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Real Estate Investing School Podcast
119. Knocking Doors to Own Doors with Zach Winter
01:00:10
Welcome back to the Real Estate Investing School Podcast. Today we are kicking off 2024 with the motivating story of Zach Winter. Zach shares his journey from door-to-door sales to real estate investing. He explains how he was introduced to real...
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- [00:00]
A
I look at my bank account every day. I'm not looking for the dollar amount. I'm just looking at that real estate account. Like, okay, when can I, when can I get that next property? When can I get the next property?
- [00:13]
B
Welcome to the Real Estate Investing School podcast. I'm your host, Joe Jensen. We've got Zach Winter on today. Now Zach lives here in St. George, Utah near me, and he's been selling door to door since 2015. He's also been investing in real estate since 2019. So he's been in the game four or five years here and he's got, what is it, 16 deals under his belts already in a short amount of time. So I'm excited to kind of dive into that. But welcome to the show, Zach.
- [00:45]
A
Awesome. Glad to be here.
- [00:46]
B
Yeah, man, glad we can make this work. So, I mean, so tell us a little bit about your story about, I mean it gets you, you've been doing door to door sales for, for a while now, but where, where did you first get introduced to real estate as an investment?
- [01:06]
A
I think it came just from my, my first year doing door to door. You know, something I really love about this industry is like they, they want you to grow outside of the industry as well. And so just going to seminars outside of like, once we were done with this, with the summer, there was a ton of opportunities to att seminars and coaching classes and things like that and just listening to how people were utilizing the money that they were making and how to grow outside of the job, that's kind of what piqued my interest. I wasn't super fond of some people, you know, investing in the stock market or, you know, doing these like, investments that way wasn't really exciting to me. But when someone, when I went to a seminar once for, for real estate investing and, and it was, you know, that was what really, really clicked for me. And so I, that's what I focused on.
- [02:10]
B
So what, what do you think it was about real estate investing specifically that just like, like got you psyched? Like, what, what about real estate is interesting and cool as opposed to other, you know, revenues of investing?
- [02:25]
A
Truthfully, Truthfully, I think the answer, I think the answer was just that it's, it's safe. I like it. I, I, I'm a pretty reserved guy. I, I like to play it safe, but at the same time, like, I know if I like, play extremely safe my whole life, you know, you know, retirement accounts, 401ks, things like that, it's like that's not really going to get me anywhere. But like putting money into something that's like real, physical, tangible, you know, I mean, for some reason that, that's what got me excited. I was like, oh man, you know, people are always going to rent, especially right now, and it's like something you buy that you can actually go see, touch, feel. I mean it's, it isn't a physical asset, which I always, for me, that always made sense.
- [03:19]
B
I love that. Well, and it's funny because the interesting thing, if anybody listens podcast, they know that I'm like pretty risk adverse, right? Like, so I love the safety aspect of real estate investing. Especially like long hold cash flow, like landlording stuff. Like you know, that's, that's pretty safe. Like it doesn't get much safer than that when it comes to investing. If you're into like land developing and flipping, you know, there's a little more of a inherent risk because there's so many unknown variables. But, but long haul, so stuff, it's super, super safe. But what's interesting is you mentioned like, oh, I could play like really safe just doing like stocks and like 401ks and stuff. And I would just argue for those listening. It's like those are so commonly accepted and they're easy to do, but they're not actually safer. Like I would argue that real estate investing is way safer than a 401k or anything in the stock market because we've seen what happens to the stock market. I mean it goes up and down and there's an election and somebody tweets something and then the whole world explodes and it's like, and the stock market reacts accordingly. It's so volatile. Which, you know, those who argue for it like, oh, but overall it goes up. Like, yeah, but what about when you need to retire? What about when you need the money? What if it's not up then? You know what I mean? Like that's, that's a hard bet. And so anyway, I think real estate investing is, even though it is more complicated, it's more hands on than just throwing some money in the stock market. I do think it is safer. But anyway, so that's awesome, dude. I love the, you know, that was kind of my, a lot of my attraction to it as well. And I did like that I could own something that's real, that's mine, that isn't going to just disappear overnight that somebody else could take away. It's not somebody else's company. It's. It's my own little business that's mine. Regardless of what else I do, which is, which is awesome. A lot of us spend a ton of time building other people's book of business. You know, whether we're salesmen, you know, we're building their solar company or building their alarm company, or building their pest company or whatever, you know, or, you know, just a normal W2 job. You're building someone, you know, you're working to help build someone else's business, which is fine as long as you're also building your own. But if you're never building your own, it's like, where are you going? And that's what I loved about real estate is whatever else I was doing over here, I'm still taking care of me. I'm building my portfolio. Um, so anyway, I know that resounds with you as well, I'm sure.
- [05:48]
A
And you can like, you can if you want to do bigger, riskier, like you can. That's what I love about real estate. If you want to scale a little bit faster, do bigger deals. Like if you want to be risky. I still think, yeah, I mean it's very scalable on like very low risk or high risk. You can really choose where you want to be. I'll lean towards the, the lower risk long term, but you know, maybe if I get an itch to do a little bit more of a higher return, higher risk deal, I mean, it's definitely available, it's definitely out 100.
- [06:17]
B
Yeah, I love how customizable it is, especially once you have that like foundation, you know, let's say you build up your, your portfolio where you can kind of like, hey, I could live off this. Now I'm free with my time and my efforts now anything else I do, I go make some big money I can go put into a risky one. If it all falls through. Like, I'm still not going back to a 9 to 5. Like I'm still free, right? So it doesn't matter. So it's like you can kind of have a multi staged approach of your risk level as you build your portfolio out, you know, Because a lot of people doing the real risky stuff, you know, they have such a strong found that it's like, even if all of that goes south 100%, like they're fine, you know?
- [06:52]
A
Yeah, exactly.
- [06:54]
B
So, so let's go back. What was deal number one then, man? So you start knocking doors, you're going around these people like that are like, in trying to improve themselves and better their investments and you get exposed to real estate. You're like, oh man, I should do that too. When did it, when did you first pull the, the first trigger and actually start buying?
