Latest / Financial Survival Network / Real Estate Guru Reveals Secret Hacks -- Dave Dubeau #5827

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Real Estate Guru Reveals Secret Hacks -- Dave Dubeau #5827 · Financial Survival Network

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Well, I think so. When you're definitely the expert on this, you've
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got your thumb on the economy. You know what's going on with investments and
0:06
interest rates and all the shenanigans the government's pulling and all that kind of good
0:10
stuff. I think you know, and I'm probably preaching the choir. It
0:13
really is incumbent upon ourselves to take responsibility for our own financial futures because the
0:19
government ain't gonna do it. You're listening to Carrie Letts's Financial Survival Network,
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where you get valuable information you just can't find anywhere else to thrive in today's
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trying times. You need the Financial Survival Network now more than ever. Go
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to Financial Survival Network dot com and get your free newsletter and gift. Financial
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Survival Network now more than ever. Welcome you are watching and listening to the
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Financial Survival Network. I'm your host, Carrie Lots and hey, we've got
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the really special guest with you for you today. Seasoned real estate investor can
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help kickstart your real estate investing campaign and his name is Dave Dubo and Dave,
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it's great to have you on the show. So look, you've been
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real estate investing successfully for how many years now? Oh jeez, I got
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started in two thousand and three. That's when it really first took a kick
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at it. So I've been doing it since then. In the last ten
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years, really focusing on helping other what I call mom and pop real estate
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investors raise private capital so they can grow their portfolios. All right, So
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first you got to start someplace. Yeah, your investors start when it comes
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to raising capital, well, it all starts with having a deal or two
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under your belt, so you got some proof of concept, But you don't
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need to have decades of experience or hundreds or dozens of deals under your belt.
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You can get started with that because the statistics I've seen carry and take
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them for what they're worth, right, statistics is that ninety five percent of
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the general population has never purchased an investment property. Your own house does not
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count as an investment property. So if you've got a couple of investment property
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deals under your belt, chances are you're far and above ahead of most of
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the non real estate people that you know. So what kind of properties do
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you counsel your group to invest in? I don't. I don't. We
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work with people that are investing in single family homes, multifamily properties, people
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who are doing flips, people who are doing Burr's, self storage facilities,
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commercial, commercial, residential, you pretty much you name it. In real
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estate, We've got clients that are doing all of it. So I don't
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think there's any one particular category that's head and shoulders above everything else. It
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just kind of depends on where you are and what your goals are. So
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you're agnostic, and I got to cover my bases there carry I I cat
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show preferences. I'm definitely agnostic. Yeah. Yeah, when it comes to
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real estate investing, So when somebody is interested in one, do you have
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geographical preference? Do you steer people to certain parts of the country? Dave,
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No, Here's what I do. Carry. I help people who are
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already doing deals to do more deals by accessing private capital. That's the whole
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stick. That's that's how we really help our clients is to find joint venture
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partners, private investors, private lenders, what have you, so that they
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can scale their portfolios. They can do more of what they're already doing typically,
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or they can start doing that next category. They can go from single
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family homes to small multifamily properties. Or small multifamilies to larger multifamilies because they're
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able to raise capital to do that. Okay, and the capital that you
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raise private capital, Yeah, what is it cost? Usually what's involved in
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the transaction, Well, that's all over the board, because that's the beautiful
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thing. You're not dealing with hard money lenders. You're not dealing with institutional
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lenders necessarily. Typically these are our clients or mom and pops who are raising
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capital to do that next deal, and they just don't have any experience with
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it. So you know, quite often I recommend people get started by bringing
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on a joint venture partner so they've got the deal, they've got the knowledge,
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they've got the expertise, and they bring on somebody who's not all that
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familiar with real estate investing or who doesn't want to do the hands on work
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themselves. That person comes into the deal, they bring their money, they
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bring their credit, and they join forces and they do the deal together and
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basically they share in the risks and in the rewards of that deal. So
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the big advantage is to the active real estate investor, they're able to get
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that capital without necessarily having to come out of pocket. While they're aabilizing the
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property and you know, paying an interest rate, they're only paying out when
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the property is profitable. Now, the disadvantages, you're giving up a big
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chunk of equity typically in that kind of deal. But you know what,
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half of something is a hell of a lot better than one hundred percent or
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nothing. So that's that's how we recommend newer investors get stared with the raising
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capital. Okay, so with your capital partners, if you will, what
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kind of returns do they look for and how much do they finance of the
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typical project. Yeah, so again, what we're showing our clients to do
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is how to tap into their network of friends, family members, co workers,
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business associates, people I have that pre existing relationship with a lot of
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these folks aren't necessarily super sophisticated, accredited type investors, so they don't even
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really know exactly what they're looking for. They just know that whatever kind of
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returns they're getting in traditional investments suck, and you know, real estate is
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a is a better option for them. So again we highly recommend you don't
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you don't start off offering specific rates of return. If you bring on a
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joint venture partner, you explain to them, Hey, here's what I've done
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in the past, here's how it's worked out. If we were due to
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a fifty fifty deal, hopefully it would be something similar to that. Every
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deal is a little bit different, but this is how it works. So
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the joint venture partner goes in with their eyes wide open, and typically what
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they're hoping for obviously is double digit returns, but that may or may not
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be direct cash on cash returns. That can be all sorts of different things
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through mortgage paid down, property appreciation, depreciation, all that kind of good
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stuff. So with interest rates going up and money becoming scarce from bank failures,
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etc. How are you helping clients now? What are their main concerns.
