Episode 144 – Lane Kawaoka

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Lane Kawaoka  0:01  

I started to realize that high net worth investors don’t own rentals directly. You don’t want the liability you don’t want the debt burden in your own personal name you want to in your commercial business. And you also want scalability. Around this time, I started to join different masterminds to get around other higher net worth doctors, lawyers, engineers, other working professionals. And they invested as a passive LP investor into dozens of these little deals where hundreds of 300 unit apartment complex or a general partnership manage the asset, manages the manager, and investors don’t get any loans in their name, and they don’t do anything. They just cash your checks. That’s all they do.

 

Richard Matthews  0:43  

Heroes are an inspiring group of people, every one of them from the larger than life comic book heroes you see on the big silver screen, the everyday heroes that let us live the privileged lives we do. Every hero has a story to tell, the doctor saving lives at your local hospital, the war veteran down the street, who risked his life for our freedom to the police officers, and the firefighters who risked their safety to ensure ours every hero is special and every story worth telling. But there was one class of heroes that I think is often ignored the entrepreneur, the creator, the producer, the ones who look at the problems in this world and think to themselves, you know what I can fix that I can help people I can make a difference. And they go out and do exactly that by creating a new product or introducing a new service. Some go on to change the world, others make a world of difference to their customers. Welcome to the Hero Show. Join us as we pull back the masks on the world’s finest hero preneurs and learn the secrets to their powers their success and their influence. So you can use those secrets to attract more sales, make more money, and experience more freedom in your business. I’m your host, Richard Matthews, and we are on in 3…2…1…

 

Richard Matthews  1:38

Welcome back to The Hero Show. My name is Richard Matthews. And I have the pleasure of bringing back one of our more popular guests from the past is Lane Kawaoka, Lane are you there?

 

Lane Kawaoka  1:48  

Hey, thanks for having m, Richard. Awesome. 

 

Richard Matthews  1:49  

Awesome, and Lane you are. You have a podcast called Simple Passive Cash Flow. Is that right?

 

Lane Kawaoka  1:55  

That’s correct. And doing it since 2016. And hopefully, it helps a lot of people get started in real estate buying rentals syndications, that kind of stuff.

 

Richard Matthews  2:03  

Yeah, you guys talk a lot about real estate investing and other things. And I know, whenever we bring our returning guests back on, we’ve already heard your heroic story. So we get in and talk a little about some of the fun topics that you guys actually teach. I was looking through all of your stuff here today. And I thought it would be fun to talk about some of the counterintuitive wealth rules that the rich follow. And you got a few of from here. So I want to dive into this first one. It says don’t buy a home to live in. Instead buy rentals. So why don’t you tell me a little bit about that and why that’s an important rule and why it’s counterintuitive?

 

Lane Kawaoka  2:41  

Yeah. So before we get going, and I just preface it, a lot of this stuff is, more of my clients are higher net worth doctors, lawyers, engineers, working professionals, guys pretty good with their money already. So a lot of this stuff kind of flies in the face of your traditional Suzy Orman Dave Ramsey type of traditional dog financial dogma. But yeah, I mean, so like, not investing in retirement accounts seems super irresponsible, right. But yet, none of us do it for a variety of reasons. We’ll kind of walk down the list here. So first of them, you’re going to be paying taxes on your money, regardless, either now in a 401k or later, or now in a Roth or later in a 401k. So pre tax post tax, it’s all the same. But we get to pretty much choose when we pay taxes on it. So most of us are, in kind of my world, our tax bracket is likely lower today than it is tomorrow. Most financial advice is predicated on the fact that they think that you’re going to quit your job, live in your home, and kind of shrivel up and die off a meager Social Security or lower tax bracket. I don’t think that that’s going to happen. I’m a pretty optimistic guy, but I’m pretty sure I’m gonna be a lot richer in the future in being a higher tax bracket in the future. Therefore, I want to pay my taxes on it today. Get it out. Second reason. how else are we going to pay for all this government stimulus,  these trillions of dollars to prop up a pandemic? But tax brackets will likely be going up in the future and inflation will likely happen. Not in the next few years, but definitely in the next decade or two. So, therefore, tax brackets are likely to be going up the third reason I’ve already retired. I’m 35 years old. Obviously, I want my money. I want to get my money before 70 or whatever age you need to get at that retirement money. Fourthly, and this is the big one and this kind of transitions probably to our next topic is, we try to use these deductions, these paper losses from Real Estate Investments today. So we don’t pay taxes. I don’t pay taxes, Trump paid $750. To me, I think he messed up. So you don’t get these types of losses from the investments unless you invest in a non retirement account or not self directed IRA account or not checkbook IRA account.

