The 5 Questions Podcast
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The 5 Questions Podcast
Thriving After Layoffs: Tony Lopes on Financial Independence and Real Estate Investing Strategies
Ever wondered how a layoff could be the best thing that ever happened to you? Join us as we chat with Tony Lopes, who transformed his career from the defense industry to real estate investing, achieving financial independence by 44. Tony opens up about his journey, starting with small multifamily properties and steadily growing his portfolio. Learn about his investment philosophy focused on ensuring cash flow from day one and his preference for a buy-and-hold strategy, allowing him to benefit from long-term appreciation and increasing rents. Tony's experiences offer invaluable lessons for anyone interested in venturing into the world of real estate.
We also dive into the factors driving the shift towards renting over home ownership. Discover how rising property taxes, peak fossil fuel production costs, and the high price of essential home maintenance create an affordability crisis in housing. Even with lower interest rates, the financial burden on homeowners remains significant, pushing many towards renting for convenience and immediate gratification. This trend not only shapes societal behavior but also presents lucrative opportunities for real estate investors. Tune in to explore how these dynamics are redefining the housing market and what it means for your investment strategies.
Because when you go into a meeting, when you go into a conference, when you go to see somebody, handing somebody a business card is great, but if you can hand them a book, Welcome to the five questions podcast, where I am your host.
Speaker 2:Mario Lamar, our guest on today's show, has had a career in the defense industry, then transitioned into real estate investing and retired at the age of 44. He is a best-selling author, a coach and public speaker, and he loves sharing his knowledge and experience so that others can enjoy the same level of freedom that he does. Welcome to the show, tony Lopes. Tony, welcome to the podcast.
Speaker 1:Thank you so much, mario. I so appreciate having you on today and we're going to have a lot of fun during this podcast?
Speaker 2:Absolutely, tony. The concept of this podcast is very simple Five questions about real estate investing or business and we get straight to the point. You ready? Yep, let's do it. Okay, tony, we spoke in the introduction about you going from the defense industry into real estate investing. I need to understand what motivated you to transition from a successful career in the defense industry to a real estate investing career and, at the beginning, how did you manage both at the same time?
Speaker 1:Yeah, great question. You know, and some of this may actually apply to your listeners and your viewers from the standpoint of you know, that decision was made early, early on, and I'll say, shortly after I graduated college, because I came from a family right, my parents were, were immigrants. They came to this country, they saw a lot of opportunity and they handed down the mantra of go to school, get a good education, you'll get a good job and you'll be set for the rest of your life. A lot of us grew up with that. That's the age our generation grew up with that mantra, and so that's what I did, because I didn't know any better.
Speaker 1:So I went to school, I got a great education, ended up with a great job and thought I was going to be set for the rest of my life until I got laid off. Right, that was nowhere in the plan, that was nowhere part of the mantra, and so that happened about four years after I had graduated from college with my engineering degree and with my MBA, and I had great, you know, paperwork. So to degrees. But uh, still got laid off and um, so, yeah, at that point being laid off, I was laid off for three months. I had to think about, like, do I want to continue down this road of being, you know, harnessed to a job and not really have any other way out, uh to uh, enjoy my freedom? And so that's where, you know, I had to get another job because I wasn't financially independent at that time.
Speaker 1:Mario, I wasn't right, I was young, I, you know a lot of bills to pay at that point, and so I ended up getting another job and then, shortly thereafter, I started to get into real estate. My parents, my father, had a couple of multifamilies, so I was somewhat familiar with it, but I didn't do too much. I didn't work within, so to speak, the business of multifamily real estate. I had some familiarity and I knew that was a way to generate additional income, a second means of income, and so that's that's the road I started to go down.
Speaker 1:Once I landed on my feet, working my job nine to five, I started getting involved with real estate, buying buildings slowly, you know, you know, a three unit building, a four unit building, a duplex, right, you know, you know, I my unit building a four unit building, a duplex, right, you know, my family was very blue collar. I did not grow up with a silver spoon in my mouth. We didn't have a lot of money and so you know, I share that perspective because I think, again, a lot of your listeners and your followers and your audience, you know, may come from that same background where it's, like, you know, you have to start somewhere right.
Speaker 1:Absolutely. You're probably not going to buy an apartment complex with you know, 50, 60 units, right? That's probably not going to be your starting point. It's going to be, you know, a small multifamily. And that's how I got started. And when you look and you chat, chat with some of these other large investors out there, most likely they started the very same place Mario, buying a condo, renting it out, buying a duplex renting it out. I know some of these guys and let me tell you that's how they started too.
