Not Your Average Investor Show
Not Your Average Investor Show
424 | He Quit His Job in Under 10 Years After His First JWB Property!
What if you could quit your job and create new financial freedom in under 10 years? That’s what this JWB investor did—and his story can help you rethink what’s possible with real estate investing!
On this episode of the Not Your Average Investor Show, we’re diving deep into how Dan Reilly, a former JWB client, turned a six-property portfolio into life-changing income, ultimately building his own real estate business. And now, he’s back, leveraging JWB’s unique approach to property management for his multifamily properties in Jacksonville.
Join Gregg Cohen, co-founder of JWB Real Estate Capital, and show host, Pablo Gonzalez, as they break down:
- How quickly a passive real estate portfolio can build life-changing wealth
- The critical advantage of working with a seasoned operator like JWB in a high-growth market
- Why JWB’s resident-first management approach outperforms traditional strategies for multifamily properties
This is the perfect episode if you’re looking to understand how real estate can open new doors—and why JWB’s approach is challenging outdated industry norms.
Don’t miss out on a chance to rethink what your financial future could look like!
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Today GC is not here with me, but we are talking to somebody that at least three people in this building have approached me and said, this dude is the man. He's got an incredible story of early days of investing with JWB finding success in real estate in Different ways that allowed him to take risks and now has been able to build a business off of it And we're gonna get into the story super interesting Hello, welcome, welcome, welcome everybody to your weekly edition of the Not Your Average Investor show. I'm your host Pablo Gonzalez and GC's not here, but we have Dan Riley joining us from Newport Beach, California Dan, you want to say hello to the Not Your Average Investor community here? Hello, everybody. Really excited to be here. Super, super pumped to be with you, man. I, I'm not kidding. Adam Eisman literally just came in here like five minutes ago. He was like, Oh, you're, you're with the man, Dan. Let's go. Let's go. And, uh, you know, Dan, I think, you know, that we have a little tradition here at the Not Your Average Investor of how we start. Do you know what it's called? Roll call. Oh, baby. This man does his homework. All right. We got the MVP Lee Bishop checking in first. We got Joanne, our community manager, welcoming everybody reach out to her if you need anything. We got the early bird from Columbus, Ohio, Mr. Dean Curry. In the house, we got the patron Santorios Michael Santorios from Northern Virginia. We got the ringmaster, Drew Barnhill. Saying good day all we got Laura Colby from Washington state. We got our regulars, Gary and Russell and Riley from Marietta, California. We regard you that's right down the street from you, right? That's right. Right there. We got let me see it. From the Inland empire. Also right down the street from you. Also not far. We got the grand amigo Bill Shields with us. Buenas tardes, amigos! Buenas tardes, Bill Shields. Bill's been texting me surf reports this week also. We got Lewis Hudnall from Rockin in Rockland, California. You brought the California folks out. Everybody from that west coast. Let's go. Everybody's out here claiming that west side. We got Jeff Pettyjohn from Missouri. We got The shaman Nadeem Shah from the Pacific Northwest with his good morning. Good afternoon. Good to have you Nadeem. Who else? We got T Castor in the house, T from Tennessee. We got teammate Lauren Alleman making it happen. Lauren. Yeah. Do you want my favorites? Just be clear. Hard to not like orange. I'm on now. Yeah. Christopher Lee from Fernandina Beach. Good to have you back. Chris Lee. Shannon Lillard is back. Good to have you, Shannon, teammate on the JWB operations coordinator side. Good to see you. Who else we got in here? Alma Valenzuela from Long Beach. Dude, you're pulling, you're pulling, you're pulling. Come on. Let's go. Over there in Belmont Shores, Alma. I bet you're having a good time. I love Long Beach, man. Who else we got in here? Check it. Fritz Brown, my portfolio manager, Fritz Brown. Good to have you. Justine Herrera. Good to have you back, Justine. Anya Sanchez. Anya IOC. I don't know the acronyms, Anya. I'm sorry. Anyways, teammate. Teammate with the JWB team. Good to have you, Anya. Ken Millie. So Ken and Carolyn Milleen. We call them the JWB. Patriarch and Matriarch of the First Family of the Not Your Average Investor Show. And we salute you, the Malines. Good to have you. We got Sales Kate in the house. Kate Sutherland. Jeff Gardner from Clearwater. Good to have you. Charity Graham is back. Good to have you. Tom Riley is checking in saying, Have it, Dan. I like that guy. I like that guy. That is my father. Just so everybody, you know, I'm, I'm pumped on that. We always, we always support family over here and an investor and an investor and an investor. Good to good to have you. That's good. That's good. Validation. Good validation. I think my mom's checked in here a couple of times. She never actually says it. So who knows? But we do get GC's dad Jay, who we call the co founder of the co founder of JW checks in on the regular. We call him big Papa. Out here. All right, Dan, enough of enough about this shenanigans. Um, we were just talking about how you invested with JWB kind of like at a, at a funny time where they were just like, Hey man, I'm going to sell you a flip and I'm going to manage it. What's, what's, what's the story? How'd you get started with these guys? Yeah, it's exactly. So my inspiration to invest in real estate, first of all, came from a painful experience. I purchased a home in early 2008. in high demand, high competition, high expensive Southern California. And if anyone knows the calendar, within weeks of that occurring, the subprime mortgage crash became national news, Lehman Brothers collapsed, and my mortgage, which was two mortgages, 95 percent total leverage at a blended rate of 7 percent on a home that was dramatically overpriced. So, I can just say the pain of that unwinding that for the next 12 months, 18 months, realizing I overpaid, I can't get out of this mortgage. I can either declare bankruptcy or I can just keep paying this thing. So the pain from that is where I just said, like, I'm not going to keep throwing bad, you know, good money after bad on this deal. I made a mistake effectively. How can I now find positive real estate? Because I know, and I believe wealth can be created through this asset. But I didn't do it right the first time and I got to use these experiences to, to, to do better. Right? So that was the motivation. And then Greg, Colin and Alex, they're high school buddies of mine. And when we reintroduced, I was just back on a seeing buddies. I went to school at UNF and spent many years in Jacksonville. So I was out in California working and I came back to. See some friends and made sure I stopped by and saw Greg and Alex. And basically what you just said, it was like, Hey man, we've got some flips going and we're trying to find a way to, to scale this up, right? I know I have a valuable product, but they were trying