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Well, that's why it's even more important to be doing this these days,
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because a lot of our clients who could qualify for traditional financing before don't
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any longer because the banks have tightened things up. However, if they bring
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on a capital partner who not only helps out with bringing money to the table,
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but also helps out perhaps with bringing credit to the table, then they
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can join forces and it's a lot easier for them to qualify. It's a
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lot easier for them to make the banks happy under their current financial stringent financial
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situation. All right, So kind of your specialty is helping people, helping
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your network, your existing groups, and finding others who can be potential equity
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partners in your deals exactly. And one of the ways that I always recommend
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to people carry that you're an absolute master at is you know, be seen
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to get the green. So it's like you can be a very very astute
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real estate entrepreneur, but if you're the best kept secret, it's not going
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to do you much good when it comes to raising capitals. So there's there's
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all sorts of things that I recommend people do to number one, kind of
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get out there and be seen, not necessarily just to kind of expand their
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reach, but to show people in their network that they know their stuff right,
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because a big challenge a lot of mom and pop realistic investors have is
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their friends and their family know them as you know, John the plumber or
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Jane the receptionist or whatever they do for their day job or whatever their background
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is. They don't take them seriously as a real estate entrepreneur. And they
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can bang their chest and they can talk to their blue in the face about
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how great they are. But it's so much more effective if they get featured.
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For example, if they get featured on somebody's podcast and that other person
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is interviewing them, then they're automatically elevated to that status of being an expert.
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So it's not just about the reach they get by being interviewed on somebody's
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show, like, for example, I'm on your show right now, and
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that's going to reach a broad audience, your audience. However, the real
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impact, especially for our mom and pop real estate investors, is also pointing
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their network to the show they've just been interviewed on as kind of like hey,
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proof, here's somebody that's interviewed me. Check it out. Does that
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make sense Garry? Yeah definitely. And so all right, so do you
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give guidance as far as what types of deals or how to structure a deal
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to bring on these outside investors. Yeah, well, like I say it
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initially, my usual recommendation is to, you know, especially if you're smaller
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deals, keep it super simple. I could wave the magic want to bring
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on one investor partner to do the deal with you, and bring them on
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as a joint venture partner and share everything fifty fifty, right, so after
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their initial the investors initial investment is covered, all of the profits are shared
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and split fifty fifty between the two of you. That's just the simplest way,
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and it's also it's more generous for your investors, and it's lower risk
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for you as well, because again, a big challenge that a lot of
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people have is, especially if they're doing a flip or a burr or they
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have to do some renovations on the property, is you know, they don't
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want to be coming out of pocket more than necessary while they're repairing the property
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and getting it optimized. Right, So this is a way to lower that
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risk for them. I answer your question, Yeah, I think you covered
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it pretty well. So it sounds exciting. It sounds like there's a lot
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of opportunity in light of the current economic disruptions to be doing this, isn't
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there Well? I think so when you're definitely the expert on this, you've
11:07
got your thumb on the economy, you know what's going on with investments and
11:11
interest rates and all the shenanigans the government's pulling and all that kind of good
11:15
stuff. I think you know, and I'm probably preaching the choir. It
11:18
really is incumbent upon ourselves to take responsibility for our own financial futures because the
11:24
government ain't going to do it. I'm up hearing candidates the same thing as
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in the States. You know, too many people rely on the government,
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and that's in my opinion, a very very bad plan. So again,
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what I'm what I'm showing our clients, our real estate investor clients, is
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how to educate their network about the big benefits of investing in real estate compared
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to so many of the other traditional investments that are out there, all of
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the things that are rammed down their throats that they should be doing, like
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putting all their money in mutual funds with the financial planner, which I think
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is is generally speaking a pretty bad idea. Okay, So yeah, obviously,
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stock markets so volatile, you still feel that pretty much real estate is
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the best long term investment with inflation, with high interest rates, with the
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potential recession, You're still you're still allowed a real estate investor. I am.
