The Human Connections Behind a $2 Billion Real Estate Portfolio | Kris Krohn

Summary

Podcast Summary: The Entrepreneur DNA Episode: The Human Connections Behind a $2 Billion Real Estate Portfolio | Kris Krohn
Host: Justin Colby, Bleav
Release Date: September 9, 2024

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Introduction: Welcoming Kris Krohn

In this episode of The Entrepreneur DNA, host Justin Colby welcomes seasoned real estate expert Kris Krohn, a personal friend with over 20 years in the industry and more than $2 billion in real estate transactions. Justin sets the stage by sharing a transformative quote from Tony Robbins:

“You’re one person away from lifetimes of income.”
— Justin Colby (00:47)

This sentiment underscores the episode’s theme of the pivotal role human connections play in entrepreneurial success.

Current Real Estate Market Insights

Kris Krohn shares his optimistic perspective on the current real estate market, contrasting it with the downturns experienced during the 2008 financial crisis. He highlights his strategic investments in top markets like Phoenix and Las Vegas during their low phases, which yielded substantial profits as these markets rebounded.

“Right now I'm actually more excited than I've ever been.”
— Kris Krohn (01:51)

He emphasizes a robust average return on investment (ROI) of 60.6% over the past nine years in single-family home investments, a figure that astonishes Kris:

“60.6%. That's insane.”
— Kris Krohn (02:40)

Investment Strategies: Nationwide Play and ROI Diversification

Justin delves into the mechanics behind such impressive ROI figures, explaining that Kris focuses on nationwide investments rather than local markets. This approach allows Kris to capitalize on high-growth areas with extenuating circumstances, such as significant corporate investments driving up property values.

“Where do we have extenuating circumstances? Especially where it was already a great market but then a large corporation moved in and they're actually going to alter that entire subframe of that market.”
— Kris Krohn (06:03)

Justin further breaks down ROI into four components:

1. Appreciation: Long-term value increase of property.
2. Cash Flow: Income generated from the property.
3. Principal Reduction: Equity built as tenants effectively purchase the home through rent.
4. Tax Advantages: Benefits that enhance overall returns.

“And when you add up all four of those, that's how I get to that 60% number.”
— Justin Colby (04:40)

Financial Philosophy: Challenging Conventional Wisdom

The discussion pivots to contrasting traditional financial advice, particularly that of Dave Ramsey, with Kris and Justin’s real estate-centric approach. They argue that focusing solely on debt elimination and conservative investments like 401(k)s pales in comparison to the exponential growth possible through strategic real estate investments.

“Why follow Dave's program when you can make up to 108 times your money through real estate?”
— Justin Colby (10:40)

Justin criticizes the limited growth of traditional retirement accounts, presenting real estate as a superior alternative for wealth accumulation.

“50 grand sitting in a 401(k), making me 6%. If I put it in real estate, that same 50 grand turns into $17.3 million.”
— Justin Colby (10:40)

Importance of Networking and Mentorship

A significant portion of the episode emphasizes the critical role of human connections in achieving financial success. Justin recounts personal anecdotes where meeting influential individuals transformed his career trajectory.

“The $2 billion real estate transacted does not happen without that man.”
— Justin Colby (24:54)

Kris reinforces this by highlighting the value of events like the Clever Summit, where entrepreneurs can forge meaningful partnerships and gain invaluable knowledge.

“There's going to be 3,000 incredible entrepreneurs, real estate investors, real estate enthusiasts.”
— Kris Krohn (22:22)

Scaling and Diversifying ROIs: Justin's Blueprint for Wealth

Justin discusses his book, Have It All, outlining a multi-tiered ROI strategy to achieve financial independence:

1. Pay Yourself First (PYF): Prioritizing savings to invest.
2. Life Insurance Investments: Earning stable returns while leveraging assets.
3. Double-Dipping in Real Estate: Ensuring investments yield high returns.
4. Private Equity: Investing in high-growth companies for triple-digit returns.
5. Infinite ROI: Utilizing other people’s money (OPM) to amplify investments.

“It's not just putting all your money in real estate, it's actually diversifying your ROIs.”
— Justin Colby (28:00)

Impact on Society and the Value Chain

Kris elaborates on the broader societal impact of real estate investments, noting that each transaction involves a vast network of professionals and contributes to economic growth.

“A house moves all of society.”
— Justin Colby (20:13)

He highlights the ongoing single-family home shortage, emphasizing the long-term sustainability and necessity of his investment strategy.

Upcoming Events: Clever Summit

Both Justin and Kris promote the upcoming Clever Summit, positioning it as a pivotal event for entrepreneurs and real estate investors to gain insights, network, and capitalize on emerging opportunities.

“Make sure you are there.”
— Kris Krohn (23:36)

Justin underscores the event’s potential to transform attendees' financial futures through intensive learning and strategic partnerships.

Conclusion: The Power of Connections

Closing the episode, Justin reiterates the profound impact that one meaningful connection can have on an entrepreneur’s journey, reinforcing the episode's central theme.

“You’re one person away from lifetimes of income.”
— Justin Colby (23:44)

Kris and Justin encourage listeners to actively seek out and engage with mentors, peers, and opportunities that can catalyze their success.

