Real Estate Investing School Podcast 199: First-Generation Success with Tony Lopes

Episode Date: October 7, 2024
Host: Joe Jensen
Guest: Tony Lopes, CEO of Dirty Boots Capital

Overview

In this insightful episode, Joe Jensen sits down with Tony Lopes, a first-generation American, real estate investor, CEO of Dirty Boots Capital, bestselling author, and coach. Tony shares his inspiring journey from humble beginnings as the child of immigrants to financial independence and early retirement at 44. The discussion dives deep into building wealth through real estate, the importance of active learning and networking, and how adaptability and creativity are essential in today’s ever-changing real estate market. Tony offers hard-won advice, actionable tactics, and motivational wisdom for both beginners and seasoned investors.

Key Discussion Points & Insights

1. Tony’s Origin Story: From Immigrant Roots to CEO

(01:59-06:09)

• Tony’s parents immigrated to the U.S. with little, stressing the classic mantra: “Get a good education and you'll get a great job and be set for life.”
• Tony followed this path, earning degrees in engineering and business, but realized its limitations after being laid off from his “good job.”
• This shock prompted him to seek financial independence through multiple streams of income, leading him to buy his first multifamily property—a four-unit building he still owns.
• Notable Quote: “I didn’t grow up with a silver spoon in my mouth... My parents came to this country with a few bucks in their pocket.” —Tony Lopes (02:22)
• He stresses you don’t need a lot of capital to start—use savings, 401k loans, or a HELOC for your first property.

2. Achieving Financial Independence & The Importance of Reserves

(06:09-09:39)

• Tony’s “retirement number” was double his living expenses to create a cushion for vacancies or major repairs:
  “Me being an engineer, I always put a factor of safety on things... I needed 2x my expenses.” —Tony Lopes (06:19)
• Many investors struggle because they underestimate necessary reserves and fail to account for vacancies, capital expenditures, and downturns.
• Joe’s Tip: Always keep a 3–8 month reserve for all your assets and account for capex and vacancy before calculating cash flow.

3. Learning from the Right People

(08:03-09:41)

• Tony emphasizes seeking advice only from those with real experience:
  “Don’t go talk to your neighbor who probably has never done it, never researched it, never experienced it. Go find those people who can help you avoid those pitfalls.” —Tony Lopes (09:14)
• Both Tony and Joe stress the danger of listening to naysayers without experience and the value of following proven paths.

4. The Power of Real Estate: Growth, Adaptability, and Creativity

(09:41-14:47)

• Real estate grows with you thanks to rent and property appreciation.
  “One thing I love about real estate is it grows with you... It’s so unique and special as an investment.” —Joe Jensen (10:12)
• Tony shares creative strategies to boost income, like leasing space to cell towers, billboards, or even adding storage or small RV parks.
• Today’s higher-interest environment demands more creativity:
  “You gotta get creative... A cell tower, I never would've thought of that until you mention it.” —Joe Jensen (13:04)

5. Getting “Dirty Boots”—On-the-Ground Diligence

(13:47-16:59)

• Tony’s company name, Dirty Boots Capital, symbolizes getting involved on the ground:
  “Get your boots dirty physically... walking a construction site, walking through a building.” —Tony Lopes (13:48)
• He now analyzes not only the property itself, but also local politics, tenant vs. landlord-friendly regulations, demographics, and economic trends.
• The importance of population pyramids and business migration: He seeks markets with strong young adult demographics and positive business movement.

6. Then vs. Now: The Evolving Landscape for Investors

(17:06-18:47)

• 20 years ago, Tony lacked today’s resources; now, podcasts, Facebook groups, and social media offer instant answers.
• Entry is easier than ever thanks to abundant free information, but creativity and diligence are still essential.

7. The Rise of “Renter Nation”

(20:11-24:31)

• The U.S. is becoming a nation of renters: The average age of a first-time home buyer is now 37, and 53% of 19-29-year-olds live at home.
• Not everyone dreams of homeownership; high earners are renting by choice, making multifamily investing increasingly promising.
• “We are purchasing... and are so bullish in terms of the multifamily space. The demand is phenomenal.” —Tony Lopes (21:24)
• Rents continue to rise: It’s still often much cheaper to rent than to own, giving landlords pricing power.