- [07:13]
A
So I ever like the first year is when I like went to a seminar. I was like, it talked about real estate, talked about the benefits, it talked about the four returns. So like as soon as I, my very first year, I was like, okay, that's what I want to do. So I actually years and years and years, like I worked but never pulled the trigger. So like 2015, I was like, this is what I want to do. I don't want to work forever. I don't want to, you know, go year to year just banking on, you know, my sweat, blood, sweat and tears to pay for the things that I want in my lifestyle. But I was so timid. I have no idea why. I'd read books, I'd listen to Grant Cardone. I've been like, watch people on, on Instagram. I've read books. Like, I went through all of it and I had, you could say maybe a little bit more than a basic, understand real estate. But I, and I had a real estate account in, in my bank account, I had a separate account. Every paycheck I would put 30% of my paycheck into that account. And so I actually, I didn't end up pulling the trigger till, till 2019, but I had like, you know, I had a way good amount of money sitting in that real estate account for two, three years. And I just never did anything with it. I, I don't know what it was just the, I don't know. I feel like there's a really big talent in execution. I feel like it take. I feel like execution is a skill set and it has to be practiced and learned. And for whatever reason, I didn't pull the trigger until 2019 and I bought my first property. It was just a single family home in Tulsa, Oklahoma.
- [09:06]
B
So how. What, what happened for you? What was the shift? You know, because you're looking at it, you're thinking about it. I think a lot of people are in that same boat, you know, you're looking at for years, you, you even put a money aside, you've got the money to do it and you're thinking about it. What was the shift to actually, you know, take action?
- [09:22]
A
I think I just stop. I think it's fear. I think, I think people create this story in their head that, you know, that, that keeps them from actually pulling the trigger. Like, oh, next year is going to be a better year. Like, for those listening right now, I'm sure that's going now, like, okay, I'm going to wait till interest rates go down. I'm going to wait till prices come down. I'm going to wait till, you know, my income's a certain level. I'm going to wait till this, that and the other. And I think, I think I just came to the realization as like I, in 2019, I had at that time my biggest income year and I actually wasn't excited. I think that's what switched because I had a really good year. You know, I mean, it was awesome. But the big question that came to my head is like, what do I have to show for it?
- [10:13]
B
You know, it's funny as, as a salesman, like for those listening that have never done direct high commission sales, like the, the excitement from the sale is all that you, like, you live off the high of like getting the sale, hitting. And there's nothing better than hitting your, your yearly goal. Your yearly goal. You're like, elated. Like, that's heavy. Like I not only. It's like getting a sale times a 2 or 300, right? Like, it's like I did. And when you hit the point in your career where you're like, I don't even care, this deep introspection goes on. You're like, huh, that's like the ultimate goal I hit and I don't even care what, what do I need to do? And I likely say it's like, but what am I, what am I building of my own? You know? And that's what you're saying, like, what do I have to show for it? And so you kind of did some, some deep dive into, into your own motives, huh?
- [11:03]
A
Yeah, because it's scary. It's because I, I think a huge motivator is like in a, and also a huge like skill set you can learn is like having a vision. So I think, I think the biggest thing is like, okay, and I've been in door to door for four years now. Like, what do I have to show for it? What am I continue to have to do this year after year to continue to support my lifestyle? Like, what, what happens when I can't do that right? This, I feel like door to door is the best opportunity in the entire world. I think it, I think it opens so many different doors for you. I think it's the number one vehicle to start your own business, to do what you want to do, to do real estate, to invest. I think it requires no capital. You can go out and just trade time for money. It doesn't require any of your own money.
- [11:47]
B
Yeah, Time out verse. Right. Like, it's so none. You know, you just step in.
- [11:53]
A
You just step in and do it. And I think the, I think just the biggest thing, I was like, okay, like, now that I've done it, why am I not excited about this anymore? Like, you know, I hit my income, but I literally, I look back and I have to go back and trade another year of my life in order to recreate that, and I don't want that.
- [12:13]
B
So then you start putting into real estate, and then it's. Now you're not knocking to hit the goal. You're not knocking. You're not selling to hit the certain commission. You're like, you're selling to buy the next door. You're selling to buy the next piece of freedom.
- [12:23]
A
Him.
- [12:23]
B
And then you got the motivation, the excitement back, huh?
- [12:26]
A
Oh, yeah. Now I just, every day, I don't. I look at my bank account every day. I'm not, look, I'm not looking for the, the dollar amount. I'm just looking at that real estate account. Like, okay, when can I, when can I get that next property? When can I get the next property? I'll, you know, my, the expense account and all the other accounts I have. It's not really, it's not really exciting anymore to see those grow. I'm just waiting for that real estate account to hit, you know, whatever my goal is, put another down payment on another property.
- [12:51]
B
I love, I love that you break it up that way. And that's something I coach all my students to do too. I'm like, hey, look, like, break up your, your buckets, like your budgets. You got your spending money, you know, your, Your working capital. You got your personal like cash cushion safety net and stuff. And then you have this investment budget, you know, and that's that bank account like that you say. And then when that one. That's the money you're just itching to spend. The moment you can find the right deal. You're just like, you're wanting to spend that. The other money you don't touch. And it's, it's different. But, but that, that one bucket, that bank account for investing, everybody should have that. And they're just itching to spend that money as soon as they can find something that get hits their goals, you know?
- [13:28]
A
Yeah. And it's such an easy budget. Like something I've learned. I've. I've worked with some incredibly financially smart people, yet they don't do that. And they, they're. They're very Wise, they know what to do. But if the money's sitting in an account and it doesn't have a place to go, you will spend it.
- [13:49]
B
Mm.
- [13:50]
A
If the money's not already allocated before it hits your account, if you don't already know where your money is going, it doesn't matter how wise you are. It doesn't matter how financially literate you are, the money's gonna get spent. It's not gonna be. It's not gonna be put where you want it. But, like, for me, like, I have my checking account. That's where all my expenses come out of. I have my tax account. You know, I pull a percentage out of every paycheck, so I'm 100% prepared for taxes. I have my real estate account, and then I have my kings vault, you could say, or my rainy day fund. The 12 months of expenses saved up. And then I have a toy account. It's. And I have them all labeled. I don't know if you knew this. You can message your bank and say, I want this account labeled toys. I love it. Put a portion in that so I can go have some fun. And, you know, I just bought a dirt bike today, so, you know, pulled that out of the. Out of the toy account and, you know, go treat myself a little bit. But I also do not whatsoever ever spend real estate for anything else other than real estate. That tax money is never spent until I pay taxes. Typically, I'm. I pay less than what I put in over the year. So when that realist in the play fund after.
