52 Properties in 52 Weeks with Investor Omni Casey

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Buying and selling real estate portfolios isn’t what Omni Casey was raised to think about. As a middle child in a large family, Omni was never given the “investing talk” and was often surrounded by people who thought landlords were greedy. But, Omni had the entrepreneurial spirit, and through trial and error, found real estate investing to be the most reliable, practical, scalable, and fun business around.

He started with a single “condotel” in his native state of Hawaii before branching off into out-of-state investing. For most of the past two decades, Omni never spoke about his investing career to those outside of his immediate family. It wasn’t until recently that he started the “Cash Flow Breakfast Club” for agents in his brokerage to talk about investing, financial freedom, and generational wealth.

Now, with over one hundred properties, Omni is on a mission to purchase fifty-two properties in fifty-two weeks! Although it’s not the end of the year just yet, we’re quite confident that he and his team will successfully cross the finish line.

Brandon Turner:
This is the BiggerPockets podcast show 547, where today we’re going to sit down with Omni, the Investor Guy. He’s going to explain everything from how to get your kids involved with your real estate investing, how to buy giant portfolios and a whole lot more. Stay tuned.

Omni Casey:
Because I used to worry about who got elected. And I vote and obviously I care, but my portfolio or my ability to invest got better and better regardless who was in just based on my experience. So the better investor you are, the market’s really good for you.

Brandon Turner:
What’s going on everyone? It’s Brandon Turner, host of the BiggerPockets podcast here with my cohost, Mr. David Greene. David, this is the show where we teach people financial freedom through real estate and today is a perfect example of that, huh?

David Greene:
Yeah. And you’re coming directly from a, what, 20,000 square foot suite that you have in Las Vegas right now?

Brandon Turner:
I’m literally in a 7,500 square foot suite in Vegas right this moment with our guest today. Omni’s actually joining me in suite today.

David Greene:
That sounds pretty sweet.

Brandon Turner:
Yeah. I grabbed a bunch of my buddies and we’re doing a goal setting day tomorrow. We’re going to spend the whole day going through goals for the next year. So I thought, why not rent a stupid nice suite for the event? And that’s what we’re going to do. So I’m excited about that. But man, I can literally see … It’s called suite 180. I can see 180 degrees pretty much around.

David Greene:
What I love about what you’re doing is first off, for most human beings to stay in a 7,500 square foot Vegas suite is an incredibly foolish decision that you would just … A treat yourself moment, right?

Brandon Turner:
Yes.

David Greene:
So you actually found a way to structure this event so that enough value was created from the people that you brought together in the event you did that the suite was paid for and the people who are there at the event are actually going to make money from being there. They’re not even wasting their money by spending it to go hang out in Vegas. You did what we’re all looking to do. Is how do you get the best parts of life and without having to feel guilty about it because you’re doing it in a way that actually creates more wealth than you spent to do it. It’s an investment, which is what we’re all about here at BiggerPockets.

Brandon Turner:
Yeah, man. And if people are like, “Hey, I want to be in Vegas in a suite.”, just grab a handful of your friends and just find out how much it costs to rent a cool spot. Because there’s something magical about going to … This is today’s quick tip, by the way. Quick tip. I have no voice. By the way, I have no voice today because I just came from Nashville where I went out way too late and hung out at a honky-tonk bar and yelled for three hours straight trying to over the music. So no voice. But today’s quick tip is grab a bunch of your buddies who are goal minded and say, “Hey, let’s get together and split the cost of a stupid, big, expensive, cool place.” There’s something magical about … It doesn’t have to be 7,500 square feet, but just go out of the norm.

Brandon Turner:
Take that intentional moment and divide the cost of what it’s going to be and have a cool experience. There’s so much that can be done in those moments where you pull out of the day to day and go into some special thing. So that’s the quick tip for today is by the end of the year, try to do that with a bunch of your friends and maybe just meet people on BiggerPockets or organize it on the Facebook group, whatever. But yeah, pull some time out of your life to do this because I’m excited about tomorrow. So should be a good time.

David Greene:
Well, the key is you’re not going out to Vegas to get smashed and waste money gambling and enjoy yourself and that’s it. You’re actually doing it with a purpose that’s going to create more value than what you spent to get there. Which is what investing is, right? How do I put a resource into something that will give me a higher return than what I put in?

Brandon Turner:
There we go, man. Well, that is today’s show. So here live in Vegas. Well I guess we’re not live but-

David Greene:
We’ve never been able to say that on the show.

Brandon Turner:
I’m also going to the UFC fight. That played into it a little bit. It was like why Vegas? Because the UFC fight was here. So I’m going to go do that. Now, it’s almost time to get into today’s show. Hey, quick reminder for everybody. At the end of this year, if you haven’t heard, I’m going to be taking off from the BiggerPockets podcast, handing over the reigns to David Greene. So in case you haven’t heard the news, that’s the news. I’m going to spend a year focusing, or at least a while, focusing on my family and a little bit more the Open Door Capital stuff that I’m doing. So anyway, I’ll still be back on and off. I just won’t be the regular guy every week. So if you’re wondering what happens in the future, that’s what’s happening in the future, but you can still follow me on all the social networks so you’ll find me there.

Brandon Turner:
All right. We got to get into today’s show. Today’s guest is Omni Casey. And Omni was actually the guy who won at BPCON, the BiggerPockets conference. We had a charity auction and he won chatting with me. Basically, it’s just one on one coaching. And then the first time I talked to the guy, I realized, no, I should be getting coaching from him. This guy is legit. He is incredibly gifted, talented, and experienced when it comes to real estate. You’re going to learn a lot of stuff today about, like I mentioned, buying portfolios. We talk about how the property manager can make or break your deal, how to invest at a distance, how to invest when you’re in an expensive market, how to do it with kids, and a whole lot more. So that and more coming up here today. Anything David, you want to add before we jump in?

David Greene:
No. Just make sure you stay all the way to the end because Brandon, I, and Omni all sort of go into a pretty good conversation about how to make sure that whatever you buy today is still profitable five, 10, 15, 20 years from now, if the rules of the game change. If we have different politicians, different laws, different financial structure in our country, there’s still a way to build your portfolio in a way that will keep it safe and profitable for a long time. It’s a discussion I don’t think I’ve heard anywhere else so you definitely want to stick around and don’t miss that.

Brandon Turner:
There we go. All right. Well, with that said, let’s get into the show with Omni Casey.

Brandon Turner:
Omni. Which I called you Omni many times and you graciously allowed me to. Omni, welcome to the BiggerPockets podcast, man. Good to have you here.

Omni Casey:
Thank you. It’s an honor. Thank you.

Brandon Turner:
Yeah. So we’re going to dig into your story a little bit today. Learn a lot more how you became the man, the myth, the Omni. You like that? It’s pretty good, right? And why don’t we start at the beginning. How did you decide to get into real estate?

Omni Casey:
Yeah, real estate. I tell everyone I kind of like real estate, but I love business. At some point I realized that real estate was an amazing business and so just kind of putting it all together. I grew up in Hawaii on the business track, had a few small businesses. Actually owned a retail store at the mall.

Brandon Turner:
Oh really?

Omni Casey:
Yeah. And then-

Brandon Turner:
That’s cool.

Omni Casey:
Yeah. Just kind of figuring out that the one winning in all that was the landlord. I hated retail after having that business up and running. And so I wanted to get out of that and I saw all my friends that owned these shops that some were successful, some weren’t. And really the one winner in the entire equation was the landlord. So I said, how can I become a landlord? And I put some effort into finding out the best way to get into real estate investing, found a mentor or mentors and I’ve been doing this for almost 20 years now.

Brandon Turner:
Awesome man. Well, let’s go through the very first thing you bought. What was the very first property?

Omni Casey:
Very first property was a partnership with … It was a condo in Waikiki. So it was just a rental property, a small condo property, and did some sweat equity renovations. And I did the grunt work and my mentor was the guy kind of leading everything and we kept that as a rental property and I did a few of those in that same building with them and eventually stepped out on my own and started buying my own property. So started out with a lot of condos and then completely did a shift away from condos further on in my career.

Brandon Turner:
All right. So let’s talk about the condo thing, because for those who don’t know, Waikiki is an expensive, expensive area of Oahu of Honolulu and it’s a great place, but it’s very expensive. How did you get the guts to do that? What did you pay for that first property? What was going through your head then when you’re like, I’m going to go buy this condo? What was going through your head?

Omni Casey:
Sure. I was just looking at my mentor. He’s been doing it and I trust this guy, so let’s go ahead and go into it. So on the condo side in Waikiki, there’s two different types of condos. There’s a regular fee simple condos and there’s actually something called condotels which is zone four resort. And so I started on the regular side and realized that I couldn’t Airbnb. Airbnb wasn’t a thing back then, but couldn’t go on the vacation rental side. And then eventually got into the condotel, which brings its own challenges for financing. Much harder to get financing. But with a partner and mentor that was able to bring a lot of the capital, we were able to make it work.

Brandon Turner:
That’s cool. Yeah. This is one of those benefits of, as we said on the show for years, but when you start associating with people who that’s just normal business for them, it makes it so much easier for you. For me, I don’t know. Some random thing like hockey, right? I don’t know anything about hockey. I don’t know how to play hockey. I haven’t skated since I was four. And so that would be incredibly difficult. But if I was with somebody who was a professional hockey player, they’d be like, “Oh yeah, you just put on your skates like that and then these are the skates you obviously want. Everyone knows. And then you obviously just stand up and …” It is so obvious to them and easy that then I’d be like, “Oh yeah, it is that easy.” And you just listen to them and then all of a sudden you’re playing hockey. I might not be a pro right away, but it alleviates a lot of that fear. So that’s cool. All right. So what did you pay for that first one?

Omni Casey:
In the 430 range. Yeah.

Brandon Turner:
430,000. And when was that?

Omni Casey:
Almost 20 years ago. Yeah.

Brandon Turner:
Wow. What’s that worth today?

Omni Casey:
We don’t own it anymore. We probably should. Probably in the 750 would be my guess. Yeah.

Brandon Turner:
Yeah. All right. Okay. So that’s how you got started. For those people listening and they’re in expensive markets like Seattle, LA, New York, every other city in America now, what’s your recommendation on getting started like that where the price of a condo is 400 grand?

Omni Casey:
Sure. Yeah. Finding a partner is obviously a key element, but being from Hawaii, I had to learn how to quickly invest elsewhere. Very similar to David. He wrote the book on this, but long distance investing. I had to figure out how to invest outside of our market there and find the markets that I could afford to do things on my own.

Brandon Turner:
Yeah. That makes sense. Makes sense.

David Greene:
So at the time that you were starting your long distance investing journey, I’m assuming this was before the book was written. So were you in a position where a lot of people were saying, “This is crazy. You shouldn’t be doing this. You’re going to lose a lot of money.”?

Omni Casey:
Yes. However, I didn’t tell most people. My mentor was very private. It was like own nothing, control everything kind of mindset. And growing up in Hawaii, there’s kind of this inherent distrust that we have of people with money and it’s almost evil to want the success. So I literally went most of my investing career without talking about it. Not even my parents, not even of my siblings knew. And I just did it. Because I knew that they would say it’s crazy. And so I just wanted to prove it. If I was going to fail, I was going to fail by myself. If I was going to succeed, then eventually I guess I would tell people, but I didn’t get around to telling people until really a couple years ago.

David Greene:
Well, I think there’s a lot to that too. Because I think a lot of our listeners are in a position where maybe they’re not Hawaiian, but they’re in a family that doesn’t trust people that have money that assumes the only way you get money, I know Brandon you’ve talked about this, is you have to take advantage of somebody else. And that’s a popular narrative that’s going around right now that if the CEO’s making a million and the person on the front line is making $25 an hour, there’s something obviously wrong with that scenario because one person’s making more than the other. And for those of us that we function in that CEO role, we see the risk that CEOs take. We see the stress that they take. We see the investment of themselves they have to put into the company and the skillset they’re bringing.

David Greene:
Many times I think if you took the $25 an hour person and put them in the CEO’s role, they’d say, “No thanks. I don’t want this. This is nuts.” So I’m curious, just hearing your story Omni, I’m sure you went through a lot of self-doubt. There had to be. As you have everyone in your world that you know believes what you’re doing is maybe even morally wrong or at best risky. Then you have one mentor that you’re watching and you’re like, but that’s the path I want to follow. Can you just speak briefly to the mindset that you had to develop in order to move forward in an environment like that?

Omni Casey:
Yeah. I come from a big family. I’m one of eight kids and I’m three. So I think I thrive in the middle. And my whole life I think I’ve been good at just kind of blending in, in the background. Love my family. Amazing family. But I was able to just kind of step away and do that. And so I think I had that mindset from just growing up. I just tried things, started a few businesses. Even my family didn’t know about those businesses until they were off the ground and running and I said, “Hey, come to our launch.” They’re like, “What are you talking about?” So kind of took a very similar approach. And I think I’m just comfortable because maybe I’m a third of eight and I’m comfortable in the middle there.

David Greene:
Tell me how you chose the market that you chose when you started investing out of state and then what struggles you found because you now don’t have the backing of your mentor who’s native to Hawaii and probably knows how to grease the wheels and knows the right people to talk to.

Omni Casey:
Yeah. When I decided to break out on my own and do my own thing, well, I … Backing up a little bit. I was all over the place. So there’s so much equity in Hawaii. There’s a lot of appreciation. There’s not a lot of cash flow. Then all of a sudden, swinged over to look at cash flow markets. This is amazing, but then you don’t have the appreciation, the equity in those markets. So I had to come to terms of the difference so I kind of created this classification for myself. I’ve flipped properties, I’ve wholesaled, I’ve done almost everything throughout my career. And I had to understand that I was in a different role for those types of properties. I think every investor falls into one of three categories. You’re either doing it as a profession full-time or part-time. That’s a flipper, that’s a wholesaler. And it’s a job. And it’s a great job to have, and there’s nothing wrong with it. But once again, your cashflow is gone.

Omni Casey:
And then you have the financial freedom area, which I really wanted was financial freedom. And then you’re going to focus on the cash flow. But most of the best properties for cash don’t appreciate that well, and we hear some people saying, “Only do cash flow and appreciation is risky.” Or some people say, “Only focus on appreciation and cash flow is not going to make you wealthy.” I just had to realize it’s a different category altogether. So the third category is the generational wealth. Once you’re financially free, I was able to think a little bit differently. Say now I can focus on those different types of assessments that do have higher appreciation and maybe don’t have the cash flow, because I don’t need the cashflow anymore. So kind of put me into that category. So once I understood I wanted to be in that second category of financial freedom, then I really just looked at okay, for this three, four, five year period that I was trying to commit to becoming financially free, I’m going to focus on cash flow. With the understanding at the end of that period, I’m going to shift my strategy because I’ll be financially free and what I do next is a little less risky.

Brandon Turner:
That’s such a great point. Yeah. Because when you view real estate that way there are different types of investments for different purposes. And that’s why today, I don’t buy a lot of really cash flowing properties. I’m not going to buy properties that lose money, but I don’t buy a ton like that because I have financial freedom. So once you get over that. But to get financial freedom … I would say I don’t regret the properties that I bought back in Grays Harbor, Washington, but man, I would not buy them today. They were so much work, but they got me to financial freedom. So where were the properties that you started buying that got you to that financial freedom?