8. Picking Markets & Scaling Up

(25:15-30:31)

• Tony’s advice for beginners: Start local, where you know the market, and expand later.
• As you gain experience and resources, you can invest in growing states like Florida, leveraging property management teams and market data.
• “Invest where you’re at”—not just geographically, but skill-wise, knowledge-wise, and emotionally.

9. Shifting into Bigger Deals & the Value of Teams

(31:43-39:50)

• Tony’s leap from small properties to large multifamily came after his initial retirement, propelled by deep dives into macroeconomics and the realization that bigger deals offer better risk-adjusted returns.
• There are two types of multifamily distress: distressed assets (the property) and distressed operators (the management). Most current issues stem from inexperienced operators.
• Scaling up requires partnerships: Find your strength—deal sourcing, property management, capital, or underwriting—and partner with others with complementary skills (the “Avengers” analogy).
• Notable Quote: “Understand where your core value is that you bring to the table... and then go find those other people who need what you have.” —Tony Lopes (39:51)

10. The Power of Networking

(41:33-44:38)

• Tony shares a powerful story about meeting a family at a networking event, explaining how those genuine connections build trust for future big deals.
• In-person relationships matter far more than social media celebrities for real-world investing partnerships.

11. Service, Sharing, and Paying it Forward

(46:48-55:41)

• Tony generously offers to send a free copy of his book, Freedom at Risk, to listeners who email him (see below).
• Real estate’s collaborative culture: The industry is unique for its openness to sharing advice and contacts, unlike fields with guarded “trade secrets.”
• Tony’s driving motivation is helping people find satisfaction and serve others—beyond just financial gain.
• Notable Quote: “Don’t follow my dream. Find your own dream... what makes you satisfied?” —Tony Lopes (51:48)

Notable Quotes & Memorable Moments

• On Starting Out:
  “You don’t have to go super big and have tons of cash. Start with the means you have.” —Tony Lopes (04:40)
• On Financial Safety:
  “I needed to be making 2x my expenses, so in case I had vacancies or some issues... I had enough to support that repair.” —Tony Lopes (06:19)
• On Advice:
  “You’re listening to the wrong people. Listen to those who’ve actually done it.” —Tony Lopes (08:35)
• On Investing Philosophy:
  “Invest where you’re at...where you’re at skill-wise, knowledge-wise, emotionally, and fear-wise. You know, just invest where you’re at.” —Joe Jensen (28:38)
• On Teamwork:
  “You’re not going to do it on your own at this scale. You need to network, find the people, and then put the team together.” —Joe Jensen (40:28)
• On Helping Others:
  “What makes me satisfied is truly helping people.” —Tony Lopes (55:41)
• One-word reason for real estate:
  “Cash flow, baby, cash flow. It’s all about the cash flow... Cash flow is king for me.” —Tony Lopes (61:01)

Timestamps for Important Segments

• [01:59] – Tony's backstory: immigrant roots and discovery of real estate
• [06:19] – Defining “retirement” and the importance of cash reserves
• [09:14] – Why taking advice from the wrong people is dangerous
• [13:48] – “Getting your boots dirty”: the need for hands-on due diligence
• [20:36] – America as a “renter nation,” record numbers renting and living at home
• [25:15] – Evolving market selection strategy: start local, scale later
• [31:44] – Tony’s transition to big multifamily deals after early retirement
• [39:51] – How to break into big deals: play to your strengths, build partnerships
• [41:33] – Why networking is essential (and a $200M story)
• [46:48] – Free book offer: Freedom at Risk
• [51:48] – On life satisfaction and “finding your own dream”
• [61:01] – “One word” for loving real estate: “Cash flow!”

Resources & Recommendations

• Book Recommendation:
  • Who Not How by Dan Sullivan — Focus on building a team and leveraging others’ strengths.
• Podcast Recommendation:
  • Kenny McElroy’s podcast for advanced multifamily and syndication insights.

How to Contact or Connect with Tony Lopes

• Email: tonylopes@dirtybootscapital.com (mention “book” in the subject line for a free copy of Freedom at Risk)
• Website: dirtybootscapital.com
• Social Media: Find Tony Lopes or Dirty Boots Capital on major platforms.

Closing Thought

“Invest where you’re at—skill-wise, knowledge-wise, emotionally. Real estate is customizable and you can start small. The key is to begin, keep learning, and surround yourself with the right people.” —Key theme from Joe Jensen and Tony Lopes

For more detailed episodes and actionable real estate investing advice, subscribe and stay tuned to the Real Estate Investing School Podcast!