to figure out how can I get other people involved? And it just seemed to be, you can buy the home, renovate it, put a tenant in and manage it for me. And my job was just to be the capital partner and kind of cheer you on. I like that. And it was worth, worth the experiment at the time. When you first told me that story, the, the two things came to mind, right? Like first is this idea that We kind of hear it all the time that the, the average, not your average investor is generally folks that have been burned by real estate elsewhere, and then realize that. Man, better off finding people that like are doing this a way that has all these results that I can, I can see are working. I don't have to worry about it. And I can also hand it over and, and, and let that thing happen. And the other thing that pops out is inherently within that is that I love the real estate crowd. Like, like we all self select for people that are able to take a punch in the mouth and decide that I don't want to quit this fight. Yep. And by the way, I will echo that, like everything about what you just said is what attracted me and what made that decision easy. It was like, I can comprehend it, you can buy cheap real estate, but you got to get in the market, you got to know banks, you got to close. Uh, now you got to learn how to renovate and do it well. Yeah, all these different steps, what you said, it was like, I'm not going to learn how to do that. I'm, I have another career, but I'd like to experience this asset class. Totally. Totally. I, you know, for me, I, I feel so lucky that I got to, I was telling you my story, right? Like I, I was just like the host of the show that then was like, Oh, wait a minute. This sounds really good. Sounds pretty good. What y'all are doing. Yeah. I was pretty happy. I was pretty happy that you pointed out that you go to other real estate conferences and the speakers don't all invest. That happens to me here, by the way. They're almost never, by the way, almost never. Yeah. That made me feel pretty smart. That happens to me here at, at their like, Charity golf tournament where it's like all the vendors are there. They'll play golf and like pay JWB money to sponsor it. And I'm always like, who here invests with JWB? And I'm like, what's wrong with you guys? What is wrong with you? Yes. So, yeah. So Dan, so you did that and we're going to go over, we're going to go over your, your portfolio journey. Right. But like you essentially. You decided to buy in and then you built a portfolio relatively quickly, right? You want to kind of like talk me through that? Yeah, for sure. And again, the idea was, this hole that I had in my personal financial statement was over a hundred thousand dollars of bad debt that I had to like, I was, the idea was I'm going to make this up and pay it off so I can get out of this house. So instead we decided to use that cash and start to move toward positive things. As you can see, when you show the numbers, that enabled me to buy a couple of homes, right? 100, 000 of cash enabled quite a bit. So, we bought the first house. The stuff came true. Everything Alex and Greg predicted came true. The tenant was in place. They paid rent. Every now and then we had an expense, but it worked. Six months later, I decided, let's do another. A couple of months later, let's do another. And that got to the point where I remember I bought two of them sight unseen as a package deal. It was just like, Greg, Alex picked the right address for me and let's do it. So Paul, the point was like they under promise and over reformed dramatically in those early years, right? We got a great price, we got a great mortgage. The tenant paid the rent, the cashflow was real. And I became kind of an evangelist. No, I definitely became an evangelist for the concept early on to the point where it became like in Southern California, like the guy who pedals working class homes in Jacksonville. But anyways, that's how I got, that's how I got hooked. Let's talk about, let's talk about that. Let's talk about, first of all, you know, I know that Greg, Greg's always like, Hey, make sure he talks about how like, We were early on how much better we are for a while about that. I mean, first of all, the office was in a home that they were flipping or had flipped. Right. And they were like, ah, we'll just use this as the office. The summit that we had, it was like three people and it was all buddies. Right. And we were all at a conference table. And Greg, you know, he sold his heart off for two hours and telling us how it worked. And yeah, it was, it was a great experience and it was fun being that early on. I told you before too, the word SFR, the term that didn't really exist and turnkey provider, I'd like to go to the internet. I don't think that existed in 2010 when I did this, that was a new concept. So very innovative though, right? They figured it out. They're part of, they part of what created this industry, I believe. I, I agree with that by the way, when I, when I brag to people about like this community and whatnot, I'm always like, yeah, and you know, like they were like front page of the wall street journal because they invented built to run and they've done all these different things. What, you know, and, and, and we built this whole community kind of like to have that experience that you had of just like, Hey, I'm investing with a couple of buddies that I know that sound really smart and it all makes sense. But What about it convinced you to go with them at that point when it was just like, Hey, we're calling this a summit, but there's four people here and we're going to sell. You remember? Yeah. I mean, it is, it's the quality of the people. And again, we'll get later, like I'm now a real estate operator in and of my own, my own self. And like the biggest risk to any asset is the person managing the deal. I know that full heartedly. So, the reality is like, it was just good people. Adam Iseman, you know, became kind of my quarterback internally at one point. So I had a guy who got me and I got him and we could talk at a high level and make decisions quickly. Lauren, she got her brought up earlier. She was assigned to my account and managed all the properties firsthand. So I just highly trusted that Lauren and Adam had my best interest at heart. We'd have tough conversations. Hey, you need a new roof. Hey, the tenant did this. But it was always with, with love and with, you know, emotion and they understood. And then they were investing right along with me too. I also, I don't know the stats, but I knew every time I bought a house, like Adam or Greg was buying a house too. So they were eating their own dog food, as you call it. And it was clear to me that the scale of, they were producing them, putting out their own risk, investing in good people. Like it was, it was just going to work out. It became clear to me early on the quality of people was going to work out. It's such a great perspective, man, because I come here, you know, for me, when I first started kind of being the hype man for this operation, right? Like I was always, I was always really pleasantly surprised of how without fail, every time Alex or Greg or either of the Adams would be like, our number one thing here is our people, right? Like that, that, that idea of people capital and investing in people