955: The Commandments of Cash Flow Investing – Lifestyle Investor Justin Donald

Aaron Amuchastegui 

Real Estate Rockstars, this is Aaron Amuchastegui. Today, you guys are gonna have a treat. I get to interview a friend of mine. Yeah, I first got to meet Justin through Front Row Dad’s, you know, it’s a men’s group for fathers that we get together a few times a year. And there’s all sorts of different things for a bunch of guys that used to say, you know, we were entrepreneurs with families, and it was a mindset change to say, No, we are we are family guys that also have businesses are also entrepreneurs. So that was the first time we got to talk. And we’ve had we’ve shared a bunch of, you know, fun, interesting conversations, especially now that we are both living in Austin. But you know, Justin started in door to door sales a really long time ago, I’ll let him share that, you know, he had to learn and a lot of people are out there, you know, selling and he converted, you know, she started making money in door to door sales, but has converted that into multiple different streams of income, multiple different businesses has done, you know, somewhere between 100, 200 kind of investment deals, has started businesses has sold businesses has helped people has consulted. And the reason I wanted to bring him on to talk to you guys out there is you know, last year was the year, I’m going to start talking about 2020. Like last year, I want that thing like behind us, but we get to take the lessons from it. But some of those lessons that we got was, I remember being really glad I had my rental properties when my income business of flipping houses was shut down, you know, because the foreclosures were cut off. So it’s good to have a backup plan. And Justin has over 100 backup plans for things he started with. He was just making money selling door to door. But being able to use that agents are the same way a lot of agents go work and get the commission and they build that sphere and they get the commission. But what if you know, something happens right now there’s not much inventory. It’s hard. It’s harder for people to work. We’re going to talk about some backup plans. So the end, he has a great new book, we’re going to talk about two suggested, thanks for coming on.

Justin Donald 

Well, thanks for having me on Aaron. And this is a lot of fun. And you know, it’s really fitting because we had this scheduled and we’re hanging out last night watching the Super Bowl together and talking about homes and investment properties. And you know, it was cool, we looked at a property that you’re looking at right now. So, you know, it’s fun to connect and be able to kind of go deeper here for, you know, for your audience. And just for the fun of us getting to know each other even better.

Aaron Amuchastegui 

Yeah, yeah. We’ve got to talk about deals a lot. Yeah, even last night, as we’re watching the Super Bowl, and the but this will be a unique opportunity for all of us, because we are going to get to go deep get to learn more about kind of Justin’s history, and you know, the different things that he has to offer out there. So Justin, tell me, how old are you? And when did you get your first sales job? Where did you live?

Justin Donald 

So I grew up in Chicago, in a suburb of Chicago, and what I did when I first got started, so when I was in seventh grade, you know, I had had an allowance before this was my parents, and they, you know, had different things I would do and I would earn money, but I wanted to earn some real money. And I was spending more than, you know, or I wanted to spend more than what I was getting an allowance. And so I remember my mom saying, Hey, we’re not going to be your bank. If you want more money, go get a job. And so seventh, you know, seventh grader trying to find a job, there’s not a ton of options out there. But I pulled out the old you know, the daily newspaper, and started going through it and finding, you know, work that maybe I could do. And I found this job, I actually don’t even know that I really understood what it was till I got there. But it turned out to be selling newspaper subscriptions door to door. And, you know, in today’s day and age, I don’t know if people are as comfortable with that. But back then it was like, Hey, you can go in these neighborhoods and just, you know, try and sell just knock on these strangers doors and try and sell them and they didn’t even have a script or anything. And so I remember I first started and I was horrible. I was just so bad at it. And I still don’t know why I continue to do it because I it’s not like I got good fast. It took me some time. But with time and with modeling some other people and with getting used to the rejection, you know, there’s a fear of rejection that eventually disappeared, and I stopped taking things personally. Then it just kind of became a lot more linear. They want to buy they don’t want to buy or I did a good job influencing them. I didn’t do a good job influencing them. And it really kind of changed my perspective around it. I ended up getting really good at selling newspaper subscriptions door to door I ended up building scripts for the company that any new person brought on would be trained with. And then everyone on the team would start using my scripts. And then I eventually developed my own team while I was in high school, and took them out. And they sold subscriptions or coupon books or whatever it was on a door to door basis, and I would earn a commission off of each of them.

