then you get into the burr method, which is a really powerful way for people out there that are looking for a way to scale capital very quickly. So you’re starting out with 50,000, or something like that for an example. And you do a fix and flip, right? It’s a little hard right at the moment to do that. But if you can refinance out that initial equity, right, and keep the asset as a cash flowing asset and take that original 50 and go do another project. Right now you can see that there’s velocity of capital and all that stuff. So I just want to make sure everybody got that, because I have all these notes, Greg. So are you writing some stuff down too? But, Victor, I have two main questions right now. Number one, did you have any training, coaching mentorship meetups, what was it about fix and flips that you were able to do it successfully, right, and then able to get a system and a process down? And what were you doing the work? I mean, tell us a little bit about that. And then the second one was, how did you make it happen while working two full time jobs as a married physician?
Victor Leite 09:42
Right. Yeah. So that’s a two part question. So yeah, in the beginning phase, right, starting off with that first project, we had to build a team that could handle that, right. I’m similar to you guys. I can put a hole in the wall just by kicking out the wall itself. And I don’t have that kind of level of training, right? But I focused on what I did. Best, and then I hired out what I could not do. And what I do really well, that is I can multitask at high levels of stress. I can delegate and I can lead. And I was able to connect with people and build my team, right? You got to build your team. It doesn’t come out of thin air, right. So building your team of brokers, agents, contractors, stagers cleaners, right, you have to have at some point investors to come in and help you with all this, right. But in that beginning phase, that first project, yeah, we did the grind, we put the work in, right, we had to put the work into kind of learn through the school of hard knocks of how to get that process going. And in the process of it, I went to local meetups I did reading, I did a lot of listening to people who also in podcasts with people who also had the same strategies that I did, and connecting that way and learning that way. It allowed me to kind of say, hey, we can do this better, we can set up a system that can really bring in consistent volume, consistent labor force, consistent capital. And then you just kind of just rinse and repeat similar to like a factory line, rinse and repeat, rinse, repeat, rinse and repeat on a fix and flip side. And so that’s kind of how we did it. Yeah. In the beginning, you don’t just quit on day one, you have to kind of test the waters and making sure your systems are in place. And so I did work. And I was taking calls from Lowe’s Home Depot. In the middle of my lunch or middle of seeing patients, I was signing contracts on my phone, I was underwriting deals on my phone, I was going to go look at properties at six o’clock in the morning, before I have to get to the hospital at 7am. I’m looking at properties at midnight, I’m coming in signing checks, wiring money, at midnight, I have a lot of systems for getting that done now. But at the beginning, it’s just it’s the barrier to entry. And then it’s the entrepreneurship side of things. You just have to figure it out, right what works. And then as you go, you improve on the mistakes you’ve made before.
Greg Lyons 11:55
That’s exactly right. And a lot of people have trouble getting started. And that’s either as a passive investor, or as a hands on investor and you want full added right into the hands on approach. And I love that. And you probably learned a ton about what’s going on construction building teams. And that probably gave you the confidence as your first multifamily to take down a 65 unit distressed property that sent a shiver down my spine, mostly because as Tim alluded to, wielding a hammer is not something that is particularly natural for me, that’s for sure. But when people have that trouble getting started either way, and they’re that Daydream investor, that’s where there’s no start to anything. And before we started the podcast you talked about you’re always in constant motion, always and constantly doing something to move the ball forward. As someone sitting here listening, either a doctor or a lawyer kind of trapped in their W two job, what’s the first thing they should do? Is it reach out to someone is to start listening to podcasts? How do they get started? In the real estate drain?