Speaker 2:So basically, learn how to walk before you run, especially in the real estate, Because if you do a wrong move you could lose a lot of money.
Speaker 1:Absolutely, you're right.
Speaker 2:That brings us to our question number two, and you know now you invest in a lot of. You have a portfolio, a lot of properties. What is the investment philosophy or strategy and how do you evaluate potential real estate opportunities strategy and how do you?
Speaker 1:evaluate potential real estate opportunities.
Speaker 1:So, uh, so it. It changes as you, as you grow, as your business changes. Uh, uh, so uh. For me, first and foremost, uh, it's.
Speaker 1:My philosophy is I don't buy anything If it doesn't cashflow on day one. It needs to cashflow on day one, okay, so that's, you know, one of my philosophies. The other one is, you know, I'm pretty much a buy and hold investor. I like to see the long-term appreciation of a property along with seeing the rents go up. That's just what I enjoy. Other people may have a different appreciation for doing maybe getting there. Other people may have a different appreciation for doing maybe getting there, buy a building, do some value add quickly, make some apartments look nice and then sell the apartment building within three to five years. That's not really me, but it's for some people that absolutely works and that's OK.
Speaker 1:And then, you know, one of my other philosophies is I don't like to pay taxes. I just don't. I pay plenty in property tax, so I pay my fair share. And so, for me, I try to avoid paying taxes by using cost segregation studies to be able to help reduce my tax base. And then also, when I do sell a property, I do try to use a 1031 exchange so that I avoid paying taxes on the profit of any property that I sell to the best of my ability. So there's some strategies that I use in sort of investment philosophy.
Speaker 1:But, depending on where somebody is in their career, if they're just starting out buying their first property, they may be looking specifically at how much they can cash flow per door so they may buy a duplex and they may say they may have a bogey, a philosophy of saying I need to make at least $200 per door, so if they buy a duplex they got to make $400 a month for that duplex, $200 per door per month. Okay, so and that's, and that's how I started. When I started buying a real estate, I looked at it on a per door. People would say, tony, take us back. What metrics did you use? What was your cash on cash and what was your IRR? And I'm like I didn't use that. For me it was purely cash flow per door and I had my metric. At the time it was 300, 300 to 400. I wanted to make per door and I had my metric. At the time it was 300, three to 400. I wanted to make per door.
Speaker 1:Times were different back then. Now it's a little more difficult because prices are so high, the cost of money is so high. So for new investors it's usually something like that how much per door do they want to make? And then separately, like if you're a more seasoned investor and you have more property or if you're going after larger deals. We use to a large extent we use the cap rate as a metric to determine which may be a better property. This one offers a 6% cap rate or yield. Think of it as an interest rate that you're getting, like you would get an interest rate from a bank. 6%, 6% cap rate is how we calculate it for larger apartment complexes. Or another one might offer 8% cap rate, right yield. So we kind of look at that as a starting point as to which building we want to dig into further.
Speaker 2:So when you know newer investors can use a simple strategy of you know per door, don't overcomplicate things, make sure you cash flow, because that's you know it is a business. You want to make money. But as you get, as you evolve in your real estate journey, you have all these different metrics that you can use. Which brings us to question number three, and this is a we're going into a little bit different direction here to get maybe bigger deals. You talk about branding, having followers on social media. You also used of becoming an author. You wrote a book, which we'll talk in a little bit, that brought you to become a $20 million investor. Can you highlight the importance of personal branding and how did building your personal brand contributed to your success in securing maybe substantial investments?
Speaker 1:Yeah, great question. If you want to grow in this business, scale in this business, eventually you're going to run out of money. You know, when you buy your first deal you probably have, you know, the down payment either saved up or you're going to do a cash out refinance on your primary residence or something like that. Or maybe you get it by taking out a loan from your 401k plan and paying that back slowly back into your 401k. There's a lot of different strategies you can come up with for a down payment. But after you've pulled that trigger and you bought your first property and maybe your second property, the cash starts to run out for that down payment. So you have to come up with some other creative ways to come up with that capital, that money for the down payment. And so for me and us, we're looking to grow, or we firmly believe and we're going to talk a little bit about renter nation, but I absolutely believe we are in this country, in the United States, heading more and more towards needing more multifamily units. We're going to have more renters than owners of homes. So we're growing, we're scaling and we need money.