Aaron Amuchastegui 

Well, and I, and I’m sure a lot of a lot of you guys listening out there. Maybe some of you guys like, Yes, I remember doing that seventh grade job. And other people are thinking, wow, I wouldn’t have imagined doing that when I was in seventh grade. So you were going, I used to love looking at the classifieds back then. And being able to see like, what was out there? Like that was it. Now there’s social media. Now, there’s all sorts of different ways. But you’re right. Not many opportunities out there for a 12 year old to go and start making money and they have nothing to lose. They’re like, hey, go try. That must have been a commission based job.

Justin Donald 

100% commission. So I mean, I literally was working for free for a period of time, because I was not good at it.

Aaron Amuchastegui 

Like, you’re like, Well, can we lose like, yeah, you’re 12. But we can send 10-12 year olds to the same neighborhood. And it doesn’t even matter if nobody buys we don’t pay you. If somebody does, then it’s a win-win. So you got to see you’re working hard, your parents are not going to be your bank go out there you found the one job you can get. And then you started, how old were you before you realize like, hey, there’s a system here and other people can use my system, because my high school you had a big team. But how old were you? When it was like, hey, I’ll just tell someone what to say. Like where you started doing the same thing each time?

Justin Donald 

Yeah, so in eighth grade, I had gotten a lot better. So you know, after a year, I would say I was pretty, you know, pretty average. And then by eighth grade, I had gotten decent at it. By ninth grade, I was really good at it. And I was making a significant amount of money because I wasn’t working a ton of hours. So let’s think about it as let’s say I work three or four days a week after school. And that’s it, you know, maybe four hours each night, but I’m bringing home checks that were $300 to $500, sometimes even close to $600. And that’s a lot of money for a young high schooler who’s totally working a part time job. And it really opened my eyes to the opportunity. So when I really started getting to the place where my boss said, hey, you’re onto something, can you just write down everything you say, because at that point in time, I didn’t have a script, I just rattled stuff off. So I actually created a script, it was all in my head. And then I laminated it and kind of handed it to him. And he’s like, this is incredible. I want to start training everyone on it. So it took me some time to really get it down. But once I got it down, I really started to excel with it. And I got very comfortable with it. And I’ve always enjoyed people. So that was something that was fun. But once I got control my emotions once I learned how to you know, really receive rejection and not take it personally. And then recognize the cause effect with work ethic and number of you know, potential sales, seeing how many yeses I could get to so it was all kind of a numbers game. That’s when things really started to take off.

Aaron Amuchastegui 

Yeah, yeah, that’s a lot like real estate agents are out there listing on their processes, they’ve got their scripts, and they’ve got their processes and it takes a little practice to get there. But it still becomes a numbers game, right? No matter what you’re not gonna have 100% success rate, you got it, you got to go. You got to finely tune your skills, right? You’ve got to make sure that you that you are more and more skilled and you’re doing your best and then you got to put forth the effort and get the numbers. So tell us about your I know there’s your next sales job but I also I know that a lot of the a lot of the people in our network together, you know that the way that you and I got connected is kind of through Cutco. Right so that you were one of your one of the guys in our group that also was a Cutco salesman. How old were you when you did that? And tell us about that experience?

Justin Donald 

Yeah, so this is so I was finishing up my senior year I had just graduated literally on the day of graduation, I got a post it on my car talking about this opportunity. And it was really vague. I didn’t know what it was it just had a really high base pay. And I was like, that sounds really attractive. I like what I’m doing. I’m making good money, but could I be making more or Could I just have something new a new challenge? So I decided for a while to juggle both of them. So I would take my crew out. I would sell Cutco part time I would have my crew part time and really just tried to see what I was best at and could I juggle both of them. It was pretty easy to tell right away that it was hard to juggle both of those like I really needed to put more time into one than the other. And so that’s when I said you know what I’m gonna pursue selling Cutco and see how good I can be here. And that ended up working out really well too. You know, at first I would say I was very average. But I understood the game of work ethic I understood just this idea. Have of having a script having a formula following a blueprint? The whole rejection thing I didn’t. I mean, I was numb to the word no, like, it didn’t do anything to me. I just had, you know, I was very callous there. And it just bounced off me. So I think that I had a lot more success because of that, but I ended up paying for all my college by selling Cutco. You know, that was $15,000 a year for tuition and room and board at the University of Illinois. And, and I did it all by selling over summer only. So it was a it was a really cool experience for me on the sales side before I got into the management side, which I also did in college as well.