 

Richard Matthews  5:19  

I remember the first time, I was in a corporate meeting when I was running the marketing department a big regional company. And they had their retirement person come in, and they were, Hey, we’re gonna talk about how we can set up your 401 Ks. And I remember him getting up there. The first thing he said to everyone is, for all of you people who want to get to their retirement age and retire, you’re all going to have a lower income bracket, and blah, blah, blah. I raised my hand, and I was, I don’t plan on retiring, less wealthy than I am now I plan on retiring more wealthy. And I was like, wouldn’t it make more sense to pay taxes on the seed money, rather than paying taxes on your harvest later, which is what most people do. They put in money tax free out of their paycheck into their retirement accounts, and then it grows, hopefully. And then at the end, when they go pull it out, then they get taxed on the harvest instead. And from the people I know that are a lot wealthier than myself. It’s things like learning how to pay taxes on the seed, and then let it grow tax free and have the harvest. The stuff that grows over time is where you want to get taxed at the beginning, not at the end.

 

Lane Kawaoka  6:34  

Right, I mean, the whole point is that let’s think for ourselves like just think logically through this. And think for yourselves, and don’t just go off for the book dogma, right? The guy who came in, give you that presentation, his company, and your company, were in cahoots to get you into their program. He is not a financial expert to me. You never take financial advice from somebody who’s not financially free themselves or gets paid off commissions.

 

Richard Matthews  7:00  

Absolutely. So why do you say that you should not buy a home right? Instead, buy rentals?

 

Lane Kawaoka  7:12  

When you’re investing in real estate, something as simple as a turnkey rental property, buy a home rental, you’re making like over 30 35% on your money. When you factor in, maybe you’re only making 5 to 10% in cash flow, the monthly revenues, income, and expenses, but you’re making money with mortgage pay down the 10s paying down your mortgage for you. So your equity is building up that way. And your leverage, and you’re still getting the appreciation there. And you’re also getting the tax benefits, say pay less taxes, you add up all those for you making well over 30 35% of people want to see a video breakdown on this, they can go to my website, simple passivecashflow.com slash returns. And if you don’t trust me, go look it up for yourself and do the math for yourself. But, why would you want to put your money in a house where all it does is keeps up with the pace of inflation when you could be making 30% on your money plus in summer Avenue. And this is kind of where all to me where I discovered maybe over a decade ago where I was like, well probably make it 30% here want to make it like eight to 10% in my 401k stocks. I think this is one of the biggest mistakes that young couples make they buy a big house, then they buy a starter home, that’s 600 grand. And that’s like 100 $200,000 down payment where they could have bought maybe four, six houses out in the Midwest that is all cash flowing, growing the money and 20 30%. And now that young couple has that big mortgage, and they’ve lost all their cash flow, and they’ve lost their options and other stuff. I will caveat saying because people, this is a very emotional topic for a lot of people they want that home to live in. But this is one of the most financially debilitating decisions I think people make. But I still think it is for most people because it’s kind of like a forced savings account. A home is like a mortgage, you put your money to. But if you’re financially responsible fiscally response with your money maybe the minority of people out there, then there are different ways there’s a better way.