Speaker 1:The best way to show yourself as an authority is to be able to talk about a lot of different aspects beyond just the multifamily space. So for me, that was really combining all my ideas into a book, and so that book is such a huge contributor to my authority on the subject of macro and multifamily investing. Because when you go into a meeting, when you go into a conference, when you go to see somebody, handing somebody a business card is great, but if you can hand them a book that explains many, many, many different aspects of what's happening in the world and why it contributes to a renter nation and why we need to be investing in some different assets, that authority is just huge. Right that you gain versus handing somebody a business card. Right, I gift my book to people all the time, all the time, because I want them to to have all the information. Right, and I believe that's you know, that's a huge part of the branding that that I bring is using my book to substantiate and to prove I am an authority within the real estate space, and so that has led us to, you know, yeah, one of my first clients who was able to bring $20 million, you know, to us.
Speaker 1:Basically, I was just on a Zoom meeting yesterday speaking with another individual that I've gotten to know well. Well, through the book tours, through the speaking tours I've gotten to know well. He was just chatting about how and we've partnered on other deals in the past how he has a new investor who's going to be bringing 50, five zero $50 million to a deal. We're looking at a 700 unit project right now in the States. And, yeah, being able to scale, you need to have the ability to raise capital and you need to be an authority in the field. And I could talk macro all day long as to why we are becoming more a nation of renters than owners. So, yeah, that's the deal behind the book.
Speaker 2:Building a brand. Show yourself as an authority, or at least know what you're talking about, but bring value behind your brand, not just a logo. Bring value. That's what I get from from what you just explained.
Speaker 1:Absolutely, and that and that doesn't happen. All in, you know, all in day one. It takes time, it takes time. So again, for some of the listeners, some of the viewers out there, the audience, you know, start, start somewhere. Start by, you know, watching some great YouTube videos. There's a lot of great masters out there, including Mario here, who's you know, watching some great YouTube videos. There's a lot of great masters out there, including Mario here, who's, you know, going to be sharing some great videos. You know, just start following some credible people. Get away from listening to the Fox news and the CNN and those types of, you know, news outlets, because you don't, you're not really learning what you need to learn. You know, start, start to follow some more credible people on YouTube and, at the end of the day, it's free, right? This?
Speaker 1:is content you don't pay for, and so it's a great source for information.
Speaker 2:Brings us to question number four, and you touched on it a little bit. You talk about the rise of Renternation. The rise of Renternation, what key trends?
Speaker 1:have you identified that are shaping, maybe, the future of the rental market? Yeah, so there's many. Today on this video, I'll share with you just three, three particular ones that are really shaping it. Number one is in the United States. During the pandemic, we've ran up such a huge federal deficit in this in the United States, and so that needs to be paid back, right, and so we have interest payments on that and there's, like you know, since the start of the pandemic, we've increased that federal deficit by $8 trillion, and so you know that money needs to come from somewhere to pay that, that debt payment. Right, it's not free interest, it's not free, right. So what ends up happening there and we're starting to see it here in the States, we're starting to see it what's happening is the federal government is paying that interest payment each and every month on that loan. Let's call it for that debt, right. But the other side of that is it leaves less money at the federal government level to flow down to each one of the particular states for health care programs, for education programs, for actually pension systems, right, it's not known very well, but some of the state pension systems in the United States are partially funded by the US government, right, and so if that money isn't flowing down from the federal government for the healthcare programs, welfare programs, education programs, pension, on and on and on, right, that money needs to come from somewhere at the state level. And so one of the things that we're starting to see, we've been seeing for a couple of years now, is the property taxes are going up and we have an affordability issue, much like in Canada. You guys have an affordability issue, we have an affordability issue here. The housing prices have risen dramatically here in the States and it's hard to afford to buy a house, and so there's this affordability issue. But I'm one of those people where I say, even if the interest rates came down and helped people to, so to speak, make it more affordable, they're going to be hurt by the fact that property taxes are going to continue to rise. Right, because this money at the state level it needs to come from somewhere to be able to fund the state level welfare, health, education, pension programs, and it's going to, to a large degree, you know, come from property tax increases, right? So that creates again, even with interest rates coming down, property taxes going up. That just continues this affordability issue and drives more people towards being renters. Yeah, okay, so that's one aspect.
Speaker 1:Another aspect that we see happening worldwide this is a worldwide phenomenon, that's that I'm going to talk about here, not just in the US is that with energy right, fossil fuels, we've already passed peak production of energy in the world in terms of oil, natural gas, things like that that really power the world today. Oil, cold natural gas those are the fossil fuels that power the world right and create GDP for countries. Really, you know solar and wind, those are new technologies. Maybe in the future, down the road, another 50 years from now, they'll be much more efficient and powerful and beneficial to us, but they're not today. And beneficial to us but they're not today. And so, since we've already passed peak fossil fuel production in the world not just United States in the world, this affects every country when you pass that point, it starts to get more expensive to pull those natural resources out of the ground, and so, as that gets more expensive, all the related byproducts that are made with oil and natural gas and from coal right, all those byproducts become more expensive. It's just you know that cost gets passed down to the end user.