Victor Leite 13:04
Yeah, to be honest with you, it’s all about in my opinion, is just starting with your mindset mindset itself. Get yourself prepared before you even jump like jump in that car. Before you get on that down that road. You have to figure out why why are you doing this? Why are you doing this? What are you doing in Florida, and then you can figure out your how, but then once you get to that how you say success is a skill, you have to keep working at it right, you have to keep working at it, you have to build your habits consistently on a daily basis to start chopping down that tree, little by little. And then once you’re working on it, then you have to be all in on that one path. So if you’re educating, you’re understanding your networking, you’re leveraging your network on your cell phone and then build out from that. You’re listening to podcasts that give you a lot of the information, you’re reaching out to mentors, you’re paying for mentorship or paying for a mastermind, you can do a lot of things. It’s we have access to so much more now today than we did five to 10 years ago. And so now you have everything’s at the touch of a button. And you can learn so much in the beginning. But the one thing that that people get overwhelmed with is that they don’t know their why they don’t know which way they’re going to have 10 different roads that they think they’re going to go down. And they then they get analysis by paralysis and just quit. And they just keep going on. Still in that same clock in clock out method, and they never really change. But if you gotta go deeper and focusing on why you’re doing it, looking at those reasons, and then you move forward from that. So that’s how I say that’s how you get started really focus on mindset first,
Tim Lyons 14:36
dude, I love that and I’m gonna stack on top and I’m gonna give everybody the golden keys right here. I’m gonna save you guys. tons of money on Amazon books, tons of money on courses, because here’s the five steps of every beginners book to real estate. Step one know your why. Why are you doing this? Are you burnt out? Are you looking for more you want time with your family? You don’t like what you’re doing. You don’t have fulfillment you don’t have purpose, whatever it might be step one, why? Step two? What are your goals? Right? What are your goals in life? You want to have time, freedom, location, freedom, freedom of association, financial freedom, whatever it might be right to his goals. Number three is education. Right. And one of our mentors, he pounded into the ground, he says education times action leads to results, right. Step four is building a team. I mean, Victor just said, when he was doing 200 fix and flips as a physician, married couple I mean, think about that incredible. You gotta wonder a lawyer, a broker, an agent, a stager a cleaner. Who might miss it here, Greg, insurance guy or girl, right? I mean, on a contract to contractors, right, Greg and I, that’s probably the first thing we would need as contractors because we can’t swing hammers. All right. And then the last step on any of these beginning intro books, is you have to take the action, right? You have to take action. There’s a bookshelf behind me, the bookshelf behind Greg filled the real estate books, right? And all these how to raise capital and how to do fix and flip and all these things, Intro to real estate. And all them the first chapter, I just saved you guys a ton of time, right? But here’s the thing, Victor, you were taking action dude, which I love, right? So you’re working full time, your wife’s working full time, you’re doing these fixing flips, you’re getting these teams in place, you’re getting the you’re doing some birds doing some fix and flips, and now you’re probably stacking capital, right? I’m just curious, how did you start out with capital was your own capital that you use? And you saved up? Did you break a 401k? Did you go to friends and family colleagues? Like how did you originally get started hard money lending in so many ways to get started? But I’m just curious, because a lot of people will say I can’t get started in real estate, I don’t have the money. Right? Well, yes, you can. There’s ways that you could do it. But I’m just curious how you did it.
