I don't do any work. I don't look at any emails. I try not to look at social media at all until we're at breakfast or even after breakfast that hour and a half is just for myself. Hey guys, just coming to you real quick. We want to talk about our morning routine and what we do to get in the right headspace to make the most effective to be most effective in the day. So like what kinds of things do you do? Crystal? Well, I've been starting to get up an hour earlier. Yeah. I noticed that you are all about your morning routine much more so than I am and I need to get there. Yeah, you hate it whenever I wake up early and try not to wake you up, but you know, I wake up an hour earlier and go into the other room. I actually get my oatmeal and my hot tea and my pre-workout and I head upstairs and get into my little meditation room, which is just our bonus room. But sit there and I read for 30 minutes while I'm eating my oatmeal letting that get in my stomach. Then I start doing my journal. While I'm doing my journalism, I am drinking my pre-workout. So then the Pre-Workout starts setting in and then I take a minute to meditate and do affirmations.
And so before my workout, I bring John a cup of coffee. I do that and then I go downstairs. I work out. Once I worked out then I come inside I make my smoothie make us breakfast and then we sit down and have breakfast with each other and I don't do any work. I don't look at any emails. I try not to look at social media at all until we're at breakfast or even after breakfast that time is just for myself. What do you do for affirmations? I mean that word, affirmation, means a lot of things to a lot of different people. So like what does it mean for you? What do you do?
So I struggle a lot with believing in myself and always wanting like always afraid of being wrong. So I always just it's the same affirmation every day until like I get it in my head.
I am strong.
I am smart.
I am brave because I have a hard time of definitely just taken the ropes on things.
The other ones are I am intentional because for 2020 my word is intentional. I want to be more purposeful with what I am doing in my life and then I love myself. I think those five affirmations that I tell myself everyday help really some of the anxiety and stress that I have on a daily basis.
So I've read the book The Morning Miracle by Hal Elrod (https://amzn.to/385tKmY)
And if you haven't read that book check it out. It's definitely a good read. It's fast reading probably a day or two and it's very good. It's very informative and he's very thoughtful and about why he does what he does how talks about seven.
Different things he does in the morning meditation affirmations scribing exercise. There's a list of seven of them and obviously, I don't know all seven of them all the top of my head because I don't do all seven of them. I've actually adapted my own from his you know, The Morning miracle.
I do my own morning miracle. And basically I'm waking up and I'll meditate for a few minutes whether that's just me sitting trying to wake up half asleep still I'm sitting quietly collecting my own thoughts. Either that or I'm actually like doing like a meditation something like that. I do something to start off with that way get myself in the headspace. I need to start the day, I try to exercise every day and I'm using that term loosely. I'm just trying to elevate my heart rate a little bit. Even if it's just, you know hanging out 50 squats or max out push-ups or actually it going to hit the gym for a hard workout. You know, I'm just trying to get my butt blood pumping to get those endorphins rushing.
I'm also a big fan of affirmations just like Crystal what affirmations do you use? So do you mind sharing of course? I don't mind sharing mine is more about programming self-conscious. There is power there and it's one of those underlying principles across a lot of different books. I'll buy a lot of different authors over, you know decades and centuries of writing.
The subconscious has power and so things I repeat to myself emphatically and you know, very convincingly, you know, I repeat the net worth that I'm trying to get to myself. I repeat outlandish goals that I've set for myself this year. I try and give myself lines, I tell myself over and over again that I am where I want to be that I am going to be where I want to be.
Yeah, so my affirmations are a little bit different than your affirmations and that's because I write down at like I do the same thing but I write it down in a journal. So I have 10 goals that I want to accomplish but I write them down as if I've already accomplished them, so like one of them is I have like I ran a 5k. I haven't run a 5k, I've barely run a mile, but I want to make that one of my goals. So I write it down his if it's already happened. So he's just doing it in his head to wear as I'm writing it down. Well actually say it out loud. Okay. Okay, so you're saying it out loud, but I think that that helps. Yeah, if you hear it and say it'll help program. I think yeah more so you should just start writing it down so you can also so see it see it hear it say it and it's the very touch it. So anyway, also, we do our morning routine separately. We try not to be in the room together if he's in the room, then I'll end up going into the office and doing my routine in the office or vice versa. You can't really do your morning routine with somebody because your morning routine is about you and you really need to focus on yourself.