capital, because they understand that the experience is the, is the big differentiator. And to know that they were on it, right? so early with that stuff. And it wasn't just like, that is a, it's pretty telling man. And I'll say too, it's like, there wasn't, they didn't oversell. Like, it was like working class homes in Jacksonville and a new business model that we think is going to work, you know? And it was like, you're a big boy and they set it up. So like, it is your investment. Once we clear this transaction, you own it, I'm going to help you manage it. But you know, you got to make the decision for yourself. And I've always liked that aspect of their model. Whereas reads or buying into someone else's deal. You're just kind of passively handing that to the other person. Yeah. Yeah. Definitely, man. This idea of like you have the upside, you have the floor and the upside of real estate, but you also have control, right? Like is a, is an attractive, it's exactly right. Yeah. Yeah. Yeah. Lee is his usual self being funny in the comments. I see that. Yeah. Like, yeah. Like the early, you know, like you talk about summits and you talk about eating your own dog food and I was, and you talk about evangelizing Jacksonville in Southern California and I keep thinking, dude, this guy uses all of my same vernacular, but that being said, let's talk about that. Let's talk about, you know, I, I, I told you that when I first got here from Miami, I was And having lived in Huntington Beach just up the road from where you're at now, I was like, Oh my God, this is Orange County 20 years ago. And I need to get in. And you're like, yes, that's what I tell people here. And they make fun of me. Tell me why you think that Jacksonville is Orange County 20 years ago. Yeah. I think I've been studying the data on trends and populations and the domestic growth for years now. And it's just clear to me, like there's certain elements to a city lead to growth. There needs to be a reason that the city existed. So, like, Jacksonville, it's a port, it's got rivers, it's got beachfront, it's got recreation, it's got transportation hubs, it's got 95, it's got a big airport. Like, I can continue about all the reasons that geographically it makes sense. And then it's, it's, it's a, it's a city that already has a million plus people got a lot of land to grow on. Right. So those elements are what I like about my other markets Des Moines, Iowa, million people, high growth, diverse economy lots of land to grow on. And it's a, it's a regional hub, right? People come there from all the, if you don't go to Chicago, you come to Des Moines, which you're not from Midwest. Like, that's kind of crazy to think, but it is a hub. We talked about Waco, Waco, Texas. It's the meeting point between Austin and Dallas. So I just think all these cities Jacksonville coming back to, it's like, it has inherent elements that are driving the business and the reason that people move there, then you can get into like the politics and the tax treatment and the landlord treatment and all these other reasons that are great reasons to be in Jacksonville, but. Being in Orange County, it's, it's, you know, one of the densest, most expensive, highest growing places on, in the earth. And it's just like, I've learned what, what drives these things. And Jacksonville shares a lot of those same things. That's super, that's super analytical. When I first got here, right? I, I now as, as the host of the show, we are very versed in Jacksonville, right? Like Wall Street Journal rated it this, the second hottest job market in America. it's the only major market in Florida with under median pricing homes. So it has a bunch of upside. there was another one. It has the fastest growing median income in all of Florida. Oh, wow. Right. So, so all the stuff that we like when I first got here. I looked around and I was like, wait a minute. When I was living in Huntington beach in the early two thousands, it felt like there was a whole bunch of like open spaces within the city fabric. There's great like weather and surf culture, which at the end of the day, man, Greg is tired of it. But like I talk about all the time, like prudential commercials show a 65 year old guy about to go paddle out. And you're like, that guy doesn't surf. People here do. And it's affordable. Like it's a, it's a symbol of quality of life. It's got great road trips. Right. Like it's got all these great road trips. And then the thing that I realized in Huntington Beach in like 2005, I was like, this dude's rich, but he was not rich 10 years ago. Like he just did this on real estate, you know, like, and, and that was what was very obvious to me that made me want to rush to get in here before it all kind of like happens is that it happens in one generation. Well, and I can say to another piece that I could say why I'm confident that we're seeing a new Orange County. You know, I told you about why I love Jacksonville fundamentally, but why I think it's a new Orange County is the trends of the real estate in the population. So, when I come to Jacksonville, which is still play quarterly to look at deals and look at our assets. I always stay at the same hotel on the beach and I always do this bike ride up and down. It's just kind of a calming thing, but every now and then I'll, I'll, I'll hit the old Zillow app and I'll pull up like, what's a house on the beach in Ponte Vedra? It's up. I don't, I mean, I don't know the stats 300, 400, 500 percent in the last 10 years, beachfront property in Jacksonville is getting close to what like beachfront properties in Orange County 10 years ago, those would have been five X differences. So that's a theme really wealthy people are moving there and they're buying expensive property and they're building businesses there and they're generating, you know, they're deploying their wealth there. That's why I think it's going to be the next Orange County. You know, all the fundamental reasons are one thing, but like people are bringing money there. That's why. Yeah. Cause of super high quality of lifestyle because of the fundamental factors that we just talked about. All of it's a flywheel, right? I love it. All right. So, so Dan, the thing that we teased about was this idea that you quit your job in like 10 years. Um, thanks to kind of like these options of real estate, but then you, you, you gave me some nuance, right? Like I thought that you went from the thing that you were doing to like, you're all in on real estate, but you, you're like a bona fide entrepreneur tech guy. Give me a little bit of like, your, your entrepreneurial kind of swings. Thank you. Sure. So, originally started, went to school at USC was going to be an accountant. I actually have a master's degree in accounting, figured out within weeks that that wasn't going to be a good career for me. So I got recruited into a company that did tech sales out in Laguna beach, California. That came, it was an incredible run, got me out of my shell, taught me how to sell, taught me how to lead. And that's a long story that could take hours, but eventually left that and then started a similar business. So the leaving to start a similar business was two years after buying all the JWB homes. So it wasn't enough money to live on, but like I had this constant recurring income that I didn't have to work