Real Estate Investing School Podcast

Episode 127: Find More Deals Faster with Zachary Gray

Release Date: January 29, 2024
Host: Joe Jensen
Guest: Zachary Gray, Entrepreneur, Strength & Conditioning Facility Owner, Real Estate Investor (134 units in 2 years)

Brief Overview

In this episode, Joe Jensen sits down with Zachary Gray—a driven real estate investor who scaled from zero to 134 units across Massachusetts and South Carolina in just two years. Zach shares his journey from growing up in a modest household, through the military, personal training, and into commercial and multifamily real estate. He dives into his hands-on strategies for finding and funding deals, establishing strong investor partnerships, and building a system rooted in abundance and collaboration over competition.

Key Discussion Points & Insights

1. How Zach Got Into Real Estate

• From an early exposure to renting, Zach was intrigued by the concept of property ownership (04:00).
• Took elective real estate investing courses in both high school and college as part of his business curriculum (04:40).
• Didn’t pursue ownership immediately due to perceived lack of maturity/confidence as a young adult (05:00).

2. The Catalyst: COVID, Financial Literacy, and Bold Moves

• During COVID, as a self-employed trainer, Zach focused on reducing personal expenses to scale his business and investments (06:00).
• Sold a personal townhouse to buy a duplex, thus house-hacking to eliminate housing expenses and free up capital for further investments (06:15).
• Inspired by financial literacy podcasts and binged BiggerPockets episodes, using downtime to deeply educate himself on real estate mechanics (07:00).

3. Creative Financing & Lending Solutions

• Faced self-employment lending hurdles (less than 2 years’ tax returns), but leveraged networking to secure a portfolio lender via BiggerPockets, requiring 20% down (08:00).
• Would use hard money or alternative financing if starting again, underscoring the importance of creative problem solving for new investors (10:00).

"I don't have the ability to just wait around for two years because I'm going to get left behind."
— Zach Gray (11:22)

• Understanding economic cycles: Recognized COVID-era money printing would drive asset inflation, prompting urgency to “buy as much property as I can in as short a period as possible." (11:06, 12:12)

4. Building the Portfolio: First Deals and Leveraging Equity

Step-by-step of Zach’s rapid scaling:

• First Duplex: Sold townhouse, bought duplex for $510,000; put in $102,000 (sale proceeds + cash) (21:00).
• HELOC: Immediately got a home equity line of credit (HELOC) from a credit union up to 95% LTV, pulling out $93,000—reducing cash at risk to just $9,000 (21:55).
• Next Property: With 2 years’ tax returns, used VA loan (or FHA), bought a three-family ($865k) near his business, no down payment needed (23:01).
• Networking: Attended real estate meetups, found business partners, and sourced deals via aggressive in-person networking—“vibe checking” for commitment and hustle (24:00).
• First Partnership: Bought a five-unit with a new partner—decision made on the spot—secured and eventually refinanced, pulling most capital back out to recycle (26:00).

5. Attracting & Structuring Investor Capital

• Demonstrated results from early deals to high-net-worth clients from his fitness business (27:00).
• Offered attractive investor terms: 9–10% preferred returns (personally guaranteed), paid within 30 days, plus 50% of deal upside. "Regardless of whether the property performs, you're going to get your 9 or 10%, and you’re going to get it in the mail." (29:41)

"No one’s concerned about my ability to pay, because... I see them once or twice a week. If not, they’ll stop paying for training!"
— Zach Gray (30:29)

• Used social proof—seated investors together at his wedding to stimulate curiosity and interest from new prospects (31:14).

6. Scaling Up: Syndication and Lessons Learned

• Landed a 69-unit off-market portfolio via networking and word-of-mouth (estate sale, not widely marketed). Bought at a $37k/unit discount (compared to area comps of $120k/unit) (33:19, 34:14).
• Realized the operational complexity of syndications make them less attractive—prefers joint ventures (JV) with fewer partners for higher speed and control (37:36).

7. Partnership and Deal Structure

• Typical deal has immediate preferred return (8–9%) paid upon acquisition—no “wait and see” period for cash flow (40:09).
• All cash flow and equity above the preferred return is split 50-50 between operators and investors (41:01).
• Generous incentives: 16% equity to anyone who brings a deal (thirds split if a third partner brings the deal), stimulating pipeline (42:05).

"If you have 30 people who are moving in the same direction as you, all taking actionable steps... you will win."
— Zach Gray (43:29)

• Upon refinancing, investors get 100% of their capital back before further splits—motivating reinvestment and referrals (44:51).

8. Abundance Mindset & “Go-Giver” Principle

• Zach’s guiding philosophy: “Hook up” everyone in your circle—investors, contractors, attorneys, deal finders—often overpaying or rewarding to foster loyalty, speed, and opportunity (47:55).
• Key book: The Go-Giver—prioritize giving and collaboration over competition. “People at the top collaborate and people at the bottom compete.” (49:33)

Notable Quotes & Memorable Moments

• On risk and opportunity:

  “This is the cheapest things will be forever, right now.” — Zach Gray (16:59)

• On finding the right partners:

  “If they didn’t have an answer or there was a pause, it’s not the right person.” — Zach Gray (24:02)

• On aligning structure:

  “Our incentives are mutually aligned between us as operators and to our investors.” — Zach Gray (38:53)

• On investor experience:

  “I want everybody to funnel me deals.” — Zach Gray (43:38)

• On collaborations:

  “People at the top collaborate and people at the bottom compete.” — Zach Gray (49:33)

Timestamps for Key Segments

• [02:51] Early influences: discovering property ownership as a kid
• [04:36] Taking real estate investing classes in school and college
• [08:00–09:58] Overcoming self-employment lending hurdles
• [11:04] Recognizing economic opportunity during COVID
• [21:00–23:01] Step-by-step: From first duplex with significant down payment to creative equity extraction and subsequent deals
• [24:00–26:18] Networking and the first partnership
• [29:41] Investor offer: preferred returns, personal guarantees
• [33:19–34:39] Acquiring a 69-unit portfolio—major upward leap
• [38:53–42:05] JV deal structure, incentive model, and rapid deal flow
• [44:51] The importance of returning investor money on refi
• [47:55] Zach’s guiding principles—abundance and giving
• [49:33] Collaboration vs. competition
• [51:40] Zach’s costly mistake: spending $10k on lead abatement unnecessarily
• [52:40] Purpose of life: continuous self-improvement and happiness balance
• [53:36] Connect with Zach: Instagram @the1099mindset

Conclusion & Takeaways

Zach Gray’s journey is a testament to creative problem solving, relentless networking, and operating from a mindset of generosity and abundance. His systems—deeply focused on minimizing personal risk, maximizing partner incentives, and always putting investors first—have enabled explosive growth in a short period. For listeners at any stage, Zach’s story showcases that with the right attitude, relationships, and approach, “everyone has an equal chance” in real estate.

Connect with Zach:
Instagram: @the1099mindset