It's a very personal time. We work out together and it's probably the only morning routine that we have if you work out in the morning, usually, you don't.
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Hey guys, it's John Stewart here with Bugay Investments. I want to talk to you guys about what's on a lot of people's minds right now. You're hearing Buzz about it all over social media and all sorts of forms and everyone.
Is there a recession coming?
So that's a great question. Obviously, it affects all of us as business people and especially us in the real estate industry eight out of the ten last recessions have been marked by a slow down in the real estate sector. So what is recession? Well recession is the default state of an economy in growth. But that growth is marked by periods of recession or economic slowdown. Usually lasting 24 to 36 months. We all know the last one in 2007-2008 the Meltdown was catastrophic. It was really bad.
So is there another one coming. Well, of course it is. I mean, there's no doubt about it is how the economy works. It booms, it expands, and then it slows down and then it expands again and then it slows down. So what can we expect? Well, the last recession was really bad and I believe that this next one will be really bad as well.
In the 2018 tax spending went up $300 billion dollars, we went down $218 billion dollars in tax revenue... sounds like a recipe for disaster. So what actually happened in 2008 & 2009. Well, the the feds dropped the interest rate down to almost zero and when doing that it spurred investors to borrow lots of money at a very cheap price.
It stimulated the economy and we got ADDICTED. I mean we like to make money here in the United States. Interest rates have been dropping to a historically low. It's about as low as it's ever been. There is more capital in the economy. Then there's ever been people are borrowing people are investing huge amounts of money are being made and lent and borrowed.
Then spent every single year and it's continuing to happen. What does that mean? So corporations are borrowing huge amounts of money. So our investors there is a huge boom right now in the corporate bond market. And actually if you track what has been happening the same sort of thing that happened in 2007 to 2008 is happening now with corporate bonds junk rated bonds are being mixed in with investment-grade bonds and sold off on the secondary market.
What exactly does all that mean? Well, in the future, we'll see what happens. But for right now what it means is money is being borrowed and the truth about the security of the debt obligation is not being lent on terms.
On terms that are not actually equivalent. So as far as what it is going to actually happen, who knows we could have another banking meltdown ...lending meltdown. The truth is that none of us really know we're not fortune tellers it will happen. And the only thing we can do is be prepared for it. Someone really wise once told me that all you can do is ride wave you can't control the ocean?
So we're out here and you just need to keep making wise Investments, making wise business decisions, continue to return money to you through dividends and returns and income.
Other than that, there's there's not much else we can do again this is John Stewart with Bugay Investments.
Just giving our professional inside.
Engineering a system engineering a system. I'm Jon Stewart. I'm Crystal Spear and we are Bugay Investments.
And we are here to talk about engineering a system.
So we want to talk about some of the systems that we use on a day-to-day basis in our business. It's going to be anything that will help you automate your life and your your business process more smoothly. What are some of the little things we do we are a small small business and we are growing but we still do have some systems in place. We use Stessa Real Estate Management to automate our
It Imports all the expenses and the Chargers and the ink comes and helps track what we spend and what we makes Tessa is really nice. It does automate all of our accounting and the tracking of our incomes and our expenses. It will even out output a nice neat little tax package. We still use an accountant to Oat to look it over but it does help us with the profit and loss the balance sheet.
Another thing that we do as a couple and business partners, we have linked calendars on our iOS phones. We have an email that we share that is linked to both of our phones. So anytime any business email any business email comes in we can both see it both respond to it. Same thing with the calendar if either one of us makes an appointment in the calendar, we both see it we both know it's there.
Get alerted. We also leverage each other's strong points and our skills. So I am really good at handwritten letters because his handwriting is just terrible and I put John's name and his number on it because I don't like talking to people on the phone, especially to ask them if they want to sell their house. So I have no problem with it. If they call they call him and he gets to talk to them and sometimes get some of their rude.