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Notable Quotes:

• “You're one person away from lifetimes of income.” — Justin Colby (00:47)
• “60.6%. That's insane.” — Kris Krohn (02:40)
• “50 grand turns into $17.3 million.” — Justin Colby (10:40)
• “A house moves all of society.” — Justin Colby (20:13)
• “Make sure you are there.” — Kris Krohn (23:36)

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Key Takeaways:

1. Strategic Investing: Focusing on nationwide real estate markets with high growth potential can yield substantial returns.
2. Diversified ROI: Combining appreciation, cash flow, principal reduction, and tax advantages maximizes investment profitability.
3. Challenging Norms: Traditional financial advice may limit wealth potential; leveraging real estate offers exponential growth opportunities.
4. Networking: Building and maintaining meaningful connections is crucial for entrepreneurial success.
5. Continuous Learning: Events like the Clever Summit provide invaluable opportunities for growth, learning, and networking.

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For entrepreneurs seeking to scale their businesses and achieve financial independence, this episode offers actionable insights and emphasizes the indispensable value of human connections in the journey toward success.

Transcript

[A]

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[B]

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[A]

Tony Robbins, I'll never forget when he said this one line and it changed my world forever. He said, you're one person away from lifetimes of income. You pay to get into the rooms so that you can finally meet that person. So that one interaction changed everything. The other gentleman that I met, that person stayed in my life and helped me do my first several deals. And so I'm like, yeah, my world is a byproduct of people that changed everything for me. Like the $2 billion real estate transacted does not happen without that man.

[C]

What is up, entrepreneur DNA Family. I am excited about this episode because if you are watching this, you will see I am with an absolute, absolute real estate stud. A personal friend of mine done this business for 20 years and over $2 billion worth of transactions. Chris Crown's in the house.

[A]

What's up, man? How we doing?

[C]

Yeah, I'm excited about this. So listen, real estate, I've been doing it 17, you've been doing it 20. We've seen the highs, we've seen the lows, we've seen the last six to eight years. Just incredible.

[A]

Yeah.

[C]

What's your thoughts right now about what's going on in the real estate market?

[A]

Well, right now I'm actually more excited than I've ever been. Right. Like when I got started in the 2000s, before 2008, like 2008, 2009 was the best thing that happened to me because while everything else was crashing, I was going into the top markets in the nation like Phoenix and Vegas that had just tanked. And I was buying up their inventory for 100 grand, 150 grand. That was selling for 3, 400 grand before.

[C]

That's it.

[A]

Yeah. Within five years, I made my investors over $100 million. And I was like, okay, I get it this nationwide game. So I've been playing Nationwide ever since obviously 20, 21, 22 was incredible because the pandemic was incredible for real estate. But we actually just finished Justin the last nine years. We just looked at our average ROI year over year for the last nine years. Did any guess on what our year over year ROI averages on, on buying single family homes?

[C]

I don't, but I guess it's huge.

[A]

Yeah, it's, it's 60%.

[C]

That's insane.

[A]

60.6%. That's.

[C]

And so I've been telling people for the. You and I are cut from the same cloth. We have the experience, we've seen it, we did it. I'm more bullish on real estate now. I'm buying more assets today than I've ever bought in my 17 year career as fast as I can. Right. And I'm doing it nationally, I'm doing it not in my own backyard. I'm in Miami right now. We're in Miami. What do you say to the people that are the doom? Like you and I are saying the same thing, but everyone else like, oh my gosh.

[A]

Oh, high. I'm like, okay, so let's, let's just break down the interest rates for just a moment. Right. Because people have this really weird assumption that a high interest rate is bad and a low interest rate is good. You know, like, okay, you realize that the, the interest rate only affects the cash flow and cash flow is only one of four ROIs and it's the smallest of the four ROI. So I'm like, if, you know, when I say I'm making 60% a year on average on a property that I do, if the interest rate was 2 points lower, what would happen to my ROI might go up a percent.

[C]

Right.

[A]

Like it's almost not touched at all. So people, people have been taught to be rate conscious and they're really focusing on the wrong game.

[C]

So what should they. Because I think I have your answer because I go to appreciating markets. I care more about the market than I do about the three, four hundred dollars per door I'm getting.

[A]

Yep.

[C]

Because of the thing you're going to say. But what are you focusing on when making those purchases?

[A]

Okay, so there's four different ROIs. Right. Obviously appreciation, if you're going to, if you're going to go nationwide and then you only go to the top markets, that's where you're going to cash in. Is okay. If I'm going to buy and hold for a period of time, I'm going to kill it on that.

[C]

That's right.

[A]

But then on top of that, it's like, okay, well, I do have my cash and cash roi. What's my what. What's my return on the cash flow number three, the principal reduction. Like, a lot of people don't even factor in the ROI from a tenant that you're really outsourcing to buy your house for you.

[C]

That's right.

[A]

So I didn't buy a house. My tenants are buying me houses. Like every day I buy a house that a tenant buys for me. Like, it feels like Christmas.

[C]

Right, right.

[A]

You know, and then you've got tax advantages. So when you add up all four of those, that's how I get to that 60% number. And appreciation by far is the biggest. But I don't have to have it. Just, it's just going to be there.