for. I knew that my balance sheet was getting bigger every month. So that just gave me this extra confidence to leave a high paying job and start a, start a business. So that was exit or, you know, jump number one. And then eight years later, holding onto those homes, I actually packaged them all up, sold them back to JWB. I don't know if that's been talked about, but you actually were my liquidation on that as well. And used all that capital to buy what is now our dream home that I'm living in now. In Southern California, which is a challenging place to make, you know, your big dream home purchase. So yeah, two exits, right. I was able to leave my job to, to start a business. And then that business ended up taking over passive income of my life. And I was able to use the homes to then upgrade my real estate again. So, it's, fascinating what you can do with these little chunks of wealth that JDBB kind of represents. Yeah, man. And I, I, I love that. I love that part of the story. Cause the thing that popped out to me is the same thing that kind of got me into it. Right? Like I was, I was starting a business at the time. I knew I wanted to build wealth. It, there's something, there's some security around this idea that, Hey, I have like fast forwarded my demand and put it into this thing that's going to grow and do its thing and give me options that you think about it at first in financial options of later in life. But as it matures within like five to 10 years, which is kind of where I'm at right now, right? I'm at like that four year mark. It starts to get really interesting on just. Okay. This is actually giving me some cashflow. It actually gives me like a source of capital. If I really needed it, if I need to refinance, if I need to liquidate or whatever. And as long as I keep it going, I know that I'm building, you know, like I'm, I'm building real wealth that, that will be my retirement plan. I don't need that W2 so much. Right. In fact, now that you're saying it, it's coming a little clear to why these things happen. The homes enabled my Next home purchase because it was actually balance sheet wealth, right? I wasn't going to qualify for the home, but I had all these assets called JDB homes, and that's what qualified for the mortgage to buy that. And now I'm thinking about it. I had to sell these homes because I had so many mortgages tied to my name that I actually had to liquidate them just to get the mortgages freed up to take a new mortgage. Right. So it was like, these are all problems of abundance. Like Wells Fargo is like, you have seven mortgages. You need to have two. Could you sell some and recycle? And while it's like. These are great problems to have Paulo, right? And enabling me to make, like you said, it wasn't just cashflow. Like one day I'm like, I need a lot of cash. Boom. You can sell the houses and get it. Yeah, totally man. And it, you know, there's a, there's a couple of us in the community that I've been saying for a while that, you know, I think most people Are not investing in JWB as their first property, right? But like I was somebody that was renting and it was my first property. I know Jen Filson who lives in Monterey has a portfolio of JWB properties, but she rents in Monterey, California. And, and, and the idea that these things, we both have been saying this idea of like investing in these rental homes are what's going to allow us to buy our actual dream home. Like she wants to buy a home in Hawaii. I want to buy a home beachfront, you know, like here in Jacksville which I'm. Mike, right from the beach now. So, but house hacking, that's getting there. Yeah. Getting there, getting there, getting there. But yeah, man, I love, I just you know, when I, when I think of real estate, the big light bulb for me is this idea that every other kind of every other asset class that we invest in, it's kind of like thought of as like, you know, Store, store acorns, store acorns, store acorns, and then like live off the acorns as opposed to and like your options get worse over time And especially when like you're living where real estate your options continue to get better over time Generally speaking every year. I hold a rental my options expand. Yes Exactly. All right. So then so then let's get to the so You're the second person that started investing with JWB that we've had on the show. The first guy was Joe Dela Cruz back in the day. That kind of like from investing with JWB has then graduated to being an active investor, building a real estate business. tell me about your real estate business right now, how, how that's evolved. And kind of like what you're doing these days. Yeah. So I now for the last, what, three plus years have been a full time multifamily real estate investor. So to fast forward the story. I had that company entrepreneurial venture that I started, ran that for eight years, had a liquidity event. I sold it to my partners and it was like, okay, I have a time to reset my professional life and redirect my energy into something that's going to be profitable. You know, it's going to fulfill me a long term. And it was a conversation with my wife, actually looking over the options and she looked, okay, so you've led these technology companies and you've had all these other things, but like, realistically, most of our wealth was being generated by real estate. And realistically, that was taking an hour a month to manage the real estate. So it was her challenge to say, like, how can we make this your full time gig? How could this, you know, rather than signing up for another eight years of pain, managing a technology company. How could you make it bigger or so? Well, I think, you know, it got to the point where I wanted to, the goal was how can I live on passive income and the assets that we own, right? And the reality was to do that, you are gonna own, gonna own a lot of doors, right? So in order to do that, we needed to go to multifamily. And in order to go multifamily and go big, I realized I needed to bring other people's capital to the par to the party. So now the company's called Measured Capital. We have a total of 900 units in three markets. And we're a classic multifamily operator. We identified the deals based on a very specific thesis that we talked about and I can get into my partner and I, we identify the deals. We go acquire them. We bring together somewhere between five to 20 investors per deal. Close it and then operate that on behalf of the investors. So, a lot of the assets right now we're in Des Moines, Iowa. I can give you more, I kind of tease it as to why we're there. And then Jacksonville was always the long term plan, Paul. I mean, always that was where I started, but three years ago, multifamily in Jacksonville was dramatically overpriced, like dramatically overpriced. And there's been a big correction. So last year we were able to buy a 64 unit and and we're actively under contract and a couple other deals in Jacksonville right now. Cool. Very quick. Yeah. Yeah. No, I like it. I like it. Very succinct. I'm seeing folks ask about like the portfolio that you've built. So just like all guest investor shows, we're going to go through Dan's portfolio here before we get off. But we're going to jam on a couple more topics and finish with that piece. Dan, can you tell me the thesis itself? Right. So you're