- [15:05]
B
Huh.
- [15:06]
A
Yeah, the last couple years, I've actually dumped it back into real estate, so.
- [15:11]
B
Love it. Love it. That's cool.
- [15:14]
A
So.
- [15:14]
B
So you buy your first. Well, okay, so you live in Utah, but your first property you buy as an investment property is in Oklahoma. Was that. How did you find that? How did you fund it? Was this, like, a. A partnership thing where there was like. How did you end up pulling sugar and doing that out of state?
- [15:32]
A
No, so I actually. I actually lived in Texas at the time. I've been traveling over the last four years for. For my job. I'd actually just recently moved back to St. George four weeks ago, so. Oh, okay. I. I got put into contact with a real estate agent in Tulsa, Oklahoma, that also managed the properties. And I had chatted with him over three, four, or five months, and just over the deals that he sent me and the communication that we've had, I was like, you know, I trust this guy. The person that put me in contact with this, with with this agent, had a really good experience with a purchase of real estate investment himself. So I had, I had credibility, I had trust, I had someone at already previously had a good experience with him. And over my communications with him over, you know, the three or four months while I was looking for a deal, all went really well. And so I ended up pulling the trigger on that first one.
- [16:32]
B
So you were living in Texas at the time?
- [16:34]
A
Yep, I was living, I was living in North Lake, Texas, which is just 40 minutes north of Fort Worth.
- [16:41]
B
Okay, so you're living in Texas, you end up getting connected with an agent in Oklahoma who's also a property manager. And you had a friend that had worked with him and so you felt comfortable pulling the trigger and you just buy a deal that he finds and it's kind of turnkey, it sounds like he finds it, he sells it to you, he property manages it and then you're good to go.
- [17:01]
A
Yep. And it's been awesome, awesome ever since. I don't ever hear from him, which is really good from a property manager like in other investments. It feels like property managers don't really understand what their title is because it feels like they're calling me to help them manage the property, but I don't ever. Checks are always on time. Rent checks are always on time. Tenants that have leases that are ended typically have another tenant in there within a week or two. So I never, never miss a month of rent. So this guy is, this guy's really good.
- [17:35]
B
That's a dream. That's awesome. So then what happens after that? So I mean you're 16 homes in at this point in life right now, today. So that was deal one. We probably don't have time to cover all 16, but maybe paint the picture how you see it. Like what happened to kind of add so many and scale? Were they all just these kind of out of state turnkeys or what did it all look like?
- [18:01]
A
Yeah, I mean after that it's. That's, that's what I'm talking about is the art of. I feel like it's an art. It's the art of execution. And once you execute once the floodgates open. Once, once I did it once I knew I could replicate it, I knew I could do it. It wasn't an idea anymore. It was something I was doing. And what's way easier then, what's way easier than buying your first one is continuing to do it the first the hardest for sure. And it's just kind of that initial. The first step's always the hardest. You hear it all the time. Like, okay, that first step is the hardest. But then you have momentum and momentum is key. Once you're focused and once you, once you take that first step, focus starts to happen. And when you start to focus and obviously where focus goes, energy flows. And now it's just a regular day to day thing for me.
- [19:05]
B
That's awesome. I love that. So you just start doing the same thing. Okay, Rinse and repeat, rinse and repeat. Let's just buy another, buy another, buy another. And you're buying a couple year at this point of just kind of the same thing. Just these turnkey out of state residential rentals.
- [19:22]
A
Yep.
- [19:22]
B
I love it. It's like, guys, it doesn't need to be sexy or creative. Like you just figure it out and then you just duplicate it.
- [19:29]
A
Right. I'm not the brightest tool in the shed. I, if I can do it, literally anyone can do. Just all comes back to actually pulling the trigger. And, and for me I'm, I could, I could say maybe I'm slightly analytical like to analyze the crap out of everything. And I'm like, oh, I got to be 100% all knowing on, on a B and C topic before I do anything with about it. And for me I just realized like, I like I would say probably more than 90% of all the knowledge I have on real estate has come by just doing it. Things I've learned way like asking my real estate agent like, you know, hey, so what does that mean? Like I've already bought the property and I have no idea like you know, how the property, how I should be paid. So like are you going to send me a check? Is there like some sort of software that I need to, you know, get paid every, like how does that work?
- [20:30]
B
I love that, that concept of like just not being afraid to look stupid. You know, you get, you get moving. You're just like, I don't, I don't know what that means. Like, and I've done dozens of deals and I'll still have something come across my table from a lender or a bank or an agent. I'm like, you're gonna have to explain that one to me. I don't know what that means. You know what I mean? At the beginning you're gonna do that to almost everything. You're like, what's escrow? Like what is the closing cost? Like, I didn't know there was. Okay, you just like, you might look stupid but like who cares? That's how you're gonna learn. And they don't care. They're making money off you. So they'll tell you, you know what I mean? The agents, the lenders are like, they're used to it. You know, they don't, they don't care if you look cool or not. They're just, they'll expl. The more, you know, you'll probably come back and buy another one with them. So everybody's motives are very aligned. They don't care if you look good or dumb or this or that. And yeah, just ask those questions as you go. I love it.
- [21:21]
A
Yeah, like, just recently, I, I, I sold a, I, I had a property in Utah, in Syracuse, Utah. And I, I sold it, I had a pretty decent amount of equity in it. So I was trying to funnel that money back into Tulsa and I'm like, oh, heck, yeah. You know, I got all this equity and then I got the, you know, after closing, you know, I got the, the detailed, you know, breakdown of like, the closing costs and all that stuff. I was like, what? I have no idea. I paid that. You paid real estate agent commissions for. The seller pays. I had no idea.
- [21:56]
B
He's never done it.
- [21:58]
A
What the heck is this? Like, you know, I paid 6% to what?
- [22:03]
B
I paid half the closing costs. What? What?