[C]

So would you go personally, this is more a curiosity just for me. Would you go to a market like Cleveland, Ohio, or Ohio in general? Columbus is one of those markets that does appreciate, but Ohio doesn't really. Or would you go to more of an Alabama that has a sizable up tick? Do you personally have a.

[A]

So I swear this is the weirdest question you could ask me because I will never own real estate in Cleveland, Ohio. Okay. I will never buy in like Detroit, Michigan. Sure, like. And why am I saying that? Because in 2009, I bought a couple hundred homes in those markets off of Fanny Freddie tape from the government at a 92% discount. OK. And I'm like, I'm going to make $10 million. And then, like, even if I suck, I'm going to make 3 million.

[C]

Yeah, yeah.

[A]

I lost a million dollars just breaking even to get out of that.

[C]

That's it. Yeah.

[A]

And, and, and that's where I learned about blue states and red states.

[C]

Okay.

[A]

Like, the mindset of the people that currently live in Those markets, a 92% discount on real estate is still lost. I'm like, how does that even happen? Well, I can tell you exactly how it happens now, but measuring 324 markets that make up the nation and being in the top five. Yeah, well, that's a total different game. Like, for example, blue Oval City.

[C]

Yeah, right.

[A]

This is a market most people don't know about at all. You've got Ford that is building an $11 billion plant that needs 11,000 employees and they don't have any real estate in that market. So it's a tiny submarket that I'm going in, and these homes I'm buying Them brand new for 180 to 200 grand.

[C]

That's amazing.

[A]

Brand new. These four bedroom, two bathroom, 1800 square foot homes. And guess what they're going to project it to be in five years. They're going to be a 300 to $350,000 house. So I'm going to experience unnaturally high appreciation in those market. And that's part of what my strategy is is, is it's not just picking one of the top growing markets like Florida, that's obvious and which parts of it but it's going beyond that and saying okay, where do we have extenuating circumstances? Especially where it was already a great market but then a large corporation moved in and they're actually going to alter that entire subframe of that market. That's where I'm winning.

[C]

You and I are yelling from the mountaintops of this and people are still scared. And it just. This is why he and I are keynote speaking at cleversum. And if you don't know about clever, oh my.

[A]

Have you talked about freaking clever?

[C]

We haven't yet. Dude.

[A]

I'm going to be at the VIP party the night before with all of the speakers on a yacht.

[C]

Let's go in the bay.

[A]

It's going to be amazing. Yes, but no. So clever is September 13th, 14th, 15th. Jen Gottlieb, you've got Cody Sperber himself is speaking there more be you're going to be there. I'm going to be there. Veena Jetty is going to be there.

[C]

It's going to be great.

[A]

All the legends. Ryan, Sir Hands coming.

[C]

That's it.

[A]

And Patrick bet David.

[C]

That'll be awesome, dude.

[A]

It's going to be, I think it's going to be probably one of the most important, important not only is real estate events of the year, but I think it's actually going to last through 2025 because the way the rest of this year is shaping up, the game has changed. Most people haven't figured out how to adapt and if you go to Summit you're going to learn that game and then you're going to realize oh crap, there's a short window opportunity for to to freaking spank it and win that no one else is going to take advantage of.

[C]

Get there's links all over this. If you're watching this, get to the link, get your tickets now. By the time someone sees this, there's probably no more yacht tickets left. But if there are, get them, get the all access pass because you'll be with Chris, myself, Sperber Pace all those speakers. We will be there. This is going to be the game changer. So we'll plug that right now.

[A]

Dude, I'll tell you, I was at summit in 2022. It was a freaking party.

[C]

No doubt.

[A]

It was so fun. But people also walked away then with everything that they needed to go win.

[C]

And that's the point is they need to know we're doing a podcast about what we know to be true today.

[A]

Yeah.

[C]

There's going to be three straight days.

[A]

Yes.

[C]

Of hardcore speakers with the experience that people want to do what we do. And that's why I say that is so important that you're screaming from the mountaintops. I'm screaming. No one should be scared. Be smart.

[A]

Yeah.

[C]

Don't be foolish with how you're buying and what market you're buying in. But if you're not following Chris, follow Chris on all platforms. Instagram, Facebook, TikTok. Everywhere this man's at, he and I are saying the same thing. Be a clever summit, but did you have something?

[A]

Well, I was just going to say that I think that a lot of people, they're looking at what we're doing. Like, oh, that's too inaccessible. It's like you're saying, out of state, get on play. I wouldn't even know the first thing of how to do that. I'm like, you know, I commiserate with you. I get that. Because there's a lot of people, I think they're like, just what should I be doing right now? Others saying, buy real estate. Interest rates are high. How do I buy my backyard? The numbers aren't going to pencil. It doesn't make sense. And I'm like, no, you're right. Like what you're thinking is a bad idea is a bad idea. You've got to change to adapt to what's happening in the market. And that's what we're doing. We've adapted, and we know how to win in this economy.

[C]

That's right. So let's talk about how people think. You know, I like to talk a little bit more about the money side of it. People actually don't realize how much money can be made right now.