in, you said, you said you're in Des Moines, you're in Waco, you're in Jacksonville. What's the thesis that ties these things together? Yeah, the thesis is around, first of all, it's, it's, We know that over half the country is rent by force. They have no other option. So this is a renter nation. We're going to be a renter nation. And then it's about what market we want to be in. So the thesis is around tertiary markets. That have at least double the growth of population and income from the rest of the nation. And then they have to have some kind of qualitative feature, like I talked about a port, an education system, an airport that really draws and there's a reason for all that growth. So those have become the cities are Jacksonville, Des Moines and Iowa, Des Moines, Iowa and Waco, Texas, and they check all those boxes. Then within each market, we buy 50 to 200 unit deals. Under a certain, you know, criteria of what we want to buy. We mentioned the book Play Bigger before and it kind of like in our onboarding. And to me, what I love about this thesis is two things. One is Right. This, this idea of like what's talked about in Play Bigger is, is when there is, when there are these big context changes, there's always going to be like big, big winners and losers who can identify these context changes because a new context change creates a new missing that requires a new innovation. And, and you've identified this idea of like growth of a renter nation as a, as a big context change. And then on top of it, Investing in growth markets is also, is also another, another thing that provides extra boost. So you're kind of like investing in both the context change in a growth market that I assume is, is kind of like what, what creates these higher than normal expectations that most people have. All right. Absolutely. And then you can take it even further to then study the supply and absorption of those markets. So these markets traditionally haven't built enough housing for the population growth that's coming. Jacksonville happens to be there right now, but in the next three years, we'll be right back to undersupplied. So part of it is that these cities never built enough apartments for their renting citizens. And that's another thing that overlaps with JWB's overall thesis, right? This workforce housing asset class, right? Whether it is in the single family or the multifamily space is, I mean, I saw it in Miami, right? Like I, Miami, Miami boomed in during my lifetime. And it's very, very clear that it was I remember like the early two thousands, everybody looking at downtown Miami and Brickell and saying, this is going to be as dense as Manhattan. And everyone's like, Oh, what are you talking about now? It is, but guess who doesn't have homes? It's guess, guess who can't afford to live there. It's the working class, right? It's our teachers. It's our firefighters. It's the legit, the folks that work at Amazon logistics centers and, and, and, and, and these kinds of folks that deserve a place to live. And there it's a undersupplied asset class, which Again, leads to good market dynamics, right? Yep. You got it. That's exactly right. Yeah. Cool. So, I mean, I can gush about your thesis all day long. Here's, here's something else, here's something else that I think is undersupplied, even within that asset class, which is something else that we were jamming on. It's the idea of not just Does that asset class exist and can people live in it? But are people being given a good place to live within that asset class and treated fairly? And I know you're pretty passionate about that, right? Yeah, for sure. And it was, it surprised me when I got into it. I mean, my experience was with JWB single family homes, putting in longterm renters. And then I got into 50 unit deals and a hundred unit deals. And all of a sudden it starts being talked about as a financial instrument and the renters really aren't discussed. And the bigger you get, the more that's the case. So my big moment was like, I did a unit walk on a 216 unit deal that we did purchase working class and it, it, it was heartbreaking. I mean, to hear, to see the squalor that some people live in. And then I realized that a lot of people who buy these buildings, they're just going to come in, if that, you know, evict everyone who's not their choice tenant, over renovate the building to try and make it look nice, jam up rents as fast as they can, and then sell it to the next yahoo who's looking to make money. So it was like, it got to the point of being like really depressing what I saw was happening, and that's part of how Jacksonville got overbought by the way. Trade flip trade flip and point of being is like the tenant gets lost in this So what I love about jwb and what's really natural for us is like long term trinit long term renters treat them Well provide a clean safe respectable place to live and then charge like a reasonable rate for it So far our portfolio in jacksonville is 100 occupied and we're well above our forecast And we haven't evicted a single person who, who, you know, didn't deserve it. Right. Who didn't pay their rent for 60 days. Let's be clear. We're not over renovating units that don't need to be. If the lady who lived there for 12 years is happy with her, her, her place, then we're going to let her stay there. I don't force her out. And Paul, that's a big problem in this industry. It's, it's a financial instrument. We plow capital into it and we don't really realize who's paying the rent. Yeah, man. when you just described that whole, like flip it to the next guy and force people out like it, you're literally describing Miami. Yes. It's the perfect example. Yeah. Related group, I think coined that whole like flipping thing and doing it right. So, so yeah, that is, that is the thing that breaks when you're not, when you're not thinking longterm and you don't have. People that are conscious of the growth rate of the city and needing to bring up median incomes and needing to like Um, think long term the way that JWB does and the way that you're doing in your assets, it's, it's detrimental. But I guess, I guess what, what people are really starting to have an aha around, we just had Andrew Smallwood from second nature, who is the company that has really championed this resident experience and how like the resident experience is at the heart of outperforming your, Your original your original forecast and driving high results and you're, you're, you're living that right in your hands down hands. I mean, I can even tell you our strategy meeting, right? We bought a 64 unit building and I'm on site the day after we close and we're actually Kate's on the call. I remember she was the one who challenged me, you know, I said, Kate, we're going to have to get rinse up here. And she said, give us three months to see what we can do with the current rent roll. Let's see if we can adjust these leases. Show them the improvement that you're making and make it work. The current leases we've renewed 64 people, and we've owned the building for less than six months. It's outrageous how proactive we've been to that community while still hitting our financial projections, which is just like. It's a total win win. It's great. Yeah. Yeah. That's awesome, man. That's awesome. And the story that we're not outwardly saying here is this