Omni Casey:
I’m embarrassed on how many markets I tested. And never did a ton in every single market. And really what I found was once I found a market that cash flowed, if I couldn’t find that rockstar team, that property manager to support it, that might be the only property. So I’ve done in Texas, I’ve done in Georgia. And it wasn’t until I found really markets that cash flow and have a rockstar property manager. So there’s a few pockets in Maryland and there’s some in Virginia as well that a lot of what I’m doing recently is. And it’s not because they’re the best cash flow markets, because they’re not. They cash to my terms, but I have amazing property managers and teams that could take care of it for me.

Brandon Turner:
Who is the most important member of a team when you’re going to go long distance real estate investing? Who should you number one make sure you have?

Omni Casey:
Yeah. I think the real estate agent is crucial. I eventually got my license and understand. I still hire real estate agents, even though I’m licensed. If it’s not my market, I will hire somebody to go do the due diligence for me. So crucial, but in the long term, the property manager. If it’s cash flow, your property manager is crucial. I think a really good property manager could take an average investment and make it stellar.

Brandon Turner:
Yeah.

Omni Casey:
Right?

Brandon Turner:
Yeah.

Omni Casey:
On the other end you can have an amazing investment and you have a subpar property manager, it will eventually become subpar. And so-

Brandon Turner:
Such a great point.

Omni Casey:
Understanding that key element within your team, those are my two key people.

David Greene:
Can you break this down into a story that you can tell me about how the same property, how one property manager can run it into the ground and how the other can make it flourish?

Omni Casey:
Yeah, absolutely. I mean, you got these rules of thumbs. The 1% rule has been around for a while and I look for markets that, okay, can you hit the 1% rule? And you’ll have people screaming at us saying it’s impossible. And you’re going to have people saying, “Well, I bought that yesterday.” Right?

David Greene:
Yeah. True.

Omni Casey:
So it just depends on the market there. So kind of finding, for cash flow, that 1% rule. Understanding that I’m not looking at equity at, at the moment within that phase. However, that 1% rule, if you buy, let’s say a very low price property, $200,000 or so, although you’re hitting that 1% rule, you’re getting a good return, one repair takes out your cash flow for a year. Takes out your cash flow. And it’s usually poorly managed properties that need the most repairs. And so if you have, let’s say a fourplex in Georgia that is just mismanaged and when they move out, you’re having to do a full turn of $5,000 or whatever the case may be. All your return is gone and you can have a break even property in a cash flow market if your property manager is not on top of it, setting the right expectations with maintaining the property.

Brandon Turner:
Yeah. That’s such a good point is that a great tenant when they move out, it might be a $200 turnover. A bad tenant, when they turn over, might be $5,000 or $10,000. And it’s like, who decides who’s going to be that tenant? It’s the property manager. And I think that that turnover cost is something that a lot of investors don’t think about because that’s probably the largest expense we have other than mortgage. In all reality, if you have a regular turnover, like once a year you’re spending five grand on turnover, which is the case for a lot of my properties back when I first got started and I didn’t know how to screen tenants. Every year it was five grand. And I’m like, “This is just as much as my mortgage.” And so that just shows you the power of that property manager in finding someone that not only is going to treat it well and you won’t have the heavy turnover, but is going to stay for two, three, four, five years. So over the course of five years, one property manager could lead to $30,000 in loss, negative, and the other one could be 30,000 more just based on those decisions that’s made.

Omni Casey:
Yeah. Across my portfolio, I try to, as a rule of thumb, reserve 10% of rents for maintenance and things like that. That being said, some properties in areas that aren’t managed well, probably need 30%. Some properties need way less just because they run a tight ship. So across the board, and that’s why I do like scaling up at a higher level and people say, “How can you absorb that risk?” I think I am diversifying my risk the more properties I have. If I have one property that is risky. You have one tenant, you have one maintenance bill, and it might be 100% vacant at $10,000 cost there. But if you have 100 properties, if you have 10 properties, you’re scaling up and as long as you have good people in place to manage it along the way, you’re actually reducing that risk and you can kind of reduce your overall cost if you do that.

Brandon Turner:
Yeah.

David Greene:
Brandon, you’ve told the story that when you first started managing your own properties, you were just really nice to the tenants and didn’t hold them accountable to very much and they took advantage to say the least.

Brandon Turner:
Yep.

David Greene:
And then you learned I need to set very clear standards and I don’t let anything grow into something bigger. So if they’re late on the rent, it’s boom, you’re late notice, you were told this would happen, this is the process that’s being started, and they weren’t late anymore. So Omni, what you’re describing here is are you getting Brandon at the beginning of his career managing your property or are you getting Brandon once he figured it out managing his property? Can you share with us some of the questions you ask property managers to figure out which version of Brandon you might be getting?

Omni Casey:
Yeah, hat’s a great … And I would say probably my weakest element is being able to interview and find these property managers. Because everyone interviews well.

Brandon Turner:
Everybody interviews well. Dude, that’s such a good point.

Omni Casey:
And the reality is they might be a good property manager, but you’re not the most important person to them right now. Which sounds terrible because I just bought one property. It’s three units and they have 300 units they’re managing. So I’m their least important client. And so my shift over the last few years has been, can I more centralized in areas? And I started asking my property managers, the ones I like, “What will it take for me to be your number one client?” Doors. “How many doors do I need to be your number one client? Because I want to be your number one client.” I want to be the most important person because no matter how good they are, if you are 1% of their portfolio, they can’t commit that amount of time to you. But if you’re 50% of their portfolio, then they’re going to commit a lot of time to you.

Omni Casey:
So I knew I needed to become a better landlord and a better investor for my property managers so that they could take me more seriously. I used to get angry about it but then I had to look at it from a business standpoint. I was their least important client. And so you take some pretty good property managers, then you say I’m committed to become your number one client, which means … And that’s been a huge lead flow for me because I tell them, “I’m committed to you. I want to buy more in your area.” So I’m going to show them I add units every once in a while. But I tell them, “Any of your landlords that are looking to exit, the last few years we’ve had a lot, any of your landlords looking to exit, tell me about it. Because they’re going to come see you first. Tell me about it. I will buy their portfolio. I’ll buy their properties. I’ll keep it with you.”

Omni Casey:
Because if your property manager gets contacted by one of their landlords saying we’re selling a property, they know they’re property losing that property. Someone buys it to move in, they don’t need a property manager. Another investor buys it, they probably already have a property manager. So now a lot of my properties come from my property managers in forms of small portfolios of landlords just saying, “I’m done.”

Brandon Turner:
Yeah. That’s great, man.

Omni Casey:
“COVID kind of kicked my butt. I think I want to get out now that things are stabilized.” And I’ve done a few of those.

Brandon Turner:
I love that for a couple reasons. One, because you’re established in this relationship with the property manager and you’re trying to become their top client, you’re working with them, they’re going to want to make that push to help buy the portfolio so they don’t lose that. That’s cool. But then also the property manager then knows the history of the property. So they’re not hiding. There’s not some seller hiding it.

Omni Casey:
Exactly.

Brandon Turner:
Yeah. So you know what you’re getting and I know they’re … We don’t a lot about that but that idea of buying a portfolio is such a powerful strategy. And there are a lot of investors today, myself included, if somebody for the right price came, I would probably sell my entire Grays Harbor portfolio in one shot right now. Now I’m going to get hit up by a million people. Now, would I take a discount for that? Probably for the hassle of not having to go through, I would probably sell … I’m not going to give somebody 50% off, but I would give the discount to somebody so I don’t have to go through an agent. I don’t have to get each one ready and then go through each my numbers. It’s a hassle. I’m actually selling a lot of them right now on the MLS and it’s been a huge hassle.

Omni Casey:
One at a time.

Brandon Turner:
Yeah, one at a time.

Omni Casey:
From the purchase standpoint, it’s a hassle. So I set out this at the beginning of the year, a really big goal, 52 properties in 52 weeks. I’ve never done that. And so I just kind of wanted to stretch myself. So that’s my goal. I’m at 44 purchases this year. I don’t know if I’ll get it by the end of the year.

Brandon Turner:
Come on man. You want to buy my portfolio? You’ll have it. You’ll be there.

Omni Casey:
The only way is by doing portfolios. I lucked out and I got two mid-size portfolios.

Brandon Turner:
Oh man. Love it.

Omni Casey:
And you’re solving a problem because a lot of these mom and pop landlords, let’s say they bought them cash or they’re paid off for a while but then at some point they went back and cross collateralized them. And they took out a loan across their entire portfolio because they got a lot of small properties, some great properties, some mediocre properties. But what that means is if they got to sell their bank, every bank’s a little bit different, usually won’t let them sell one property because they gave them a loan on properties combined.

Brandon Turner:
Oh, yeah. That’s a great point.

Omni Casey:
So they need to find someone that can usually pay cash and buy the entire portfolio there. And so I’ve been able to do that to reposition equity and funds to do that. And then obviously one by one, try to use the BRRRR strategy and re-leverage on the back end. But they cannot put it on the MLS because I just bought one that was a 13 building portfolio and every single one was tied to the same loan. So they had to close same buyers, exact same time. It’s just complicated there. So if you solve that problem, you can get a deal.

Brandon Turner:
I wonder if there’s not a way … And somebody listening to this knows the answer. Maybe you know the answer. Is there a way to publicly, using public data, find loans that go across multiple residential properties like that? If you could find that list, you would know every landlord who has those commercial loans over all their properties. I don’t know if that’s a thing but that would be fascinating to figure out.

Omni Casey:
I don’t know the automatic way to do it, but there is a way. So you look at the tax records, and let’s say it’s a $200,000 duplex and there’s a $800,000 mortgage on it.

Brandon Turner:
Oh. Okay. Yeah.

Omni Casey:
There’s something wrong. You look up that owner in that state or wherever you’re looking for and say, okay, he owns X amount of properties and then you’re seeing that same $800,000 mortgage attached to all of these properties.

Brandon Turner:
Genius, man. Genius.

Omni Casey:
So there’s a way. I don’t know if there’s an automatic way.

Brandon Turner:
Yeah. I don’t know either. But yeah, if somebody’s listening to this right and wants to figure that out, that would probably help a lot of people buy portfolios. Yeah. Yeah. It’s just such a cool strategy to the portfolio thing. Yeah. David, would you ever sell your portfolio? What are your thoughts on that? I know you’re an agent, so you like the one off stop. I mean, you’re used to that. But if somebody came to you and wanted your whole portfolio right now, would you consider it?

David Greene:
I would absolutely do that. In fact, that might be the only way I could do it because when you try to sell a house that has a tenant already inside of it in general, you don’t get as much money for it.

Brandon Turner:
Yeah. It’s hard already. Yep.

David Greene:
You can’t sell it to someone who wants to live in it so now you’re limited to investors who want a deal and they have to put 20% down so your buyer pool shrinks quite a bit. Your ability to get multiple offers almost goes away completely. So you really want to try to sell rental properties when they’re vacant. But my properties are not set to all go vacant at the same time. Your leases were all signed at different times. So you end up not able. You have to almost sell them ones and twos, unless you package them all and you sell them to an investor. Now I will say, if someone’s trying to do that, there’s probably not a better time in history to be doing it than right now because there’s so much money out there. Everybody needs to deploy capital. So you can get away with things that you couldn’t get away with before. But yeah, just based on the workload that people like the three of us have, trying to sell them onesie, twosies like that is agony.

Brandon Turner:
The other reason that’s really powerful right now … This is going to go a little bit into the weeds, but it might affect some people. When people sell a property that they’re a landlord, they want to 1031 exchange it. But it’s so hard right now to 1031 exchange stuff. And if you’re selling your whole portfolio one off, one off, one off, you get all these different 1031 things to try to do. It’s just a mess. But right now again, David, to go to this is the best time to do this, right now we’ve got this accelerated depreciation thing going on and the cost segregation studies. So people can invest … I know people who have sold their property, not done a 1031 exchange, and then took all the money that they made that they have to pay taxes on now, they just go and dump it into my fund or somebody else’s fund or their syndication.

Brandon Turner:
That’s syndicator, they will go and do the cost segregation study and the accelerated depreciation and it offsets almost the entire amount. So it’s almost the same as a 1031 exchange without the actual effort of doing the 1031 exchange. And you’re not in that pressure of having to buy a bad deal within 45 days and identify it. And that’s a short window. The accelerated depreciation’s ending here over the next five years though. Right now it’s a cool time to do that.

Omni Casey:
Yeah, it’s, it’s an easy exit for the landlord to do that. But I look at it … And I’m not in big multifamily like you are. I have mid-size multifamily properties and small multifamily. But I look at a portfolio like a mid-size multifamily and I got flack for that because it’s not the same. It’s more work. I agree. However, you have one person managing it for you. In the area, you can treat it like that. But I like it because you can’t buy a 50 unit building and decide these two underperforming units we’re just going to sell off. It’s not a condo. But on this portfolio I can buy … You’re usually getting some really good properties, some average properties, and some sub performing properties. I can still sell those sub performing properties probably at retail. Wholesale them to somewhere else. And basically I’m left with, at the end-

Brandon Turner:
Genius.

Omni Casey:
Just the cream of the crop. And I paid a premium in terms of having to come up with the upfront capital to do that but that’s short term because I’m going to back out with leverage.

Brandon Turner:
Yeah. Dude, that’s such a great point. You’re just cherry picking the best ones. And dude, I love this. This is such a great strategy. This is going to change a lot of people’s lives. Because the idea of buying a portfolio is something that we’ve never really dug into on this show before.

Omni Casey:
And if you could find the mom and pops that don’t have good property managers, they’re doing it themself, they’re stressing out right now. Because they had tenants that weren’t paying. And really we know that tenants paying is really a direct correlation for the most part of your property manager being really good. And if it’s yourself … I would be a terrible property manager. I know that. If I managed all my properties, my tenants would not be paying. I’d be high vacancy. I’m not built for that. And some people, they kind of started out small and they grew bigger than they thought, but the autopilot kind of wore off and now they’re sub performing properties for them.

Brandon Turner:
This is another call out to people listening to who knows technology more than I do. If you could find a way to automate the idea of who’s done multiple evictions, if you could find the landlord’s name in an area that they’ve done three evictions in 12 months, that’s a really good indication that they’re struggling and that they’re a bad landlord. Or at least they’ve done a bad job of screening or whatever.

Omni Casey:
They’re hating their life right now.

Brandon Turner:
Yeah. They’re hating their life right now.

Omni Casey:
Absolutely.

Brandon Turner:
Yeah. I’ve always liked that strategy too, of just going to the county courthouse, find out who’s going through an eviction and you just hit them up. Whenever I’m going through an eviction or especially when I was emotionally involved in it, those were the moments I hated being a landlord and I would’ve taken any price just to take my property off my hands.

Brandon Turner:
It’s just an easy strategy for if you’re new to real estate and you’re trying to find deals, it requires actually talking to a human being so it’s a little scary and you got to maybe actually go to your courthouse. Because a lot of places don’t keep digit … It’s not online yet. It’s still paper and pencil sometimes. But by doing so, you’re doing the work that nobody else is willing to do and you’re going to get the rewards that nobody else is going to get. So let’s shift back to your portfolio. What’s it look like today? What’s the size of your empire like today?

Omni Casey:
Trying to get one per week. It’s always shifting, right?

