Podcast

Episode #199 – Mastering Real Estate Asset Management with Gary Lipsky, Part 2

Real estate investors love to work their butts off.  They chase deals from one side of the country to another.

But this strategy quickly leads to overwhelm and burn out and misery.

Want to know the secret to maximizing your efforts and reducing burn out?

Focus. Focus leads to speed in the marketplace. It drives you to build better systems. And it turns you into the go-to person whenever a deal comes up in the area.

In this episode, Gary Lipsky from Break of Day Capital continues our conversation and shares his system for building a pipeline of deals by using this superpower called focus.

Listen now.

Show highlights include: 

  • How to spot lucrative deals while you’re out drinking with your friends ([2:00])
  • The secret to moving quickly on deals (even if you are an overthinker) ([4:00])
  • Use this pattern recognition superpower to recognize lucrative deals before anyone else does ([5:00])
  • The “Instant Authority” method to building trust in your marketplace to be a magnet for deals ([11:15])
  • How to stay committed to your goals every time (even if you hate setting them) ([14:00])
  • The “Authentic” formula to do things that you love in your real estate business (without burning out) ([17:25])

To connect with Gary Lipsky, please visit: https://breakofdaycapital.com/

To get the latest updates directly from Dan and discuss business with other real estate investors, join the REI marketing nerds Facebook group here: https://adwordsnerds.com/group

Need help with your online marketing? Jump on a FREE strategy session with our team. We’ll dive deep into your market and help you build a custom strategy for finding motivated seller leads online. Schedule for free here: https://adwordsnerds.com/strategy

Read Full Transcript

You're listening to the R E I Marketing Nerds podcast, the leading resource for real estate investors who want to dominate their market online. Dan Barrett is the founder of AdWords Nerds, a high tech digital agency focusing exclusively on helping real estate investors like you get more leads and deals online, outsmart your competition and live a freer, more awesome life. And now your host Dan Barrett.

(00:40): All right. Let's talk about breakup day cap, right? So you bringing all this business experience, this sort of past business experience, building these systems and everything to what you do now, what do you think gives break of day an advantage? Obviously you're looking at these kind of Phoenix and Tucson markets, but those are very, Phoenix particularly is a very competitive market. You're going up against very sophisticated people. You're not out in the middle of nowhere, right? So why do you think break of day has such an advantage in that market? You mentioned you get there first, right?

(01:21): I guess my question is why do you think that is? Is this something about how you approach the logistics of the business? Is it something about how you evaluate deals? What if you had to put your finger on what gives you an advantage? What would you say? Yeah, I mean, we've underwritten deal. I'll tell you one example. So we were out to dinner with a broker celebrating a deal we just bought from him and he talked, he was telling us about this student housing thing that he is got. He didn't really think we would be interested in student housing, but when he was reading me and not reading me, but telling me this is how much it is per unit, this is the size of the unit, I'm like, this makes sense. We would want this. We left dinner after having a few drinks. It was nine o'clock at night and went to the hotel and underwrote that deal that night because this sounded like a great deal.

(02:14): We walked the property the next morning, submitted an offer that night, had a conference call with the seller the day after that made an offer. And he's like, can you get this done in 45 days? And we're like yeah, we could do that. And we got it done. But I mean, if we didn't move that fast, it wouldn't have been ours. It would've gone on the market. Perhaps it would be a very competitive bid. And that's just one example. And wasn't our business plan was convert the student housing to multi-family. And so during, I had a very small window before Armani went hard to talk to the city of Tucson, talk to a zoning attorney, get all these different things to make sure this could happen. And we felt comfortable enough to proceed. And we took a 52% occupied building and within, I don't know, seven months, got it up to 95% occupied.

(03:13): We got the approval on breaking up the units. We created just a ton of value in a very, very short time that I don't a lot of people would've seen right away. First of all, listening to that story is very inspiring because I think there's a tendency for a lot of people, myself included. Anytime I say, a lot of people have a tendency, I'm really talking about myself. So there's a tendency and a lot of people to overthink and delay decision making because you don't want to do the wrong thing. And so it strikes me that you are able to see what's there and move very quickly. Do you think that's just a certain tolerance for risk? Do you not think of it as tolerance for risk? Because you just see the idea very clearly. Why do you think you were willing to jump on that so quickly where I think a lot of people would wanna know, they're going to do some research, they're going to think about it.