- [22:06]
A
And so they're like, oh, yeah, seller always pays real estate, the agent commissions. And I was like, oh, I had no idea. I had no. Yeah. Anyways, it's just like, stuff like that, that's fun that you're like learning along the way. And now, now I know to prepare that on, like, if I ever sell a property again, you know, I'll prepare for, for commissions.
- [22:25]
B
Yeah, dude, I, I love it. I think that's so key. And then just on that note, for those listening, it's like, yeah, when you're buying, you, you use an agent, do whatever you want. Who cares? You're not paying the fee. The seller's paying the agent fees.
- [22:37]
A
Right?
- [22:38]
B
You, you get a, just use the agents for free and they can help you find it and help you close it and all stuff. When you're selling. Yeah, you're paying the agent fees and so be aware of that. You could sell it on your own. You know, you can use Homey. You can get it listed. You can use Facebook. I've, dude, I sold a million dollar home on Facebook Marketplace, by myself. Like, no agents. Like, like, it's not complicated, to be honest, because, you know who does all the work? The title company. I just go to them and say, like you were saying, how does all this work, I don't know what to do next. And they'll put the pieces together, you know what I mean? So can earn his income and they can, they can do some amazing things, you know what I mean? And who knows, maybe I would have got a lot more if I'd had a better. Had used an agent and he, you know, showed me some tricks. But, but so, so tell us, Zach, what, when you're looking at these deals, what makes you feel comfortable pulling the trigger as? And by that, I mean, like, what's your buy box? How are you analyzing them? How are you deciding, like, this one fits Whatever you're looking for, what are you looking for? You're not just buying randomly, right? You're like, okay, I'm gonna buy this next deal. How do you know it's a deal that works for Zach Winter?
- [23:47]
A
Yeah, so I, I think, you know, maybe for me, my goals are a little bit different than everyone else's. So I, I feel like, I feel like there's three different types of, like, real estate goals. Like you can purchase for, for high net worth or high equity. So you just want to build a portfolio that has a ton of equity. You could buy for solely cash flow. Like, okay, I want to have a high amount of cash flow. And then obviously, like a third way is just somewhere in between where you're making decent equity and you're making decent cash flow. I think I probably fall currently more in the cash flow side of things. Like, for me, I'm not too concerned about my net worth. I'm not too concerned about having all my money tied up in assets. For me, I want liquid, usable money right now in order to continue to buy and continue to replicate and continue to build my portfolio. So I am very, very cash flow conscious right now. I don't, I don't care if the property is going to be a good investment now and it's going to be worth, you know, 200,000 later down the road, which maybe that's not the right way to go about it. Now I have people all the time like, oh, well, you could just do a HELOC and pull out equity and buy more and, you know, whatever. I'm not really. That's not my idea and that's not what works for me. So I'm looking for homes that are in obviously decent locations so it will appraise over time. But that's not my main goal. But I'm primarily looking. It's like, okay, am I going to make more than 10% cash on cash return on each property that I purchase.
- [25:24]
B
So if it's in a decent area, has a 10 plus cash and cash return and you've got, then if fits the budget that you have, you're pulling trigger.
- [25:34]
A
Exactly.
- [25:35]
B
I love that and I just want to say like, I love how you're like, yeah, there's lots of ways to make money in it. Right now. This is what I'm focusing on and I think this power, when I teach, I, I say those are like the blinders. Figure out what your goal is, put on the blinders and just go hit that. There's going to be a dozen good deals out there for somebody else that you're going to ignore along the way. And like I say, like, it might seem shortsighted because, oh, you're missing this deal and this down this deal. But the truth is it's the only way to take action because if you're looking at everything, you're not doing anything. You know, as soon as you put the blinders on, you can get some momentum and then, yeah, maybe then down the road you pivot, you take the blinders off, you reevaluate and now you put the blinders on, on a different goal. And now you are focused on appreciation and equity growth and you're not worried about the cash flow because you already hit your cash flow goal. You know, you can change your, your goal and your perspective throughout the, your career of investing, but when you're, wherever you're at, when you're there, laser focus. Like, and that's what I hear you saying you did for better or worse. Like, I don't know if it's the best thing or not, but I'm doing it. Let's go.
- [26:44]
A
I get, people tell me all the time, oh dude, commercial is going to be better or, you know, this and that. Actually I'm super, super attracted to commercial, but I haven't mastered residential yet, so it's like nor do I have the cash flow currently. Like I'm doing really well, but I don't have the cash flow to utilize that passive income to get into commercial do like do big, you know, commercial deals or not. So laser focus to master residential long term renting first and then when my passive income turns into something where I can start taking that money and putting it elsewhere, I'm super, super open to starting to get into commercial, but it's just not right now.
- [27:25]
B
I love that. So earlier in the podcast you had said something about that like taking action is like a skill, like it's a talent. Maybe you could speak on that. A little bit of how do you develop the skill of taking action?
- [27:41]
A
Yeah, I think, I think it starts doing small things. I think the, I think the art of execution is, is, is something that's like, I'm not going to go to the gym and immediately bench 500 pounds.
- [27:56]
B
Right.
- [27:57]
A
I think taking like, obviously the way you eat an elephant is one bite at a time. You're not going to take a whole bite, you're not going to eat an elephant all in one day. It's one bite at a time, little by little. I think it's the consistency of taking action on small little things. So, you know, I think the first, like the first thing that I did was, you know, the first, first after the first summer I made that real estate account, that was my, that was my execution. I'm going to go do it and then it's a little bit more real. And then, then it started as like, okay, I got to determine how much, what percentage of my income do I want going into this account. And now it's like, okay, now I'm going to execute every paycheck that goes in my account. That percentage goes to this. And so now I'm executing that. And it's like, okay, now this account starting to turn, starting to build up, starting to build up. And then finally once you make all these little actions, then the bigger action doesn't seem so tough. I made all little actions over, you know, three or four years and then, yeah, it took me forever to buy the first one. But I think most importantly, like, when I finally did pull the trigger, I was ready and I was prepared. I feel like a lot of people talk about like, oh, you know, opportunities like that just happens to Zach, right? Yeah, just Zach is a door to door guy. Everyone in Utah, you know, they get all these business opportunities and, and it's because they do door to door and you know, whatever A, B and C reason, only Zach gets the opportunities.