Brandon Turner:
Sure.

Omni Casey:
But I broke the hundred property unit mark and I got single family homes. I got land for development.

Brandon Turner:
Oh cool.

Omni Casey:
And I’ve got my biggest property is a 18 unit multi-family so I don’t have large scales there.

Brandon Turner:
100 properties, 100 hundred units?

Omni Casey:
100 properties.

Brandon Turner:
100 properties. So a lot more units than that.

Omni Casey:
A lot more units and a lot of those are development projects that we’re lining up. So I like buying vacant buildings as well. Completely fixing them up and stabilize them and burning them out. Right now I think everyone’s coming up with the trouble of material shortage and things like that. But I’ve got a pipeline for the next two years of projects to work on. So I’m happy with that.

Brandon Turner:
How are you finding deals other than the portfolio stuff? Any other strategies that you’re using right now?

Omni Casey:
Yeah, I mean, I became an agent broker, so I have MLS access everywhere. And I employ agents all over in areas that I focus on and I tell them this is what I’m looking for. So I do look on market and I do buy I handful of on market deals a year. And then wholesalers. Networking with wholesalers. And I will say when I started telling people that I’m investing in … For most of my career, I never told anyone. Just the last couple years started telling. It became so much easier. I just tell people, this is what I’m looking for now. I’m looking for small multi-family. I do flip a few properties a year, but really I’m looking for the duplex, triplex, quadplex is my bread and butter. You tell people and they send it to you whether they’re official wholesalers or not. And then the big chunks come in those portfolios.

Brandon Turner:
I love it. This is that thing we talk about all the time in the show is define what you want, have an idea of what you want to go after. Like, oh, I’m buying duplexes or I’m buying small multi, or I’m buying large multi. And then just tell everybody. It’s that’s simple. When you’re clear about what you want, everybody around you will conspire to get you that. We do it all the time. If David was like, “Oh man, I just love,” I don’t know, whatever, “Red Bulls.”, and we’re all hanging out, I’m going to go to the store and get him a Red Bull because I want to be a nice friend to David. Or if I see a Red Bull, I’m like, yeah, I’ll grab that for David because I know he wants a Red Bull. But if he’s just like, “Oh, I’m thirsty,” I might not be like, well, I don’t know what he’s going to want. I don’t know. And I’ll get him something he doesn’t want. I’m like, “Hey David, I got you a coffee.” And he’s like, “I don’t drink coffee.” So yeah. How’s that metaphor, David? Was that a David Greene metaphor?

David Greene:
That’s really good. It makes me think of when you’re the agent and you’re working for the client who doesn’t know what they want. And you’re like, “Okay, what do you want to drink?” And they’re like, “Well, I’m kind of open to anything. I would take a Red Bull. I would do a Monster. If it was a really, really good deal, I could look for a Rockstar, but I don’t want to pass anything up.” And you’re like, “I don’t know how to help you now. I can’t go to this store and find that.”

Brandon Turner:
Yeah. Agents hate that.

Omni Casey:
And people just don’t have the ability to network. They don’t know that. And you preach that. You guys both preach that. We ran a meetup. We do a regular meetup. We had about 100 people last week at this investor meetup. Little bit of education and then a lot of go talk to someone that can do a deal with you. But I had to start doing it in short burst networking. Eight to 15 minutes. But at the beginning I remind everyone come up with your crystal criteria. Because if you say, “I’m looking for a deal, send me a deal.”, no one’s going to send you anything because they just don’t know. But if you say, “I’m looking for a portfolio. I’m looking for a duplex in this area, in this price point that I can add value.”, there’s someone in this room that probably already has that and can make that connection. He’s just reminding us of how do we actually put that out there and tell people what we want.

Brandon Turner:
Well, it’s also a good reminder, when you see this, a lot of times people are thinking, “Well, there’s so much competition out there. I can’t find deals because there’s so much competition.” But there are so many types of real estate. I did a real estate meetup the other night. I was in Nashville, Tennessee and I had almost 100 people come out for this thing. And I’m talking to everybody like, “What do you do? What do you buy? What are you into?” And I think every answer was pretty unique. There was a few that were the same kind of the general I buy single family houses in this, but most everybody has a unique thing. And so when you get a group of people together at a networking event or at a BiggerPockets meetup or REIA and you just tell people, you’ll find like, “Oh yeah. Well if I ever see that, I’ll let you know.” And then just keep track of that. And then when you start letting other people know, “Hey, I found you a deal.”, now they’re going to want to reciprocate back to you again. So that’s cool.

Brandon Turner:
All right, let’s move into financing then. 52 properties in 52 weeks was the goal. You’re almost there. You might hit it. We’ll see. That’s an incredible amount of money needed to buy that. So what are you doing for financing these days?

Omni Casey:
Pulling equity out properties, or I’m really good at earmarking income for things. And so cashflow comes in, it just doesn’t come into our main bank account. We hide it from ourselves and we just let it pile up and pile up and we’ve been doing that for years. And so the only thing we buy with our cash flow is more cash flow. And we have separate properties, very specific properties that are set aside for our lifestyle expenses. But that’s it. And they bring in predictable amount of income and that’s all we need. But if we saw all the cash flow coming in, sure, our lifestyle would definitely creep as I think David calls it and we’d be spending a lot more, but we’re really good at doing that. So we’re able to self fund most of this through our cash flow.

Brandon Turner:
That’s great.

Omni Casey:
And then pulling out through equity. It’s the cheapest way to get money right now is your BRRRR strategy.

Brandon Turner:
Yeah. I call that cashflow recycling. It’s like your cashflow, you just recycle it and you put it back into the machine and it makes more cashflow. And you put it back. It’s like a snowball. It’s like Dave Ramsey’s debt snowball. But it’s the wealth snowball, right?

Omni Casey:
Absolutely.

Brandon Turner:
Yeah. You just build wealth and you put the wealth back into the machine to build more wealth and that snowball is incredible. And so when people hear sometimes they’re like, “Oh, I could never buy all that.” You don’t need to. Start with one. If you bought one property that cash flows 300 bucks a month … And it doesn’t seem like a lot of money. So after the end of the year, you’re making what, three, four grand? You dump that back in though again. Maybe that’ll get you some direct mail letters. Maybe it’ll get you half another property. Or you partner with somebody and you divide it up.

Brandon Turner:
But then two years later you got enough for another one. And then one year later and then six months later, and then three months later. And pretty soon that wealth snowball is just flowing down a hill and just gaining speed at such ridiculous rates. And then you’re just like, “I’m trying to buy 52 properties 52 weeks.” And it’s not a crazy thing because you’ve got that momentum going. So that’s awesome. I love that. All right, man. Where’s the market headed? Crystal ball time. You see a lot. You’re an agent. You buy in a lot of areas. Where’s this headed?

Omni Casey:
Yes. Supply and demand is keeping us in a comfort area I think. So I’m not worried about the market and the moment people start to say, “Hey, should we pause a little bit?”, that’s when I really want to ramp up my purchasing power for that exact reason. I think we’ve got several really good years ahead of us in terms of appreciation. But once again, it really depends on what bucket you’re buying for. So if you’re buying for cash flow, it doesn’t matter too much what the market is, because the rents are not coming down. That the rents are staying consistent. I think the rents are going to continue to go up. I think I’ve heard both of you guys mention this. We’re probably going to see more and more government intervention in terms of making housing affordable, making housing a right. And more of the section eight and the housing programs. One of my biggest tenants is the government and they’ve never missed a payment. So I’m okay with that as long as you manage the expectations with the property manager.

Brandon Turner:
Will you explain that for those who don’t know what you mean by that? Why is the government one of your biggest tenants or payers?

Omni Casey:
Well, let’s say you buy a studio or one bedroom and your price point is $400 to $600 rent. That is a low income rent there and so your average tenant is going to be someone that needs assistance. And I know a lot of people that they don’t want to touch section eight. They don’t want to touch government assistance. But it’s a guaranteed check. All it is is replacing income that they don’t have. We still need to vet that client. We still need to vet that tenant to make sure that they’re a good tenant and a good … There are bad tenants that are not on section eight and they’ll trash your house. There are great tenants on section eight that will take care of it and especially if they go through the work of getting that secured, they really don’t want to move. They are longer term tenants than your average tenant. Instead of a one year or two years stay, they’re like, “Can I just live here forever?” Sure. Absolutely.

Brandon Turner:
David, where’s the market headed?

David Greene:
I think that we are going to see a lot more inflation. To be fair, when the shelter in place first kicked in, we were doing this podcast and everyone was playing chicken little. The sky is falling, the sky is falling. And I remember I took a stance and Brandon, you kind of supported me on it, that I just don’t think that’s going to happen. It’s not popular, but I think we’re going to stimulus our way out of this and we’re going to have inflation. And I took some heat on that. And now I’m looking pretty smart. I don’t know how many people remember what was said back then.

Brandon Turner:
I remember. Absolutely.

David Greene:
But you’re seeing what’s happening is even if you made bad decisions that rising tide bailed a lot of people out. And that is good in the sense that owning assets is very, very powerful because your money is becoming worth less. It can be problematic in the sense that these syndicators that are raising money and they’re deploying it can operate fast and dirty and not very well and they can make it work just because rents are rising across the board quickly due to inflation as well as property values and then cap rates depress so even if you made bad decisions, your property became worth more because there’s more demand to get into it. But at the point where that stops, you may find yourself with an asset you don’t want to own that you can’t manage very well and you’re not being bailed out by inflation. So I would say in the short term, as weird as it is to say, the majority of deals that anyone does are going to look really good. They’re going to be propped up by inflation. It’s just how good you do.

David Greene:
And then at a certain point, if we get inflation under control, we get our monetary policy under control, that’s when you’re going to find out who’s been swimming naked. When the tide goes back down. So my personal philosophy is, it sounds very similar to Omni’s, I want to own an asset in an area that I like owning that does not drain me of my energy, of my time. Even if it’s not the most cash flow strong thing, I don’t want another job. I want it to be more passive income and I’m willing to play the long game and I think that the metrics that our government is creating support that strategy. I just want to caution people that are buying, if you’re going into a D class neighborhood and you’re trying to make something work, it might look good for the time being because you’re watching your assets value increase, but you’re still going to be stuck with that thing when the music stops. And is that what you want? I wouldn’t mind known in something in Waikiki when the music stops. I don’t know that I want to own it in one of these stereotypically bad areas that aren’t good for landlords. So I hope that kind of answers the question. What are your thought?

Brandon Turner:
Yeah, well, this morning my COO, Walker, texted me and said, “Hey, just food for thought for a fun conversation starter. What’s the biggest risk to my company, ODC, over the next 12 to 24 months.?” And I was like, “Oh, that’s a good question. What is the biggest risk to us?” And I thought the biggest risk is that if inflation hits … And I’m curious you guys’ thoughts on this. If inflation hits really hard, harder than we expect, and especially if it hits in the rental market where from supply and demand and from inflation, from everything else but the average rent starts going up 20% per year let’s say. Now that sounds really great for us because our mortgage is the same, but the risk is in the politicians. Will they just put a … Whether it’s nationwide rent control and be like, “You know what, we’re cutting all rent in the US by 30% starting tomorrow.”

Brandon Turner:
There was some lady in Seattle on the Seattle city council who proposed that all landlords have to give their tenants equity in their properties. Now, it didn’t go anywhere. But there’s a segment of the US political spectrum who would be okay with a thing like that. So I think that anyway, that’s what I think is the biggest fear is if we see too much inflation or too much problem with rent growth, we’re going to see a backlash because, “Hey, I want to get reelected next session. How am I going to do it? I’m going to make everyone’s rent go down. And I’m going to be known as the guy who made everyone’s rent go down.” So I don’t know. That’s my fear. You have any thoughts on that?

Omni Casey:
Yeah, I think you’re exactly right. The political spectrum does play … I think it affects the newer investors the most. And the housing market I think is affecting everyone but I think it affects the newer investors the most. Because I used to worry about who got elected. And I vote and obviously I care, but my portfolio or my ability to invest got better and better regardless who was in just based on my experience. So the better investor you are, the market’s really good for you. If you are a brand new investor, guess what? It’s a tough market. You got to buy your first property and not be a brand new investor anymore. And then next year it’s going to be a better market for you. And if you do that two years, next year’s going to be a better market for you as well. And really it’s going to be directly proportionate to your experience as an investor versus what’s happening politically or in the market in general.

David Greene:
This is such a good question that you asked Brandon. Did you have a point you wanted make?

Brandon Turner:
No, go ahead. Continue.

David Greene:
I don’t know that any other podcast in the world is talking about what we’re saying right now. It just doesn’t get brought up. And so I want to make sure we don’t gloss over it because I think this is really powerful. The problem with following the herd like, “Well, Omni’s investing there so I’m going to go invest there.”, or, “Short-term rentals are hot. I’m going to go get a short-term rental.”, is you’re putting a target on your back. Okay. So you hear a lot of prominent real estate investors that will brag openly and publicly, “I don’t pay any taxes.” This comes up all the time. All that does is send a message to politicians that, “Oh, really?” And so they go to the tax code and all the ways that we benefit like accelerated appreciation 1031 like kind exchanges, the things that are actually healthy for the economy because they encourage people to invest their money and create jobs and create wealth and improve things, they’re just going to take it away.

David Greene:
They’re like, “Oh, that’s what sure you’re doing to not pay taxes? Well, we’re going to remove all that.” And now it actually makes it harder to build wealth through real estate than it would be through other means. And I think that when you’re following the herd, you put yourself in a position where you can easily have the branch you’re standing on chopped off. So the advice that I would give to people is that you have to take action, but you can’t assume that the environment you’re buying into right now is what you’ll have in 10 years, in 20 years, 30 years, that you need to be thinking about exit strategy. So if you’re buying an apartment complex simply because of the tax benefits that you get, and like Omni said or you said Brandon, they come in and say, “Rents are now being capped at this percentage of whatever the median income is for that area.”

David Greene:
And you can’t raise rents enough to make it worth owning. And you’re stuck with the headache of owning that property over and over and over. You can’t cry victim. You knew going into this that politicians make rules that affect how that works. And right now a lot of those are in the real estate investor’s favor. The tax code is written in a way that encourages development of communities. But that may not be the case all the time, regardless of if we think that’s stupid or not, that could happen. So when you’re making these decisions, if you’re buying into an area with a very expensive short-term rental, you’re paying $2 million and you’re just like, “Oh the gross revenue’s incredible. This is going to change my life.”, what are you going to do in a year if they come in and outlaw that? What if the hotel lobbies all gather together and say, “No, we’re not letting that happen anymore.”, and the politicians go against you and you’re are stuck with a 25, $30,000 mortgage payment and you can only rent it out for five grand a month?

David Greene:
I think today’s investor that’s making moves should still be aggressively going after what they want but you need to be playing chess. You got to be thinking a couple steps ahead of where you are right now to protect that wealth. Because I do think that, like what you said Brandon, there’s a politician who’s saying, “We think landlords should have to give equity to tenants.” If that catches steam and it starts to pick up, I think Omni could probably speak about that better than anybody living in Hawaii as he’s seen how easily the masses can influence the way that the laws are written.

Brandon Turner:
Yeah. It’s a sketchy, scary proposition. So David, what do you suggest and Omni, what do you suggest to best prepare yourself against a changing economy or a changing government? Because I don’t want people to walk away from this interview being scared. Because like you said, it doesn’t really matter who’s in. As long as we’re smart, we’re going to figure out a way. So what are some tangible things people can do? Either one of you got a idea?