 

Richard Matthews  9:21  

So the obvious question then is if you’re not going to buy a house, and you’re going to buy rentals and do other things and start creating the cash flow, are you recommending that you rent a house to live in? Yeah, that’s what I do. Interesting. So when it comes to renting a house, do you rent a house from your own company? Or do you rent a house from someone else?

 

Lane Kawaoka  9:43  

Just from somebody else. I mean no games here. In terms of, renting from my Corp, kind of LLC or anything like that, not just renting from some private person out there. Put it this way, there’s a lot of investors are unsophisticated. Most of them are mom and pop investors that only want one or two rental properties, and they are just so lucky when somebody buys or rents their house, there are a lot of really unsophisticated investors that buy higher end properties, that the rent to value ratios don’t work. I know we’ve talked about last time you’re looking for a property that is 1%, rent to value ratio or fire so that you can cash flow. So a house that’s, likely over 300 $400,000 of potential property that you may want to live in as a rental. Probably doesn’t make financial sense to me. You want to be renting, these properties don’t work as a rental, therefore, for you as a person living in there, it makes so much sense if that makes sense.

 

Richard Matthews  10:44  

Yeah. So you’re you there’s a lot of unsophisticated investors like to get a good deal as a renter?

 

Lane Kawaoka  10:51  

We don’t advocate for buying rentals in any primary markets like California, Washington, Seattle, Hawaii, New York, Miami, like those types of markets. And that’s a lot where a lot of us choose to live, right? Because they’re great places to live. Therefore, it’s a great place to live in a rental property, because the numbers don’t make sense for the buy.

 

Richard Matthews  11:13  

That does, yeah, that makes a lot of sense. So then, if you’re investing in the rental properties, and you’re going through and you’re buying three or four of those rental homes, instead of buying a home. When you get to a point where you’re looking at maybe expanding and moving into, I know like reading through your stuff, you’ve started sort of investing in multifamily and other things and growing your portfolio that way.

 

Lane Kawaoka  11:38  

Yeah, so probably around when your net worth gets to be about half a million dollars, give or take a quarter million, is when you start to get to a level where I was in 2015 when I had 11 rentals, I started to realize that, high net worth investors don’t own rentals directly, you don’t want the liability, you don’t want the debt burden in your own personal name you want to in your commercial business. And you also won’t like scalability for each rental property, great returns don’t get me wrong, but it’s only a few 100 bucks a cash flow every month, not gonna say I’m not appreciative of that. But, you know, with 11 rentals, I had an eviction or two every year, some kind of big catastrophe that happened every quarter. And yeah, I’m having my property manager do all my dirty work for me. But with 11 rentals, that adds up, right? With 30 rentals, it starts to become sort of a full time job to manage the manager. And that’s that the level that you kind of need to scale to, to I mean, 10 rentals is just $3,000 passive a month. I don’t know what American founding can’t survive on that. So you’re gonna need 30 properties. So now you’re talking about an eviction every other month, some kind of big catastrophe every other week. It’s just not scalable. And this is where I started to. Around this time, I started to join different masterminds to get around other higher net worth doctors, lawyers, engineers, and other working professionals. And they invested in as a passive LP investor into dozens of these little deals where hundreds of 300 unit apartment complex or a general partnership manage the asset managers, the manager, and investors don’t get any loans in their name, and they don’t do anything. They just cash your checks. That’s all they do.

 

Richard Matthews  13:24  

That’s interesting. So you’re actually investing just the cash into the deal and getting some sort of an equity return?

 

Lane Kawaoka  13:32  

Yeah, and the deal gets a loan, not in your name, but in the general partner names who are being leveraged to, and you’re also getting the tax benefits. But also, in these larger deals, you can do what’s called cost segregation, where basically extracts way, way more like four to 10 times as much losses in the first year as you would if he just would have bought a little single family home with the same amount of money. And that’s where we’re playing this game, right with taxes, getting these passive losses.