(04:10): Why do you think you were able to jump on that the way that you did? Part of it is reps underwriting so many deals and putting my eyes on deals and walking properties and getting a feel for it. So the numbers made sense to me. My biggest concern was, okay, will the city approve this and whatnot? And so I called 10 different people from the city to get the right person to get a feel from them. Then called the lawyer, Hey, have you worked with this person? What do you know? We triangulated all these different things and make sure to protect our investors to make sure that this made sense. So I knew I wasn't going to continue forward if it just didn't make sense, but I was going to work nonstop until we figured that out and we had a number of different people on our team all working on it, talk to 10 different people to get to the right zoning attorney in Tucson that knows that it was the best.

(05:04): And so it was all hands on deck to make sure, but no, it's not going back, okay, I'm going to chill out, read my emails, this and that. It was immediate action and I've had reps like that, so it's just, boom, let's go to work. Yeah, I mean, it's interesting. I wasn't even thinking of it like that, but we've mentioned pattern matching earlier in the episode where you're talking about you're really focused on a specific market. It gives you more sort of say reps. I always say at bats you have a certain number at bats. You start to see patterns get an intuitive sense. I mean, I think intuition has sort of a bad reputation, but I think intuition is extremely powerful. It is based on data. It's just processed at a level that's maybe below spreadsheet level. We could call it that. So I mean, that is really interesting to me.

(06:03): It strikes me too, there's something about your background that I find really interesting is you have such an entrepreneurial background besides real estate, right? I think when you're in, we were talking before it, it's like I think you had a food delivery service when you were in college. You did film, right? So I think you wrote and directed a film y, you know, have the business working with the at-risk youth youth and doing leadership development. Now you're doing breakup day capital, you're in multi-family real estate. So this is a very varied entrepreneurial background. I was at Goldman Sachs and then I moved to Bear Stearns and then I moved to Chase or whatever. These are all over the place. I'm wondering the way you think about business, do you notice certain lessons or mindsets or even systems that have emerged across all of your different entrepreneurial experiences?

(06:59): You are all businesses at their core very similar. Is it not like that? It's like, no, the context is totally different. It's a totally different skillset every time. What have you taken away from being in so many different industries over the course of your entrepreneurial life? I think it's all about people. I've gone a hell of a lot better dealing with people, certainly not expert, but it all comes down to people and building your team. Real estate is a team sport. All the different things is working with other people, experts that you could bring on that can help you get there. And treating people and getting them on board or getting them to feel empowered to help you has led to my success. It's certainly not singular, but people wanting to help and creating win-win scenarios for people has provided rocket fuel for me. And you could go very far just by yourself.

(08:07): Certainly you can do well, but to get to those next levels you need to other people on board. And so pretty much everything is a people business. I mean, I love that. It's such a good reminder to keep in mind. I think investors can be very independent minded. I know I am entrepreneurial people. We're used to solving problems and we get rewarded for solving problems. And it leads you to a tendency to be like, well, if there's problem, I'll just solve right? It's quicker for me to do it. That's the classic entrepreneur's myth. It's just what faster I do. But when you build a team, that's the sort of multiplier effect. You can do so much more. I mean, I love the idea that whether you're doing food delivery or film or you're doing leadership or you're doing real estate, it's all about your team.

(09:01): Let's talk about break of day capital. So break of day capital.com. You can go there, check it out. I highly recommend actually for folks listening to this, they know I'm an online marketing person. It's a great website. It's a really nice looking website. Not every real estate investing website is how we would say good. It's a really nice one. But not only that, you also have a book out, you have a podcast. Let's talk about that a little bit. E explain to people what the book is. You can grab it right off the homepage. If you go to breakup day capital.com, there's a button you can click the Multi-Family Passive Investors Guide. Talk a little bit about this kind of thing that you've created and also a little bit about why you decided to do this specifically. Because it's hard. Writing is hard, right? It's not easy. Yeah. Well, that's just like an ebook. But I did write best in class, which you could find behind me. That's an Amazon best selling button.

(09:57): Want to find motivated seller leads online but don't know where to start? Download our free motivated seller keyword report today. Edwards nerds have spent over 5 million this year researching the most profitable keywords for finding motivated seller leads. And you can grab these exact keywords when you download our report at www.adwordsnerds.com/keywords. Okay, well let's talk about that then. So let's talk about best in class. So tell people about this book and also why you decided to write this book in the first place. So that is everything about asset management from due diligence to takeover, to driving income to taxes, KPIs, and eventually selling it. So the whole gamut, and I don't think there's anything out there like it. So whenever I go to a conference or something, there's always people that come up to me. I read your book, I love it. It's helped me so much, but I decided to write it. I wrote it with a business partner at the time, for us to get better, first of all, by putting on paper. And if we didn't know something, we'd have them on our podcast and interview them, and then we'd have the content for the book too.