David Greene:
I’ll let you start Omni.

Omni Casey:
Yeah. I think you guys hit on the key points here, but when I buy a property, especially if it’s cash flow, it’s a little bit safer on the cash flow side, because you have cash flow, right?

Brandon Turner:
Yes. Yep.

Omni Casey:
If things change you have it, but if you have a drastic change in rents there. When I buy a cash property, I would love to not ever have to sell that. I do sell my properties, but I’d love to never have to sell it. But I absolutely think that what is the one or two exit strategies that I have? Exactly what David said. Do I need to cash out? Do I need to pull my money out of this? Can I sell this if we drop at 10% and I’m still okay with that return there? So I have triggers of what makes sense if I need to exit. And if there’s something drastic across the board, you just need to know when you’re going to make that move.

Brandon Turner:
Yeah. That’s really good. David, anything you want to add?

David Greene:
What I love about this podcast is we don’t fall into the trap that our competition does, the other podcasts, where what most people do is they recognize what’s trendy right now, short term rentals. So they make the short term rental podcast and every episode is about someone who crushed it with short term rentals and you can too, and if you buy our short term rental course, we can teach you how to do it. And they capitalize on … Like in football, the Wildcat offense was really popular for a while. There’s always a gimmick in any sport that’s working good before defenses figure it out. And they just hammer that point home and they make you think, all you need to know is this one little thing and it caters to the worst part of human nature that’s like, “Just tell me the quick answer. Just tell me where to invest. Tell me where to find the house. I just want to do it. I don’t want to have to learn how to do this. I just want to be able to get myself wealthy in a year or two.”

David Greene:
What we do is we actually force you sort of to listen to us talk about all the different tools that you need in your tool belt to make this worth. The strengths and the weaknesses of individual markets and individual strategies. And when you under understand that it’s like knowing the game of football, not just knowing the gimmicky play. It doesn’t matter what the government throws at you. It doesn’t matter what the economy throws at you. If you have these tools in your toolbox, you will adapt to what happens. So my advice would be always consider area first. Location first. There’s a lot of people going to Midwest markets and buying turnkey homes and in this climate that will work because you’re seeing a lot of inflation and it’s not that hard to rent out a property.

David Greene:
Well, if the economy goes down, those areas tend to get hit the hardest because they don’t have as many options as far as employment opportunities. And those properties are typically difficult to manage. And if you’re not seeing a lot of appreciation, you’re going to lose money as soon as the HVAC goes out or like you said Brandon, you have one bad turn that costs you five grand, your cashflow flow for a year and a half is gone. You’re sort of pigeonholed into a bad location that worked in a climate with rising tides, but doesn’t work anywhere else. So you start off by saying, where are the thriving areas that people are moving to and businesses are moving to that if my short-term rental strategy doesn’t work, I have a backup plan?

David Greene:
I can turn it into two units or three units. I can go corporate housing. I could rent it out and maybe lose 300 or 400 bucks a month as just a regular rental. But in two or three years, I’m okay again. Or I could sell it because somebody wants to live in it to buy there and I can get my capital out and reinvest in a better place. That would be the best thing that I could offer is don’t just get locked into looking down the scope of your analyzation tool and only seeing cash flow, cash flow, cash flow, or whatever that the flavor of the month happens to be in real estate investing.

Brandon Turner:
Yeah. Very good. Really good stuff. Omni, what is the cash flow breakfast club?

Omni Casey:
Cash flow-

Brandon Turner:
I solve that written somewhere.

Omni Casey:
I probably blame this on you guys. I’ve been a closed book for most of my life. In hiding, ashamed of being an investor. And then I found BiggerPockets. You guys are talking about it and it’s cool now. And then it wasn’t cool when I started. At least I didn’t feel it was. And then the more I listened to you, the more guilt I had of not sharing what I know. Because my friends, my family, my own agents that I love dearly, I have not taught them anything along those lines. And you’re having conversations with somebody about a transaction and you’re just thinking, “Why does this even matter?” We’re talking about such a small piece when most people are not focusing on their financial freedom. So a couple years ago kind of decided to start coaching my agents to become financially free and help them buy rental properties. And then we slowly opened it up to their friends and their family and things like that. And then my family. I’ve been able to buy with them.

Omni Casey:
But it started with this agent investor club and we just called it The Breakfast Club just to play on the movie. But it was focused on cash flow. And so we met, we talked about it and it allowed me a safe space to take off my broker hat, take off my agent hat and say, “All right, I’m an investor. You’ve never heard me say any of this before. This is something different. This is something I’m not telling you as an agent, not I’m telling you as a broker. But we’re going to talk about investing and we’re going to dive deep into it. And if you’re going to be in this club, you’re committing to buying a property in a year. And if you’re going to be in this club, you’re committing to buy X amount of doors in X amount of years. And you could leave if you’re not comfortable with that but I want everyone in here to be comfortable being in an investor, stepping outside of their comfort zone and doing it on a regular basis so that you guys can go spread the word to your friends and your family and kind of ripple through effect.” So it’s an actual club that I started and I wrote a book several years ago, never published it, didn’t have a name.

Brandon Turner:
Really?

Omni Casey:
Yeah. Never published it. And I-

Brandon Turner:
Oh, come on man, you got to publish. Okay. Keep going.

Omni Casey:
I thought about publishing it under an alias because, once again, it’s the step by step process of what I did to become financially free and what I think most people could do to become financially free. Problem, it was my story and I wasn’t ready to tell that story. I wasn’t ready to tell anyone I was doing that. So thought about using it, publishing it as a alias and just kind of put it on the back shelf. Once I started this cash flow breakfast club over the last two years, one, I love the concept and so I kind of rewrote the principles of the book through a power parable almost. So a fictional story of a guy that happened to grow up in Hawaii, that happened to be an investor and things like that. And I was able to remove myself from the story and keep the principles in there.

Omni Casey:
But really it’s a story of this guy that just doesn’t know what he wants, but knows he wants to do something other than work for 30 plus years and retire at 65. He stumbles across Rich Dad Poor Dad. He plays the the cash flow quadrant game. And then he finds a group. He finds a mentor. He finds a club that helps him understand what you talked about, the stacking effect of your cash flow properties. And then understanding that once you become financially free, there’s a whole nother world of investing that’s not cash flow related and jumping out of that. So that’s kind of the crux of the book. And basically all the lessons that I’ve taught my agents over the last couple years are just thrown into this book. So if someone says, “I need help.”, it’s like, “Here. It’s all in here. Read through this. If this doesn’t scare you, then we can talk.”

Brandon Turner:
Yeah. That’s so good, man. So is it officially out? They can go get it?

Omni Casey:
By the end of the year, my goal is to have this published. It’s written, it’s ready to go. I have one unpublished copy right here. And this is my training manual that I use from. And by the end of this year, I think I’m hopefully going to get this published.

Brandon Turner:
All right, man. Well, let me help you with that. I’ve done it a few times.

Omni Casey:
Exactly. Right.

Brandon Turner:
We’re going to get this thing out and we’ll put links at the show notes. I don’t even know what this show. Yeah. 547. So you can go to biggerpockets.com/show547 and we’ll have a link in there to the book. Even if it’s not out by the time this show airs, we’ll have a link to maybe a landing page they can go put their email in and then they’ll get it when it comes out or you’ll be able to send them where they can buy it from or get it. So yeah, we’ll make sure that everyone can get it because that’s awesome and you had a cool story. So last question before we move to the famous four. Where are you headed in the future? What do you foresee for Omni?

Omni Casey:
I was mentioning this before we got on. This feels like a therapy session for me. We were speaking last week or a couple weeks ago as well. And I haven’t been thinking that big. I haven’t really been thinking about what are my big goals? I have three young kids that they’re my world. My oldest is 12. My daughter is nine. She’s like our investment CEO for my family. And then my youngest is seven. So everything I’m doing now is investment related, but can I do it nearby, closer by so that I can involve them? So I’m trying to figure out a better way to have dialogues with children about this. And we play the cash flow game quite often. That helps. But they’re out with me on the weekends, every single weekend looking at properties and I think there’s a need for that, because I think there’s people our age or older that yes, they like investing, they do investing or they want to get into investing. But if you can think about the next generation to come and how can you instill the things that we never talked about growing up? And so I’m trying to figure that out, but I’ve got three tests cases with my kids right now every single weekend. And they’re telling me exactly what’s working and what’s not working.

Brandon Turner:
Yeah. What are you doing? What are some things that you’re doing to pass on not just the wealth, but more importantly, the knowledge that comes with it? What are you doing with your kids?

Omni Casey:
Yeah, we started out with the cash flow game. Playing that quite often, almost every single weekend. And now we got my kids that we used to help them on the game, but now they can play on themself and my son wins quite often against us. Whenever we’re looking at properties and analyzing properties and walking through properties, I usually have one of my kids, if not two of them walking through and just taking notes and say, “Here’s what we’re going to be doing here.” And then most recently when we started a meetup, I started to bring one of my kids. Usually my daughter fights to be the one to go. And she sits through. We have an educational moment. An hour of education. And she just kind of sits through the details of it.

Omni Casey:
Like we started talking about inflation last week and then she comes back like, “Why is money losing value?” And so she came to the next one and she’s like, “I’m raising my hand to talk about what inflation is.” And she wants to kind of put it out there. So I think just exposing them to the dialogues and the conversations. And I’ve been more open about putting it out on Facebook over the last few months, telling people about it, to start this uncomfortable conversation. Because if we can have that uncomfortable conversation with our friends, our family, and our kids, it becomes normal at some point.

Brandon Turner:
Yeah. Man, that’s awesome. Really good stuff. I want to relate back on a metaphor or analogy I used in the beginning of the show and I’m just going to putting it together in my head right now. But remember I mentioned hockey earlier? If you want to be able to be good at hockey, hang out with somebody who plays a lot of hockey and it’s so easy for them. But a thing I never really thought of before is that’s why we need to involve our kids in what we’re doing. Not that they have to know everything and not that they have to be real estate people. But for us talking about inflation is easy. For us, talking about cash flow is easy. For them, it’s not. So the more that they get into that world of talking about financial things, it’s like we’re the professional hockey player and our kid’s the one that … And that way we give them that training without sitting down and being like, “All right, today’s lesson is this.” It’s just they’re involved.

Brandon Turner:
And we want to make it so when they graduate high school or go into the world, like, “Oh yeah, cash flow. That concept that most of us never knew. Sure. That’s just easy. It’s just like putting on a pair of skates.” So dude, this has been amazing. We’re not quite done though. We got to head over to the last segment of the show. It is time for our-

Brandon Turner:
(singing).

Brandon Turner:
The famous four. It’s the part of the show where we go through the same four questions every week with every guest. And this week we’re going to ask Omni these four questions. So number one, Omni. Favorite either all time or current real estate related book.

Omni Casey:
Yeah. It’s going to be the same book everyone does and I book them together. Rich Dad Poor Dad and Cashflow Quadrant. I think they have to be together. And it’s what changed my life. It’s the first book I recommend anyone read before they ask me for help.

Brandon Turner:
Yep. Love it. Love it.

David Greene:
Next book. What is your favorite business book?

Omni Casey:
There’s a lot of good ones. Probably my all time favorite is the Goal Giver. There’s a Goal Giver series. It’s just the not keeping score concept. I think this comes from my guilt of hiding all this time and not sharing. And so now I just really want to share with as many people as possible. It’s not a business for me. I don’t get paid for coaching or anything along those lines, but it is very rewarding and I’ve done more real estate in the last few years than I’ve ever done because I started to give. And so the more I teach, the more I help, I do realize it comes back tenfold. And so it’s a really good parable, really good story for anyone, any business to follow.

Brandon Turner:
Awesome, dude.

David Greene:
All right. What about some of your hobbies?

Omni Casey:
I used to water … Everything water used to be my hobby. When I moved away from Hawaii it hasn’t been as ideal.

Brandon Turner:
Yeah. Where you at now?

Omni Casey:
I’m out of Northern Virginia, actually. My wife’s from there so we moved there. It’s closer to some of the properties that we’ve invested in. Her family’s there so it was a family move a while back. So not a lot of water things going on. Really, I’m embarrassed to say my hobbies are real estate investing with my kids. And so there’s nothing I look forward to more. And real estate investing by myself is okay and fun. Analyzing deals and things like that. But it is a family event to go out and drive and walk through properties. We’re buying this property or what do you think we should offer? And so we just kind of make it a game and my kids like it for the time being, I think.

Brandon Turner:
Awesome, man. Very cool. All right. Well, my last question of the day. What do you think separates successful real estate investors from those who give up, fail, or never get started?

Omni Casey:
Yeah. I’ve heard so many people answer this question and there’s so many really good answers and there’s no one right answer, but I think it’s two part questions. So the first part is not get started. You’ve just got to get over the fear of failure. People don’t start because they know they’re going to fail or they’re worried about failing. Yeah, you’re probably going to fail. Everyone fails to some level. Every property you have will have failure involved in it. You have to be comfortable knowing that that’s just step one. But for those who give up without starting, I think it comes down to a concept that I put in the book as well. I call it the three batteries. We all have three batteries, at least starting out, in investing. And one battery is our time. One battery is our capital, the money we can bring. And one battery is debt to income.

Omni Casey:
When you’re using leverage. And I think people make the wrong move starting out, use up too much of those batteries to start. And it kind of puts them in a pigeonhole to say, “Well, I’m maxed out at one property, I’m maxed out at two properties.” So I think putting that right plan in place of where you actually start is helpful. And most people that we’ve helped over the last couple years really were at a place they gave up. They bought a property five, six years ago, but they kind of hit a wall. And so kind of putting into that succession what kind of properties I should be buying first is probably the easiest way for people to kind of move forward and do this full-time.

Brandon Turner:
All right, man. I love it. I love it. Well, thank you very much for joining us today. It’s going to be a great episode. People are going to love this thing. It’s going to change a lot of lives. So David, I guess I’ll give you the final question as usual.

David Greene:
Where can people find out more about you?

Omni Casey:
TikTok. I’m all over.

Brandon Turner:
Doing the dances? That’s what I thought.

Omni Casey:
Not on TikTok. I’m on Facebook. Omni the Investor Guy. O-M-N-I, the investor guy. And I’m on Instagram. I’m embarrassed on how little I do on Instagram. I’m trying.

Brandon Turner:
We’re going to get you there, man.

Omni Casey:
Yes.

David Greene:
You need to be Omni-present.

Omni Casey:
It was taken. So I’m Omni the Investor Guy.

Brandon Turner:
I love it, dude. All right. Well, thank you very much. Thank you for joining us today. And David, thank you as well for joining us today.

David Greene:
It was a blast. Omni, I really appreciate your insight. You can tell that there’s a lot of wisdom that’s coming out of you and that you also have a very good heart. So thank you for coming and sharing what you’re doing and letting us take this show and make it less about specific tactics and more about overall how you build a healthy portfolio that will last for a long period of time. Because it doesn’t matter how much we you build if you end up losing it.

Omni Casey:
Absolutely. Thank you.

David Greene:
This is David Greene for Brandon, he’s on TikTok and you know he won’t stop, Turner. Signing off.