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I'm I'm a long personally, I'm I'm more of a long term,
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buy an old kind of guy. So if you just look at it historically,
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if you if you buy a piece of a good piece of real estate,
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you'll hold onto it long term, you know, unless you're in an
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absolutely disastrous area. You know, even if you look at the markets that
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took the biggest hits in oh seven o eight, you know, if you
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if you held onto those properties long enough, they would get turned around.
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So really depends on what you're doing, how you're doing. But I'm such
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a big fan of real estate carry because they're just with a good deal,
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there's so many different ways you and your investor partners can make money, and
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there's so much more control, relatively speaking, that we can exercise over this
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asset versus pretty much anything else out there that I'm aware of, at least.
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So, I mean, we control what we buy to a certain extent,
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how we buy it, We can negotiate the price quite often to a
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certain degree. We determine exactly what we're going to do with that project,
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whether property, how we're going to make improvements. We determined to a large
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degree, who we're going to get in there, how we manage that property,
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how we exit it, maybe not exactly when, but how we exit.
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We could have multiple different exit strategies for that property. And then you
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and your investor partners you benefit from all depending on the deal. I'm aware
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of up to eight different profit centers in a real estate deal, like cash
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flow as king. Everybody knows that one. That's a cash on cash return
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that you get monthly, the jingle left over in your gene so to speak.
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You've got property, you know, you've got mortgage paid out, You've
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got forced appreciation. If you get a good deal on the property, you
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get instant equity in that deal. You buy it on, you buy it
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at a discount, find a motivated seller, Lots of people do that kind
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of stuff. You've got depreciation, You've got you know, all of these
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different with leverage, massive leverage with real estate, I mean many investments.
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If you want to buy half a million dollars worth of gold, well,
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I guess how much that's going to cost you half a million bucks. Want
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to buy half a million dollars worth of real estate. You can typically get
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into that with between twenty and thirty percent down, so the bank will will
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finance the rest of it. So just in my mind, so many big
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benefits to real estate, right and not to mention the inflation protection aspects of
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it, right, Well, you're definitely the expert on that, that's for
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sure. Yeah. Well that's one of the reasons I like it. Yeah,
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So any red flags that you tell people when you're bringing on an investor,
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if you see this, don't do it. Well. The red flags
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are usually the person trying to bring on the investor, right, So I
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see lots of people making all sorts of mistakes around that. And I'm going
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to cover my butt here carry and say, I'm not a lawyer, I'm
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not a securities guy. I'm a real estate investor and a marketer, and
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I'm just sharing my understanding of things. So get your own appropriate legal advice.
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So I'll let cover my butt stuff. But bottom line is what I
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see so many people making mistakes because they're you know, they're a mom and
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populistic investor, and they're soliciting capital online like they're posting on Facebook, Hey
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I've got this great deal guaranteed fourteen point seventy five percent DM me for more
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details. Well, that is so many people do that. Everybody else thinks
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it's okay, but it's not. I mean, that's that is that is
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illegal, and if you get caught, it can be very very painful.
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For you with a security and exchange commission. So that's a big mistake.