[A]

Yeah.

[C]

With money and how to utilize money and what you can do in the real estate. Let's talk a little bit about your philosophy on money and real estate. And like, I mean, dude, we have mutual friends.

[A]

There's.

[C]

What is it, $65 trillion in IRAs and 401ks and.

[A]

Well, let's talk about that. Right. This year, they came out with a 20 year study on 401ks showing that the average ROI is 4.2%. And I'm like, well, that's good because inflation is 4.1.

[C]

That's right.

[A]

So it's a total cancel.

[C]

Yeah.

[A]

Right. And it's kind of a scam anyway. And then your IRAs are doing maybe like five and a half percent. You know, the S and P is not. The tenant used to be now sitting around seven and a half. So people's blended average return is going to be like 5, 6% if you're generous. And I talk to people all the time, like you, that have money in retirement accounts. And I'm like, okay, let's, let's do some basic math. Take 50 grand.

[B]

Right.

[A]

Because I can show you markets where 50 grand is a down payment on a basic home.

[C]

That's right.

[A]

So it's like, okay, 50 grand sitting my 401 Care IRA, making me 6%. If I don't do real estate, what will happen to it? Over 20 years, it'll triple. 50 grand turns into 160 grand. Like that is to the penny amount, by the way. And it's like, okay, well, what would happen if I put it in real estate? Just earning, not Chris's 60%, 34%. Well, that same 50 grand now turns into $17.3 million. That's wild. It's 108 times more money.

[C]

Yeah.

[A]

And so it's like, it's no comparison. Yeah, it's no comparison. I'm like, 90% of all wealth is held to real estate. 90% of all millionaires did it in real estate. I don't know why people are so scared and nervous.

[C]

Yeah.

[A]

Their own strategies are not going to work, but there are strategies that do, and you've got to be looking for those.

[C]

What do we. You know, some of the things that I go viral with is when I go across Dave Ramsey, and Dave's the.

[A]

Only person online that I kind of make fun of a little bit.

[C]

Well, and so my podcast is ranked right under his.

[A]

Yeah.

[C]

And we say the opposite of.

[A]

Well, that makes sense. And in.

[C]

But I would tell you this. The reason why people are scared is because the people that he's talking to don't have you in their back. And they can. That's the point. You can find Chris today, right now, in direct message him. When you're watching this or listening to it, he and his team will respond to you. You can have Chris or you can have me. But the point being is there's so much More knowledge out there if you have someone that can be by your side holding your hand. Correct.

[A]

Yeah. Dave, I think he's winning a lot of following a lot of followers right now. Just because we're in an election year.

[C]

Sure.

[A]

People are scared right now. There's less money in the market than we've had in years prior. Debts are running really high. Average household debt is over $100,000. So when you start looking at the.

[C]

Talking about, like, just credit card debt. Yeah, yeah.

[A]

So when you. When you start really looking at the economy, his message has a strong appeal. The only problem is, is that if you follow Dave's program, it's really for people that don't know how to manage money and they've made poor choices and they have debt. And he's like, let me show you how to get out of debt. It might take you five years or maybe like 15 years. The problem is, by the time you get out of debt, you're going to say, I made it. Like, I'm freaking. I'm free. I'm like, cool. You're 48 years old, and you just spent almost all of your time unwinding choices. You had made years in the beginning. And now what do you do with the last time that you have is like, you don't have time to compound your money anymore.

[C]

Yeah.

[A]

Like, you're so late to the game because I got news for you. You can't eat no debt. You can't travel on no debt. Like, no debt doesn't actually give you the life that you want. No debt is a feeling. So Dave has got everyone chasing a feeling of like, but, Kris, when I'm finally out of debt, I'm going to feel good. I'm like, oh, good, you're making bad financial choices so you can have a feeling. Well, I'm like, let me tell you where that'll put you. At 65 years old, you can have $254,000 in your 401k in your IRA. You're going to have a house that's 70% paid off. Your average net worth between the two of them combined is going to be $600,000. But you're not going to feel like it because you're not going to sacrifice your house, your 401. By then, your average earnings is sitting right around $90,000 a year. You're living off of about 85 grand of it, which means $254,000 will last you for three years. Congratulations. You spent 40 years to save three years worth of retirement.

[C]

Yeah.

[A]

And it's like it's broken. And if it's broken, then you got to do something different.

[C]

So what would you tell the person who. Let's just talk about like the teachers, the service cops, firemen who, like, they don't necessarily have the opportunity to spend time making more money. So they buy into this, this subscription or whatever we want to call Dave, what he talks about. And I understand that you made bad decisions. You have high debt, you don't have the ability to go make an extra 100 grand a year. What do you tell those individuals?

[A]

Well, first of all, like, it's not like they all have bad debt with interest, you know, credit cards with interest rates at 22%, they consider like their student loan debt at 5% bad debt. Right. They consider their 6% house loan a bad debt. I'm like, hey, you got to actually learn a different game called opportunity cost. And it's like, okay, let's say you're not investing with Kris making 60% on your money, but you can read some of my books and find out very easily how to make 25% on your money.

[C]

Yeah.