Aaron Amuchastegui 

Alright, so you would go to college for nine months out of the year. And then for three months, you’d sell Cutco, you do $15,000 in sales that pay for your tuition, and you’d go back to school, I would just Yeah, when I went to school, I did summer internships and summer internships kind of pay for the tuition for the year. And then you got to go back at it. So a lot of people we’ve been telling agents this year to be able to come up with different investments, right? They they’re really great. our listeners are really great at getting deals or investors are really great at being agents at creating income. But we’ve talked about, you know, being able to invest in real estate, like buy some rentals, or buy businesses, we had Cody Sanchez, on you’re talking about how to buy like a business for sale, you know, and diversify that way. There’s a lot of different options for people out there. But I think some of the pushback people will say is they kind of picture investors as well, people need to be making just so much money to become an investor. You know, they may imagine like, Oh, I need to have like hundreds of 1000s in savings before I become an investor. Maybe that is the truth. Is that the truth? Like does someone need to have a certain amount of money in savings to be able to become an investor? What was your first investment you did?

Justin Donald 

Sure. I mean, I think that, could it help if someone has money to invest? Sure. But is that does that mean if they don’t, that they can’t, not at all, you know, I think there’s a lot of creativity that exists. And there are ways to structure deals where you don’t have to put any money down and you can still get some sort of, you know, action in a deal. And so, you know, when I think about like being a real estate agent, and and you know, really in that space number one, you’re you’ve got an expertise in an area where you can also invest a lot of people don’t have that, you know, when I became a manager with with Cutco, it wasn’t like I could just invest in Cutco as an investment opportunity, you know, that didn’t exist. So I worked really hard to make as much as I could and then save as much as I could. So I could invest it into different areas. And so for a while, you know, I worked hard to build up investments. But what I realized later is that I never really even needed to do that, that if you have a good investment, you’ll find the money for it, because investors are always looking for a good deal. And the same is true in the world of a single-family home or other types of real estate, if it’s a good investment, people will find a way to invest in that deal if they know about it. So I’ve structured many deals over the years that have been little down or no down or just a unique structure where I paid over a period of time off of you know, profit that the business generated. And you know, the first investment that I had was in a home, it was in a condo and I was buying it for myself, but I quickly received a promotion at that time with Cutco. And I moved from Chicago to St. Louis. And so that home ended up becoming a rental right away. But I never priced it that way. I never looked at it as if it would be a rental and it was a negative cash flowing deal. So I learned a valuable lesson right out of the gates that I need to be careful with the purchases that I make, and that they can be a good cash flowing opportunity. And if they can’t, I should just sell it. But this was back in, you know, oh 2006 and, you know, peak of the housing market to you know, just the Valley of it. And so I you know, I if I had thought of this ahead of time, I could have sold unfortunately, I wasn’t able to, and I just hung on to it for years and years and years with negative cash flow. I did finally sell it. I was upside down. And I was like I just got to get rid of this thing. It’s taking up too much emotional space, you know, and I just had to let it go and I let it go for a loss. But once I got rid of it, it felt so good. And I just knew that I needed a better model. You know, that model was let me buy a home to live in. And I didn’t even consider that homes were that prices were inflated. But I also didn’t consider the ramifications if I were to move and you know if I should sell if I shouldn’t if I could rent it what that looks like. And there are just so many great lessons inside that and I knew so many people that did real estate and were successful. Got it. And I just knew that I needed a copy of them. Like my, my process didn’t work because I didn’t model anyone. I just tried my own thing.

Aaron Amuchastegui 

So your first investment was actually a losing investment. And the other way to learn, right, we ended up having great rules. What’s your what’s your smallest investment you’ve ever done?

Justin Donald 

Well, you know, it’s interesting that you asked that the smallest investment I’ve ever done is free, like $0 down? Yeah. So I mean, that that’s truly the smallest, you know, total size. You know, I mean, I’ve invested $10,000 into speculative stuff, maybe before I knew what I know, today. And I’ve invested, you know, $50,000 or $100,000 into different debt deals. So I mean, that would probably be the span of it. But I’ve negotiated in a way where I’ve set up some revenue streams with no money down. And those have been very lucrative deals as well, you know, just for people getting access to my network or for advisory on scaling a business or building out divisions of a company, whatever it might be.