 

Richard Matthews  14:04  

Can you explain a little bit what a passive loss is? And how that lowers your AGI your Adjusted Gross Income and how that impact taxes?

 

Lane Kawaoka  14:15  

Yeah, so not a CPA, not a lawyer, but I do know a thing or two and I probably do know a lot more than a lot of CPAs who have a day job, and that’s why they’re stuck there. So the way I explained this is like there’s ordinary income, and there are passive income and passive losses. So there’s a barrier between those. So when you make a passive income, like do your rentals, you have revenue, you pay your expenses and you have cash flow, that’s passive income and you can use passive losses to offset that. How do you get passive losses will you go buy equipment or you can take a paper loss on the property. So with a rental property, you can take 127th of the value of the improvement of the building value every year. So on a $350,000 house, you can take about maybe $6,000 every year. So that’s your Phantom, that’s your paper loss, that’s the passive loss that you can use to offset the income. And likely that usually exceeds what you made as a passive income that year. Again, as good business operators know, you’re always trying to.

 

Richard Matthews  15:27  

If offsets bring your income to zero if your income is zero or less than zero, you don’t pay taxes on that income.

 

Lane Kawaoka  15:34  

Exactly, and good business owners know that you’re always trying to drive your income down to zero, right. So you don’t pay any taxes. But things get really cool when you do cost segregation. I mean, you can get way, way more passive losses. I mean, sometimes I’ll see like 60,000 $80,000 comebacks on $100,000 investment, and you only made maybe $5,000 that year in income, but you have like an $80,000 loss. So net of a $75,000 loss, which you can use the passive losses, you

 

Richard Matthews  16:13  

apply those to other income areas.

 

Lane Kawaoka  16:16  

Yes. So if you cannot use passive losses to offset ordinary income, unless you are a real estate professional, on the designation on taxes, and you meet a few more criteria, but this is the magic here, right. So like, a very common scenario is I have a doctor or lawyer high paid salary, where they make maybe 600,000 a year, their spouse does some real estate stuff, they play the real estate professional status on taxes. Now they can use whatever passive losses they have to offset and lower their AGI down to whatever they want.

 

Richard Matthews  16:53  

That’s really fascinating. And so that’s how the rich play the tax game, right? They’re not actually just going with, hey, here’s what your income is. And here’s how much you owe on it. They’re looking at how they use their real estate, paper losses to reduce AGI to the level that is acceptable to them.

 

Lane Kawaoka  17:14  

Right, at least the big strategy is to get it out of the redzone. Get it under $330,000 or so at AGI because when you’re above that, that’s where you’re getting killed, or in the Biden plan, he’s going to kill $400,000 income earners and higher. So you go right up to 399. Right. I don’t know what the strategy is going to be this time two years from now when all the changes happen, but that’s generally the strategy. And I know people think, these guys are jerks. They don’t pay any taxes. But this is what the tax code is It’s incentivizing. They want people to like us to be infusing our capital into the economy. We’re the ones that deserve the tax breaks. It’s the people who sit on their money under their mattress not doing anything, you have to pay taxes. That’s the deal.

 

Richard Matthews  18:00  

Yeah. So because you’re actually taking the capital that you have and investing it back into the economy, whether you’re buying property or upgrading the property, or whatever it is you’re doing with it, you’re creating more value in the economy that wasn’t there before.

 

Lane Kawaoka  18:20  

In the midst of a pandemic, we’re the ones putting in money into the economy where people are kind of frozen.

 

Richard Matthews  18:26  

Absolutely. I know since we’re talking about taxes. I know one of the things really interesting with property is do cash-out refinances on equity. And when you pull out those, pull out the loans, those loan dollars are tax free as well. Is that right?