 

 

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52 Properties in 52 Weeks with Investor Omni Casey

Buying and selling real estate portfolios isn’t what Omni Casey was raised to think about. As a middle child in a large family, Omni was never given the “investing talk” and was often surrounded by people who thought landlords were greedy. But, Omni had the entrepreneurial spirit, and through trial and error, found real estate investing to be the most reliable, practical, scalable, and fun business around.

He started with a single “condotel” in his native state of Hawaii before branching off into out-of-state investing. For most of the past two decades, Omni never spoke about his investing career to those outside of his immediate family. It wasn’t until recently that he started the “Cash Flow Breakfast Club” for agents in his brokerage to talk about investing, financial freedom, and generational wealth.

Now, with over one hundred properties, Omni is on a mission to purchase fifty-two properties in fifty-two weeks! Although it’s not the end of the year just yet, we’re quite confident that he and his team will successfully cross the finish line.

Brandon Turner:
This is the BiggerPockets podcast show 547, where today we’re going to sit down with Omni, the Investor Guy. He’s going to explain everything from how to get your kids involved with your real estate investing, how to buy giant portfolios and a whole lot more. Stay tuned.

Omni Casey:
Because I used to worry about who got elected. And I vote and obviously I care, but my portfolio or my ability to invest got better and better regardless who was in just based on my experience. So the better investor you are, the market’s really good for you.

Brandon Turner:
What’s going on everyone? It’s Brandon Turner, host of the BiggerPockets podcast here with my cohost, Mr. David Greene. David, this is the show where we teach people financial freedom through real estate and today is a perfect example of that, huh?

David Greene:
Yeah. And you’re coming directly from a, what, 20,000 square foot suite that you have in Las Vegas right now?

Brandon Turner:
I’m literally in a 7,500 square foot suite in Vegas right this moment with our guest today. Omni’s actually joining me in suite today.

David Greene:
That sounds pretty sweet.

Brandon Turner:
Yeah. I grabbed a bunch of my buddies and we’re doing a goal setting day tomorrow. We’re going to spend the whole day going through goals for the next year. So I thought, why not rent a stupid nice suite for the event? And that’s what we’re going to do. So I’m excited about that. But man, I can literally see … It’s called suite 180. I can see 180 degrees pretty much around.

David Greene:
What I love about what you’re doing is first off, for most human beings to stay in a 7,500 square foot Vegas suite is an incredibly foolish decision that you would just … A treat yourself moment, right?

Brandon Turner:
Yes.

David Greene:
So you actually found a way to structure this event so that enough value was created from the people that you brought together in the event you did that the suite was paid for and the people who are there at the event are actually going to make money from being there. They’re not even wasting their money by spending it to go hang out in Vegas. You did what we’re all looking to do. Is how do you get the best parts of life and without having to feel guilty about it because you’re doing it in a way that actually creates more wealth than you spent to do it. It’s an investment, which is what we’re all about here at BiggerPockets.

Brandon Turner:
Yeah, man. And if people are like, “Hey, I want to be in Vegas in a suite.”, just grab a handful of your friends and just find out how much it costs to rent a cool spot. Because there’s something magical about going to … This is today’s quick tip, by the way. Quick tip. I have no voice. By the way, I have no voice today because I just came from Nashville where I went out way too late and hung out at a honky-tonk bar and yelled for three hours straight trying to over the music. So no voice. But today’s quick tip is grab a bunch of your buddies who are goal minded and say, “Hey, let’s get together and split the cost of a stupid, big, expensive, cool place.” There’s something magical about … It doesn’t have to be 7,500 square feet, but just go out of the norm.

Brandon Turner:
Take that intentional moment and divide the cost of what it’s going to be and have a cool experience. There’s so much that can be done in those moments where you pull out of the day to day and go into some special thing. So that’s the quick tip for today is by the end of the year, try to do that with a bunch of your friends and maybe just meet people on BiggerPockets or organize it on the Facebook group, whatever. But yeah, pull some time out of your life to do this because I’m excited about tomorrow. So should be a good time.

David Greene:
Well, the key is you’re not going out to Vegas to get smashed and waste money gambling and enjoy yourself and that’s it. You’re actually doing it with a purpose that’s going to create more value than what you spent to get there. Which is what investing is, right? How do I put a resource into something that will give me a higher return than what I put in?

Brandon Turner:
There we go, man. Well, that is today’s show. So here live in Vegas. Well I guess we’re not live but-

David Greene:
We’ve never been able to say that on the show.

Brandon Turner:
I’m also going to the UFC fight. That played into it a little bit. It was like why Vegas? Because the UFC fight was here. So I’m going to go do that. Now, it’s almost time to get into today’s show. Hey, quick reminder for everybody. At the end of this year, if you haven’t heard, I’m going to be taking off from the BiggerPockets podcast, handing over the reigns to David Greene. So in case you haven’t heard the news, that’s the news. I’m going to spend a year focusing, or at least a while, focusing on my family and a little bit more the Open Door Capital stuff that I’m doing. So anyway, I’ll still be back on and off. I just won’t be the regular guy every week. So if you’re wondering what happens in the future, that’s what’s happening in the future, but you can still follow me on all the social networks so you’ll find me there.

Brandon Turner:
All right. We got to get into today’s show. Today’s guest is Omni Casey. And Omni was actually the guy who won at BPCON, the BiggerPockets conference. We had a charity auction and he won chatting with me. Basically, it’s just one on one coaching. And then the first time I talked to the guy, I realized, no, I should be getting coaching from him. This guy is legit. He is incredibly gifted, talented, and experienced when it comes to real estate. You’re going to learn a lot of stuff today about, like I mentioned, buying portfolios. We talk about how the property manager can make or break your deal, how to invest at a distance, how to invest when you’re in an expensive market, how to do it with kids, and a whole lot more. So that and more coming up here today. Anything David, you want to add before we jump in?

David Greene:
No. Just make sure you stay all the way to the end because Brandon, I, and Omni all sort of go into a pretty good conversation about how to make sure that whatever you buy today is still profitable five, 10, 15, 20 years from now, if the rules of the game change. If we have different politicians, different laws, different financial structure in our country, there’s still a way to build your portfolio in a way that will keep it safe and profitable for a long time. It’s a discussion I don’t think I’ve heard anywhere else so you definitely want to stick around and don’t miss that.

Brandon Turner:
There we go. All right. Well, with that said, let’s get into the show with Omni Casey.

Brandon Turner:
Omni. Which I called you Omni many times and you graciously allowed me to. Omni, welcome to the BiggerPockets podcast, man. Good to have you here.

Omni Casey:
Thank you. It’s an honor. Thank you.

Brandon Turner:
Yeah. So we’re going to dig into your story a little bit today. Learn a lot more how you became the man, the myth, the Omni. You like that? It’s pretty good, right? And why don’t we start at the beginning. How did you decide to get into real estate?

Omni Casey:
Yeah, real estate. I tell everyone I kind of like real estate, but I love business. At some point I realized that real estate was an amazing business and so just kind of putting it all together. I grew up in Hawaii on the business track, had a few small businesses. Actually owned a retail store at the mall.

Brandon Turner:
Oh really?

Omni Casey:
Yeah. And then-

Brandon Turner:
That’s cool.

Omni Casey:
Yeah. Just kind of figuring out that the one winning in all that was the landlord. I hated retail after having that business up and running. And so I wanted to get out of that and I saw all my friends that owned these shops that some were successful, some weren’t. And really the one winner in the entire equation was the landlord. So I said, how can I become a landlord? And I put some effort into finding out the best way to get into real estate investing, found a mentor or mentors and I’ve been doing this for almost 20 years now.

Brandon Turner:
Awesome man. Well, let’s go through the very first thing you bought. What was the very first property?

Omni Casey:
Very first property was a partnership with … It was a condo in Waikiki. So it was just a rental property, a small condo property, and did some sweat equity renovations. And I did the grunt work and my mentor was the guy kind of leading everything and we kept that as a rental property and I did a few of those in that same building with them and eventually stepped out on my own and started buying my own property. So started out with a lot of condos and then completely did a shift away from condos further on in my career.

Brandon Turner:
All right. So let’s talk about the condo thing, because for those who don’t know, Waikiki is an expensive, expensive area of Oahu of Honolulu and it’s a great place, but it’s very expensive. How did you get the guts to do that? What did you pay for that first property? What was going through your head then when you’re like, I’m going to go buy this condo? What was going through your head?

Omni Casey:
Sure. I was just looking at my mentor. He’s been doing it and I trust this guy, so let’s go ahead and go into it. So on the condo side in Waikiki, there’s two different types of condos. There’s a regular fee simple condos and there’s actually something called condotels which is zone four resort. And so I started on the regular side and realized that I couldn’t Airbnb. Airbnb wasn’t a thing back then, but couldn’t go on the vacation rental side. And then eventually got into the condotel, which brings its own challenges for financing. Much harder to get financing. But with a partner and mentor that was able to bring a lot of the capital, we were able to make it work.

Brandon Turner:
That’s cool. Yeah. This is one of those benefits of, as we said on the show for years, but when you start associating with people who that’s just normal business for them, it makes it so much easier for you. For me, I don’t know. Some random thing like hockey, right? I don’t know anything about hockey. I don’t know how to play hockey. I haven’t skated since I was four. And so that would be incredibly difficult. But if I was with somebody who was a professional hockey player, they’d be like, “Oh yeah, you just put on your skates like that and then these are the skates you obviously want. Everyone knows. And then you obviously just stand up and …” It is so obvious to them and easy that then I’d be like, “Oh yeah, it is that easy.” And you just listen to them and then all of a sudden you’re playing hockey. I might not be a pro right away, but it alleviates a lot of that fear. So that’s cool. All right. So what did you pay for that first one?

Omni Casey:
In the 430 range. Yeah.

Brandon Turner:
430,000. And when was that?

Omni Casey:
Almost 20 years ago. Yeah.

Brandon Turner:
Wow. What’s that worth today?

Omni Casey:
We don’t own it anymore. We probably should. Probably in the 750 would be my guess. Yeah.

Brandon Turner:
Yeah. All right. Okay. So that’s how you got started. For those people listening and they’re in expensive markets like Seattle, LA, New York, every other city in America now, what’s your recommendation on getting started like that where the price of a condo is 400 grand?

Omni Casey:
Sure. Yeah. Finding a partner is obviously a key element, but being from Hawaii, I had to learn how to quickly invest elsewhere. Very similar to David. He wrote the book on this, but long distance investing. I had to figure out how to invest outside of our market there and find the markets that I could afford to do things on my own.

Brandon Turner:
Yeah. That makes sense. Makes sense.

David Greene:
So at the time that you were starting your long distance investing journey, I’m assuming this was before the book was written. So were you in a position where a lot of people were saying, “This is crazy. You shouldn’t be doing this. You’re going to lose a lot of money.”?

Omni Casey:
Yes. However, I didn’t tell most people. My mentor was very private. It was like own nothing, control everything kind of mindset. And growing up in Hawaii, there’s kind of this inherent distrust that we have of people with money and it’s almost evil to want the success. So I literally went most of my investing career without talking about it. Not even my parents, not even of my siblings knew. And I just did it. Because I knew that they would say it’s crazy. And so I just wanted to prove it. If I was going to fail, I was going to fail by myself. If I was going to succeed, then eventually I guess I would tell people, but I didn’t get around to telling people until really a couple years ago.

David Greene:
Well, I think there’s a lot to that too. Because I think a lot of our listeners are in a position where maybe they’re not Hawaiian, but they’re in a family that doesn’t trust people that have money that assumes the only way you get money, I know Brandon you’ve talked about this, is you have to take advantage of somebody else. And that’s a popular narrative that’s going around right now that if the CEO’s making a million and the person on the front line is making $25 an hour, there’s something obviously wrong with that scenario because one person’s making more than the other. And for those of us that we function in that CEO role, we see the risk that CEOs take. We see the stress that they take. We see the investment of themselves they have to put into the company and the skillset they’re bringing.

David Greene:
Many times I think if you took the $25 an hour person and put them in the CEO’s role, they’d say, “No thanks. I don’t want this. This is nuts.” So I’m curious, just hearing your story Omni, I’m sure you went through a lot of self-doubt. There had to be. As you have everyone in your world that you know believes what you’re doing is maybe even morally wrong or at best risky. Then you have one mentor that you’re watching and you’re like, but that’s the path I want to follow. Can you just speak briefly to the mindset that you had to develop in order to move forward in an environment like that?

Omni Casey:
Yeah. I come from a big family. I’m one of eight kids and I’m three. So I think I thrive in the middle. And my whole life I think I’ve been good at just kind of blending in, in the background. Love my family. Amazing family. But I was able to just kind of step away and do that. And so I think I had that mindset from just growing up. I just tried things, started a few businesses. Even my family didn’t know about those businesses until they were off the ground and running and I said, “Hey, come to our launch.” They’re like, “What are you talking about?” So kind of took a very similar approach. And I think I’m just comfortable because maybe I’m a third of eight and I’m comfortable in the middle there.

David Greene:
Tell me how you chose the market that you chose when you started investing out of state and then what struggles you found because you now don’t have the backing of your mentor who’s native to Hawaii and probably knows how to grease the wheels and knows the right people to talk to.

Omni Casey:
Yeah. When I decided to break out on my own and do my own thing, well, I … Backing up a little bit. I was all over the place. So there’s so much equity in Hawaii. There’s a lot of appreciation. There’s not a lot of cash flow. Then all of a sudden, swinged over to look at cash flow markets. This is amazing, but then you don’t have the appreciation, the equity in those markets. So I had to come to terms of the difference so I kind of created this classification for myself. I’ve flipped properties, I’ve wholesaled, I’ve done almost everything throughout my career. And I had to understand that I was in a different role for those types of properties. I think every investor falls into one of three categories. You’re either doing it as a profession full-time or part-time. That’s a flipper, that’s a wholesaler. And it’s a job. And it’s a great job to have, and there’s nothing wrong with it. But once again, your cashflow is gone.

Omni Casey:
And then you have the financial freedom area, which I really wanted was financial freedom. And then you’re going to focus on the cash flow. But most of the best properties for cash don’t appreciate that well, and we hear some people saying, “Only do cash flow and appreciation is risky.” Or some people say, “Only focus on appreciation and cash flow is not going to make you wealthy.” I just had to realize it’s a different category altogether. So the third category is the generational wealth. Once you’re financially free, I was able to think a little bit differently. Say now I can focus on those different types of assessments that do have higher appreciation and maybe don’t have the cash flow, because I don’t need the cashflow anymore. So kind of put me into that category. So once I understood I wanted to be in that second category of financial freedom, then I really just looked at okay, for this three, four, five year period that I was trying to commit to becoming financially free, I’m going to focus on cash flow. With the understanding at the end of that period, I’m going to shift my strategy because I’ll be financially free and what I do next is a little less risky.

Brandon Turner:
That’s such a great point. Yeah. Because when you view real estate that way there are different types of investments for different purposes. And that’s why today, I don’t buy a lot of really cash flowing properties. I’m not going to buy properties that lose money, but I don’t buy a ton like that because I have financial freedom. So once you get over that. But to get financial freedom … I would say I don’t regret the properties that I bought back in Grays Harbor, Washington, but man, I would not buy them today. They were so much work, but they got me to financial freedom. So where were the properties that you started buying that got you to that financial freedom?