Aaron Amuchastegui 

Yeah. What’s an average type of investment that you do? Or what are the just a normal business sort of investment?

Justin Donald 

Well, my bread and butter is real estate, though, I’ve invested in almost every real estate asset class, unless it’s super obscure, but my bread and butter is mobile home park investing. And I’ve done that for about 15 years, and that I really know inside and out. And so deals there for me, were anywhere from half a million to $5 million. And each one, you know, some I would buy and hold and some I would flip and it just kind of depended on the season or the deal. So in the world of real estate, that was it. And I would generally put down 15 to 20%. That was pretty standard. If I did a seller finance deal, I could often get it for less. And if I did just a standard small bank loan, in a local market, you know, generally it was 20% down. And that would be kind of like a standard deal. But I’ve done a lot of debt investing as well. And so that’s completely different. And if you’re investing in like a fund, or even a syndication, or even just a specific asset, that could be a $50,000 investment or a $100,000 investment. I’ve done some that are over a million. And then a lot of investments that I do are in the realm of operating companies just you know, buying businesses that already exist or investing into them. So maybe I don’t buy them outright. Maybe I just become an investor or a minority investor in a deal. And you know, that comes with all different numbers. I mean, I’ve invested just a few $1,000 I’ve invested no money and just expertise and my network to a few $1,000 to $5200, from $1,000 to, you know, $500,000. So it all really depends. And sometimes I’ve been able to finance even those investments.

Aaron Amuchastegui 

So you’re talking about debt deal, that’s somebody saying, “Hey, I’m gonna buy this real estate, and you’re gonna, you know, put up a certain amount of money, and you’re gonna get paid like a flat percentage like a lender.” Is that what you mean by that?

Justin Donald 

Yes. So that could be one way where you’re like a hard money lender and you make a premium, you know, something above and beyond your market interest rate, because they can’t get a standard loan, or they need it quickly, they can’t go, they don’t have the time for the underwriting, or maybe they’re just not going to qualify. And so you can charge a higher interest and be in the first lien position of that asset. So if anything goes wrong, and you default, or they default, then you can take that asset. So that that’s one type of debt deal. There are other types of debt deals where you can invest in a company, and they can pledge their assets as collateral. So it could be a real estate asset, it could be their accounts receivable, they could pledge membership interests or other equipment that they have, they could pledge stock, they could pledge all kinds of different things as collateral. And when I invest on the debt side, I really like to see 2-3-4 times the value of my loan in collateral. So the goal in investing on the debt side is that I want the second best investment to be honoring the terms of the contract, which is already a good deal, otherwise, I wouldn’t do it. But the first best situation is if they default, that doesn’t mean I want them to default. But I want the leverage to be there that they have every incentive in the world to not default, because it’s a way worse deal for them if they do.

Aaron Amuchastegui 

Yeah, I get that. Somebody that was like, “Yes, we’ll give you will give you a six month loan.” And it was expensive, it was a very risky, like non secure, it was like they needed to close a deal. They said, “Okay, we’ll do it as a 15%.” And they were sure they were going to be done in 90 days and have this thing sold. And we said but if you’re, you know, “If after 120, you still own it, then we double our fee.” Then you know, and that was the big incentive, right? We really wanted to get it done. Because it was like, Hey, you can, yes, we can help you with this, but having that kind of back end. So I think that’s probably the example of the you know, the best, the best investment is actually if there’s a default, the second best is because yeah, it’s, it’s no fun if you have to do that. Because most of the people you’re investing in here, people, you know, like people that are, that are friends and other people brought it to you. So that’s probably not always that easy to separate it. So you had, so you would you had a job, you know, a good job, or you would work hard and you would do sales, and you would earn money, like that’s the vertical income, that’s the you’re going to work somewhere every day and getting paid as a result of that work. If you take two weeks off, you don’t get paid anymore. But if you’re acting, you know, if you’re in action, you’re making money, and you started taking that money that you were kind of saving, and putting in other scenarios. I remember a business that you told me about once that you invested in the business for like startup capital to help cover some salaries and some other stuff. You also kind of help the business through like some board type stuff and gave them guidance and advice. But then somewhere, and I don’t know how long the process was, but then eventually they pay you off, you’re no longer on the board, but you own a percentage of that company kind of forever, or they can buy you out? Is that a common structure? And when you do structures like that, is it is every deal different? Or if somebody is looking at that somebody goes, reaches out to one of our real estate agents and says, Hey, invest $50,000 in my business, what should they be asking for back?