Victor Leite 16:50
You mentioned all the strategies that I’ve used already. But in in initially, in the beginning phases, we focused on pulling capital that we had, but we thought we couldn’t touch. So the 401k loan, taking the loan from the IRAs, leveraging friends and family and provide them with a solid return on their income and give them some passive income. And we started that way, because those were the ones who believed in us, those are the ones who knew what we’re trying to accomplish. We set out the business plan, we set out everything organized, we have notes, everything organized. And that’s how we really kind of scaled in that model. In the beginning phases. There’s capital out there accessible to you, you just don’t know it. Most people don’t know about the 401k loan, they don’t understand it, because it’s not mainstream, the banks don’t want you to take money away from them and invest in other assets, like real estate, because they just don’t teach you about it. But these certain strategies are what we called ninja strategies. And in order to be successful, and to have this level of growth, and to really not do what’s easiest, but what do what’s best for you, you need to be a ninja, and try to figure out ways to make it go in the direction that you envision it going. That
Greg Lyons 18:00
is gold right there. Love that. And as you keep building your business from fix and flips and into multifamily, there’s an evolution that takes place in kind of all of our real estate investing careers, and we find ourselves at a time with high interest rates, some uncertainty in the markets, are we going into recession? Are we going to recession? So if you could just do it, I love having smart people on the podcast, that is the engine that makes it go, if you just comment kind of on the macro economics of where we are right now in the US and how that’s going to impact your real estate investing, kind of going forward into 2023. Yeah,
Victor Leite 18:37
of course, this is what we talked about every day, actually, we’re trying to we’re proactive, not reactive. So already projecting how the next year is going to be. And we kind of seen a little bit of distort, before we already know what the feds are doing. Actually yesterday, they just raised another half of basis points. We know where this is going. But right now the waters are murky. And if you say that, you can’t control the rules of the game, but you can control how you play the game. Right? So the rules have already been set for us, the environment is here. And a recession in my eyes is obviously inevitable. At some point, we don’t know how long it’s gonna last. But I don’t I’m not a crystal ball thinker. But going forth in this current environment, debt is expensive, right? So we have to find other strategies of making opportunities happen, whether it’s obviously assumable, debt, seller financing, finding off market opportunities, where we can help distressed owners in taking that distress acid off of their hands, because there’s so many of them out there, or there’s a lot of other groups who are kind of just riding the wave of the market, trading cards, like I say, and not really doing what we do, which is true value add. And so I think a lot of chips may fall in certain cases where people are in Bridge debt CMBS debt that’s going to be difficult to keep that going, especially if they didn’t get any caps rate caps on. Yeah. And so we foresee The next year as being a year, where we’re going to see a lot more opportunity. And but we’re gonna have to finesse it smartly, especially in the debt structuring. Because right now debt itself is more expensive, but it doesn’t mean the game stops. The game doesn’t stop. But real estate in this game of investing has been here since the beginning of man, right? You need shelter, food, water. Now I guess we need power, right? That’s our new need, right? But it doesn’t stop. So it’s whether you have yourself or your team or the people that you’re partnering with have smarter strategies of going after it in this looming upcoming recession. But you don’t just I don’t believe that you sit on the sidelines and just wait to time the market, you just have to continuously be constant with your efforts, looking at opportunities, especially if we’re talking about real estate, because it’s a great great, in my opinion, it’s one of the best hedges going into next year, you want to be in real estate, okay? I don’t care what magical stock you bought, or financial visor, you have the 23rd percent losses this year are going to carry over to next year, and they just can’t change it. That’s just the way the game is right now. So I think playing smarter, having your criteria of using smart strategies, like I said, in regards to a suitable debt seller financing options, because there will be there. All right, and then not being afraid to push the boundaries to find deals, make deals work. Okay. That’s that’s how we see the next year going. Dude,
Tim Lyons 21:29