Responses, but that works out really well and also much more comfortable and have more experience underwriting properties and looking at what would make sense for a deal to offer price wise in the same category. Crystal is really really talented at looking up rental comps and still sold comps to help us price home.
And things to make an offer we're always working on better systems to improve the efficiency of our business. You can't do everything yourself. There aren't enough hours in a day. You do need to develop systems and strategies to take over parts of the business and it's probably the hardest part about starting your business. Yeah honesty, and we're still trying to figure it out ourselves. We're still figuring it out.
Out every day what will work for us? What won't work for us? I'm honestly a very disorganized person just not my strong suit. I don't have neat handwriting and I'm not good at writing things down part of what works for me is putting minders in my phone to write things down or to do things when it needs to get done details and organization is not my strong suit and
Actually have to come up with something specific to address the fact that I'm lacking. Yeah, so you really have to find somebody or create your own system to be able to effectively work and get stuff done because if you don't then you're just going to be wandering around throughout the day scatterbrained and not feel like you got anything done because you're driving around town to go pick up.
Paint or you know, I have a meeting with an investor went going to pick up paint. You could have had somebody else go and do that and save yourself a lot of time and you could have focused on getting ready for that meeting. Like he said he is not very organized and which is why he has me not the only reason but you know, it's really nice to have some has the opposite strong suits of you because then you guys can help each other out one of the hardest things that
I think is at least for me is giving up control of something. It's knowing that okay, you know what? I can't do this at this time. I have to have you do it and then just making sure that they can do it and if they can do it then you just need to let them do it because they already have a system in place. I am Jon Stewart. I'm Crystal Spear and we are beginning best friends.
I think one of the most important things is understanding the difference between a consumer mindset and a wealth-building mindset.
So what is the difference between wealth mindset and consumer mindset? Well, a consumer mindset views money as something to be spent for instant gratification wealth-building mindset views money as tool that'll is that is used to build wealth or put more money back in your pocket. For example, tax Seasons coming up so you get a three thousand dollar return on your taxes a consumer mindset would take those taxes out and buy a TV or go on a mini weekend vacation (but what you deserve it) well mine set is taking that three thousand dollars in fines.
In a way to invest it to make more money, correct? Yeah, it's absolutely right you it's really all about the way that you view money. If you see it as a tool that can be used to build more money or to put more money in your pocket. That is the wealth building mindset. If you see money as something that you need to spend to feel better or feel good or have fun. You may be in the consumer mindset trap.
So right now I'm reading Secrets of The Millionaire Mind by T. harv Eker and because I'm in that consumer mindset trap and I am working my hardest to get out of it said that that book it really helps. I'm only I just finished part one. There's two parts to it and the part one talks about where where you came from and your past and how money was traded by your parents or any adults that you are around and it really makes you think well, okay. Well if my parents were sit in there and complaining about money. Well, then when you're older, that's all you're going to do and every time you get money you're going to end up spending it because you don't want to complain about it. So I really liked that book because it's actually helping me become a millionaire mind. A book I really like it serves really practical information, you know process is the book Set For Life by Scott trench and he really breaks it down and gives you tools you can put in your tool belt to change your mindset because it doesn't happen overnight. It doesn't even happen in a year. It's something that you need to work on and change but one day you will realize that you think differently than everyone else, you know, and you'll wonder why they think the way they do and it's something you everyone needs to work on is their mindset and how they be wealth and creating wealth and it's something probably that is the least addressed in our country right now money is a taboo subject. It's not discussed at dinners not discussed between family members and I think that it needs to be on the Forefront of our what
We teach and what our families talk about because most people don't get the financial education that you need to become wealthy. So which ones that would you say that you are I would say that I'm working on my wealth building mindset. I do love you money as a tool to be used and deployed to make more money. Yeah. I think you have more.
Wealth mindsets and I do he's always telling me not to spend money. But in reality we actually don't spend that much money on different things. For example, we both have older phones. We don't go out and buy the new phone. We just wave had to buy a new car because our other car broke down but we buy it brand-new we bought it used so that's another and paid cash.
Big thing that everybody else has or can you just get by with what you already have and spend that money on something else? How do you keep your mind focused on the well-known mindset? It's actually a funny thing because once you change your mind.