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I see people making. The other mistakes I see people people making are of
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ignorance more than anything. And I've made these mistakes myself. So when I
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was first trying to raise capital, I would show a potential investor my best
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deal ever. Why because I was so damn proud of that thing, right,
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So I'd I'd show this, Hey, here's how smart it was,
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here's how great we did, Here's how much money we'd made, and it
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was so profitable, and you know, I was kind of beating my own
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chest, you know, showing by yeah, my prettiest baby, so to
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speak. However, one or two things would happen. Either number one,
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the returns would be so much higher than a than a non investor type person's
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accustomed to that their BS motor meter would go off and they say that this
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guy must be full of crap. There's no way, you know, I'm
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only getting three percent on my money in mutual funds. There's no way you
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can be getting twenty thirty returns kind of thing. He must be full of
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crap, or it would set up very unrealistic expectations, right, so now
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they're now they're pinned in at this expectation of the kind of returns they should
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be getting they invest with you, and if your deal doesn't bring those kind
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of returns, then you look like a schmuck, even if the deal did
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pretty well overall. So what I always recommend to people is don't show off
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your best deal ever. Show off kind of a plain Jain type of a
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deal that's got decent returns but nothing too crazy. And then, due old
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Tom Peter's advice, there under promise and over delivered. So if you're showing
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people that, hey, we're thinking we probably will be able to get you,
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you know, ten or eleven percent return on your investment all in not
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cash on cash, but if you look at everything over this timeframe, should
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be able to do that. Well, then if you're able to get them
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actually fifteen or twenty percent, you're going to look like an absolute rox star.
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Yeah you're a hero, right, and they're going to reinvest with you,
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and they're going to refer you to the friends and their family and all
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that kind of good stuff. I gotcha. It's fascinating. And yeah,
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so to give us an example of an average deal that you pulled off recently
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that you've helped facilitate. Well, it's kind of interesting. Yeah, not
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one specific deal, But I've got a couple that pops into mind. I
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just interviewed the other day. They took some of our training and then applied
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it, which is the most important important part. And they basically the big,
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the big light bulb moment for them, Gary was how they were bringing
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investors on board. Because here's my philosophy. All of the real estate gurus
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out there say, hey, just find a good deal and the money will
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find you. And I say, that's our croco or scooky right, that's
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that's that's bull. What you want to do is you want to get investors
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lined up first, then go finding deals and then that way you're not scrambling
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for the cash last minute. Because if you're scrambling for the cash, that
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no matter how good the deal is, the desperation oozes out of you and
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it actually turns people off. So what this couple was struggling with was they
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were connecting with potential investors, but they weren't getting any real bites. Right.
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They're getting a lot of people saying, hey, yeah, sounds good
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when you got a deal let me know and I'll take a look at it.
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Well, guess what. Then they go out and look for deals,
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and these people would all flake out, They say oh nos, or I
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can do it blood all the So what they learned, what right, what
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I showed them on how to do is instead of just getting a soft verbal
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commitment, what you want to do, you, guys, is get a
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signed expression of interest assigned expression of intent of interest. This is a non
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legally binding document. But I tell you what the difference between somebody signing off
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on a document that says something like this, I Dave and ready willing and
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able to invest the sum of up to one hundred thousand dollars with Kerry if
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he finds me a real estate deal. Sometimes it was in the next six
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months. I date it, I sign it, you sign it. The
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chances of me coming through when you bring me a deal rise exponentially. So
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these folks implemented that, and within a couple of months they got over six
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hundred thousand dollars worth of capital committed, and they were able to do their
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next two deals because they pegged people down with these expressions of interest. I
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like it, I like it all right. Well, Dave, it's been
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a pleasure speaking with you. Why don't you tell us where we find you,
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how we connect with you on the web. Oh, thanks, Garry.
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So what I'm looking for is I'm looking for other real estate investors who
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are interested in gaining some exposure by being interviewed on a podcast. So I've
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got a long running podcast called the Property Profits real Estate Podcast. So I
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would like to invite your real estate guests to be interviewed by me on my
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podcast. And that's a great way for them to number one, get exposure,
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but more importantly, number two, to be able to kind of indirectly
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strut their stuff and be seen as a legitimate real estate professional in the eyes
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of their network. So if any of your folks are interesting being interviewed,
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love to do that, they can check that out at Dave interviewsu dot com,
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Dave Interviews You dot com and as a link to that in the show
21:22
notes on Financial Survival Network dot com. Make sure you go there sign up
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for your free newsletter. Dave, been an absolute pleasure, Thanks for stopping
21:30
by. Thank you, Kerry, Thanks for listening to Carrie Lets's Financial Survival
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Network. Your solution to today's trying times for the latest go to Financial Survival
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Network dot com. Financial Survival Network now more than ever,