Justin Donald 

Yeah, that’s a great question, Aaron, and every deal is a little bit different. And I do like structuring deals like that. So I love being the capital of a deal. You know, I like having that role. As long as it makes sense, as long as I’m really protected in that. And so, I’ve had many that have just really been unique deals, it was a time and a place where they needed capital to scale or, and or expertise. And, and so we were able to, you know, figure something out. And so in my book, I actually outlined kind of the framework that I operate on it. So if I’m going to do some sort of advisory or consulting, or if I’m just strictly going to be a capital partner, what that looks like, and so, you know, sometimes if it is a cash flow friendly business, I want a piece of that cash flow, you know, I want some top line revenue, if it’s possible to have equity as well, that might make sense, you know, there if it’s not like a business where I can have revenue, you know, maybe it is some sort of higher equity type position, but with distributions or with an accelerated distribution schedule, so that way I can get all of my money that I invested in out quickly to de risk the deal. There are a lot of different ways to structure it. And I’ve done I mean, there’s just truly no business that’s exactly the same. I mean, There are ways that I like to negotiate a liquidity preference for an exit on a company, that’s another great way. And I like to negotiate those in the first position, I’m gross proceeds. So it doesn’t matter what debt exists, it doesn’t matter what you know who else I need to pay off, I’m going to be in first position when they do exit and be able to capitalize on that investment. So lots of different ways, lots of different mechanics, and that, you know, that’s one of my favorites. And, you know, in all, you know, just being clear, like, when I was in college, I sold Cutco. So the time that I spent was really what my income was based on. Once I graduated from college, and technically in between my junior and senior year, I ran an office with Cutco. So a lot of our network, we’re in two different groups, a lot of them were sales professionals that really operated at a high level. And I transitioned into the management side. And so I learned to build teams, I learned to scale, I learned how to operate a business without me doing everything. And so I really implemented a lot of what I learned as a sales representative on, you know, even the newspaper subscription side or the Cutco side, with making scripts and creating processes and making it easy to teach people so that they can move in and do the same things. But really, I see the world through repetition. And so that helped me to be able to build out teams grow, you know, recruiting, increased sales, build out divisions in companies, which lends itself very well to a lot of the consulting and advisory that I’ve done over the years, where companies will have me come in, and they’ll have me either invest or share with them things that I’ve done in the past to help other companies scale. And so that that really like the foundation for me where I was able to transition from getting paid, on my time directly to getting paid on my time indirectly.

Aaron Amuchastegui 

Yeah. So are people going to learn more about investing from watching Shark Tank or from reading your book? Because the only other time I see people talking deals like that is like on Shark Tank? They’re all the different versions of it. What do you think?

Justin Donald 

Well, Shark Tank is a lot of fun. But I think that the likelihood of even getting a deal there is not good. You know, they say no to most of them. But you can learn some unique deal structures. But I think a lot of what they do is pretty elementary there as well, or at least what they air on the episodes. So the way I wrote this book, you know, the lifestyle investor, I really wanted to make it a book that a novice investor could pick up and say, Wow, I can take action on this. This is there’s content here that is so relevant to me. But at the same time, I want an experienced investor to be able to pick it up. And you know, I had one of my friends that has been investing for 20 years, a professional investor, very successful, built his own company. He picked it up and read it. And he said that there were several things in there that he had never even heard of never even considered and said it was a total game changer for him, which he didn’t expect being an investment professional. So I think that it really spans all genres. And it’s really appealing to anyone that wants to figure out how to stop trading time for money, and really create assets that produce income, or just have your capital produce income.