[A]

So it's like, okay, do you try to pay off a 5% debt or have that same dollar sitting at a 25% asset? I'm like, hello, yeah, like 25% can make you a multi millionaire in this lifetime by the time you need to retire. And trying to eliminate this debt will never do that for you.

[C]

That's right.

[A]

So it's just which choice are you going to make? What makes more sense?

[C]

So I lean to people. Even if you do have a job, that is a time suck. Right. So most of these individuals have jobs that do. There's still opportunity out there that you can actually just go make more money. It doesn't have to be life changing money.

[A]

Yeah.

[C]

But if you make a couple extra bucks and you have people like myself and yourself that know what to do with those couple extra bucks.

[A]

Yeah.

[C]

That's where the extra money comes from. And it starts to compound to your point.

[A]

Well, and I think you also have to look for just passive opportunity, you know, I mean, you and I both harp on real estate, but let's be honest. I mean, I don't know how much time you're spending every month managing your portfolio, but I'm twitting my thumbs because it takes less than an hour. I don't.

[C]

Yeah, I know.

[A]

And so it doesn't mean that you have to find more active income. Sometimes it's just being better with the money you got that's right.

[C]

And that's why I think they should make a couple extra bucks. Because if they are strapped.

[A]

Yeah.

[C]

Then go make a couple extra bucks and then learn how to utilize it. I mean, I. I talk a lot about insurance as an opportunity. Yeah. That. That allows you to compound your money, and then you can very quickly have an extra five figures. Now you can go work with Kris for 50 grand that you didn't even think was possible because you know what I mean?

[A]

Yeah.

[C]

But they don't think that way. And that's what I want to try to break them out of, is like, you know, scared money doesn't make any money.

[A]

Yeah. The other thing is a lot of people actually have money, but they don't feel like it. And I call this hidden assets.

[C]

Yeah.

[A]

Because I'm like, hey, do you have any money in your bank account? They're like, no, I'm broke. I got like two grand sitting in my account. I'm stressing about my bills. And they have $150,000 sitting in a 401k.

[C]

Yeah.

[A]

And it's like, yeah, but that's not my money. I'm like, well, actually, it is your money.

[C]

That's right.

[A]

And you should be asking how to access it. I was like, I know, but that's my retirement. I'm like, cool, run the math. Where's it going to be? Well, it's going to be, you know, a quarter million dollars. I'm like, cool, yeah. What are you going to retire on? Well, I was making 80 grand a year. I was wondering if I could retire on, like, maybe 50 grand a year. Cool. So how long is quarter million going to last you? Even with Social Security, what, six, seven years?

[C]

Do math.

[A]

Do math. And it's like fifth grade math, too. It's like, that's my biggest frustration with people. I'm like, like, why are you doing math?

[C]

Yeah.

[A]

Like, is this. It's not hard to project into the future what you think you're going to need.

[C]

It's. It's incredible. I mean, I even have individuals that I will literally help them math out the equity in their home.

[A]

Yep.

[C]

Now, say, listen, guys, you have $600,000 of equity in this home. You've owned it for 20 years. If you know how to map this out, you can be a lender.

[A]

Well, do you want to know what's crazy about what you're saying? They just came out with a stat. The average American has $304,000 of equity. It is the highest figure we've ever had. And it's due in part to 2020, when houses each went up $100,000. And so right now, for the first time ever, people have more equity than retirement at retirement. And. And so your idea of, like, how do you pull that out and actually put it to work and get performance on it? And there's so many. But that rubs against this mindset of their sacred gather. Like, no, not my house. Got news for you. Got no assets. You don't have a choice. You don't have the luxury of protect my house. You're not protected at all. You got to use what you got and get ahead.

[C]

To your point. If they sold it as a retirement for 300 grand of equity, it lasts six years.

[A]

Yep.

[C]

70. I mean, you know, but they stretch it.

[A]

Yep.

[C]

But the reality is, in our world of real estate, that's why everyone should be in real estate. If you have equity, if you have a source like that, then it is just math. Let's just say you go and get a HELOC as an example at 9%, if you could lend it to, whether it's me, you, or anyone else out there on a secure asset with a deed of trust and a mortgage, whatever, at 12, it's called arbitrage. Yeah, right. You and I know this.

[A]

That's an extra 3% you pick up, literally, for just how you move money around.

[C]

That's right.

[A]

And you already have it. But the weird thing is, humans, I think, would get that if you're like, hey, right now you have nine streaming platforms and they cost you 300amonth, but you only use three of them. Like, why not save 200amonth? They would get that. Yeah, but this is the same game just in the name of making money, not saving.

[C]

Saving. Because you can't save your way with wealth.

[A]

Yeah.

[C]

I mean, you know, it's interesting. So I have two little kids, and I know you have a handful of kids yourself. Yeah, mine are really little. I started late in life. So we watch these ridiculous shows, in my opinion, that have gone viral on YouTube, and I'm talking like 18 million views of them opening up a puppy dog pal thing and playing with the toy. And my daughter loves it, begs for cries for it. And I'm like, they probably made, oh, yeah, 80 grand on this one video. Just this one. And they have 400 others. I mean, there's literal side hustles that. This is where I go, guys, you can't tell me you're broke and you don't have a way to go start to create income, because if someone can open a toy and go to 18 million views on a single video that came out nine months ago, I go, everyone's just not thinking they're not being opportunistic enough.