Omni Casey:
I’m embarrassed on how many markets I tested. And never did a ton in every single market. And really what I found was once I found a market that cash flowed, if I couldn’t find that rockstar team, that property manager to support it, that might be the only property. So I’ve done in Texas, I’ve done in Georgia. And it wasn’t until I found really markets that cash flow and have a rockstar property manager. So there’s a few pockets in Maryland and there’s some in Virginia as well that a lot of what I’m doing recently is. And it’s not because they’re the best cash flow markets, because they’re not. They cash to my terms, but I have amazing property managers and teams that could take care of it for me.

Brandon Turner:
Who is the most important member of a team when you’re going to go long distance real estate investing? Who should you number one make sure you have?

Omni Casey:
Yeah. I think the real estate agent is crucial. I eventually got my license and understand. I still hire real estate agents, even though I’m licensed. If it’s not my market, I will hire somebody to go do the due diligence for me. So crucial, but in the long term, the property manager. If it’s cash flow, your property manager is crucial. I think a really good property manager could take an average investment and make it stellar.

Brandon Turner:
Yeah.

Omni Casey:
Right?

Brandon Turner:
Yeah.

Omni Casey:
On the other end you can have an amazing investment and you have a subpar property manager, it will eventually become subpar. And so-

Brandon Turner:
Such a great point.

Omni Casey:
Understanding that key element within your team, those are my two key people.

David Greene:
Can you break this down into a story that you can tell me about how the same property, how one property manager can run it into the ground and how the other can make it flourish?

Omni Casey:
Yeah, absolutely. I mean, you got these rules of thumbs. The 1% rule has been around for a while and I look for markets that, okay, can you hit the 1% rule? And you’ll have people screaming at us saying it’s impossible. And you’re going to have people saying, “Well, I bought that yesterday.” Right?

David Greene:
Yeah. True.

Omni Casey:
So it just depends on the market there. So kind of finding, for cash flow, that 1% rule. Understanding that I’m not looking at equity at, at the moment within that phase. However, that 1% rule, if you buy, let’s say a very low price property, $200,000 or so, although you’re hitting that 1% rule, you’re getting a good return, one repair takes out your cash flow for a year. Takes out your cash flow. And it’s usually poorly managed properties that need the most repairs. And so if you have, let’s say a fourplex in Georgia that is just mismanaged and when they move out, you’re having to do a full turn of $5,000 or whatever the case may be. All your return is gone and you can have a break even property in a cash flow market if your property manager is not on top of it, setting the right expectations with maintaining the property.

Brandon Turner:
Yeah. That’s such a good point is that a great tenant when they move out, it might be a $200 turnover. A bad tenant, when they turn over, might be $5,000 or $10,000. And it’s like, who decides who’s going to be that tenant? It’s the property manager. And I think that that turnover cost is something that a lot of investors don’t think about because that’s probably the largest expense we have other than mortgage. In all reality, if you have a regular turnover, like once a year you’re spending five grand on turnover, which is the case for a lot of my properties back when I first got started and I didn’t know how to screen tenants. Every year it was five grand. And I’m like, “This is just as much as my mortgage.” And so that just shows you the power of that property manager in finding someone that not only is going to treat it well and you won’t have the heavy turnover, but is going to stay for two, three, four, five years. So over the course of five years, one property manager could lead to $30,000 in loss, negative, and the other one could be 30,000 more just based on those decisions that’s made.

Omni Casey:
Yeah. Across my portfolio, I try to, as a rule of thumb, reserve 10% of rents for maintenance and things like that. That being said, some properties in areas that aren’t managed well, probably need 30%. Some properties need way less just because they run a tight ship. So across the board, and that’s why I do like scaling up at a higher level and people say, “How can you absorb that risk?” I think I am diversifying my risk the more properties I have. If I have one property that is risky. You have one tenant, you have one maintenance bill, and it might be 100% vacant at $10,000 cost there. But if you have 100 properties, if you have 10 properties, you’re scaling up and as long as you have good people in place to manage it along the way, you’re actually reducing that risk and you can kind of reduce your overall cost if you do that.

Brandon Turner:
Yeah.

David Greene:
Brandon, you’ve told the story that when you first started managing your own properties, you were just really nice to the tenants and didn’t hold them accountable to very much and they took advantage to say the least.

Brandon Turner:
Yep.

David Greene:
And then you learned I need to set very clear standards and I don’t let anything grow into something bigger. So if they’re late on the rent, it’s boom, you’re late notice, you were told this would happen, this is the process that’s being started, and they weren’t late anymore. So Omni, what you’re describing here is are you getting Brandon at the beginning of his career managing your property or are you getting Brandon once he figured it out managing his property? Can you share with us some of the questions you ask property managers to figure out which version of Brandon you might be getting?

Omni Casey:
Yeah, hat’s a great … And I would say probably my weakest element is being able to interview and find these property managers. Because everyone interviews well.

Brandon Turner:
Everybody interviews well. Dude, that’s such a good point.

Omni Casey:
And the reality is they might be a good property manager, but you’re not the most important person to them right now. Which sounds terrible because I just bought one property. It’s three units and they have 300 units they’re managing. So I’m their least important client. And so my shift over the last few years has been, can I more centralized in areas? And I started asking my property managers, the ones I like, “What will it take for me to be your number one client?” Doors. “How many doors do I need to be your number one client? Because I want to be your number one client.” I want to be the most important person because no matter how good they are, if you are 1% of their portfolio, they can’t commit that amount of time to you. But if you’re 50% of their portfolio, then they’re going to commit a lot of time to you.

Omni Casey:
So I knew I needed to become a better landlord and a better investor for my property managers so that they could take me more seriously. I used to get angry about it but then I had to look at it from a business standpoint. I was their least important client. And so you take some pretty good property managers, then you say I’m committed to become your number one client, which means … And that’s been a huge lead flow for me because I tell them, “I’m committed to you. I want to buy more in your area.” So I’m going to show them I add units every once in a while. But I tell them, “Any of your landlords that are looking to exit, the last few years we’ve had a lot, any of your landlords looking to exit, tell me about it. Because they’re going to come see you first. Tell me about it. I will buy their portfolio. I’ll buy their properties. I’ll keep it with you.”

Omni Casey:
Because if your property manager gets contacted by one of their landlords saying we’re selling a property, they know they’re property losing that property. Someone buys it to move in, they don’t need a property manager. Another investor buys it, they probably already have a property manager. So now a lot of my properties come from my property managers in forms of small portfolios of landlords just saying, “I’m done.”

Brandon Turner:
Yeah. That’s great, man.

Omni Casey:
“COVID kind of kicked my butt. I think I want to get out now that things are stabilized.” And I’ve done a few of those.

Brandon Turner:
I love that for a couple reasons. One, because you’re established in this relationship with the property manager and you’re trying to become their top client, you’re working with them, they’re going to want to make that push to help buy the portfolio so they don’t lose that. That’s cool. But then also the property manager then knows the history of the property. So they’re not hiding. There’s not some seller hiding it.

Omni Casey:
Exactly.

Brandon Turner:
Yeah. So you know what you’re getting and I know they’re … We don’t a lot about that but that idea of buying a portfolio is such a powerful strategy. And there are a lot of investors today, myself included, if somebody for the right price came, I would probably sell my entire Grays Harbor portfolio in one shot right now. Now I’m going to get hit up by a million people. Now, would I take a discount for that? Probably for the hassle of not having to go through, I would probably sell … I’m not going to give somebody 50% off, but I would give the discount to somebody so I don’t have to go through an agent. I don’t have to get each one ready and then go through each my numbers. It’s a hassle. I’m actually selling a lot of them right now on the MLS and it’s been a huge hassle.

Omni Casey:
One at a time.

Brandon Turner:
Yeah, one at a time.

Omni Casey:
From the purchase standpoint, it’s a hassle. So I set out this at the beginning of the year, a really big goal, 52 properties in 52 weeks. I’ve never done that. And so I just kind of wanted to stretch myself. So that’s my goal. I’m at 44 purchases this year. I don’t know if I’ll get it by the end of the year.

Brandon Turner:
Come on man. You want to buy my portfolio? You’ll have it. You’ll be there.

Omni Casey:
The only way is by doing portfolios. I lucked out and I got two mid-size portfolios.

Brandon Turner:
Oh man. Love it.

Omni Casey:
And you’re solving a problem because a lot of these mom and pop landlords, let’s say they bought them cash or they’re paid off for a while but then at some point they went back and cross collateralized them. And they took out a loan across their entire portfolio because they got a lot of small properties, some great properties, some mediocre properties. But what that means is if they got to sell their bank, every bank’s a little bit different, usually won’t let them sell one property because they gave them a loan on properties combined.

Brandon Turner:
Oh, yeah. That’s a great point.

Omni Casey:
So they need to find someone that can usually pay cash and buy the entire portfolio there. And so I’ve been able to do that to reposition equity and funds to do that. And then obviously one by one, try to use the BRRRR strategy and re-leverage on the back end. But they cannot put it on the MLS because I just bought one that was a 13 building portfolio and every single one was tied to the same loan. So they had to close same buyers, exact same time. It’s just complicated there. So if you solve that problem, you can get a deal.

Brandon Turner:
I wonder if there’s not a way … And somebody listening to this knows the answer. Maybe you know the answer. Is there a way to publicly, using public data, find loans that go across multiple residential properties like that? If you could find that list, you would know every landlord who has those commercial loans over all their properties. I don’t know if that’s a thing but that would be fascinating to figure out.

Omni Casey:
I don’t know the automatic way to do it, but there is a way. So you look at the tax records, and let’s say it’s a $200,000 duplex and there’s a $800,000 mortgage on it.

Brandon Turner:
Oh. Okay. Yeah.

Omni Casey:
There’s something wrong. You look up that owner in that state or wherever you’re looking for and say, okay, he owns X amount of properties and then you’re seeing that same $800,000 mortgage attached to all of these properties.

Brandon Turner:
Genius, man. Genius.

Omni Casey:
So there’s a way. I don’t know if there’s an automatic way.

Brandon Turner:
Yeah. I don’t know either. But yeah, if somebody’s listening to this right and wants to figure that out, that would probably help a lot of people buy portfolios. Yeah. Yeah. It’s just such a cool strategy to the portfolio thing. Yeah. David, would you ever sell your portfolio? What are your thoughts on that? I know you’re an agent, so you like the one off stop. I mean, you’re used to that. But if somebody came to you and wanted your whole portfolio right now, would you consider it?

David Greene:
I would absolutely do that. In fact, that might be the only way I could do it because when you try to sell a house that has a tenant already inside of it in general, you don’t get as much money for it.

Brandon Turner:
Yeah. It’s hard already. Yep.

David Greene:
You can’t sell it to someone who wants to live in it so now you’re limited to investors who want a deal and they have to put 20% down so your buyer pool shrinks quite a bit. Your ability to get multiple offers almost goes away completely. So you really want to try to sell rental properties when they’re vacant. But my properties are not set to all go vacant at the same time. Your leases were all signed at different times. So you end up not able. You have to almost sell them ones and twos, unless you package them all and you sell them to an investor. Now I will say, if someone’s trying to do that, there’s probably not a better time in history to be doing it than right now because there’s so much money out there. Everybody needs to deploy capital. So you can get away with things that you couldn’t get away with before. But yeah, just based on the workload that people like the three of us have, trying to sell them onesie, twosies like that is agony.

Brandon Turner:
The other reason that’s really powerful right now … This is going to go a little bit into the weeds, but it might affect some people. When people sell a property that they’re a landlord, they want to 1031 exchange it. But it’s so hard right now to 1031 exchange stuff. And if you’re selling your whole portfolio one off, one off, one off, you get all these different 1031 things to try to do. It’s just a mess. But right now again, David, to go to this is the best time to do this, right now we’ve got this accelerated depreciation thing going on and the cost segregation studies. So people can invest … I know people who have sold their property, not done a 1031 exchange, and then took all the money that they made that they have to pay taxes on now, they just go and dump it into my fund or somebody else’s fund or their syndication.

Brandon Turner:
That’s syndicator, they will go and do the cost segregation study and the accelerated depreciation and it offsets almost the entire amount. So it’s almost the same as a 1031 exchange without the actual effort of doing the 1031 exchange. And you’re not in that pressure of having to buy a bad deal within 45 days and identify it. And that’s a short window. The accelerated depreciation’s ending here over the next five years though. Right now it’s a cool time to do that.

Omni Casey:
Yeah, it’s, it’s an easy exit for the landlord to do that. But I look at it … And I’m not in big multifamily like you are. I have mid-size multifamily properties and small multifamily. But I look at a portfolio like a mid-size multifamily and I got flack for that because it’s not the same. It’s more work. I agree. However, you have one person managing it for you. In the area, you can treat it like that. But I like it because you can’t buy a 50 unit building and decide these two underperforming units we’re just going to sell off. It’s not a condo. But on this portfolio I can buy … You’re usually getting some really good properties, some average properties, and some sub performing properties. I can still sell those sub performing properties probably at retail. Wholesale them to somewhere else. And basically I’m left with, at the end-

Brandon Turner:
Genius.

Omni Casey:
Just the cream of the crop. And I paid a premium in terms of having to come up with the upfront capital to do that but that’s short term because I’m going to back out with leverage.

Brandon Turner:
Yeah. Dude, that’s such a great point. You’re just cherry picking the best ones. And dude, I love this. This is such a great strategy. This is going to change a lot of people’s lives. Because the idea of buying a portfolio is something that we’ve never really dug into on this show before.

Omni Casey:
And if you could find the mom and pops that don’t have good property managers, they’re doing it themself, they’re stressing out right now. Because they had tenants that weren’t paying. And really we know that tenants paying is really a direct correlation for the most part of your property manager being really good. And if it’s yourself … I would be a terrible property manager. I know that. If I managed all my properties, my tenants would not be paying. I’d be high vacancy. I’m not built for that. And some people, they kind of started out small and they grew bigger than they thought, but the autopilot kind of wore off and now they’re sub performing properties for them.

Brandon Turner:
This is another call out to people listening to who knows technology more than I do. If you could find a way to automate the idea of who’s done multiple evictions, if you could find the landlord’s name in an area that they’ve done three evictions in 12 months, that’s a really good indication that they’re struggling and that they’re a bad landlord. Or at least they’ve done a bad job of screening or whatever.

Omni Casey:
They’re hating their life right now.

Brandon Turner:
Yeah. They’re hating their life right now.

Omni Casey:
Absolutely.

Brandon Turner:
Yeah. I’ve always liked that strategy too, of just going to the county courthouse, find out who’s going through an eviction and you just hit them up. Whenever I’m going through an eviction or especially when I was emotionally involved in it, those were the moments I hated being a landlord and I would’ve taken any price just to take my property off my hands.

Brandon Turner:
It’s just an easy strategy for if you’re new to real estate and you’re trying to find deals, it requires actually talking to a human being so it’s a little scary and you got to maybe actually go to your courthouse. Because a lot of places don’t keep digit … It’s not online yet. It’s still paper and pencil sometimes. But by doing so, you’re doing the work that nobody else is willing to do and you’re going to get the rewards that nobody else is going to get. So let’s shift back to your portfolio. What’s it look like today? What’s the size of your empire like today?

Omni Casey:
Trying to get one per week. It’s always shifting, right?