Speaker 1:So, in terms of the homeowner, when you try to replace the asphalt shingles on your home.
Speaker 1:Those asphalt shingles come from oil. It's an oil byproduct, right? Asphalt it's going to be more expensive, right? Home ownership cost is going to increase. The same thing when you have to sailcoat your driveway or replace your driveway with an asphalt driveway right, it's going to become more expensive. The same with any product in your home. Whether it's a carpet, is created from the use of oil and natural gas and coal. Right? Same with appliances different things. If you're heating your home, you guys up in Vancouver, up in Canada, it gets pretty cold up there, right? So you probably use some sort of like natural gas or coal or you know something like that right To be able to heat your homes. And so all of that is going to get more, and has already started to get more and more expensive. So what does that do? Home ownership cost becomes that much more expensive and drives people to being renters because they can't afford the home ownership cost on top of the increase in property tax right, it's not one thing.
Speaker 2:Yeah, it's multiple aspects that are adding up together, you know, going towards the rental nation.
Speaker 1:Yeah. And then the third aspect has nothing to do with either of those two things. It's just society itself. It's a societal thing that's driving people more towards a renter nation, more towards a renter nation We've had for a long time now and this is like conditioning society to behave a certain way We've had Amazon next day delivery right, and in some cases same day delivery. We've conditioned society to have this desire, this need for immediate satisfaction, this desire, this need for immediate satisfaction, right? They want to have this immediate gratification in these experiences, right? You know you look at how society works today. We have companies that you know I use the example of, like Instacart. Do you guys have Instacart up in Canada?
Speaker 2:Yeah, we have some similar things.
Speaker 1:Right, you don't even have to go to your grocery store anymore to buy anything. You could just order it up on Instacart. It gets delivered to your home Great. Not only that, mario, if you don't even want to cook the food, never mind if people don't want to go to a store and buy the food. Some people don't even want to cook the food, so we have these things called door dash and grub hub. You know where you could just order the food already cooked up, right?
Speaker 1:So we have the societal change happening here where people want to do less and less, uh, and they want to have more experiences, more fun, uh.
Speaker 1:And I'm not saying that's good or bad, I'm just saying that is what's happening. And so what that means is there's less of a desire in society for folks on their nights and weekends to mow the grass, yeah. Paint the trim on the house, clean the gutters, wash the outside windows right. If they don't even want to go to the grocery store and buy the food or even come home and cook it, right, they want to order it from other sources. There's even less of a desire for society to want to do those things around the house like paint the trim, clean the gutters, mow the lawn. They don't want to do that on the weekend. They want to go out, they want to have experiences, they want to have fun, they want to spend time with their family. It's society is just different today, so what that does is it again. Another factor, that third factor that I speak about, and there's many others that push people more towards wanting to rent than to actually own a home, because they don't want to do those things that come with home ownership.
Speaker 2:And then it becomes an opportunity for real estate investors to capitalize on this.
Speaker 1:You got it, and that's why we're scaling, because we see so many opportunities out there for really providing good quality homes at affordable rental prices to people who need it. We see that space just kind of growing here.
Speaker 2:Tony, you wrote a book, and that brings us to our final and fifth question. You wrote a book Freedom at Risk how to Protect your Personal and Financial Freedoms Two things. What motivated you to write that book and what kind of advice can people find in there?
Speaker 1:Great, great questions, and thank you for bringing it up. You know, yeah, so I did write the book Freedom at Risk how to protect your personal and financial freedom because a lot of this isn't being taught in school. It just isn't, and so I wanted to, you know, create something that you know, shared it in a very simplified format. Right, some of this stuff can be very, very complex and when you look at, you know if you ever listened to you know. When you look at, you know if you ever listen to, you know, either politicians or the Federal Reserve. They make things so complex, and it doesn't have to be so. I took these various aspects and I just simplified them. I boiled them down, and in the first part of the book, I explain various reasons why our freedoms are at risk, and so I talk about the political system, how that puts our freedoms at risk. I speak about the education system. Now, I'm a fan of getting a good education, but the school system doesn't always provide that for us, and there's some freedoms that we lose as a result of, you know, the construct of the education system. So I talk about the education system, how that can steal our freedoms, and just be aware of it. Right, I talk about the economy. There's obviously good aspects, but I also, you know, share some different economic aspects that steal our freedoms. I talk a lot about technology, which is good. Right, I use technology all day long, but technology can steal some of our freedoms. I talk a lot about technology, which is good. Right, I use technology all day long, but technology can steal some of our freedoms. I talk about society, society, us, ourselves. We willingly give over some of our freedoms to the politicians, and it never used to be that way, even as short term as 50 years ago. I look at it and I say if my parents were still alive today, you know they would be very upset with what folks are doing here in the United States in terms of, you know, just freely giving up their freedoms and not fighting for certain things or making changes themselves in their daily lives or in their communities. So society gives up their freedoms. So we need to understand. So part one of the book is really just line, the framework to understand how our freedoms are at risk. Okay, and then part two goes into what I describe. It's many chapters, but what I describe as an a la carte package and I talk a lot about how to protect yourself. Everything from personal protections like, say, you want to get a second passport, a second citizenship to a different country. If you're in a position where you can do that, we talk about that to allow yourself to travel more freely from one country to another, have different bank accounts, different currencies. There's some freedoms that are offered by doing that.