[A]

And I think that's the bigger problem. You know, it's. You take a look at Gen Z and you take a look at millennials, they've got a bad rap. People are like, oh, they're lazy. And I'm like, actually, if you look at the value of their dollar today compared to what boomers had, check out this stat. This is wild. Gen z in their 20s. Today, their money is 85% less valuable than a boomer in their 20s.

[C]

Yeah.

[A]

And it's like. And so they've got it harder, which means they have to innovate, they've got to get smarter, and they have to break the mold. And I think that that message is starting to get out there because their gig economies are increasing.

[C]

Yeah.

[A]

And their desire for college is going down.

[C]

Yeah.

[A]

Which I actually think is a positive thing because they're getting more realistic, saying, I don't know if I can shoulder a couple hundred thousand dollars of student debt. Especially since the cost of college has gone up 730% from Gen Xers. Right. Like, it's wild what the cost of their life is today. So they're forced to be smarter and they have to play the game differently. Just not all know how to.

[C]

So, dude, I want to jump into something that you and I are firm believers on, and it has to do with why you and I have probably sustained 17 and 20 years of real estate buying assets, staying steady, and being able to be a steadfast in our space. And it's the impact on people and people in general. What is your philosophy? I mean, obviously you've coached thousands and thousands of individuals. You've worked with people like, I have to guess, and you want to tell me the answer part of that $2 billion of real estate, I bet you credit people as much as anything else.

[A]

So I always say that real estate actually has nothing to do with property and has everything to do with humans. And if you really break down like a single real estate transaction and all the value that's created, like, I think I once counted up like 260 people that are part of the value chain of a property. She's starting with all the people that help build the home. But once you basically buy a home, it's like you have title agents that are involved, you have realtors, you have loan officers, then you've Got the actual families that are going to live in it. You got the people that are writing the notes. When you start really like adding up, you know, then, then someone is going to come in and do the yard work and then someone's going to clean the windows, you know, and, and when you start really looking at it like a house moves all of society. And there's something really beautiful about the value proposition of providing that necessity. Especially right now at a historic time in our country where we're missing over 6 million single family homes.

[C]

Yeah.

[A]

You compare that to multifamily. Multifamily actually is overbuilt. Multifamily is actually going down in value right now. People don't understand, like, why, why is that market softening? I'm like, because real estate is always a game of supply and demand. And right now we have too much supply of multifamily and we are still missing 6 million supply and single family. Because people are like, well, what's the market going to crash? Like, I'll tell you what, it's going to crash. It's going to crash after you have too many single family homes and people want to buy. And guess when that's going to be. Like a decade from now. It's good. It's a long ways out.

[C]

Long way.

[A]

So. So people are like, well, what happened when rates come down? Like, you're going to see prices skyrocket again. Like 20, 20, 21. Like bidding wars. I'm like, yeah. Bidding was like, well, why is that? It's not affordable, it's not sustainable. Like, I don't care if it's not sustainable. We will always find a way forward. Right now we have a scarcity because of a supply and demand problem that won't solve itself for a decade.

[C]

That's right. And the thing about this is, not only are you talking about the chain of people within the economy that you're helping and getting paychecks and all these other things, but we're talking about like, how do you help other people achieve those type of things? Right. Like, let's just use Clever Summit as a perfect example. There's going to be 3,000 incredible entrepreneurs, real estate investors, real estate enthusiasts. There will be deals done in the crowd.

[A]

Oh, yeah.

[C]

While you're on stage, while I'm on.

[A]

Stage, people are going to find business partners. They're gonna, they're gonna find the people they're gonna run with for life. They're gonna find solutions to. Oh my gosh, I knew that I needed this. I didn't know how I was gonna get there. And then I'm gonna find a way to get into the game. Like the networking of that event. I. I still have business partners today that I met at the last clever summit.

[C]

I told Sperber today I did an episode with him. I'm a product of a very large event just like this back in 2007. Yeah. Sat first row broke as like, literally my home to foreclosure repo man took my car, sleeping on a couch. And I just knew it. I said, I'm going to change my own trajectory. And I did.

[A]

Right.

[C]

17 years later. But everyone at this place needs to understand the value of sitting in that seat.

[A]

Yeah.

[C]

I don't care if it's a general admission ticket. I don't care if it's an all access ticket. You need to understand the value of being in a room like that and hearing from you and spreading all the speakers. But not just that.

[A]

Yeah.

[C]

The people in that crowd.

[A]

Yeah.

[C]

To your point, deals will happen. Money will exchange hands. There will be opportunities. There will be business partners. And that's what will help keep them pushing, keep pushing forward.

[A]

Tony Robbins, I'll never forget when he said this. One line, and it changed my world forever. He said, you're one person away from lifetimes of income. And I'm like, wait, what does he.

[C]

Really mean by that when you just said that?

[A]

He's like, you pay to get into the rooms.

[C]

Yeah.