(11:13): It was always under the thinking that we want to get better at what we do. And so running a book's going to help us get better. And it took a long time to write the book. You finish send it for edits, they send it back to you and you have to go through it again and you're like, oh, I gotta read this for the 50th time. But it has served me well, and it's also allowed me to build a brand around it and provide for investors something that they can give me credibility for. Yeah, I was going to ask, do you find that it's been a real boost to your authority? I think that's a reason that a lot of people will point to do a book. A book feels much more serious than a YouTube video or whatever, whatever it is. Yeah. Have you found that that's kind of a really good calling card for you?

(12:10): Sort of an introduction? Absolutely. I've spoken at a lot of different conferences, and so I'm considered one of the asset management guides guys out there because of the book. Yeah, I love that. I think it's, anytime I see somebody who's written a book, I'm very impressed because I've tried to write a book before and it is not easy. So when you are writing it, the actual process of writing it, how did you tackle it? Did you do it? Some people always say like, oh, from 8:00 AM to 10:00 PM or 10:00 AM I just sat at the desk and I typed exactly until the timer went off and then I stopped. Or were you more awake for the urge to strike you? How did you actually get it out? Does that make sense? Yeah. So started with just all the different chapters. So that kind of created a roadmap and knowing, okay, each chapter's going to be 10, 15 pages, get plus or minus.

(13:05): So just having that road roadmap helped. And then for me, I'm a guy that just get it down, get my basic ideas down, fine, tune it, fine tune it, fine tune it. But if I worry about each word and whatnot, forget it. I can't do it. I need to let kind of the juices flow. And sometimes they're flowing, sometimes they're not. So just get some basic ideas then. And then days that I, I'm flowing, then boom, I can write the whole chapter and it looks great, but a lot of times it's just fine tuning it. And it's funny because the partner guy I was writing with, he writes differently. He wants it perfect the first time, and he's like, why are you sending me this? It's not done. I, I know it's not done. I need a couple iterations. That's how I work. But you know, stay committed and try to give yourself some deadlines.

(14:00): And so it just keeps you moving forward because if you don't have deadlines, it could take forever. But I can't have a gun to my head and say, I'm going to write between this hours, typically. But everyone is different. Some of the best writers, that's what they do. They have that slot and they write during that time. Yeah. I also do not write that way, but I very similarly, probably the longest thing I've ever written was I wrote a master's thesis when I was graduating from college. And it's a obvious deadline. It has to be due, right? It has to be done. So it's like you start to get in the groove and really get it out. I, so I think that approach makes a lot of sense. I'm curious what, you mentioned the podcast. So you have a podcast, it's called the Real Estate Asset Management Podcast and you can find it anywhere that you go out and get your podcast.

(14:51): Wherever you're listening to this podcast, you'll be able to find that one. You going to just Google Real Estate Asset Management, Gary Lipsky. You'll find it. So tell me a little bit about the decision to do the podcast. You guys got a bunch of episodes out, you've been doing it for a while. So why the podcast Was that to you mentioned, was it in preparation from the book? Was it kind of networking? Was it all the above? Why jump into the podcasting game? Yeah, it was really for educational purposes. I wanted to bring on the best operators and things that I didn't know about or wanted to know more about. And that's why we started it and it focused, it wasn't about the journey of real estate, it was about a specific topic in asset management, 10, 20 minutes, boom, about, and then move on to the next topic.

(15:42): And so that was the driver, quite honestly. And using some of that content for the book, and it's made me a better operator. It's built my network. I've built good relationships with other good operators because of that podcast. And it's gone me on other people's podcasts. So it's really worked out well for me. I know there's a million podcasts out there, and separating yourself isn't easy. And we had a pretty niche topic to help separate ourselves. I mean, obviously mine is very similar. It's real estate investing and marketing. I don't know if this has been your experience. My experience has been like, we don't do hundreds of thousands of, of the podcast. The podcast is a niche, niche topic, a niche audience. What I do find is that there's something about the medium that is very intimate, and so we'll tend to get people who will come in and say, I'm ready to work with you.

(16:39): You don't need to sell me. I'm just ready to go. And almost always those people will say, I've been listening to the podcast for two years, three years, something like that. And they have a relationship with you before they're ready to work with you. Has that been your experience? I mean, we find it to be such a powerful sort of relationship builder, even if we don't know that the relationship is being formed, if that makes sense. Absolutely. Social media podcast, all these different avenues. There's not one thing that captures, captures someone per se, but people are following and listening to you that you don't know, and they're like, okay, now I'm ready. And outta the blue. Yeah, I like this. I feel like in general, a lot of people have a very buttoned down or buttoned up or whatever. So very tight social media presence, it's very systematic or whatever.