- [29:37]
B
Yeah.
- [29:38]
A
And I want, and I think what people don't realize is you get just as many opportunities as I do. Whether you see it or not is the difference. And typically if you're not seeing the opportunities, it's just because you're not ready for opportunity.
- [29:54]
B
Yeah.
- [29:54]
A
Like if a real estate, if you want to get into real estate and you have nothing in your account, the opportunity to come, the opportunity for you to actually get into it. Like let's say you have a phenomenal deal and it's like you only need 5% down or whatever and you're not ready. You're blinded to that. That's not an opportunity for you. You didn't see that as an opportunity because you weren't ready.
- [30:22]
B
Yeah, like, and it's so true because, you know, people could say, oh, well, yeah, you have this money so you can buy these deals. You know what I mean? Mean? And it's like, well, well, couple things. One, you work really hard for that money. Anybody can go knock a door and make money. Right. Two, it's like, there's a lot of people with a lot more money than you that aren't doing that, though, because they haven't done the research, they haven't learned how, they haven't developed the skill of taking the action, you know, so it's not like everybody with money is actually investing it wisely. You know what I mean? And, and, and three, if you, if that's not your strength, I would say that's your. Your. One of your advantages is, okay, you have this, you know, high income that you can translate into passive income. But for those that don't, like you said, okay, so do something else. If somebody really wanted to get into real estate and they had no money at all, they could study the crap out of how it works, go find deals, and I guarantee if they brought you or me or anybody else I've interviewed over the past hundred podcasts, one of those amazing deals, they're going to be able to get into you. Like, every. We're all looking for deals. Everybody wants a good deal. Like, that's like the best thing in the world. And if you can bring a good deal to an investor, like, they're gonna look at it and, and then bada bing. Now you own a piece of real estate. Like, it's, it's really that simple. If you're willing to do the legwork to figure it out, you know.
- [31:40]
A
Yeah, I promise you, like, opportunity will literally fall in your lap and that. Like, I, I am so dang surprised how many opportunities like this real estate agent, like, in Tulsa, he's like, I. My goal is to freaking own Tulsa because of how good this agent is and how, how awesome it's been so far. But it just, it just fell in my lap. And the only reason I saw it is because I was ready. Like, everyone, like, opportunity I would be willing to put money on 90% of the time, just is not you actively seeking will show up at your doorstep. And if you're ready, you'll open the door. If you're not, you won't even know someone's there.
- [32:25]
B
Yeah, I mean, we've heard the, you know, preparation, luck is what. When preparation meets opportunity, you know, and if you're prepared and. And you. You meet it, then, you know, people call that luck. And my whole theme this whole year of 2023 has been the action leads to opportunity. And it's like, if you're prepared and you're out taking action, you're out doing things, you're out meeting people, you're jumping on podcasts, you're going to seminars. I jumped on Jesse Itzler's free seminar thing this morning. Like, just jump on random things. Like, get it. Get involved. Go to a meetup. Like, just go take action. And it's like, things will fall into place. If you're taking action and you have your eyes open for the opportunity, then. Then things will come along, you know, and. And I think if you have the clarity of what you're trying to accomplish, and this goes back to those blinders, right? When you have clarity, the universe just delivers. Delivers. But when the. When you have vagueness, the universe is just silent, dude. It just doesn't care. Like, nothing will happen with vague intentions. It's funny, at the beginning of this podcast, you were saying you're like, dude, I want to do some stuff and get on a podcast, because you're listening to a couple of buddies, podcasts and stuff. And then like, what is it? Literally, Was it that day or that week you got a call to be on this podcast?
- [33:44]
A
It was that day.
- [33:46]
B
I love that.
- [33:47]
A
Like, from Elko. I. You know, it's like a 6 hour and 15 minute drive. I'm. I'm listening to my buddy's podcast. I. I think, like, oh, my gosh. Like, I would love to be. I'd love to be on a podcast. And literally, I'm 30 minutes from St. George on the same drive, and I'm messaging Kurt. He's like, dude, you need to be on our podcast. And it's like, it was. It was hers. It was like hours. And. And it was like, okay, dude, I love it.
- [34:21]
B
It's funny. Like. Like, see, when you put the intention out there, especially when you've done the preparation and you're taking action, you know, you'd already bought 16 doors. It's like you've been sitting on the sidelines. You know, you're. You're interacting with different people and messaging friends and listening to podcasts and having the thoughts, and then it comes along. Like, it's crazy how fast those things can happen. And sometimes it doesn't happen fast. And that's okay too, you know, But I love that, man. Before we go into like our final four and stuff like that, I want to ask you a little bit maybe because it's not all sunshine and roses, right? It's like a lot of, we run into a lot of headaches and a lot of issues. Now you had this, tell us about this like year long lawsuit you had with, with a homeowner. Can you kind of tell us that story?
- [35:09]
A
Yeah. So in Tulsa, I had, I had a portfolio of five homes that, that an owner was selling. Really, really good opportunity. The whole portfolio, the homes were around anywhere between 210 to 220 thousand dollars in value. And if I bought the whole, if I bought the whole portfolio, we were. He was selling for 166,5 per, per property he was selling. He was, he was doing a good deal because he wanted to get all of them and he had another investment that he wanted to, that he wanted to hop on. That was a really good deal for him. So it was kind of a price to sell. Well, again, huge praise to my, my agent in, in Tulsa. He's like, hey, this is a really good opportunity, but we still need to be smart. When we offer on these properties, we are going to do individual contracts.
- [36:08]
B
Okay.
- [36:09]
A
Because I get scared when people sell multiple homes in a single bundle.
- [36:16]
B
It's like three monies and two just crap shoots.
- [36:20]
A
Exactly. It's like someone like, in my, he's like, in my experience, he's trying to slip something under the rug. And I'm not telling you that that's the case, but I do want to make sure that we're protected. So we're going to offer individual contracts. So if something does come up, we can still execute whatever contracts we like. I love that. So we ended up doing that. The agent explained to the, the seller like, hey, there are individual contracts just in case. And they accepted it. Like, okay, we won't do one whole contract. We're going to do individual contracts per property. I spent a lot of money on inspections and that was a really good decision. We found out three of the properties had plumbing leaks underneath the slab. So really those are headaches.