 

Lane Kawaoka  18:43  

That is correct. So when you pull out the money, it is not a taxable event. But when we sell assets that you have to recapture all the depreciation that you took, and you have to pay your capital gains. But we play this game, we’re on this I call it the simple passive cash flow gravy train, or God Mode. I don’t know what I call it yet. But most investors that do this stuff, we have several $100,000 of passive losses, the big pillow to cushion any type of capital gain or depreciation recapture. And then what do we do with that money we’re investors, so we go redeploy that in several deals and grab even more passive losses is this kind of good vicious cycle we live on. Is this the 1031 exchange? No, we don’t do 1031. I don’t like 1031 exchanges at all. I don’t know why anybody does them. If you have several $100,000 of passive losses, you should just be simply taking your passive losses offsetting your income back year, your capital gains, and your depreciation recapture.

 

Richard Matthews  19:53  

And then you don’t have the requirement of reinvesting that 1031 requires?

 

Lane Kawaoka  19:58  

That’s correct. So to me, it’s all a moot point they say they’re going to get rid of that 1031 exchange. I don’t think they are. But if they do, we don’t care. And this is the example of like, the wealthy always find a way to kind of do things where it kind of flies underneath the radar.

 

Richard Matthews  20:16  

Yeah. So it’s really interesting sort of way to look at how you manage your money.

 

Richard Matthews 20:21

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Richard Matthews 21:54

So one of the things you have listed here is not using your retirement account as an investment vehicle. And I know a lot of people they’re looking at maybe buying a rental property, they’re looking at getting the down payment from say their 401k or something. Why do you not recommend doing that?

 

Lane Kawaoka  22:11  

The retirement funds, as I mentioned, right, like you want to invest outside your retirement funds to play this game. Get the passive losses, when you invest through a retirement account, you can self direct your IRA or Roth, or still take your 401k out in service transaction and invest it. But when you’re doing it in that QRP, the qualified retirement plan money, you don’t get the losses, the paper losses from it. And that’s one of the big reasons why we do this whole shenanigans. So that’s why I would rather have more money out to play with and invest via cash include that with all the other things we’ve kind of mentioned at the start to show with, paying taxes today and that type of stuff and to kind of close the loop on that. That’s the government’s biggest potential revenue stream, right there are all these untaxed retirement funds that are going to get taxed at some point, right, they just kind of it’s like a blank check for them. It’s like they have a lien on your retirement funds. I want my money out of that stuff.

 

Richard Matthews  23:16  

So for those of us who may be at the beginning of a wanting to take either the extra money that our business is throwing off or the extra income from our jobs, if that’s where we’re at, wants to get started playing in this game and creating passive income and then using the paper losses to offset the stuff because I know one of the things that like I’m running into right now in my business, I just hit the point where, I need to do something from an investment standpoint that we’re, otherwise I’m starting to owe a lot of money in taxes. And I don’t have any way to, the business costs what it costs, so I can’t adjust my, my What do you call it, the depreciation went out on the business? So how do you recommend sort of getting started in the real estate space? And can that help with the income that you’re generating? either from your business or from your job?

 

Lane Kawaoka  24:07  

Yeah, It’s not gonna be overnight. I would say, get used to owning rental properties and understand the game. It’s not that complicated. Once you do it for six months, you’re kind of an expert at that point. But, you know, depending on what your net worth is, and there’s I call this the journey to simple passive cash flow, there’s a progression, right, if your net worth is under half a million dollars, let’s go and buy a turnkey rental. Right, your highest and best use is going and buying a just a turnkey rental. Spend your time on your business. So a lot of my clients are high paid doctors, lawyers, engineers, that’s what they should do. Not screwing around with all these like flipping houses. wholesaling is really active real estate activities. We do more passive stuff. So buy a turnkey rental. So what a turnkey rental is like a rehabber where you buy a house Like a cheap house, they’ll fix it up, put in new carpet or new flooring, new appliances, they’ll fix the plumbing and fix the roof. All the big major components, they’ll revamp, sometimes they’ll even put a tenant in there for you. So it’s kind of like a rental property with training wheels, right? You can just step into it. If your net worth is higher than that, and you’re making a lot of money, you definitely, if you’re accredited investor syndications private placements is probably the way to go. But the problem there is, you don’t have that network around, you don’t have that peer group to be able to vet operators or deals. I would just say, hey, just educate yourself in this space. Listen to my podcast, it’s more geared towards high paid professionals, or affluent investors, who are geared up to be more passive. It’s just about educating yourself.