Aaron Amuchastegui 

Yeah, so Justin’s book is The Lifestyle Investor. It just came out a couple weeks ago, and I’ve already seen it’s like New York Times bestseller, or one of the Wall Street Journal bestseller. It’s hitting the bestseller list. I mean, I’ve known so many people that have bestsellers on Amazon, right? That’s a pretty normal thing for everybody that releases a book on Amazon their bestseller for at least a day or two, after that the beginning on some of those other ones is a big deal. So I think I’ve heard that your book has the kind of some rules of investing, right? Where you say like if you’re going to invest? These are the rules of investing. What are the rules of investing?

Justin Donald 

Great question. Yeah. So the subtitle of the book is the 10 commandments of cash flow investing for passive income and financial freedom. And it’s really my 10 criteria for how to invest in why I invest in the deals that I do, I look at these and I see if I can check the box. And really what I’m my goal here is to make it so investments are not emotional transactions, they’re more facts and data driven. So if I have a checklist that takes the emotions out of it doesn’t matter if I like a deal, if it doesn’t line up to my criteria, then I probably shouldn’t do that deal. Otherwise, I can get into some trouble. So that really was kind of the genesis of it. And the whole idea of the book started as more of a legacy piece to my daughter because we have a mutual friend that I was having a conversation with. I’ve had this friend for years. So Justin, write a book, you know, teach people all this stuff and You know, do a course do all these different things. And I kind of just, you know, for a while said, No, I’m not really a marketer, I’m more of a practitioner I just I like to invest in I don’t know that I want to do all the other stuff. But my friend john Kane said, Justin, what happens if you die, and your daughter never learns all this stuff you know about investing that could give her a leg up in life. And so that really hit me hard. And after years of procrastinating writing a book two days later, I’m literally writing words, my first words to this book, after that conversation, and we had a follow up conversation, it was just a very impactful and meaningful time that we spent together. And since then, I’ve really incorporated a lot of the people that I have coached and consulted over the years and taken what they gained is the greatest insight or value for our time together and, and really just kind of gave a lot of people a chance to read it and weigh in and give feedback based on the content that I put in. And I just, I’m really proud of the finished product.

Aaron Amuchastegui 

What’s the most important commandment?

Justin Donald 

Oh, man, what a tough question. You know, the very first commandment is lifestyle first, and the whole book is about getting clear on what lifestyle you want. So I would say that everything starts and ends there. Because you know, so if you want to make sure you don’t lose money, well, maybe commandment to have reduced the risk is the most important. But to me, the reason I put lifestyle first, as the, you know, kind of the, the gatekeepers, because I want to have investments that help me live a great life, I want to stop trading time for money, I want to stop living life out of fear, or out of being a slave to, you know, either the business, the job security, I just, I don’t want to be handcuffed to anything, right. I don’t want the golden handcuffs, I don’t want to be shackled to my lifestyle and not be able to leave a job or leave my business because it costs me too much to live. I don’t want that. And so the whole idea of lifestyle first was creating a vision of what you want your life to look like, what is ideal. I even have in there like a checklist of different things that would be freedoms to experience freedom of impact, freedom of relationship, freedom of time, freedom. I mean, there’s just tons of different elements there. But it’s really getting clear instead of living life on autopilot, and just reacting and responding all the time. It’s more about taking time to get clear on what you want. And then focus on living that and, you know, spending the time to build a life by design.

Aaron Amuchastegui 

We’ve been saying to your create the backup plan, we’ve been saying, use your income that you work so hard for. And you know, and some of it’s like save instead of a rainy-day fund, but also the true goal of any sort of investing. The reason I would buy rentals in so I used to flip houses, I would buy houses, and I would you buy them for $100,000. And you fix them and you sell them and we make $10,000 in profit. And it seemed like a no brainer, you’d buy this thing you’d sell it, you’d make $10,000. And for the first five, six years of doing it, I never wanted to keep any, because I was like, why would I rent it and only make, you know, $100 a month or $200 because I was borrowing money to do all this stuff. I didn’t have any money. So I get people to invest in me, I’d buy the house, I’d flip it, I’d split profit with them. And so why would I keep it and only make like $100 a month on a rental after I pay off my debt when I could make $10,000 right now. And so from 2009 to 2012 that’s the way I did it, we’ve flipped like 1000 houses and we did really, really good. But then in 2013, we got kind of pulled out of business because all sudden, there was a bunch of people in the business and we had this heavy overhead and you know, and company cars and things like that. And then we went back to like, “Whoa, if we would have just kept those houses, and we were getting paid 100 bucks a piece still on them, then it didn’t matter if all this happened.” And then we got to experience that a lot. Last year 2020 you know, we had 300 rentals, and then you know the world gets shut down all sudden our day to day normal business can’t happen anymore. And the and the rentals got to help us. So focusing on that lifestyle. The reason I reshare that story compared to Justin is it’s the idea of what lifestyle do you want? Why would you want to invest? Now some people might go, “No, I love I love doing this. I really want to sell real estate and I really want to keep working hard and I’m going to build it that way.” And I think that’s true. The idea of having that horizontal income is like well what if what if this changes what if this law changes what if this market changes what if we decide to change what if all sudden you need to move to a different city? What if all those different things – so keeping different options open and focus on that lifestyle, the biggest benefit ever of being an entrepreneur, the biggest benefit a lot of people choose to be real estate agents is because they can go on vacations and they can go do things, and they can be a little bit more in control of their time. But just I love the idea that your book is really to be in full control of your time to have them set up a goal to get there. Do you teach people how to analyze one investment to another? Is this one better than another? Is that how investments work?