idea that you've, you've gone from passive investor, letting JWB do it for you to active investor, partnering with JWB as a property manager in order to actually run your multifamilies as well. Absolutely. And to the point now long relationships, a lot of trust, right? But to the point now where your construction team even pre vets my buildings, right? When we are under contract for a building, part of your team goes out and tells us what we're going to look at and what we need to do to repair the place and recruit a business plan well before we even close the property. So yeah, it's, it's a deep partnership that I think is going to get even more so in the next year or two, because there is a reset happening and multifamily has got a lot of deals. There's distress, especially in Jacksonville. So I think it's a good opportunity to take some distressed properties and some tenants who are being treated really poorly, turn those into good assets and, and, and visit better situations for those residents. Sandra Morales has a question. In order to take care of the renters and avoid to evict current tenants, what is the financial formula for your group follow? Purchase price, investment, question mark. Is that something that you can answer kind of like, generally, I mean, I'll, I'll do my best. I mean, we do observe the 1 percent rule as like the first go, right? So that's one month's rent should be. Exceed the, uh, sorry, 1 percent of the purchase price. That's really hard to do in Jacksonville, like extremely hard to do. But when we're able to do that, Paolo, and to have the question was that enables our costs and our debt service to be low enough that I can offer. Reasonable rents. I don't have to push rents up. So if I overpaid for the building and put aggressive financing on it Then I am stuck having to grow rents and revenue We're underwriting the buildings in the sense that we only buy them when we can Kind of keep them static and not aggressively kick people out. That's the best way I can say it So there's some metrics that we run on that but it's really like you just gotta buy cheap buildings Compared to market. I hear a disciplined investor with a very clear buy box. That's it man And if it Our buy box is so clear. I mean, it's vintage number of units, exact cap rates, you know, and if it's falls out of that, you can't buy it, which is why we've been shopping for three years and have exactly one large deal under our belt. You said something interesting to me, right? Like we, we, we talk about the 1 percent rule a decent amount and it feels like the 1 percent rule in single family is almost becoming like an antiquated rule. That wouldn't work if I was buying SFRs, only a multi. Yeah. Talk me through that. So there's such scale in the cost of multi, right? One property manager can, can manage potentially hundreds of units., the scale of, of renovations, the scale of, of maintenance, it's much cheaper to run that unit. So as a result, like it just changed the dynamics of what you need to rent that unit for long term to, in order to pay the mortgage and pay the debt service and those kinds of things. So, homes are going to trade at a much higher GMR gross gross revenue, right. Compared to multi. So I don't know what the right measure is for SFR. But by the way, it's, it's still hard to buy a 1 percent rule within an apartment. That's still a challenging metric to get to. Whereas I think it. May have worked in homes for a long time, but not anymore. Yeah. Yeah. Got it. Yeah. Yeah. That shines some light on it, man. Like I'm hearing that. So essentially it's just the scale of which you're able to do the multi stuff will allow you to like reverse engineer into it. Whereas like right now, and like the single family home thing, it's like, yeah, basically the, basically the idea is, and we'll talk about this later, but for single family homes, the appreciation of the home and holding a longterm and Being able to stay cashflow neutral to positive to start and then having a mature over a long time is the game. Whereas I I'm assuming that in multifamily, it's a different window. The equation is more about like how you do the debt and then you leverage it later, stuff like that. That's it. I was going to say it's, it's the rules around commercial debt and how that works compared to traditional financing, I think is part of that answer as well. It can be very. A creative to use commercial financing if done right, but the levers move quicker, right? There's no 30 year mortgages in commercial. It's, it's a five year term. So again, I think the answer is about how it's financed and the scale. Lee Bishop MVP has a question for you, Dan. Do you have a budget for max rehab in your multi homes? Not a max. It's a situational. So each deal we come into and create a business plan and it leave, the ends up becoming what's my total cost per door. So if I buy it at. 80 a door and I put 15 into it, I'm buying it at 95 a door, not 80. So it's just about the total cost and total capitalization of the project. Cool. Um, you know, I, I love, I love the part of the story of just the idea that you can, you can start with a loss, reenter by surrounding yourself with the right people in real estate and understanding it right for you as JWB. Let that, build up, you know, in the way that you thought of it, but also it have these other externalities that allow you to take other risks that allow you to like poke and prod, have these like great results, eventually fall in love with the asset class itself with, with real estate itself and doing it always. Great advice from the wife. I feel like there's always a good advice in my career as well. Right. And then, and then, and then the idea that you can then reenter as an active investor and still get to work with the team that got you there when you were a passive investor is, is like the ultimate love story that I could write to the JWB business model of like vertical integration and thinking long term and like having all these kind of, you know, levers that people are able to leverage almost like Amazon selling cloud services and being able to sell on and whatever, right? Like I find it to be such a sophisticated business model that can serve you at your level all the way throughout your entire journey. I find it really, really interesting. It's wild and, and, and I'll credit like JDB is evolving in the moment, right? They're changing systems and changing beliefs to right now to adjust to what's, what's feasible there. So it is. It's a big testament to, to them and I'm very fortunate. I don't think I'd be buying in Jacksonville if I didn't have, in fact, I wouldn't be, I wouldn't be buying in Jacksonville. If I didn't have what I think is a competitive advantage, I can outperform other apartment owners in Jacksonville with great certainty because I know the systems that we're going to run and I know the people running the buildings. So it gives me this huge amount of confidence to play this game much bigger. Yeah. And playing bigger back to you. Hey, bring it back. And we've also, we've also kind of like hit out a lot of things that make multi family and single family home different, but I guess, I guess the big aha is. The one thing that makes it the same is that it's the team and the operator that makes the real estate investment work. I dunno how