I just want to stack on top of what’s something you just said that really hit a chord with me was, there’s always ways to make deals, right? Right. Now, you may have to be a cash buyer. Like we work with one of our companies, they’ll buy a 42 unit with cash, right? And they’ll operate that thing until they’ll add value and they’ll do the renovation plan. And guess what multifamily rates are like maybe I don’t know, six right now five, five and a half, six, six and a half, seven, whatever. What are they going to be in two years or three years? Are they down to four, four and a quarter? Right? Could you imagine refinancing like an all cash transaction in two years when you’ve already completed your business plan. And the rates are 200 to 250 basis points lower than when you went in? I mean, that’s called printing money, right? So there’s ways right? There’s creative financing this seller carries. There’s no all these different ways assumable notes. So yes, I totally agree. Or like a lot of our deals this year. Well, I would say in the second half of this year, you have to bring more equity to the table, right? You need more equity, and you need more reserves, right? And maybe a little lower returns, right? Because you’re reducing the risk profile, the risk reward. So I love that. And just one of the things about returns. This year has been a bloodbath in the not actually not even a bloodbath. This has been a bear market, right? It’s been a standard orderly sell off all year long, right? With these bear market rallies in the equities markets, there’s been no capitulation that they say where it’s just like down 30% in like one day. But here’s what happens with investors, right? We have access to the brokerage accounts to our 401 K’s right on our phones, right? So we can just in 30 Seconds or Less browse and log into like all of our accounts, right? And see kind of how we’re doing is it up? Is it down? And what happens is come January one, if this year 2022 was a rough year on your year to date, percentage wise accounts. January one, it resets and all of a sudden, you start making money again, you’re like, Whoa, I was down 30% Last year, but this year, I’m up like six like, Oh my God, I feel so much better. But like net, you’re down a lot. Right? Right. So I think people kind of they a lot of investors out there. And by no fault of their own, it’s kind of how we’ve been brought up, they scrape the surface of like investing. It’s too hard. It’s too risky. I don’t understand it, I’m gonna let somebody else handle it. I’m just gonna dollar cost average, like everybody else does 6040 portfolios, and that’s what’s safe. And that’s what everybody else does and money market account and have some savings. And I’m going to cut expenses wherever I can. And that’s kind of how a lot of people do it, even when they’re making six and seven figures. Like it’s astounding to me, right? So with real estate, obviously, it’s done well for you tell us a little bit about 25 year capital, what you and we are kind of doing now, are you still working as physicians? Are you not? What’s the goal was to gameplan? What’s been working all the good stuff?
Victor Leite 24:16
Yeah, with 25 a capital we really focus our energy and our efforts towards helping others and health care busy professional families just like ours build their freedom roadmap or their financial independence roadmap, right. And so Leah and I both are a part of this group along with our teams. And yeah, we still practice medicine on own terms. We still want to be there and help others who need our help. And so we’re out there, trying to make sure that we’re still providing value to everyone around us whether it’s with 25 E capital O with healthcare, our trajectory. This past year, we closed about $30 million worth of assets in this last quarter and now we’re just focusing on pushing our goals and scale During our operations upwards, because we like I said before, I think going into these markets where we believe it’s going to be a recessionary phase, a lot of people are going to be reactionary and psychological about it and run away. Right? When we feel like we run into that wave and deep dive in and see how we make this thing happen, because those are the moments where you can 10x the opportunity, right? everybody’s worried about real estate, everybody, you know, thinks, Oh, it’s another 2000, Nasod. No, it’s not. We’re very healthy. Right? Now. There’s a housing deficit, people have to live somewhere. So we’re very bullish, we’re very happy. We’re very focused on scaling. 25, a Capital Group and our investors and everybody that is with us upwards and onwards to the future, because you’re right, this environment won’t last forever, right. And when it comes back to a regular, stable base, real estate just continues to appreciate it never goes to zero. Right? That’s the beauty of it. So we love it. We’re very excited about what’s to come next couple of months and years,
Greg Lyons 26:04
there’s no doubt there’s definitely going to be an opportunity. And you know, we covered that a little bit earlier, with a lot of bridge debt out there. That could be deals coming along. And people were investing in the 80s when interest rates were 90 and 20%. So it never stops. But when people are scared, as Warren Buffett says when there’s blood in the streets, that’s the time to start investing. That’s the time to really double down and say, yeah, let’s get in here and see what we could do. Because the returns when there’s blood in the streets could be a lot better. So now you’re definitely on the right track there we jump in. Yeah, please. Victor.