Speaker 1:You know we also talk a lot about, you know, creating a garden in your own backyard. Right, how nice is it to get away from the TV? You know, we, we do it. We have a garden, part of our garden, we have 300 potato plants that we grow in the Northeast. Yeah, so you know, we get out to the garden. We get away from in front of the TV, get away from the Fox news, get away from the CNN get, get outside, get some fresh air. You know, have conversations with your loved ones, with your kids. You know, create a community and you're out there, you're seeing where your fruits and vegetables are coming from.
Speaker 1:There's a certain sense of freedom that comes with that. When you're able to grow your own food Now, I'm not saying you're going to be able to grow maybe all your food, but at least some of it. There's a certain warmth and satisfaction that comes with having that freedom. So we talk a lot about personal freedoms, but then we also talk about financial freedoms and things like you know, not just real estate. We talk a lot about real estate because we believe so firmly that real estate is a great way to create wealth, and with more wealth you get more freedom. So we talk a lot about real estate, but there's other things we talk about. We talk about stocks and bonds and and bonds and diversification in certain assets. We talk about precious metals as a way to hedge some bets. We talk about asymmetric plays and that's just a fancy term for think about Bitcoin, when you could have bought Bitcoin for like a nickel.
Speaker 2:Yeah, I wish it was still there. Coin for, like a nickel yeah, I wish it was still there, right, I wish I did.
Speaker 1:You know we talk about that concept, where you know we look for that next asymmetric play, that next Bitcoin type of thing where you can buy for for a nickel and if you lose you lose relatively little money but if, like Bitcoin, it goes from a nickel to 60, $70,000, you know, for one Bitcoin that's an asymmetric play. That's huge upside potential. So we explain these different things, that we talk about them, and so that's the premise of the book. Freedom at Risk is to just to help people understand how their freedoms are being eroded and being stolen. Risk is to just to help people understand how their freedoms are being eroded and being stolen, to how to get to the other side of that and have more freedom, more wealth, more abundance in your life.
Speaker 2:I love the fact that you first explain, like you said, the framework, or people understand the context, and I like the fact that it's not a, you know, a one box concept, because people's lives are all different. So one person might pick things one, two and three, and then the next person will pick four, five and six. So I love that, the opportunity that you give and that you how would I say that you give to the different people different lifestyles.
Speaker 1:Uh, whatever the case may be, yeah, Not, not everybody's uh, 100% into real estate, and that's okay. I don't look to pull everybody into real estate. I know, you know I I've been around a long time I know real estate isn't for everyone and not everyone should be in real estate, Uh, you know. But if they have an interest in starting their own business of some sort long time I know real estate isn't for everyone and not everyone should be in real estate but if they have an interest in starting their own business of some sort, a business is a great way to create wealth and create some freedoms for yourself. So, yeah, there's a lot of different ways to do it. It's just really inspire people to take action, right. Inspire people, like you do here with your YouTube channel, your podcast, to be able to inspire people to take action right. Inspire people like you do here with your YouTube channel, your podcast, to be able to inspire people to take action. That's what we're looking to do and to help people with.
Speaker 2:Well, Tony, it was a pleasure having you on the podcast. It's a short podcast, but we go straight to the point. We might have to bring you for a second episode at some point.
Speaker 1:Yeah, I would love it. No, this was great. You made it super easy for me. This was fun. I hope that the listeners and the viewers had fun with us today and yeah, absolutely, I'll come back anytime you need me to Mario.
Speaker 2:Thanks a lot and we'll talk soon. Thank you. Thanks for tuning into the 5 Questions Podcast. If you enjoyed today's episode, don't forget to subscribe, like and hit the notification bell on our YouTube channel so you never miss an episode. Stay tuned for more insights and tips to transform your real estate and business game. See you next time.