(17:32): And then I think there's a lot of people, and I would put you in this category where you are talking about things you are clearly interested in and clearly skilled in, and you are yourself, right? And there's not really like this. You're not doing the whole whatever. I like Gary Vaynerchuck, but you're not doing the thing where it's like, Hey, here's my brand. I'm this guy, I'm this guy. It's personal. People can form a relationship to you. I mean, if people haven't checked out the podcast again, I highly recommend it. It's a real estate asset management pod management podcast. I didn't know anything about asset management before I listen to it now. I feel like I know some. So I think it's pretty awesome. So we're coming up on time. I wanna wrap things up. I don't wanna take too much of your time. I'm really curious because again, questions that I'm curious about.

(18:18): Thinking about your goals for break of Day Capital, I, you've had so much success already. Do you think about your goals for the company and you're like, we're trying to hit X amount of revenue, or we're trying to hit X amount of doors, or I guess, how do you think about the future of your company, right? Because it would be easy for you if you wanted to scale this one up to have another 700 employee company if you really wanted to. So you have so many different directions you can go. How do you think about your future and the goals such as set for yourself? I do get asked that question, what's your end goal or this or that, and how many units or whatnot? And I think units or assets under management can be a dangerous thing because most importantly, I wanna do good deals.

(19:05): And if there's, I'm not going to do a deal just because it adds a number to my resume. I invest in these deals and I've got the fiduciary responsibility of all my investors. So I wanna keep doing good work and creating win-win scenarios for my investors, for the residents, I'd love to have a huge number on my resume, but that's not the driver. That's a result of doing good work. So the most important thing is finding good deals, creating a lot of value. And I don't need to be a billion dollar company, a 2 billion company probably get there, but thankfully I don't have to have this kind of constant whip to keep driving and driving and driving, do good work, let's do it, and enjoy our lives too, have some balance. And certainly I've been working my butt off for a long time, but there's gotta, it's really important for myself and for my team to have some semblance of balanced suit.

(20:12): Because at the end of the day, it doesn't matter how much money you have, have you had fun? Do you have your health, I was just going to say you're working your butt off, but you strike me as someone who you're working your butt off. But it is fun to you to do that up to a certain point, right? Absolutely. Yeah. I love that. I had a conversation with B earlier in the day, B before we talked. I was on the call with the guy who does, I have a nutrition coach because if I don't have an adult looking over my shoulder, I will eat a four year old. It's just the way that I am. So I have an adult, I pay to look over my shoulder and he's this massive muscled guy with a bite, a motorcycle, handlebar mustache, super tough, super strong guy.

(20:55): And so I was asking him, what should I set for my goal? Should my goal be body fat is here, or I'm going to lift a thousand pounds or whatever. We're talking about goals, and he was saying, the problem with goals is if you set a goal that's like, I'm going to look, do X thing, the second you get there is over, and then what do you do next? It's like, it just never stops, right? He's like, your goal should be show up every day and work the system. So the system is show up in the gym or follow your diet plan or whatever it is, but you should be check off the boxes that you did it every day, whether you wanted to or not, and the result and take care of itself. And it strikes me that you're a really good example of that.

(21:35): You are clearly showing up and having fun. You started five businesses more than anybody else I've ever known. You are killing it in all of 'em. And it kind of comes across in your personality that you enjoy what you do and the success is almost a byproduct. Yeah. Yeah. Thanks. Well, the, Gary, I wanna say thank you so much for coming on the show. Again, if you wanna listen to this, you wanna check out more about what Gary is up to? His name is Gary Lipsky, and you can get to him at break of day capital.com. That's capital with an A at the end Break of day capital.com. You can go there, check out his ebook, amazon.com. You can go check out best in class as well. Obviously, go check out the Real Estate Asset Management podcast. Anywhere else, dude, you just social media like D, do you want people to follow you on social media?

(22:21): Anything like that? Yeah, yeah. We're on Facebook, LinkedIn Instagram so check us out, follow us, and stay in touch. All right, Gary, thank you so much for coming on the show, man. I really, really appreciate it. This was awesome. Yeah, appreciate it. Had a lot of fun. Thanks, Dan. That is it. That's it for our interview this week. Please, please, please, folks, if you're listening to this, it would really mean a lot to me. Go and leave us a review wherever you download your podcasts, I read every single one. It helps other people find the show. And I gotta say, doing this show over the last couple years has been one of the most rewarding parts of my job. I really appreciate that you take the time to listen to this every week, and if I can help you or if you have questions, just reach out to us, let us know. I am here to help. As always, this is Daniel Barrett from Edwards nurse.com. Signing off and I will see you next week.

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