Tim Lyons 26:40
I’m curious as a physician, and with physician friends and colleagues and everything else. What did they say about what you’re doing? The people on the outside looking in to you and leave being like, dang, they went to medical school, they went to their they did their residency, they did all the training. And now they’re either semi retired or retired and a medicine. What are they crazy? Just kind of occurred to me that like, that’s definitely a question I should probably should have asked probably earlier on. But the reason why X is I get it all the time, right? I’m in New York City firefighter. I’m a former ER nurse, right? I’m a dad, Greg and I coach our kids teams, right. Greg’s a full time director, real estate for a company. Guys, what are you doing? Like? Aren’t you satisfied with your pension? Tim, and your health care? And this that the other thing? And why are you doing all this podcasting real estate stuff like? So like? I’m just curious in the medical field because of the train because of the because of the education? What do you feel? What are people telling you? Yeah,
Victor Leite 27:36
I mean, the regular kind of conversations are like, Wow, I can’t believe you guys took that leap. I can’t believe you guys have that level of mindset and that level of confidence to do such a thing. And Tommy didn’t happen overnight. Right? This thing is kind of slowly kind of brewed kind of filled in. And like I said, it really starts with your mindset. Because we you know, everyone around me, like I always tell everybody, like, I have people around me with extremely high level IQs, multiple diplomas, they follow the traditional path, they got a nice little middle class job, and they’re working, and they’re starting their life. I don’t know what they have 40 or so and it’s safe, it’s secure. And it’s the only way that they see it. But I always focus on like, what is important to you. And I started realizing that my time on this earth and my time with my family and raising my children and doing the same things you guys are doing being there for the events, you being there for the holidays, being there for the bedtimes being here to support others around me. That’s my focus. That’s my why. And that’s why we continued going on this path because we knew our why in the beginning. And so everybody’s like, how did you do, and I said, it doesn’t happen overnight. But if you stay consistent with your actions on a daily basis, and you look back at the journey that you took, you start realizing that you’re climbing your ladder of success, you’re climbing your peak of your goals on a regular basis. And at some point, you’re going to be at the top of that peak, you just have to stay at it. Stay persistent, stay consistent, and be open minded. Focus on what’s important to you what’s important to your legacy, if you have those basic focused drives, and you can step away from your grind, and you know what I mean? I know you know exactly what I mean, when you’re in your grind, right? You’re there, you’re focused on saving somebody’s life, where you’re focused on really helping someone through their cancer scare and trying to get them there help your focus there, your energy is there, your energy is taken away from anything else, even personally, away from you. And if you continue with those habits, you’re really not gonna have anything left over for yourself. And that’s why the burnout happens so often, because people don’t really focus on themselves, their mental health, their physical health, their mindset, their family, their streams of passive income. Right, you’re one job away. It’s like poverty is your job away from poverty, right. Are you one illness away from home? Pretty. So what are you gonna do that? Oh,
Tim Lyons 30:01
so we had an orthopedic surgeon on that practice on his own terms. And what I really want to stress out there is, like, we’re not always advocating, like, Oh, you’re gonna leave your W two to go to real estate? No, you’re a fantastic doctor, like, stay a fantastic doctor. But how nice would it be if you could take the pressure of maybe not taking that extra shift, maybe not taking that elective surgery, maybe going home for dinner time, because you had something going on. And a friend of mine is a physician here in town. And when the pandemic hit, like, he owns a surgery center, they couldn’t do surgeries, like there was zero income coming in. Right? And all of a sudden, you go from like the top of the heap to Oh, my God, like, what just happened? Right? And that’s what we’re kind of just advocating here at cityside. Capital, listen, start building some income streams. Is it overnight success? Is it Bitcoin? Billionaire? No, not even close. But you can start somewhere. So I love to, Greg, you want to start us off with the three questions here?
