Dude, Where's My House? (Jimmy Vreeland)

Jimmy Vreeland went from being an active duty Army Ranger (thanks for your service Jimmy!), to concentrating on building passive income thanks to Robert Kiyosaki's little purple book. His first deal wasn't a home run at first, but the longer he held it the more he realized it was turning into a grand slam.

And that's what he loves about real estate, as a long-term asset it's almost impossible to screw up. You just need to buy at a decent price and hold on to the property.

And if you think that's exaggerating, Jimmy actually forgot he owned a house but held onto it long enough that he still made money on it.

Resources Mentioned In The Video:

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Want to learn how to combine the VAULT life insurance strategy with Real Estate investing?

https://reiclub.com/cashflowtactics

Rich Dad Poor Dad - Robert Kiyosaki

https://www.amazon.com/Rich-Dad-Poor-Teach-Middle/dp/1612681123

Rich Dad's Conspiracy of the Rich: The 8 New Rules of Money - Robert Kiyosaki

https://www.amazon.com/Rich-Dads-Conspiracy-Rules-Money/dp/0446559806

⏰ Key Moments in this Episode ⏰

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00:00 Jimmy Vreeland - Real estate investor

02:00 Secrets the Wealthy Use To Print Money

03:15 "Throwing Darts at the MLS"

04:28 Newbies Survive the Great Recession

06:30 2 Huge Mistakes in Real Estate

08:40 The 4 Ways to Win in Real Estate

10:36 Forgetting You Own a House

12:27 CashFlow Tactics & Turn-Key Rentals

14:36 The VAULT & Velocity of Money

16:10 How Politicians Create Wealth

18:34 Interest Rates Doubled, Asset Prices Tripled?