How it works and how you need money. There's no keeping is that it is like it's like opening your eyes for the first time you you'll never see it differently. For instance. I if I see a large number in my bank account, I cannot look at it. Literally. I cannot look at money in my bank account trip.
It's closed when doing renovations because then you'll just end.
Outline all of your budget on all of the nice things in your rental and and rentals you don't need to have marble countertops mention that let's get into that. So is constantly actual rent your than gonna get from that investment you spent in the rental a big
Mission that he's the Indigo on and everyone needs vacations. I'm not saying don't vacation justification smart, but what if you could turn the vacation into a business trip getting a hundred percent tax write-off then actually increasing what your profit at year end because of the vacation for writing off a hundred percent of your vacation. Be sure to talk to your accountant. So the having it is
Mindset is it's less as much of a tangible thing as it is something that you will you will grow and nurture through your education and experience, but I would argue that you can't build wealth without it.
This is the strongest the economy has EVER been. Record unemployment at 3.5%, record real estate prices, record economic expansion. IT'S HOT! So do you buy right now?
The answer is maybe...
Everyone who is chasing wealth gets tempted by the same things. I have fallen victim myself. The real estate prices are climbing, and so are the profits. The market is a feeding frenzy, and there is chum in the water. No matter what the fundamental truths of investing are, deals are getting snatched up right and left. You don't want to be left in the dust! So you lower your standards and fudge the expectations a bit, maybe even attempt to over extend in hopes that things will work out.
We have all been there! The last crash was the worst for the people who fell in to this rut. So...do we buy now at the height of the market?? Only if it is a good deal.
If the deal is as good today as it was 5 years ago and will be good 5 years in the future then buy it.
If the deal is so good you have a general sense of its value without an excel underwriter, then buy it.
If you feel like you would be missing out on a once in a lifetime deal if you passed on it, then you should probably buy it.
Of course, this is not all inclusive, nor is it a definitive guide. But for what it's worth, it's my two-cents, and I bought hundreds of thousands of dollars worth of property in 2019 and will buy deals like them again any time I can!
Most new real estate investors view syndicators as something to aspire to, because of that most new real estate investors want to become syndicators themselves.
How do you know that you can trust someone with you hard earned money?
There are a few questions that you should be asking the one offering the security:
My business partner and I can run through a sample deal with you if you have any questions about qualifying a syndicator. If you have any questions, feel free to email me at email@example.com, and I encourage you to check out Mark Cadles website as well- www.cadlecapital.com
The SEC strictly governs how and from whom a real estate syndicator can raise capital. Until 2012, the restrictions were even more rigid. But after the Jumpstart Our Business Startups Act (JOBS), the regulations allowed for a small handful of exceptions to the otherwise restrictive rules.
Regulation D Rule 506 B:
One can raise unlimited amount of money from an unlimited number of accredited investors, or up to 35 unaccredited investors(accredited is defined as one whose net worth exceeds $1M not including a personal residence or makes $200,000 per year or $300,000 jointly with a spouse). Cannot raise the funds through general solicitation, there must be a substantial pre existing relationship.
Regulation D Rule 506 C:
One can raise an unlimited amount of funds from an unlimited number of accredited investors, general solicitation is permitted.
There are two other exceptions, Regulation A, and Regulation D Rule 504, but they are less common in real estate and usually require more registration with the SEC.
There are two parts in a syndication.
The General Partnership is comprised of the operators. They find the deals, manage the asset, personally guarantee the loan, manage all the accounting, tax and distribution of profits, and they manage the property, the operation and the entirety of the project from beginning to end.
The Limited Partnership is comprised of the passive or active partners whose liability is limited through the protections of the legal entity set up to hold the real estate. The limited partner typically invests capital for an agreed upon split of the equity and profit. Their role is usually passive and they are taxed as passive equity investors.
What is syndication?
Syndication is defined as "the pooling of resources and knowledge for a common cause."
In Real Estate, it is referring to the pooling of knowledge, experience and capital to purchase and profit from an investment property. Almost every piece of commercial, industrial and large multifamily real estate is not owned by one single individual, rather a group of people who have pooled their resources to achieve a result that is greater than the sum of their parts.