Justin Donald 

Well, it’s kind of both because in every one of my commandments, I give an example of an investment that I did that was structured to kind of fit that commandment. And you’ll notice that it fits many of the other commandments as well. But I really wanted to give at least one if not two specific examples. So there’s definitely the does it check the box type of question. But at the same time, there’s so much uniqueness in each of the deals, you can see the pros and the cons, you can see why I would invest in this deal in this situation, but maybe not in another situation. So I, I really want to do, I want to explain as much as I can through examples in real, real investments for people to kind of wrap their head around it. So how does it work? Practically? How does it you know, I hear this theory, but how does it actually work? And I want to break that down. And I think that your market is incredible for this. Because, you know, I’m sure that there are people that you have, that our listeners here that love what they do selling real estate. And I think that that is amazing. I mean, most people don’t love what they do they do it because they have to. But the question is, how do you move from having to work to getting to work? Right? It’s a big shift, it doesn’t sound really that much different. But what if you didn’t ever have to sell another home? What schedule? would it look like? Or what systems would you put in place? And what people would you empower to run things, maybe you can still have a real estate operation. But maybe you don’t do any of the work that you don’t want to do, but you don’t like doing and what happens with the business it might actually scale and the things that you may be afraid to do or unsure of how to do. You don’t have to, I guess, wait or live in fear on those. Because if money’s taken care of you can do whatever you want in your business, you can work as much as you want. As little as you want, you can do some trial and error. And I’ve found that in my life when money was taken care of. And I didn’t have to make money, that the way that I spent my time my energy shifted the resourcefulness that I had shifted, I was actually able to get more business and better results. Because I wasn’t stuck in this framework in this mindset that was very limited based on the only thing I had ever done before. And I just need to keep doing that because I know it works.

Aaron Amuchastegui 

What’s the last question, but we needed to get more of a teaser to our listeners. So we’re telling them go buy this book. But like, tell us one of the commandments and the story that goes with it. So I mean, I know it’s probably like a chapter in your book and trying to cliffnotes is hard. But what’s one of the commandments and one of the investments that you did that followed that commandment?