[A]

So that you can finally meet that person that is going to change everything. I'm like, who are the people that changed everything for me? When I was a broke college kid, I met two men who had each made over $10 million in real estate. They weren't gurus. They didn't have books. They literally were their own successful investors that had learned it. And one of them had just gotten back from spending a decade overseas with his family.

[C]

Yeah.

[A]

And I was like, I was young and broke, and I was so impressed with this person's energy and vernacular. I'm like, I don't understand that. Like, they. Because they had taught this financial class, a community class, for free.

[C]

Yeah.

[A]

And afterwards, I'm like, what's your job? Like, what do you do? He's like, I don't have a job. This person's in their late 30s. I'm like, what do you mean you don't have a job? I'm like, what do you do? He's like, well, a long time ago, I just bought a bunch of homes, and now I just travel around the world, and I Was like, I caught the bug so hard because I didn't get it. And then I got it and then I wanted it. That one person changed everything for me. Strangely, I met that person three more times in my life under no consequence, and that was it. So that one interaction changed everything. The other gentleman that I met, that person stayed in my life and helped me do my first several deals.

[C]

Yeah.

[A]

And so I'm like, yeah, my world is a byproduct of people that changed everything for me. Like the $2 billion real estate transacted does not happen without that man.

[C]

Yeah. And I think that's true for everybody. Right. And that's why when people are watching this, you need to follow Kris. Because the exact same thing, you need to engage, you need to interact, you need to get your ass to clever summit. That is for sure. There's links everywhere. Make sure you are there. But it is something that I credit almost all of my success to. The handshake, right? We have a mutual friend, Brad Lee, says it all the time. The more hands you shake, the more money you make. But you have to be intentional when you do that.

[A]

Yeah.

[C]

You don't just go and show up to clever assignment or anything. You say, okay, I'm just going to be here. Right. No, you need to say, okay, how am I going to change my life? What am I going to do? What dots can I connect? So moving forward, it actually makes an impact. And you're brilliant at this. I mean, I literally have studied and watched what you do and how you do it and the millions and tens of millions of views you get, you understand the impact of the connection. And what you're doing is you're making impact other people, which allows you to continue to grow. So let's talk a little bit about that side of your world, because this is the entrepreneur DNA, which is heavily real estate. But you own more than just real. You have businesses, you have verticals, private.

[A]

Equity, a lot of companies. Yeah.

[C]

So talk a little bit about that.

[A]

So I wrote a book a couple years ago called have it all and it's. It's a blueprint for how someone who is a nobody can become very financially successful.

[C]

Yeah.

[A]

And it's like, I don't want to encourage people to have to have star power. You don't have to have some kind of X factor. It's just like, how does an anybody with a heartbeat and can fog a mirror make money? And the book takes you through a procession of five different ROIs. And I'll hit them real quick.

[C]

Yeah. Go for it.

[A]

The first one is you got to learn pyf. Pay yourself first so you're not making money to pay your bills. You're paying money not to save it for a 401k. You're earning money to pay yourself first so that you have the opportunity to invest.

[C]

There you go.

[A]

My whole world started with PYF is that I was broke. And then I learned how to save a little bit of money. I parlayed it to a property, that property bought my next property, that property bought my next property. And that $3,300 that took me 14 months to save up turned into $1.6 million four years later. So that's the first step is you have to learn how to save. The second step is where do you put it? I like you. I put it in life insurance where I'm double dipping, I'm earning 6%. My money's untouchable and it's just waiting to come out to sit in an investment. And double dipping, sitting in two places.

[C]

That's right.

[A]

So that's where I go from a single digit ROI, which, which I don't do 4K. So don't do ROAs IRAs, I don't do the stock market. I do life insurance.

[C]

That's right.

[A]

I want that stable 6%. Then I can borrow it out and have it still earning.

[C]

Yep.

[A]

While it sits in double digit real estate. Where I always go into real estate and say I won't touch a deal unless I'm earning 25%. That's my bid.

[C]

I say 20. And what's your reason behind it? Because mine is I want my money back in five years if it's stuck somewhere. Yeah, that's my answer. Simple.

[A]

Yeah. I think my minimum is just 25% because I'm earning 60 and I had to come up with a minimum that. Yeah, you know, just high standards, Just people high standards.

[C]

I like it.

[A]

You know. Then I go into private equity where I can earn triple digit ROIs. Private equity is a shot for at moonshotting. It's like I want to some of my money sitting in companies that could be like a 2014 Tesla play where a thousand dollars then is now worth $1.7 million today.

[C]

Wild.

[A]

So it's like it's learning how to keep an eye out for companies that represent the future and then take making bets on them. And there's a whole system for how you bet on 10 companies hoping that two will win and you can lose 80% of the time and get rich. That's triple digit ROI. And then I graduate to quadruple digit ROI, which is owning companies that you don't operate. And that's where you get really healthy active incomes.

[C]

Yeah.

[A]

And then after that there's infinite roi, which is how do you use opm, other people's money to get ahead?

[C]

Yeah.

[A]

And so I take people from regression that if you can go from saving your pennies going from single digit to double digit to triple digit to quadruple digit, that's how a person literally can become wealthy in under five years. It's not putting all your money in real estate, it's actually diversifying your ROIs. So my money has a portion in double and a portion of triple and a portion quadruple. Just that alone. That means that if someone by the time they're 65 years old, could they be worth $10 million or 100 million or a billion? Yeah. Take a look at every billionaire. How did they do it? Their money wasn't in a single digit 401K.