- [37:11]
B
I'm dealing with one of those right now.
- [37:14]
A
Really, really big problems, you know, to put stints or stilts or whatever where they go in and, and re and correct the foundation and stuff. I think one of them needed like 21 stilts or whatever they call and the other were a little bit better. But still it was probably going to be anywhere between like I think 48 to $58,000 in repairs. And that wasn't a permanent fix. You know, obviously that was a temporary. It's a temporary fix for those. It's probably over time going to continue to. To degrade. So we executed the contract. We executed two of the five contracts.
- [37:56]
B
That we had written.
- [37:58]
A
He was on the same page. He knew they were separate contracts. They accepted us, pulling out of the other three. They followed through on the other two. We were. We were set to close, and the buyer or the seller no showed the close. So I had. I had. I was all done on my end. He no showed the close. So the agents got it back together three days later. They got another. They got another. They got another closing date. He no showed the second closing date.
- [38:31]
B
No way.
- [38:32]
A
And then he blew up. He's like, I'm not selling you these properties. Like, you. You. Like, you can take me to core. And, you know, you're gonna have to, you know, pretty much pry these properties out of my dead cold hands. So we ended up soon. Him.
- [38:49]
B
Yeah. So that's interesting. I. I had a seller almost do that. Like, she was backing out. She didn't show up to the initial closing. And they like the. Luckily, you know, my agent every once really, like, you can't not sell it. That's illegal. Like, there's contracts. And she just was like, okay. And she ended up selling it, which was great because it was an awesome deal. But so what happens in this case then? Like, how does that go down when they don't show? They know show. They say, take me to court. Who's paying for these attorney fees? How is it, like, how much time is this taking? Like, you know, We've got another 15 minutes I want to dive in to. Like, how does that work? If they just back out and you're like, no, like, you. You promised you'd sell them. You have to.
- [39:33]
A
Oh, it is an absolute crap show. Hey, I want to hear it is not. It is not fun. I will no longer ever. If it. If I ever run into a similar situation.
- [39:46]
B
You wouldn't pursue it. Not worth it.
- [39:49]
A
So one thing that people, I think a huge misconception is if you win the lawsuit, then the. Then the opposing side pays your attorney fees 100% wrong.
- [40:00]
B
Really? Because. Yeah, that would be my assumption. I feel like that's typically what I.
- [40:04]
A
Thought Very rarely do it agreed upon that the opposing side will pay all attorney fees.
- [40:14]
B
For those listening, put that in your real estate purchase contract. Say, hey, if there's a disagreement, the. The win the loser pays all attorney fees. You can put that in any contract you want, you know, So. I love that.
- [40:26]
A
So.
- [40:27]
B
But that wasn't the case for you, Zach. So you're. You're just paying out of pocket for these attorney fees. And how did it all go down?
- [40:33]
A
Oh, yeah. So over the course of a year. So this guy was horrible to work with.
- [40:38]
B
He.
- [40:38]
A
He turned into straight dick mode. Or. He was not. He was not. He did not want to compromise whatsoever. He was all about wasting my time and my money, which meant his time and his money at the same time. He didn't care. He was, like, dragging me down with the ship, you could say. So over the course of the year, we tried to go back and forth. We avoided trying to go to court as much as possible. At that point, I was continuing on with this just in spite of how bad he was fighting us, even though he was. We. Even though our council and even his council were like, okay, he did. This guy's crazy. Like, we have executed good contracts in good standing. There's no shadiness in it. It's like a. It's a solid, solid, like, executable contract. We don't know what this guy's problem is. He actually. We had to work with three different lawyers with him because his first two lawyers were like, I can't. We gotta. We gotta. I can't work with this guy. We gotta get him over to somebody else. I can't work with him. So over the course of the year, just going back and forth, just like him, trying to get his properties back because he didn't want to sell anymore, I ended up paying about $38,000 in attorney fees. No way. And I got $2,500 back.
- [42:06]
B
So you never got the properties?
- [42:09]
A
I did. I did. I closed on them in October.
- [42:13]
B
Oh, okay. So you did end up getting the properties for the original terms and everything outlined, or did they change? Did any of that change?
- [42:20]
A
Nope. I. Yeah, that was the other really crappy part that he kind of really kicked me in the shins with is when. When we were originally under contract, I was on a 5,8 5 interest rate, and I closed at an 8.8.125. When we finally went all said and done.
- [42:38]
B
Oh, and that would be. That was just because the market had shifted.
- [42:41]
A
Right. So I couldn't. We couldn't obviously, continue with the original lending option. Obviously, those. So not only did I lose almost 3% in interest, I lost 38. I lost 38 grand in attorney fees. I got 25. $2800 back. Yeah.
- [43:01]
B
That's crazy. Moral of the story. The attorneys usually win when there's lawsuits.
- [43:09]
A
No one won. The attorneys won. The attorneys.
- [43:13]
B
Exactly. You know, it's funny because. Yeah, that's just interesting. It's almost always better to avoid litigation. Like, it's like in everybody's best interest if, if you can avoid it. But, but, you know, sometimes you gotta go for it. But that, that's interesting. So you go, looking back though, you wouldn't do it again?
- [43:35]
A
Oh, never. Like I would have. I, I would if it. Like, for me, I jumped. I was so pissed at this guy. I was like, we, you know, we have our, the loans cleared to close. Everything's good to go. I know interest rates are going up. I'm like, I have urgency to get this thing done right now. And I kind of like wanted to stick it to him. So that was my first answer. I, I think I would go through the process again, but it would definitely, at this point, be my very, very last resort. It would not be my. I, There was, there was probably a handful of other things we could have done prior to sending him papers or serving him.
- [44:21]
B
Yeah.
- [44:23]
A
But I, I probably go. I would probably do it again as a last resort, but I would never do it again as immediately. I would definitely exhaust every single option prior to doing that.