Brandon Turner:
Sure.

Omni Casey:
But I broke the hundred property unit mark and I got single family homes. I got land for development.

Brandon Turner:
Oh cool.

Omni Casey:
And I’ve got my biggest property is a 18 unit multi-family so I don’t have large scales there.

Brandon Turner:
100 properties, 100 hundred units?

Omni Casey:
100 properties.

Brandon Turner:
100 properties. So a lot more units than that.

Omni Casey:
A lot more units and a lot of those are development projects that we’re lining up. So I like buying vacant buildings as well. Completely fixing them up and stabilize them and burning them out. Right now I think everyone’s coming up with the trouble of material shortage and things like that. But I’ve got a pipeline for the next two years of projects to work on. So I’m happy with that.

Brandon Turner:
How are you finding deals other than the portfolio stuff? Any other strategies that you’re using right now?

Omni Casey:
Yeah, I mean, I became an agent broker, so I have MLS access everywhere. And I employ agents all over in areas that I focus on and I tell them this is what I’m looking for. So I do look on market and I do buy I handful of on market deals a year. And then wholesalers. Networking with wholesalers. And I will say when I started telling people that I’m investing in … For most of my career, I never told anyone. Just the last couple years started telling. It became so much easier. I just tell people, this is what I’m looking for now. I’m looking for small multi-family. I do flip a few properties a year, but really I’m looking for the duplex, triplex, quadplex is my bread and butter. You tell people and they send it to you whether they’re official wholesalers or not. And then the big chunks come in those portfolios.

Brandon Turner:
I love it. This is that thing we talk about all the time in the show is define what you want, have an idea of what you want to go after. Like, oh, I’m buying duplexes or I’m buying small multi, or I’m buying large multi. And then just tell everybody. It’s that’s simple. When you’re clear about what you want, everybody around you will conspire to get you that. We do it all the time. If David was like, “Oh man, I just love,” I don’t know, whatever, “Red Bulls.”, and we’re all hanging out, I’m going to go to the store and get him a Red Bull because I want to be a nice friend to David. Or if I see a Red Bull, I’m like, yeah, I’ll grab that for David because I know he wants a Red Bull. But if he’s just like, “Oh, I’m thirsty,” I might not be like, well, I don’t know what he’s going to want. I don’t know. And I’ll get him something he doesn’t want. I’m like, “Hey David, I got you a coffee.” And he’s like, “I don’t drink coffee.” So yeah. How’s that metaphor, David? Was that a David Greene metaphor?

David Greene:
That’s really good. It makes me think of when you’re the agent and you’re working for the client who doesn’t know what they want. And you’re like, “Okay, what do you want to drink?” And they’re like, “Well, I’m kind of open to anything. I would take a Red Bull. I would do a Monster. If it was a really, really good deal, I could look for a Rockstar, but I don’t want to pass anything up.” And you’re like, “I don’t know how to help you now. I can’t go to this store and find that.”

Brandon Turner:
Yeah. Agents hate that.

Omni Casey:
And people just don’t have the ability to network. They don’t know that. And you preach that. You guys both preach that. We ran a meetup. We do a regular meetup. We had about 100 people last week at this investor meetup. Little bit of education and then a lot of go talk to someone that can do a deal with you. But I had to start doing it in short burst networking. Eight to 15 minutes. But at the beginning I remind everyone come up with your crystal criteria. Because if you say, “I’m looking for a deal, send me a deal.”, no one’s going to send you anything because they just don’t know. But if you say, “I’m looking for a portfolio. I’m looking for a duplex in this area, in this price point that I can add value.”, there’s someone in this room that probably already has that and can make that connection. He’s just reminding us of how do we actually put that out there and tell people what we want.

Brandon Turner:
Well, it’s also a good reminder, when you see this, a lot of times people are thinking, “Well, there’s so much competition out there. I can’t find deals because there’s so much competition.” But there are so many types of real estate. I did a real estate meetup the other night. I was in Nashville, Tennessee and I had almost 100 people come out for this thing. And I’m talking to everybody like, “What do you do? What do you buy? What are you into?” And I think every answer was pretty unique. There was a few that were the same kind of the general I buy single family houses in this, but most everybody has a unique thing. And so when you get a group of people together at a networking event or at a BiggerPockets meetup or REIA and you just tell people, you’ll find like, “Oh yeah. Well if I ever see that, I’ll let you know.” And then just keep track of that. And then when you start letting other people know, “Hey, I found you a deal.”, now they’re going to want to reciprocate back to you again. So that’s cool.

Brandon Turner:
All right, let’s move into financing then. 52 properties in 52 weeks was the goal. You’re almost there. You might hit it. We’ll see. That’s an incredible amount of money needed to buy that. So what are you doing for financing these days?

Omni Casey:
Pulling equity out properties, or I’m really good at earmarking income for things. And so cashflow comes in, it just doesn’t come into our main bank account. We hide it from ourselves and we just let it pile up and pile up and we’ve been doing that for years. And so the only thing we buy with our cash flow is more cash flow. And we have separate properties, very specific properties that are set aside for our lifestyle expenses. But that’s it. And they bring in predictable amount of income and that’s all we need. But if we saw all the cash flow coming in, sure, our lifestyle would definitely creep as I think David calls it and we’d be spending a lot more, but we’re really good at doing that. So we’re able to self fund most of this through our cash flow.

Brandon Turner:
That’s great.

Omni Casey:
And then pulling out through equity. It’s the cheapest way to get money right now is your BRRRR strategy.

Brandon Turner:
Yeah. I call that cashflow recycling. It’s like your cashflow, you just recycle it and you put it back into the machine and it makes more cashflow. And you put it back. It’s like a snowball. It’s like Dave Ramsey’s debt snowball. But it’s the wealth snowball, right?

Omni Casey:
Absolutely.

Brandon Turner:
Yeah. You just build wealth and you put the wealth back into the machine to build more wealth and that snowball is incredible. And so when people hear sometimes they’re like, “Oh, I could never buy all that.” You don’t need to. Start with one. If you bought one property that cash flows 300 bucks a month … And it doesn’t seem like a lot of money. So after the end of the year, you’re making what, three, four grand? You dump that back in though again. Maybe that’ll get you some direct mail letters. Maybe it’ll get you half another property. Or you partner with somebody and you divide it up.

Brandon Turner:
But then two years later you got enough for another one. And then one year later and then six months later, and then three months later. And pretty soon that wealth snowball is just flowing down a hill and just gaining speed at such ridiculous rates. And then you’re just like, “I’m trying to buy 52 properties 52 weeks.” And it’s not a crazy thing because you’ve got that momentum going. So that’s awesome. I love that. All right, man. Where’s the market headed? Crystal ball time. You see a lot. You’re an agent. You buy in a lot of areas. Where’s this headed?

Omni Casey:
Yes. Supply and demand is keeping us in a comfort area I think. So I’m not worried about the market and the moment people start to say, “Hey, should we pause a little bit?”, that’s when I really want to ramp up my purchasing power for that exact reason. I think we’ve got several really good years ahead of us in terms of appreciation. But once again, it really depends on what bucket you’re buying for. So if you’re buying for cash flow, it doesn’t matter too much what the market is, because the rents are not coming down. That the rents are staying consistent. I think the rents are going to continue to go up. I think I’ve heard both of you guys mention this. We’re probably going to see more and more government intervention in terms of making housing affordable, making housing a right. And more of the section eight and the housing programs. One of my biggest tenants is the government and they’ve never missed a payment. So I’m okay with that as long as you manage the expectations with the property manager.

Brandon Turner:
Will you explain that for those who don’t know what you mean by that? Why is the government one of your biggest tenants or payers?

Omni Casey:
Well, let’s say you buy a studio or one bedroom and your price point is $400 to $600 rent. That is a low income rent there and so your average tenant is going to be someone that needs assistance. And I know a lot of people that they don’t want to touch section eight. They don’t want to touch government assistance. But it’s a guaranteed check. All it is is replacing income that they don’t have. We still need to vet that client. We still need to vet that tenant to make sure that they’re a good tenant and a good … There are bad tenants that are not on section eight and they’ll trash your house. There are great tenants on section eight that will take care of it and especially if they go through the work of getting that secured, they really don’t want to move. They are longer term tenants than your average tenant. Instead of a one year or two years stay, they’re like, “Can I just live here forever?” Sure. Absolutely.

Brandon Turner:
David, where’s the market headed?

David Greene:
I think that we are going to see a lot more inflation. To be fair, when the shelter in place first kicked in, we were doing this podcast and everyone was playing chicken little. The sky is falling, the sky is falling. And I remember I took a stance and Brandon, you kind of supported me on it, that I just don’t think that’s going to happen. It’s not popular, but I think we’re going to stimulus our way out of this and we’re going to have inflation. And I took some heat on that. And now I’m looking pretty smart. I don’t know how many people remember what was said back then.

Brandon Turner:
I remember. Absolutely.

David Greene:
But you’re seeing what’s happening is even if you made bad decisions that rising tide bailed a lot of people out. And that is good in the sense that owning assets is very, very powerful because your money is becoming worth less. It can be problematic in the sense that these syndicators that are raising money and they’re deploying it can operate fast and dirty and not very well and they can make it work just because rents are rising across the board quickly due to inflation as well as property values and then cap rates depress so even if you made bad decisions, your property became worth more because there’s more demand to get into it. But at the point where that stops, you may find yourself with an asset you don’t want to own that you can’t manage very well and you’re not being bailed out by inflation. So I would say in the short term, as weird as it is to say, the majority of deals that anyone does are going to look really good. They’re going to be propped up by inflation. It’s just how good you do.

David Greene:
And then at a certain point, if we get inflation under control, we get our monetary policy under control, that’s when you’re going to find out who’s been swimming naked. When the tide goes back down. So my personal philosophy is, it sounds very similar to Omni’s, I want to own an asset in an area that I like owning that does not drain me of my energy, of my time. Even if it’s not the most cash flow strong thing, I don’t want another job. I want it to be more passive income and I’m willing to play the long game and I think that the metrics that our government is creating support that strategy. I just want to caution people that are buying, if you’re going into a D class neighborhood and you’re trying to make something work, it might look good for the time being because you’re watching your assets value increase, but you’re still going to be stuck with that thing when the music stops. And is that what you want? I wouldn’t mind known in something in Waikiki when the music stops. I don’t know that I want to own it in one of these stereotypically bad areas that aren’t good for landlords. So I hope that kind of answers the question. What are your thought?

Brandon Turner:
Yeah, well, this morning my COO, Walker, texted me and said, “Hey, just food for thought for a fun conversation starter. What’s the biggest risk to my company, ODC, over the next 12 to 24 months.?” And I was like, “Oh, that’s a good question. What is the biggest risk to us?” And I thought the biggest risk is that if inflation hits … And I’m curious you guys’ thoughts on this. If inflation hits really hard, harder than we expect, and especially if it hits in the rental market where from supply and demand and from inflation, from everything else but the average rent starts going up 20% per year let’s say. Now that sounds really great for us because our mortgage is the same, but the risk is in the politicians. Will they just put a … Whether it’s nationwide rent control and be like, “You know what, we’re cutting all rent in the US by 30% starting tomorrow.”

Brandon Turner:
There was some lady in Seattle on the Seattle city council who proposed that all landlords have to give their tenants equity in their properties. Now, it didn’t go anywhere. But there’s a segment of the US political spectrum who would be okay with a thing like that. So I think that anyway, that’s what I think is the biggest fear is if we see too much inflation or too much problem with rent growth, we’re going to see a backlash because, “Hey, I want to get reelected next session. How am I going to do it? I’m going to make everyone’s rent go down. And I’m going to be known as the guy who made everyone’s rent go down.” So I don’t know. That’s my fear. You have any thoughts on that?

Omni Casey:
Yeah, I think you’re exactly right. The political spectrum does play … I think it affects the newer investors the most. And the housing market I think is affecting everyone but I think it affects the newer investors the most. Because I used to worry about who got elected. And I vote and obviously I care, but my portfolio or my ability to invest got better and better regardless who was in just based on my experience. So the better investor you are, the market’s really good for you. If you are a brand new investor, guess what? It’s a tough market. You got to buy your first property and not be a brand new investor anymore. And then next year it’s going to be a better market for you. And if you do that two years, next year’s going to be a better market for you as well. And really it’s going to be directly proportionate to your experience as an investor versus what’s happening politically or in the market in general.

David Greene:
This is such a good question that you asked Brandon. Did you have a point you wanted make?

Brandon Turner:
No, go ahead. Continue.

David Greene:
I don’t know that any other podcast in the world is talking about what we’re saying right now. It just doesn’t get brought up. And so I want to make sure we don’t gloss over it because I think this is really powerful. The problem with following the herd like, “Well, Omni’s investing there so I’m going to go invest there.”, or, “Short-term rentals are hot. I’m going to go get a short-term rental.”, is you’re putting a target on your back. Okay. So you hear a lot of prominent real estate investors that will brag openly and publicly, “I don’t pay any taxes.” This comes up all the time. All that does is send a message to politicians that, “Oh, really?” And so they go to the tax code and all the ways that we benefit like accelerated appreciation 1031 like kind exchanges, the things that are actually healthy for the economy because they encourage people to invest their money and create jobs and create wealth and improve things, they’re just going to take it away.

David Greene:
They’re like, “Oh, that’s what sure you’re doing to not pay taxes? Well, we’re going to remove all that.” And now it actually makes it harder to build wealth through real estate than it would be through other means. And I think that when you’re following the herd, you put yourself in a position where you can easily have the branch you’re standing on chopped off. So the advice that I would give to people is that you have to take action, but you can’t assume that the environment you’re buying into right now is what you’ll have in 10 years, in 20 years, 30 years, that you need to be thinking about exit strategy. So if you’re buying an apartment complex simply because of the tax benefits that you get, and like Omni said or you said Brandon, they come in and say, “Rents are now being capped at this percentage of whatever the median income is for that area.”

David Greene:
And you can’t raise rents enough to make it worth owning. And you’re stuck with the headache of owning that property over and over and over. You can’t cry victim. You knew going into this that politicians make rules that affect how that works. And right now a lot of those are in the real estate investor’s favor. The tax code is written in a way that encourages development of communities. But that may not be the case all the time, regardless of if we think that’s stupid or not, that could happen. So when you’re making these decisions, if you’re buying into an area with a very expensive short-term rental, you’re paying $2 million and you’re just like, “Oh the gross revenue’s incredible. This is going to change my life.”, what are you going to do in a year if they come in and outlaw that? What if the hotel lobbies all gather together and say, “No, we’re not letting that happen anymore.”, and the politicians go against you and you’re are stuck with a 25, $30,000 mortgage payment and you can only rent it out for five grand a month?

David Greene:
I think today’s investor that’s making moves should still be aggressively going after what they want but you need to be playing chess. You got to be thinking a couple steps ahead of where you are right now to protect that wealth. Because I do think that, like what you said Brandon, there’s a politician who’s saying, “We think landlords should have to give equity to tenants.” If that catches steam and it starts to pick up, I think Omni could probably speak about that better than anybody living in Hawaii as he’s seen how easily the masses can influence the way that the laws are written.

Brandon Turner:
Yeah. It’s a sketchy, scary proposition. So David, what do you suggest and Omni, what do you suggest to best prepare yourself against a changing economy or a changing government? Because I don’t want people to walk away from this interview being scared. Because like you said, it doesn’t really matter who’s in. As long as we’re smart, we’re going to figure out a way. So what are some tangible things people can do? Either one of you got a idea?