Transcript

Jimmy Vreeland: I forgot about a house I owned. I literally forgot about it. was still paying the mortgage, but didn't, was not, it wasn't in my property management software. I did. Wasn't in my mind that I owned this house. I drove by it like every day too. George Uno: Hey guys, this is George Uno from REIClub. Thank you so much for joining me again for another episode of First and Worst. Now today my guest is a guy who went off to West Point then he got deployed overseas, Iraq and Afghanistan serving our country. And he actually read the little purple book over there overseas and got into his mind, hey that passive income sounds really good compared to what I'm doing right now. So while he was still on active duty, he started building up that passive income, and from there things just snowballed and took off. And before he knew it he was, you know, had 60 doors of his own and was like, wow, this is amazing. but Jimmy, let's get to know you man. How are you doing over there in St. Louis? Jimmy Vreeland: Good , how you doing, man? George Uno: I'm doing great. So how many deals you guys have going on right now? Jimmy Vreeland: so, we'll, we'll do 120 turnkey, and we'll do around a hundred wholesale this year. So we got 20 to 25 deals going on at any given time. George Uno: That's crazy. All right, well so that's probably a lot to manage so I don't wanna keep you too long, but take us back. Take us back. So you're in Afghanistan, or sorry, Iraq. You read Rich Dad, poor Dad. And how does that change the way you're looking at life and, and planning for things? Jimmy Vreeland: Growing up, I thought the only way you could become wealthy was to be like to be famous. So, you know, maybe politician, I realized with my mouth and my time in the military politician was out. Actor I'm not pretty enough to do that. And then athlete, which is what I really wanted to be, but not talented enough for that. So I was just like, oh, you know, I'm just gonna live this like nice life, you know definitely not gonna be wealthy. But then Rich Dad, poor dad opened me up to the fact that hey, the wealthy don't work for money. The, you know, the wealthy create and think and buy assets. They don't trade their time, they buy assets and then their assets buy, essentially buy their time back. So that was like paradigm shifting for me. George Uno: Yeah, that's crazy. I mean it's just funny that that's, everybody kind of gets that mind shift out of that book and so many investors have read that book and was their catalyst. You read the book, you say, okay, assets are what it's all about. So how do you decide on real estate and what, where'd you go from there? Jimmy Vreeland: And then I, I think I went home for leave and so Kiyosaki, I don't know how my mom actually sent me the book. I don't know how my mom found the book. I'm assuming it was when he was on Oprah. I'd have to ask her. But, so she knew about Kiyosaki, she wanted to get in on this, and then my brother was in medical school at the same time. Then he read it and he is like, yeah, let's get in on this. And I'll never forget this. So you know, interest rates were like at six and I'll never forget my mom being like, interest rates will never be this low, we gotta buy now. And they were at like six and a half 🤣. So so, you know, we started doing what everybody does. We started looking on the mls, we started walking houses. (03:21) We didn't know what we were doing. but you know, this was like in retrospect, this is 2006. This was the worst time to be buying. Worst time to be buy flipping, not worst time to be buying. I think when you're buying a long term assets and all the time's a good time to be buying. But we can get into that later. So yeah, we bought a rental house and then my brother lived in there and was a tenant for us through med school. And then he got two other med school students. So we got like elevated rent. It was like a, it was like an Airbnb before they were invented. George Uno: Wow. Pioneering. Okay, so you got it. It was, it was a duplex then? Jimmy Vreeland: Single family. But we charge rent by the room. George Uno: Nice. Yeah, that's the way to do it. So obviously in a college town near the med school Jimmy Vreeland: In St. Louis. So they're St. Louis University, not exactly a college town. yeah, but like for these med students, they're a little older. They want a yard, they want stuff like that. They wanna be able to barbecue. They don't wanna live in a dorm. George Uno: Right. Yeah. The the days of Top Ramen are over for them. That's really cool. okay, so take us through it. It did, you bought it a good, a decent time. I mean, cuz it's a long-term asset, but how did things play out through the great recession with you guys? Jimmy Vreeland: No change no effect. Like the asset value might have died down, but we had a 30 year fixed loan on it, so is irrelevant. And then what has been awesome is the Fed has continued to create, print money and so we've continued to raise rents now for the last 13 years as inflation has taken its effect. George Uno: All right. What was your cash flow on that? I mean, that's what survived through the great recession for you. You guys didn't run outta liquidity or anything, right? Jimmy Vreeland: Yeah, we had two other partners on the deal. So, you know, that was the frustrating part in the beginning it was like 200 bucks, divided it by three. You're not exactly getting passive income equals your expensive like Kiyosaki says. George Uno: Right? Right. But but it worked out. And then what'd you guys end up doing with it? I, I know you have some, you guys said it kind of snowballed from that one rental. Jimmy Vreeland: We sold it and bought a lake condo for it, but then the last two years with the, we were getting offers we couldn't refuse and so we 1031 into a condo at in Branson and then we were getting offers we couldn't refuse. We made like a hundred grand and we 1031 it back to a nicer four family in St. Louis, like a, a straight up wealth builder for my family. George Uno: Wow. Now what's that? What's that fourplex look like? What's it worth now and what's it cash flowing? Jimmy Vreeland: I think it's worth three and some change. And I bet you we make 1500 bucks a month, George Uno: Man, that's, that's quite the snowball Jimmy Vreeland: There's one thing you have to do to look like a genius in real estate. George Uno: What's that? Jimmy Vreeland: Do it for 10 years. George Uno: Be patient. Huh? Jimmy Vreeland: If you do it for 10 years, you'll look like a genius. Doesn't matter what happens. Doesn't matter what tenants do to the house. Doesn't matter. George Uno: Huh? So it doesn't matter what happens with the house, why? I think you have some kind of story about a house that that kind of got maybe, maybe fell through the cracks or something Jimmy Vreeland: You know, I made a lot of mistakes in real estate. Do you wanna, so two huge mistakes I've made in real estate is one, buying assets based off the performer of the first year pro-forma, like buying and selling based off, that was a horrible mistake I've made in real estate. We can get into that too, but I mean, I have, I forgot about a house I owned, I literally forgot about it. was still paying the mortgage but didn't, was not, it wasn't in my property management software. I did, wasn't in my mind that I owned this house. I drove by it like every day too. George Uno: Well, okay, so take us back to that. Why, why is it a mistake to look at the pro-formas for the first year of a, of a house and then sell it based on that value? Jimmy Vreeland: It's, I call it like the cashflow paradox. Like when you really need it and you're white knuckling your cashflow, y you won't get it. Like something the tenant karma will come to you for your worrying. A tenant will smash something, something will break. But then the, the most chill people who don't need the cash flow, don't care about the cash flow, get it all the time. There's no scientific statement around that. It's jus