- [44:37]
B
There you go. That's interesting. Well, thanks for digging into that because that's an interesting story. I think a lot of people wonder what would happen there. I've wondered it because I've been close but never had a. Quite deal with it. And, and, and I've been on the other side too, where I've wanted. I've backed out of deals. Not selling, backed out of buying deals where it was kind of getting close. They're like, well, like they might, might want you to go through with it. But, you know, luckily we're able to talk about, and make sure everybody was happy and, and it was fine. But you know, you, when you start signing contracts and you say you're going to do things, you need to do them. You know what I mean? Or else things can get hairy on either side, you know?
- [45:16]
A
Yeah. And it was, yeah, it was a huge curveball because, like, everything had gone so smoothly. Like, okay, Yep, that works. We were very transparent in all of our emails and all of our texts. When we executed five contracts instead of one, we're like, hey, here's why we're doing this. We're doing it to protect ourselves. We know the properties are probably an okay standing, but just in Case we're doing it this way. And it was always okay. Yes, that makes sense. You guys are totally fine. Okay, blah, blah, blah, blah, blah. And then until he no showed, it was just a complete 180 degree turn.
- [45:52]
B
That's crazy. Well, dude, thanks for sharing that. Hopefully there's a lot we can learn from that. I think that'll actually maybe be your answer for one of the final four questions. So maybe I already covered that. So we'll dive into the final four before we do that. If people want to reach out to you, if they want to learn from you, work with you in any way, what's the best way for people to stay in touch?
- [46:13]
A
So on Facebook, just Zach Aaron Winter on Facebook. And then obviously Instagram is the Zach Winter. So just those two.
- [46:25]
B
There we go. Love it. All right, man, so here we go, the final four questions. Question number one, Zach, what's your dream deal or a deal you'd hope to tackle eventually?
- [46:38]
A
Dream deal I'd love to tackle is a 40 plus unit complex. You know, you hear Grant Cardone, if any of you have read up on how he started into real estate, you know, he bought, he bought two single families and it was a, it was horrible and had plumbing issues and he barely escaped alive, breaking even. And then he, if you, if you've listened to any of his, like if he's on the, the Moneymaker podcast, I believe that is. I just recently listened to that one. He saved, he saved up, bought a 36 unit complex, turned it around 36 months later or 18. 18 or 36 months later for $4.2 million in profit. Just those high unit apartment complexes, I think that that would be. Currently, I'm sure, I'm assuming as once that dream does come true that I'll have a little bit bigger dreams of a dream of a, of what my big dream deal would be. Yeah. But currently just a high unit, a high unit 40 plus unit complex that would, that'd be a dream deal for me.
- [47:47]
B
I love it. I love it. All right, question number two. Zachary Winter, what's been one of the most pivotal books you've ever read?
- [48:00]
A
Two books, I think, and they don't have anything to do with real estate. I think the principles apply. Like I'm talking about the art of execution. It being a skill set. You have to, you have to learn it over time. It's like a muscle. You have to grow it. I feel like these two books really, really helped me kind of one, fix my mindset in order to obtain whatever my goals Were. And then two. The consistency of doing the small things on a daily basis. So the first. The first one is the Slight Edge. Phenomenal book. I love it. I've read the Compound Effect and stuff like that. And which one did you read first?
- [48:42]
B
Atomic Habits. Compound Effect or the Slight Edge?
- [48:45]
A
Slight Edge.
- [48:46]
B
And that is the one that was money for you?
- [48:48]
A
Yeah. And it's. It all talks about the same dang principle.
- [48:52]
B
So for me, it was Compound Effect was the first one. And then I read the other two and I'm like, yeah, yeah, they're good. But like, whichever one, like first really drives home these principles are just. It's powerful.
- [49:05]
A
Yep. So for me, you know, I. I've read. I've read the Slight Edge three, four. Three or four times. Every time I read it, I have a deeper understanding. I feel like that's why people should go back and reread books. It's not that you. Information, like having knowledge on a wide scale is. Is really good, but I really want to have knowledge on a deep scale.
- [49:28]
B
So I love read the things.
- [49:30]
A
I read the same things, but I understand it on a, like a deeper emotional, like, almost as if like a. Like a spiritual level. The more. The deeper I understand it and that specific thing has more meaning to me. And I feel like that is what impacts your life. It's not just about reading the words. And like, okay, that information's in my head. It's like, okay, that information's in my head, but now it like, pierces my soul because, like, I found it on like a super deep level. And then the other one, I would say is, as a man thinketh, that's.
- [50:05]
B
A good one too. I love it. This is great, man. All right, question number three. What is the most expensive or interesting mistake you've made in real estate investing? So maybe we already covered that, but if you wanted to share a different one, you can.
- [50:21]
A
If not most expensive, not the most expensive mistake. So a huge. If anyone is like, relocating for work, not permanently. Something that I've done is I've looked to purchase my primary residence in a specific location. So when I left, which I knew I would, I would have a positive equity going and be able to allow me to buy more property. So, for example, I typically look for new neighborhoods that are in reasonable median home value, and I try to look in neighborhoods that are at the beginning of its project stage. So, for example, when I moved to Syracuse, Utah, I. I found a home that was on. It was one of the very. It was one of the first homes in the neighborhood. It was still super nice. I loved it. It was awesome. I knew I would probably be moving again just because I'm young and life changes, work changes, whatever. But that, that was the deal that I looked for. And it's like, okay, when I moved to Texas, I got. That was the, the home that I sold where I'm like, what I gotta pay? I gotta pay six. Where's all my equity? I thought I had 200 grand in equity and I'm only getting, you know, 160. What the heck is going on? Yeah, so that's where I learned that. But then I moved to Dallas, Fort Worth. So I looked at, I looked into a neighborhood. It was a new neighborhood. It only gone through its first out of six phases of the construction. There was an elementary school being built in the next three years or the next two years. You know, tons, like, awesome, awesome opportunity, great location. And it was one of the first homes so that, you know, I, I purchased that home and, and it worked out really well. Same concept, tons of equity. You know, obviously now I knew I had to pay commission, so I wasn't too caught off guard on that. And then I moved to Wichita, Kansas where I did the same thing and got a little bit more laxed on what I looked for. I still went for a new neighborhood, still in the beginning stages of construction. But I did not listen to myself as far as like the home value. So I did not. I did obviously Wichita way kind of lower end, lower income, median income as an area, whereas Dallas wasn't that way. So I knew, I was like, okay, well this would be a smarter purchase to go, you know, maybe the 2 8, 300 range. Instead I was like, well, you know, work's going good and you know, it's always, it's worth the last four times or three times. So, you know, I'm just going to kind of get whatever house I want and obviously within reasonable, affordable range. So I ended up, I ended up breaking my rule of, of purchasing. I bought a home in Goddard, Kansas, which is just outside of Wichita, for $549,000.