David Greene:
I’ll let you start Omni.

Omni Casey:
Yeah. I think you guys hit on the key points here, but when I buy a property, especially if it’s cash flow, it’s a little bit safer on the cash flow side, because you have cash flow, right?

Brandon Turner:
Yes. Yep.

Omni Casey:
If things change you have it, but if you have a drastic change in rents there. When I buy a cash property, I would love to not ever have to sell that. I do sell my properties, but I’d love to never have to sell it. But I absolutely think that what is the one or two exit strategies that I have? Exactly what David said. Do I need to cash out? Do I need to pull my money out of this? Can I sell this if we drop at 10% and I’m still okay with that return there? So I have triggers of what makes sense if I need to exit. And if there’s something drastic across the board, you just need to know when you’re going to make that move.

Brandon Turner:
Yeah. That’s really good. David, anything you want to add?

David Greene:
What I love about this podcast is we don’t fall into the trap that our competition does, the other podcasts, where what most people do is they recognize what’s trendy right now, short term rentals. So they make the short term rental podcast and every episode is about someone who crushed it with short term rentals and you can too, and if you buy our short term rental course, we can teach you how to do it. And they capitalize on … Like in football, the Wildcat offense was really popular for a while. There’s always a gimmick in any sport that’s working good before defenses figure it out. And they just hammer that point home and they make you think, all you need to know is this one little thing and it caters to the worst part of human nature that’s like, “Just tell me the quick answer. Just tell me where to invest. Tell me where to find the house. I just want to do it. I don’t want to have to learn how to do this. I just want to be able to get myself wealthy in a year or two.”

David Greene:
What we do is we actually force you sort of to listen to us talk about all the different tools that you need in your tool belt to make this worth. The strengths and the weaknesses of individual markets and individual strategies. And when you under understand that it’s like knowing the game of football, not just knowing the gimmicky play. It doesn’t matter what the government throws at you. It doesn’t matter what the economy throws at you. If you have these tools in your toolbox, you will adapt to what happens. So my advice would be always consider area first. Location first. There’s a lot of people going to Midwest markets and buying turnkey homes and in this climate that will work because you’re seeing a lot of inflation and it’s not that hard to rent out a property.

David Greene:
Well, if the economy goes down, those areas tend to get hit the hardest because they don’t have as many options as far as employment opportunities. And those properties are typically difficult to manage. And if you’re not seeing a lot of appreciation, you’re going to lose money as soon as the HVAC goes out or like you said Brandon, you have one bad turn that costs you five grand, your cashflow flow for a year and a half is gone. You’re sort of pigeonholed into a bad location that worked in a climate with rising tides, but doesn’t work anywhere else. So you start off by saying, where are the thriving areas that people are moving to and businesses are moving to that if my short-term rental strategy doesn’t work, I have a backup plan?

David Greene:
I can turn it into two units or three units. I can go corporate housing. I could rent it out and maybe lose 300 or 400 bucks a month as just a regular rental. But in two or three years, I’m okay again. Or I could sell it because somebody wants to live in it to buy there and I can get my capital out and reinvest in a better place. That would be the best thing that I could offer is don’t just get locked into looking down the scope of your analyzation tool and only seeing cash flow, cash flow, cash flow, or whatever that the flavor of the month happens to be in real estate investing.

Brandon Turner:
Yeah. Very good. Really good stuff. Omni, what is the cash flow breakfast club?

Omni Casey:
Cash flow-

Brandon Turner:
I solve that written somewhere.

Omni Casey:
I probably blame this on you guys. I’ve been a closed book for most of my life. In hiding, ashamed of being an investor. And then I found BiggerPockets. You guys are talking about it and it’s cool now. And then it wasn’t cool when I started. At least I didn’t feel it was. And then the more I listened to you, the more guilt I had of not sharing what I know. Because my friends, my family, my own agents that I love dearly, I have not taught them anything along those lines. And you’re having conversations with somebody about a transaction and you’re just thinking, “Why does this even matter?” We’re talking about such a small piece when most people are not focusing on their financial freedom. So a couple years ago kind of decided to start coaching my agents to become financially free and help them buy rental properties. And then we slowly opened it up to their friends and their family and things like that. And then my family. I’ve been able to buy with them.

Omni Casey:
But it started with this agent investor club and we just called it The Breakfast Club just to play on the movie. But it was focused on cash flow. And so we met, we talked about it and it allowed me a safe space to take off my broker hat, take off my agent hat and say, “All right, I’m an investor. You’ve never heard me say any of this before. This is something different. This is something I’m not telling you as an agent, not I’m telling you as a broker. But we’re going to talk about investing and we’re going to dive deep into it. And if you’re going to be in this club, you’re committing to buying a property in a year. And if you’re going to be in this club, you’re committing to buy X amount of doors in X amount of years. And you could leave if you’re not comfortable with that but I want everyone in here to be comfortable being in an investor, stepping outside of their comfort zone and doing it on a regular basis so that you guys can go spread the word to your friends and your family and kind of ripple through effect.” So it’s an actual club that I started and I wrote a book several years ago, never published it, didn’t have a name.

Brandon Turner:
Really?

Omni Casey:
Yeah. Never published it. And I-

Brandon Turner:
Oh, come on man, you got to publish. Okay. Keep going.

Omni Casey:
I thought about publishing it under an alias because, once again, it’s the step by step process of what I did to become financially free and what I think most people could do to become financially free. Problem, it was my story and I wasn’t ready to tell that story. I wasn’t ready to tell anyone I was doing that. So thought about using it, publishing it as a alias and just kind of put it on the back shelf. Once I started this cash flow breakfast club over the last two years, one, I love the concept and so I kind of rewrote the principles of the book through a power parable almost. So a fictional story of a guy that happened to grow up in Hawaii, that happened to be an investor and things like that. And I was able to remove myself from the story and keep the principles in there.

Omni Casey:
But really it’s a story of this guy that just doesn’t know what he wants, but knows he wants to do something other than work for 30 plus years and retire at 65. He stumbles across Rich Dad Poor Dad. He plays the the cash flow quadrant game. And then he finds a group. He finds a mentor. He finds a club that helps him understand what you talked about, the stacking effect of your cash flow properties. And then understanding that once you become financially free, there’s a whole nother world of investing that’s not cash flow related and jumping out of that. So that’s kind of the crux of the book. And basically all the lessons that I’ve taught my agents over the last couple years are just thrown into this book. So if someone says, “I need help.”, it’s like, “Here. It’s all in here. Read through this. If this doesn’t scare you, then we can talk.”

Brandon Turner:
Yeah. That’s so good, man. So is it officially out? They can go get it?

Omni Casey:
By the end of the year, my goal is to have this published. It’s written, it’s ready to go. I have one unpublished copy right here. And this is my training manual that I use from. And by the end of this year, I think I’m hopefully going to get this published.

Brandon Turner:
All right, man. Well, let me help you with that. I’ve done it a few times.

Omni Casey:
Exactly. Right.

Brandon Turner:
We’re going to get this thing out and we’ll put links at the show notes. I don’t even know what this show. Yeah. 547. So you can go to biggerpockets.com/show547 and we’ll have a link in there to the book. Even if it’s not out by the time this show airs, we’ll have a link to maybe a landing page they can go put their email in and then they’ll get it when it comes out or you’ll be able to send them where they can buy it from or get it. So yeah, we’ll make sure that everyone can get it because that’s awesome and you had a cool story. So last question before we move to the famous four. Where are you headed in the future? What do you foresee for Omni?

Omni Casey:
I was mentioning this before we got on. This feels like a therapy session for me. We were speaking last week or a couple weeks ago as well. And I haven’t been thinking that big. I haven’t really been thinking about what are my big goals? I have three young kids that they’re my world. My oldest is 12. My daughter is nine. She’s like our investment CEO for my family. And then my youngest is seven. So everything I’m doing now is investment related, but can I do it nearby, closer by so that I can involve them? So I’m trying to figure out a better way to have dialogues with children about this. And we play the cash flow game quite often. That helps. But they’re out with me on the weekends, every single weekend looking at properties and I think there’s a need for that, because I think there’s people our age or older that yes, they like investing, they do investing or they want to get into investing. But if you can think about the next generation to come and how can you instill the things that we never talked about growing up? And so I’m trying to figure that out, but I’ve got three tests cases with my kids right now every single weekend. And they’re telling me exactly what’s working and what’s not working.

Brandon Turner:
Yeah. What are you doing? What are some things that you’re doing to pass on not just the wealth, but more importantly, the knowledge that comes with it? What are you doing with your kids?

Omni Casey:
Yeah, we started out with the cash flow game. Playing that quite often, almost every single weekend. And now we got my kids that we used to help them on the game, but now they can play on themself and my son wins quite often against us. Whenever we’re looking at properties and analyzing properties and walking through properties, I usually have one of my kids, if not two of them walking through and just taking notes and say, “Here’s what we’re going to be doing here.” And then most recently when we started a meetup, I started to bring one of my kids. Usually my daughter fights to be the one to go. And she sits through. We have an educational moment. An hour of education. And she just kind of sits through the details of it.

Omni Casey:
Like we started talking about inflation last week and then she comes back like, “Why is money losing value?” And so she came to the next one and she’s like, “I’m raising my hand to talk about what inflation is.” And she wants to kind of put it out there. So I think just exposing them to the dialogues and the conversations. And I’ve been more open about putting it out on Facebook over the last few months, telling people about it, to start this uncomfortable conversation. Because if we can have that uncomfortable conversation with our friends, our family, and our kids, it becomes normal at some point.

Brandon Turner:
Yeah. Man, that’s awesome. Really good stuff. I want to relate back on a metaphor or analogy I used in the beginning of the show and I’m just going to putting it together in my head right now. But remember I mentioned hockey earlier? If you want to be able to be good at hockey, hang out with somebody who plays a lot of hockey and it’s so easy for them. But a thing I never really thought of before is that’s why we need to involve our kids in what we’re doing. Not that they have to know everything and not that they have to be real estate people. But for us talking about inflation is easy. For us, talking about cash flow is easy. For them, it’s not. So the more that they get into that world of talking about financial things, it’s like we’re the professional hockey player and our kid’s the one that … And that way we give them that training without sitting down and being like, “All right, today’s lesson is this.” It’s just they’re involved.

Brandon Turner:
And we want to make it so when they graduate high school or go into the world, like, “Oh yeah, cash flow. That concept that most of us never knew. Sure. That’s just easy. It’s just like putting on a pair of skates.” So dude, this has been amazing. We’re not quite done though. We got to head over to the last segment of the show. It is time for our-

Brandon Turner:
(singing).

Brandon Turner:
The famous four. It’s the part of the show where we go through the same four questions every week with every guest. And this week we’re going to ask Omni these four questions. So number one, Omni. Favorite either all time or current real estate related book.

Omni Casey:
Yeah. It’s going to be the same book everyone does and I book them together. Rich Dad Poor Dad and Cashflow Quadrant. I think they have to be together. And it’s what changed my life. It’s the first book I recommend anyone read before they ask me for help.

Brandon Turner:
Yep. Love it. Love it.

David Greene:
Next book. What is your favorite business book?

Omni Casey:
There’s a lot of good ones. Probably my all time favorite is the Goal Giver. There’s a Goal Giver series. It’s just the not keeping score concept. I think this comes from my guilt of hiding all this time and not sharing. And so now I just really want to share with as many people as possible. It’s not a business for me. I don’t get paid for coaching or anything along those lines, but it is very rewarding and I’ve done more real estate in the last few years than I’ve ever done because I started to give. And so the more I teach, the more I help, I do realize it comes back tenfold. And so it’s a really good parable, really good story for anyone, any business to follow.

Brandon Turner:
Awesome, dude.

David Greene:
All right. What about some of your hobbies?

Omni Casey:
I used to water … Everything water used to be my hobby. When I moved away from Hawaii it hasn’t been as ideal.

Brandon Turner:
Yeah. Where you at now?

Omni Casey:
I’m out of Northern Virginia, actually. My wife’s from there so we moved there. It’s closer to some of the properties that we’ve invested in. Her family’s there so it was a family move a while back. So not a lot of water things going on. Really, I’m embarrassed to say my hobbies are real estate investing with my kids. And so there’s nothing I look forward to more. And real estate investing by myself is okay and fun. Analyzing deals and things like that. But it is a family event to go out and drive and walk through properties. We’re buying this property or what do you think we should offer? And so we just kind of make it a game and my kids like it for the time being, I think.

Brandon Turner:
Awesome, man. Very cool. All right. Well, my last question of the day. What do you think separates successful real estate investors from those who give up, fail, or never get started?

Omni Casey:
Yeah. I’ve heard so many people answer this question and there’s so many really good answers and there’s no one right answer, but I think it’s two part questions. So the first part is not get started. You’ve just got to get over the fear of failure. People don’t start because they know they’re going to fail or they’re worried about failing. Yeah, you’re probably going to fail. Everyone fails to some level. Every property you have will have failure involved in it. You have to be comfortable knowing that that’s just step one. But for those who give up without starting, I think it comes down to a concept that I put in the book as well. I call it the three batteries. We all have three batteries, at least starting out, in investing. And one battery is our time. One battery is our capital, the money we can bring. And one battery is debt to income.

Omni Casey:
When you’re using leverage. And I think people make the wrong move starting out, use up too much of those batteries to start. And it kind of puts them in a pigeonhole to say, “Well, I’m maxed out at one property, I’m maxed out at two properties.” So I think putting that right plan in place of where you actually start is helpful. And most people that we’ve helped over the last couple years really were at a place they gave up. They bought a property five, six years ago, but they kind of hit a wall. And so kind of putting into that succession what kind of properties I should be buying first is probably the easiest way for people to kind of move forward and do this full-time.

Brandon Turner:
All right, man. I love it. I love it. Well, thank you very much for joining us today. It’s going to be a great episode. People are going to love this thing. It’s going to change a lot of lives. So David, I guess I’ll give you the final question as usual.

David Greene:
Where can people find out more about you?

Omni Casey:
TikTok. I’m all over.

Brandon Turner:
Doing the dances? That’s what I thought.

Omni Casey:
Not on TikTok. I’m on Facebook. Omni the Investor Guy. O-M-N-I, the investor guy. And I’m on Instagram. I’m embarrassed on how little I do on Instagram. I’m trying.

Brandon Turner:
We’re going to get you there, man.

Omni Casey:
Yes.

David Greene:
You need to be Omni-present.

Omni Casey:
It was taken. So I’m Omni the Investor Guy.

Brandon Turner:
I love it, dude. All right. Well, thank you very much. Thank you for joining us today. And David, thank you as well for joining us today.

David Greene:
It was a blast. Omni, I really appreciate your insight. You can tell that there’s a lot of wisdom that’s coming out of you and that you also have a very good heart. So thank you for coming and sharing what you’re doing and letting us take this show and make it less about specific tactics and more about overall how you build a healthy portfolio that will last for a long period of time. Because it doesn’t matter how much we you build if you end up losing it.

Omni Casey:
Absolutely. Thank you.

David Greene:
This is David Greene for Brandon, he’s on TikTok and you know he won’t stop, Turner. Signing off.

 

 

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