[C]

That's right.

[A]

It was sitting in a business that, that 100x.

[C]

Yeah.

[A]

And so it's like, well then how do you become successful without being the brilliant superstar, that CEO, that company? It's diversify your roi.

[C]

And when you say that, there's a word I would be using is you become an investor. And I think that is the last, I guess, pillar on this chain for entrepreneurs is you remove yourself from the operator, you remove yourself from the business owner or even entrepreneur. Everything's passive and you become an investor.

[A]

Correct.

[C]

And it's not always in real estate.

[A]

Yep.

[C]

You know, it's got to get to the place. And, and I have the very similar thing. I have some moonshots and I have some opportunities and have some real estate and I have some crazy wild investments that just, I have a firm belief that it's going to hit and it's. You can get to a place of investor, your life can get pretty good. But you do have to start somewhere. And that's, that's where a lot of people, you know, I have a five laws of success and I won't go through them here because I do it a lot of my own episodes. But one of it is you just got to get going somewhere. I don't give a what it is. And get in, get in the game. Dude. Put your helmet on, get on the field. Otherwise you can't win a game.

[A]

Yeah.

[C]

And the last thing is you can't win the championship with a clean jersey. You're going to make a Lot of mistakes. Yeah, it's going to happen. Shit's going to happen.

[A]

Yeah, but that's where you got to find coaches and mentors because if you go it alone, you're going to make the worst mistakes. And if you have an expert, you literally, I think, produce the least mistakes.

[C]

Yeah, you'll still, there's still mistakes because things happen. But you minimize your mistakes. Right. And then you crunch time. You're able to get ahead of the time. Like I use, I go to Disney World a lot. I'm here in Miami and I have little kids. It's miserable, hot and long lines. But you still spend the extra money to get to the front of the line, of the express line, versus the general admission. And people don't understand the value of their money is not making money isn't just to have the thing. It's so you can have more experiences with the children where their eyes light up. Because you get to ride 12 rides.

[A]

Yeah.

[C]

When the average Joe rode four.

[A]

Well, it's also about arbitraging time.

[C]

That's right.

[A]

You were talking earlier about arbitraging money. But I love to arbitrage time.

[C]

That's right.

[A]

And it's just like, wow, when I, you know, most entrepreneurs, I bet you have a lot of entrepreneurs that are watching this. I can show them how to recapture 80% of their time really fast. Because the average entrepreneur, if you actually break down all their activities, they're doing the things that make them $5,000 an hour. They've only got a couple of activities that are like four figure earners or maybe three figures. But then 80% of the time is doing $200 an hour work, $80 an hour work, $30 an hour, 20 hour. And the weird thing is it's like they'll work 40, 60 hours a week and say yes to $20 an hour, $80 an hour and 8,000 an hour. And I'm like, cool. Draw a line of demarcation. Only do the 8k stuff and the 5k stuff. Only say yes to new stuff. That's double that, 16k and literally outsource the rest. And they're like, wait a second, Chris, I have to hire someone. I have to pay someone real money to do all of those low, low ticket items. And. But I'll get my time back. But I need the money. I'm like, you need your time back.

[C]

That's right.

[A]

If you get your time back, nature abhors a vacuum. And just say yes to the 5 and 8k stuff and you will get More of it. They're like. But I don't know how I'm going to get it. I'm like, if you're not wasting your time on the $80 an hour and $20 an hour stuff, trust me, it can only present when you develop standards and say no.

[C]

That's right. That's a huge takeaway. So we're having Dan Martell on the show in two weeks.

[A]

Yeah.

[C]

His book is one of my favorite business books. Buy your time back is probably, I don't know, top two books right now that I can think of. But he says the same exact thing. And he uses the formula of 2000 divided by 4.

[A]

Now, I'm going to challenge you to read my book time machine because that one just came out.

[C]

Yeah.

[A]

And it's about arbitraging time. But it's also. So Dan only talks about arbitraging time. I talk about arbitraging money, time, energy, intuition. I have five arbitrages.

[C]

I like that.

[A]

It'll add. It'll. If you like that book, of course, this one's going to add some layers for you.

[C]

Let's go. Yeah, I think that's a great spot. But Dan's phenomenal. I can't wait to get that interview. It's going to be great. But this, my friend, was a great interview as well. If you aren't yet following Kris Krohn, make sure you're following him on all the platforms. Instagram, TikTok, Facebook. Make sure you're on his YouTube. It's a massive YouTube. I look up to this man in that arena for sure. He's a king of real estate. Brother, it's been an honor. I can't wait to share the stage with you at Clever summit. Get your tickets right now. This is going to be one of the most impactful, if not the most impactful event of your life for sure. Because I know I'm ready. You're ready. I appreciate you being on this episode, brother.

[A]

Let's go.

[C]

All right, y'all, if you like this, if you got anything from this, make sure you share this with two of your friends. We'll see you on the next episode. With another incredible guest. Peace.

[B]

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