Greg Lyons 30:57
Yeah. What’s funny about? Well, not funny about Victor, but it took him a year traveling the world reading books, podcast, some soul searching to find real estate. And just like he woke up one day and said, I need another passive, I need another stream of income. Now, it took them a year to kind of find it. And I think Tim, kind of like with us, we just kept coming back to real estate, and say, Yes, we have to explore this a lot further. So Victor, that was great. We really appreciate that and be mindful of our time here, we’re gonna move to our three questions that we ask every guest. And when you come across an investor, because you have investors with 25, eight that you’ve done a wonderful job with, you always run into someone that says investing in real estate is too risky. I don’t want any part of it. What do you say to someone like that? Yeah,
Victor Leite 31:44
I have sometimes I’ll have conversations with people like that. And look, diversification across multiple investment platforms is fine with me. I think Tim mentioned the whole 6040 method, I think that’s old, old news. And that’s not going to work in this environment, you really have to really diversify yourself very well, especially going into the next environment that we’re going to, but to me real estate, it just not only provides you with that passive income, that passive cash flow benefits, right, which is, it’s similar to some of these stuff, very few blue chip stocks that give you a dividend, right, similar to that. But the magic of real estate investing itself is that it not only diversifies everything, but you get so many more benefits. I mean, nobody even talks about the DAC tax benefits. I talk to high income earners all the time, that think they’re making money, but I say what’s leftover at the end of the year, because in health care, you have no tax write offs, period. Right. And I tell him like it’s all about capital preservation. There’s so many strategies that we use cost segregation, deduction, depreciation models like this is it’s ridiculous that this is real, but it’s real. I honestly think that you tell me that if there’s one stock out there, that if I sell, I won’t get hit with capital gains tax with the short term or long term, you will, right and honestly, COVID proved to everybody COVID proved to everybody that the stock market, in my opinion, is just a casino, everybody’s reactive, they’re looking for that hot table, that hot stock to put their money in. And the thing about real estate, it’s a different, it’s a slower moving asset, it doesn’t change its value with a tweet or, I don’t know, bad news. So you have to consider that as a part, a large part of your wealth building strategy, especially for average investors in the long run, right? You have to look at that because the dollar cost average investor, I can more than likely see that if someone is not doing it for you, you’re not going to do that on a regular consistent basis, year after year after year after year. So then having your hedge having other benefits besides passive income, you can have other benefits in real estate that most people wouldn’t ever talk about. risky. I said what real estate asset has ever gone to zero? I don’t know. I mean, not even land goes to zero. But I’ve seen plenty of stocks go into negative or go bankrupt, right? And so that’s why I say, Well, what is risk? It’s all relative. And all investments are risky in the sense. As long as you’re educated. You know what you’re putting your money into, you know, what you’re focused on and you know that you have a long kind of runway ahead of you, then I don’t see it as a risk at all, if you know what you’re doing.
Tim Lyons 34:14
Have that. So one of our de facto mentors is a guy named Robert Kiyosaki. Maybe you’ve heard of him. You wrote a cool book called Rich Dad, Poor Dad, right. That’s kind of how we all get started. But he says something sometimes he’s said in the past that savers are losers and debtors are winners. And I think in this current climate, it’s pretty irrelevant. So what does that mean to you?
Victor Leite 34:35
Yeah, I agree with Robert, regarding that strategy. I mean, especially if you’re appropriately leveraged on an asset, right, that cash flows and covers the debt. Right. And especially with enough room that you’re able to squeeze the returns out of the investment, which at some point becomes infinite. It’s like a beautiful thing. Most people don’t see that we’re raised to consider debt as being bad, but if it’s appropriately leveraged, it’s so smart. I mean, private equity bank equity debt to buy assets that pay down debt while it’s appreciating and provide you capital preservation and tax advantages. Why the heck would you not consider investing in that asset class? I mean, that’s a proven strategy. I mean, it’s less mainstream. Some call it a alternative acid. I don’t even believe in that. I think that it’s just marketing. I mean, look, we all walk down these big streets, we look up and we see these big buildings. And we’re like, man, some rich person’s got to own that building. Right? But I mean, that’s not the truth. You guys, you know it. I mean, most of those assets are owned by groups like us, or you guys owe me it’s because we found ways to connect and partner and JV and syndicate and bring people together, and we put effort in preparation. And we were all in and yeah, sometimes you got to be uncomfortable, but you put in the work, and you know, not doing what’s easy, but what doing what’s best for everyone. Right? So I think that if use the strategy, especially wealth building strategy, success just leaves clues, guys, so you got to just know that there’s smart ways of utilizing debt. And I agree with Robert, in that sense.