- [53:31]
B
The rule you broke is you bought above the median.
- [53:34]
A
Oh yeah, big time. Okay, Big time.
- [53:38]
B
Because you wanted something nicer. You're like, dude, I deserve it. I can live comfortable for the summer season. So you buy it way above the median and then. So then you go to sell it.
- [53:50]
A
Can'T sell it, still have it, still paying the mortgage.
- [53:53]
B
Is it cash flowing? I mean, is it covering its own costs or.
- [53:56]
A
No, it's in an HOA can't rent.
- [53:59]
B
Oh, no way. So it's empty. It's empty.
- [54:03]
A
I still have it. It's bugging the hell out of me.
- [54:05]
B
No way. You can't even rent it. Even after living in it for a year, you can't rent it.
- [54:10]
A
Nope. HOA, 100%, no exceptions, prohibits renting.
- [54:14]
B
Well, it's about time to. Yeah, that's crazy. That's crazy. I've never heard of that. Where they can't rent it at all. Even long term?
- [54:23]
A
Nope. No long term. Okay. At least one. No, nothing.
- [54:27]
B
This is great. Because, honestly, the mistake you made. Well, one was the median income thing, obviously, and then you didn't run the numbers. Oh, would it cash flow if I had to hold on to it? Because that's two things. You Can I exit? Can I cash flow if I can't exit? But this third point, I'm really glad you brought it up. HOA policies, like, read the HOA policies, guys. Like, it is not a joke. And I'm not against HOAs. I love buying properties with HOAs that justify their value and have proper policies. Some people say, don't buy an hoas because, you know, and I see why, you know, But. But read the HOA policies, guys. Like, read the CCNRs. Like, that's what it is. It's called the CCNR. Ask your agent. I need copies of the HOA CCNRs. And if you. It's boring. Read it. I promise you, you'll avoid huge headaches like this one, right? Because if you could rent it out, at least you could be, you know, breaking. You know, who knows? But there's just crazy stuff in HO. Get this. There's some HOAs that want a 1 to 2% fee of the sales commission of the house.
- [55:36]
A
That was. That was in. In Dallas. In. In, like, they had that. Yeah, I. I ended up. I ended up getting out of it because, you know, I, you know, I talked to the hoa, and. And anyways, long story short, I had my agent communicate with them, was like, I am not giving you guys any. And I guess there was some, like, there was some vague terminology where I was able to get out of it. But, yeah, I. I saw that. I was like, what?
- [56:01]
B
Yeah, that's crazy. I know. I remember I had the same thing, and I think it's one of these dirty little like, well, hope most people won't notice. It'll just come out of the commissions and they won't even see it and they just pocket this money. But if you push back, you can get out of them. I got out of mine, too. I was like, not a chance in hell am I giving you 1% of the purchase price of this place I'm buying. Like, you're crazy. And they were putting it on the buyer. I think when I was doing it was like a transfer fee to get the HOA put in my name or something. I don't know. Anyway, read your HOA cacnrs, guys. Like, like, if you learn nothing else today, that'll be a money one for a ton of reasons. Anyway, Zach, this is great. We could go on forever. We got one more question and we'll let you go. Thanks for, like, opening up and sharing, like, the mistakes you've made. Obviously you've had a ton of success and it's been really, really cool, but it's always great to learn from other people's mistakes so we don't have to do the same thing. So thanks for paving the way for us. Zach, last question. What's the purpose of life? Zach?
- [57:06]
A
I think the purpose of life is just in. In all areas, just being the absolute best you can be. Like, if you guys. If you guys have listened to. Oh my gosh, what's his. What's his name? Carry the boats, carry the logs.
- [57:24]
B
What's David Goggins?
- [57:27]
A
David Goggins. If you, if you've listened to him, I believe it was on the Joe Rogan podcast. And he's like, if you look at yourself, he's like, what I think heaven is like, if there is one is going there. And let's just, let's just say I screwed up my whole life. And I just, like, you know, I did everything that was easy. I never did anything hard. You know, I ate all the food I want. I wasn't in shape. Like, no one wants to, like, go to the gym and spend an hour. So I never went to the gym. I never sacrificed anything to have a greater life. I get to heaven and then God shows me this absolutely impeccable, chiseled six pack, smart, wise, beautiful life. Beautiful, like, and it shows me like, a version of myself. You're like, who the heck is this Is like virtual reality is like, what is this? And then getting told, like, this is the version that you could have been. This is a view that you could have been if you would have made the hard decisions to do hard things. And I think it's an all over thing. It's not just being, like, making the most money. I think that's a very small portion of it. How can I have relationships that are absolutely incredible. How can I have, you know, friends that are literally like ride or die?
- [58:55]
B
Yeah.
- [58:56]
A
How can I have a body that's absolutely on fire, just like in the tip top shape where I can live long and just feel amazing all the time and never have any health issues? Like just creating a life where every aspect is a 10 out of 10. And that's the meaning of my life is just, obviously we're not here for a long time, but we're here for a good time. I think that's true, but I. I think the word good time is incredibly misrepresented. A good time is. Is making tough decisions and doing the hard things and making the sacrifices and. And I think the most joy comes out of doing hard things. And I.
- [59:40]
B
There we have it.
- [59:41]
A
I don't think people get it, so.
- [59:43]
B
I love it, man. That's. We're found. I appreciate you sharing that. I. I agree thoroughly. Well, this is great, man. Thanks for your time. Thanks for being on the podcast. Look forward to hearing from you next time.
- [59:55]
A
Awesome. Thanks for having me.
- [59:56]
B
Yep. This is Joe Jensen signing off for the Real Estate Investing School podcast, reminding you to develop the art of execution.