those fireworks just happened. And I was like, that was really cool, by the way. I hope that happens to me one time. But, uh, uh, I, I forgot your question now. Um, well, yeah. What I'm saying, what I'm saying is that like, while there's a ton of differences between multifamily and single family homes, the idea that it's, it's not the asset itself, it's the team running the asset that's the most difference, that to make the performance work. 100%. And again, I want to be really clear. Like, yes, I've moved to multi because I want to scale up to thousands of units and that's the only way to do it. But like the business model is rent check in operation and debt out. Like, I mean, it's the exact same business. I just, apartments just allow me to do it 10 and 100 units at a time, but it's the exact same business. Like, and yes, the success is around who's going to operate the buildings, who's going to put the tenant in place, who's going to fix the toilet when it breaks and who's going to collect the rent. It is the difference. It's the team. It's the team. All right, Dan, as I try to recreate this firework thing, maybe soon does it. We can, you want to get into your, you want to get into your portfolio and you're going to do it. Let's all right. Let's fireworks up. I know. I'm just going to be doing weird things with my hands nonstop until it happens again. All right. Here we go. So, anytime we show results like these, right? Like this is, this is Dan's journey, right? So, uh, Returns, returns vary. Do your own due diligence. This is a part of this game. We've got to go. But speaking of Dance Journey, there's his face. We know we see it. It's the same guy, right? And here is, here's your, your portfolio, right? People were asking, did you finance? Yeah, you financed. You bought Two properties in June of 2011, one in January of 2012, one in, on, in end of May of 2012, and actually two more there. Two. Well, it all happened within one year. Wow. Yeah. Talk me through when you're looking at this. I remember you seeing this be like, Oh, a trip down memory lane. Give me, give me what's incredible to look at that 81, 000 for a two bed, three bedroom home that rented for over a thousand dollars. I mean, I'll just say like incredible. Is what I can say. Yeah. And I just remember too, like the things were the cash flow the day I closed them, right? It's like 18, I think I put 2000 bucks in a reserve account and the rent check hit like the next day. So, yeah, it's crazy. I'm seeing here that you got to pick up essentially five properties for about 100, 000 down, which is everybody wishes they could go back in time and do that. Do that. Yeah. Looking at this, my only mistake is that I didn't buy 50 of them. Well, what do you think, man? So, so these homes, good news for you are probably worth about two 50 to 80, something like that these days. Do you think that they're overpriced now? Like, like when you say, like, I wish I could go back in time. Or are you thinking like somebody going through that decision? What, what, what should they think? Well, I can say I had a lot of conviction around this and I think the number that I bought was limited to the amount of capital available. So I think I did buy as many as I could, to be honest. It makes sense. And with that, you know, are the overpriced, I, I don't want to speak to that and I don't think that they are multi family as an asset class within Jacksonville go to overprice, but that's a different conversation because that's cap rates and lending terms. In Jacksonville, in a single family homes, I still think you have to respect the single family. The home buyer is still your number one competitor. And that person continues to draw it to go to Jacksonville. And that person continues to rent my apartments. So no, it's not overpriced because people are going to keep living there. The answer to that. Well said. There's still, there is still an outrageous quality of life for cost of life equation. Yeah. Keeps people moving here, which means that the single family home is going to continue to go up. Right. You know, I heard a stat too, just while we're here on Jacksonville, one out of every five employees is in the medical device industry. I read that in a CoStar report. That seems insane to me, but like, just talk about an educated workforce. So talk about a high paying job workforce, right? Like a high paying job. Right. So no wonder median incomes continue to go up. All right. So this is, this is the, this is the kind of like the history of them. This is, this is the performance. Dan, you've had a total profit of 295, 606 total, like a rate of return of 22. 17. What do you think when you see this? Again, amazing. And just wish we had gone bigger. No. Okay. Uh, yeah. And I can, I can attest, I mean, that, that total profit number, you know, yeah, it, it, it bought my dream home. So yeah. Holding these homes for six, eight years. And then there was a moment, honestly, I, yeah, I had to sell them now that I realized it was, it was a decision I kind of needed to do it. I called up Adam and by the way, I had a, you know, been offered to liquidate them within 30 days. So it's a full cycle experience. Interesting. I'm not sure that that's the, I'm not sure that that's the typical experience, right? Like I think it's definitely not. I was in a very unique situation and in hindsight, I wish, you know, I wish I'd still own them. Yeah. I had to, right. It was, I was going to find a buyer. And just made sense. Yeah. Yeah. Interesting. So, so the reason why then you didn't sell those retail because you wanted the money in order to buy. That's important. Yeah. I called and said, I need to cash these things out within 30 days. Yeah. And the response was we can market them and you can make X or we could buy them on a very short timeframe, all cash for X minus 10%. So yeah, I took a big haircut, but it was more than worth it because of the liquidity made sense. Yeah. Again, another way that you leverage the jaded. Another way. That's right. Yeah. I wouldn't. It's not the path for everybody. It's so impressive, man. Yeah. It's not the path for everybody. That's, that was very unique to me. But it worked. Yeah, that's cool, man. So here's, here's what we love to show everybody, right? Cause this is kind of like a big aha moment for, for, for all of us as we continue to see this. And it's when we break down, you know, you bought these homes very low price at the time. very high cashflow at the time, and he held them for about six years. And when we break out all of these profit centers in a pie chart, we consistently see home price appreciation, which is the bigger piece of the pie. We call it the Pac Man principle, right? Like home price appreciation, no matter what market condition people buy in, no matter, no matter how they do it, the longer they hold on, the more that home price appreciation becomes the Pac Man itself and all the other profit centers become the mouth of the Pac Man. Is that how you experienced it? It's fascinating to read that chart. If you had said without that, how much came, I would have said 70, 80 percent came from cash flow because that's what I was obsessed with. And that's the only metric on the original spreadsheet going back to the early days. It was just cash on cash returns. The only thing that they even talked