Greg Lyons 36:04
That’s beautiful. Very nice. Very nice. And to this last question, I always like to asking the highly educated the doctors amongst us, you know, another one of our mentors, Jim Rohn, had a quote that said, formal education will make you a living self education will make you a fortune. Of all people Victor, what does that mean to you?
Victor Leite 36:25
Man, I love that quote, guys. Because really speaks for I can speak from it from firsthand, right, I have that same mindset as everybody I go to school, get good grades, get a nice middle class job, start working like everyone else, pay your taxes, it’s safe and secure, right. And honestly, no one gets the education, training or influence in becoming an entrepreneur, while they’re going up or going to school. That’s not what they teach you. They teach you theories of things, right? Like I have plenty of friends who just collect diplomas, their high IQ people, right, but they don’t own businesses, they don’t have any actual steps towards creating other incomes of passive income streams of passive income, they don’t have a roadmap for the financial independence, they have one stream of income. And that’s it. And they have one retirement account, which is a four Oh, K for three B. And that’s it. And when speaking of that, self education, entrepreneurship, it takes someone who’s self motivated to become successful, I always say that it’s not an easy class to take. There’s not a secret sauce out there that will give it to you all. So no one is there to hold your hand. This is a self driven journey. And in my opinion, the process of all of this self education is required for survival. Right? I’m sure you guys were not experts, when he first got started in acquisitions, underwriting due diligence, QuickBooks, active campaign marketing, networking, I mean, this pushed your brand to the level of point that it is today, right. But the process of it, the self education was required, and in my opinion, it never stops. We always keep learning new things from each other, right? We things that I do differently, that you do better, some things that people do better that I want to kind of copy and replicate. Like, I do that all the time. And all of this that we’re talking about, it’s really just comes down to like psychological decision. It’s it’s your mindset, you have to like, retrain yourself to think of how can I versus I can’t do that, and just automatically just quit. Right? That’s what I talk about when it comes to that, quote, like, I completely resonate with that. And the self education part was a requirement in our journey. Yeah,
Tim Lyons 38:25
at the end of the day, like, you can look back and say, Well, I can’t do real estate, because I’ve already invested all this time in the past. But if you always look backwards, right, you can’t look what’s in front of you. Right. So I think it’s all about pivoting. It’s all about making good decisions. I love that answer. So thank you so much for that. Victor. I feel like we could chat probably for the next three hours about all things real estate and mindset. But I want to be mindful of our time. But how can investors how can listeners get a hold of you if they want to continue the conversation?
Victor Leite 38:55
Yeah, sure. We, you know, we obviously we have our website 25. A cap.com. We’re are on all social media platforms, really. It focused on education, motivation, no gimmicks, no sales, no BS, if you don’t mind me saying, you know, we really want to focus on teaching, providing actual steps, actual strategies. And we kind of give a little bit from we’re operators. And so if we give a little bit of a sneak peek behind closed doors of how are we actually adding value? What does that mean, when we add value? And what does that mean, not just for our investment group, but for the communities that we’re changing? So that’s what we focus on at 25 of capital given all that content out on all social media platforms?
Tim Lyons 39:38
Dude, I love that. So I mean, look, there’s a million ways to skin a cat, especially in real estate, right? But Victor has a burr method fix and flips he’s got single families, he’s got multifamily. So if you guys are highly motivated, and you guys want to get a taste of what Victor is all about, and his wife Lee, I highly recommend you guys reach out to them. So, that’s gonna do it for us for this week, we had a pleasure talking to you, Victor, and we look forward to serving you again next week. Thank you for listening to another episode of the passive income brothers podcast. We would be grateful for your support of our podcast by giving our show a five star rating and review and subscribing to our show on your favorite podcast platform. Don’t forget to take inspired action after listening to this show, so that you can start building out your passive income streams. Finally, head on over to cityside cap.com to connect with us and find out more information about how to get started passively investing in real estate