Justin Donald 

Sure. So I, you know, I think of a few different ones here. But I’m a huge fan of First of all, de risking a deal I talked about that briefly. The protection side is never as fun or sexy sounding as like the upside of a deal. So let’s maybe take a look at something more unique. Let’s talk about commandment number four. And that one is getting your principal back quickly. So a lot of the investments that I like to do involve investing a certain amount of money for a very short duration of time, maybe it’s one year, maybe it’s two years, I’ve done them in six months, and getting that money out as quickly as you can to redirect it and redeploy it. And that can work in a lot of ways. Maybe it’s by buying real estate and it cash flows enough that it pays you back quickly, maybe you’re able to refi out on real estate, maybe you’re able to structure a note that is a debt deal. And you’re able to get it back in a one year term. But with some really high interest along the way. There’s a lot of different ways that you can structure it. But since you have a real estate minded market, I’ll just talk about one of my investments that I have loved doing. I’ve done many like this, where the group, you know, maybe I invested in this case, it was a syndication. And so there was someone else running it, I didn’t have to run it and I bought properties where I’ve run it, and I’ve done this strategy, but this is one that involves no time. All I had to do is about the group, make sure that it was a really strong group that the operators have experienced in what they’re doing and this group would refi out in one to one and a half. years pay investors back all their initial investment plus a return plus they’re getting cash flow 10% preferred return quarterly. And so there’s cash flow the whole time, you get a lump sum of all your money back, plus a return on that money. Plus, now you have equity in the deal into perpetuity. Or, you know, you get your piece whenever they sell. And so that’s a unique investment, because I’m able to pull my money back out in one year, let’s say, or we could say two years, and instead of investing in something that’s a long term hold, like the stock market or a venture capital deal, maybe you’re in it for 10 plus years, before you realize what the return is, and was it successful, was it not successful, I’m doing deals where I’m getting my money out every one to two years, I still have equity, I’m investing it into something else, just like it with the same dollars. So now I’ve got this velocity of money, I take the same, let’s say, $100,000, I invested in one deal, I get it back in a year, I take that same money invested into another deal, I get it back, let’s say in two years, do it again, the next one for maybe 1.5 years. So each time I’m recycling the same dollars, but I have equity in all these investments. So once 10 years hits, maybe I’m in five or six or seven deals, whereas other people that invest long term, they’re in one deal, they’ve got more eggs in that one basket, I’m diversified, and I have equity in many different spots. So that means my return profile is exponentially larger. And I don’t even need all of them to perform to get a better return.

Aaron Amuchastegui 

Yeah. And that’s those examples are great ones for people. Like I think a lot of people can wrap their head around saving $20,000 to $30,000 a year. But then a lot of people probably think about well, then investing you’re spending it, you no longer have that money. And if you do bad investments, I could see that being the key. But if somebody does a good investment, it’s like instead of that 25,000 being savings in the bank account, now it’s over in this other thing instead, and you’re getting paid the interest, and at the end, you get it back. So if every year you’re saving $25,000, and you’re investing that $25,000 when it comes up, you know, then that gets to start to grow, you know, then then next year when the first $25,000 pays you back, you have a new $25,000 in savings now you’re investing $50,000 or now you get to invest the profits that you’ve made to and the idea of getting paid back but and still owning something later. Like I love buying a house and renting it. And then I know I’m going to get 100 bucks a month forever. Right? Yeah. But you’re saying, you know, you can actually get all your money back and then get 100 bucks a month forever. Like in real estate, we call that a refinance, right? Like, I buy a house, I put $80,000 into it. A couple years later, I get a loan and I get my whole 80,000 back out. Right. So now I don’t have an investment in there. But it still makes $100 forever. So in real estate, it’s really easy to understand that concept. But you’re taking that real estate concept. No, you can get your money back and still get something forever, Justin. I think that’s really really fun stuff. That’s really the time we have for today for our listeners. So the book is The Lifestyle Investor that people want to go by how do they find it? If they’ve got questions, they want to hear more about you. I think you’ve got a podcast you’ve got a whole bunch of other stuff. What’s the best way for people to learn more about what you’re doing?

Justin Donald 

Sure, yeah, the best place to find the book would be lifestyleinvestor.com that’s where you can go and you can get the book and I’ve got a whole bunch of free stuff. As well as just gifts to people that check out the website. I’ve got my own website, JustinDonald.com, and that one has, you know, all different sorts of things I do. So I do have a podcast called the lifestyle investor, I’ve got an online course I’ve got a master class, I’ve got a mastermind, a private coaching practice that is very limited, and it’s waitlist only at this point, but I just I love sharing this opportunity. And as far as the book goes, all the proceeds on the book, go to charity, it goes to an organization called love justice International. They stop human trafficking in 17 countries around the world. And I just really felt compelled to support that group. So wherever you buy it, just know that your proceeds are going to a really good cause a very worthy cause. But then at the same time, if you do get it on my website, I’m offering it for free. You just pay for the shipping so you can of course find it on Amazon and other places. I just give a bunch of free stuff away on my website and lifestyle investor calm,

Aaron Amuchastegui 

Very cool. You can you can invest in a book you get to learn you get to invest in yourself, but it’s also like donating to charity because that’s where Justin is putting it. Go to justindonald.com. Justin, thanks for coming on the show.

Justin Donald 

Thanks for thanks for having me, Aaron.