about. So thinking that 60 plus percent came from appreciation. I know that conceptually, but that's, it is hard to believe it really is. It's pretty cool. That's pretty cool. There's a question here about when you sold, did you, what, what year did you sell these? Okay. Here's one more story. Independently, this transaction started in February, January, February, 2020. So COVID 19 had just hit the newswire. We entered a contract, you know, a handshake contract. I remember calling 10 days later. And the nation was shut down, like banks weren't responding. And I remember, Hey, Adam, are we still going to do that deal? You know? Well, yeah, I mean, we have a contract. Of course we're going to execute the deal. So yeah, that was the timing of it. Literally. Like when president Trump was like, you guys can't go to work anymore. That was the, that was when we were closing this transaction. Wow. So I guess. I guess kind of bittersweet, right? Because it's like, but they honored the deal because everybody could have freaked out and you might've lost on your house. But then you also kind of missed out on that giant. I missed out on probably another a hundred, 200, 000 of appreciation on those homes since, but of course I didn't put it into real estate here. That's accelerated just as fast. So it worked out, but yes, that chart could say 40 percent IRR. If I hold on for another year, yeah. Interesting. Super interesting, man. Really cool story, man. I really appreciate it. Is there anything I haven't asked you about that you think is like, that you, that you want to share or want to talk about? No, I mean, just like to the audience, this is fun what you guys have built. It's fun to kind of come back and experience JDBB in this much more mature form. I'm so excited to see where it's at. And, uh, yeah, I think it's a, I believe real estate's a great way to, to, to build wealth. And this is a great way to do it in a great market. So how do people reach out to you, man? How do people reach out? So best things actually two things I can say that that would be fun. So if you go to sub stack, there's something called ventured learning, ventured learning. That's a newsletter that I write once a month. It's inspirational and challenging to high performers. So if you want to do that, go to. If you search Ventured Learning substack, you'll find me. Also LinkedIn, Dan Reilly. And then, because it's here in the timings, I'm actually writing, I'm about to publish a book, Paulo, on how to be, how to be successful as a real estate investor. It has not been listed to Amazon yet, so I can't promote it fully, but it's coming. And if you subscribe to Ventured Learning, you'll, you'll hear about it. So I just put the venture learning sub chat. You literally just have to put sub stack venture learning and it'll take you to it. Um, what is this book? Come on, man. Tell me about this book. Yeah. It's called ready, set, invest. And it's my journey. It started as documenting my journey. And ended up with the 18 best lessons that I've learned through 10 years of being a full, you know, real estate investor, passive for seven through you guys with JWB and then three full time. And I'll be clear with my last three years have been like in the cage, in the arena, fighting it out day to day. It's a, it's a, it's a challenging sport, but we have a lot of fun doing it. So yeah, the book is all about what I've learned and how to take someone who's A high income or, or, or not wealthy, but like stable investor, you know, individual and turn them into a high performing private investor. That's my, my concept and what I'm excited to do with the next phase of my career. That's awesome, man. I'm so curious about the book writing process, right? Like, we've got to come man, like Jen just published a book, but she publishes a book like every year. So it's like too intimidating for me, regular guy like you writing a book process. Like, I want Greg to write a book about JWB way. He should. Yeah. Yeah. Any advice on that? It, get ready to, to, to suffer, I think is part of the answer. I know it, every, I, uh, the best thing I did is actually hired a coach, someone who's like done that. And I just had a weekly, monthly call with them that kept me on track. But, well, it's just an hour at a time, hammering away, hammering away. It took 18 months to like put the whole thing on paper. But then, yeah, and then I was smart enough to hire editors and formatters. So I, once the draft was done, I've kind of, I'm going to push that off and let them handle it from there. But I have a lot of respect for it, man. I have a lot of respect for it. It's really cool. I'm excited. It's been an emotional journey and getting that thing on paper. So I can't wait to get public. And I you know, like I'm a big, I'm a big believer in leverage and in learning and whatnot. And the, the amount of leverage that you get from reading someone's book. Right. Like I listen to a lot of podcasts and stuff like that. Right. But the idea that somebody can download, you know, 40 years of knowledge that, that took you a year and a half to figure out, to like put it in the right messaging and do that is something that I find really fascinating. You just got a bunch of subscribers to your pot, to your sub stack. Let's go. Including myself. Let's go. So yeah, man, I appreciate that. Dan, you know, like you did not, you did not let me down. I had multiple people tell me you're the man. I, I agree. I agree. I'm now the fourth person in the room that at least that many people believe that here at JWB, at least, at least four. and I really appreciate you sharing our time with us, especially with Greg out, man. I appreciate you doing this. I want to thank the community, right? Like it's, we had 70 plus people here listening to listening to talk, man. I think it's a testament to the value that you're putting out there. And I never take it for granted that you're, you know, that you show up here an hour in the middle of the workday to, to spend time with us, ask great questions, be a part of it, be friends with everybody. Look at that. You got, you've got like 50 subscribers. I'm coming on next week. No. When you, when you have the book ready to release, let's bring you back on. We also have a summit that we're doing here that we're going to announce here sometime soon, but not your average investor. I know that you were at the four person summit. That's right. That wasn't, that wasn't the summit before it was a summit. Now you got a summit, but we had a lot of Greg told you about it, man. We're thinking about like 200, 250 people. Let's go put me in the calendar. I'll be there. I come to the expo frequently. I would love to be there. Cool. We'll make that happen. Any, any last words for anybody that's thinking about investing in real estate, investing in Jacksonville? Any, any last words there? Yeah. Okay. The book is called Ready, Set, Invest, because I see people terrified to make a decision and they're paralyzed with the analysis at some point, making a big investment requires jumping off. It requires a leaf of faith and it requires you knowing that it may not work out. It's possible that it may not work out. And as soon as you accept that you can move forward without fear. Love it, man. I always have one last piece of advice and that's one thing. Don't be average.