 

Richard Matthews  25:49  

Interesting. So you start off with turnkey rental. And you just, I guess, reinvest that back into getting a few more turnkey rentals until you sort of hit that net worth. Would you call it a bar that you were mentioning that half million dollars net worth?

 

Lane Kawaoka  26:03  

Yeah, I would say so. I mean, roughly, right. I mean, they can check out my articles, simplepassivecashflow.com slash syndication, I have a little chart based on how much money you’re making, and how much what’s your net worth is to kind of dictate where do you go. I’m an engineer, so I got like, all charts and graphs, kind of telling you which way to go in this decision matrix. But I’ve had guys like doctors before that are super busy. And they just want to learn, so they go buy a rental property, even though I say, Yeah, man, that’s a waste of time, right? For you spent all this money to deploy, you know, 550 1000 $100,000, capital is a waste of your time. But hey, more power to them. That’s how you learn the best. By starting with the small stuff. Because once you go into the big stuff, it’s easier, you become a dummy real fast, you don’t learn too much. Right? And that’s

 

Richard Matthews  26:52  

So one of the things that I’m struggling within my head is you’re saying like, half million dollar net worth. And I’m like because I’m a Southern California boy. That’s not even a whole house. That’s like half a house in the Southern California market. So I imagine you’re talking about turnkey rentals in other parts of the country where it’s going to take a few properties to actually hit that kind of a passive, net worth?

 

Lane Kawaoka  27:16  

Yeah, exactly. So we don’t again, we don’t buy properties in private markets, like California, we stick to secondary and tertiary markets. So places like Birmingham, Atlanta, Indianapolis, Kansas City Little Rock, Cincinnati, Cleveland, places like that, where their big criteria are 1% rent to value ratio or higher, nothing less. So you take the monthly rent, divided by the purchase price, and that needs to be 1% or higher. So a lot of the typical turnkey rentals are $1,000 a month rent, and $100,000 purchase price 1%. So like, you buy a house in Southern California for 400 grand in the ghetto properly, we don’t buy properties in the ghetto, that rents for two grand 2000 divided by 400,000 is half a percent. That’s, as you see in Southern California. no bueno. That ain’t gonna work. look elsewhere, right. But most investors, as I said, buy that stuff because they’re unsophisticated, and don’t think about cash flow.

 

Richard Matthews  28:15  

So when it comes to buying properties like that, like the ones in Kansas City and other places where they have that 1%, rent to value ratio. You said like you’re in Hawaii. So how are you doing? I know, because a lot of investors are thinking I have to buy in my backyard. I have to be able to go put boots on the ground and see the property or meet the people who are going to be renting from me. How do you manage that? In your case, I think you said you’re in Hawaii, right?

 

Lane Kawaoka  28:42  

Yeah, I live out here where I want but invest where the numbers make sense. And yeah, it is daunting, I’m not gonna lie, right? Like you’re going to a place that maybe you’ve never visited. And you’re going to buy properties that you may never, ever visit, either. So it’s all about building a team of professional property managers, brokers, and getting a third-party Property Inspector, the lender is going to be doing the due diligence on the appraisal in the title. So you’re covered there. But this is where you have to build your network of other peer accredited, and other passive investors, to get referrals from them, build organic relationships with people and get referrals from them. And this is where I’ve kind of created my network to kind of help people doing that. But this is like, it’s not that hard. Right. But it’s a different way of thinking for sure. Yeah, people want to help you, because you’re going to buy more properties, you’re going to do business with them again.

 

Richard Matthews  29:40  

Makes a lot of sense. So my next question for you then is I guess it’s just something in my head that I’ve not figured out how do you work out because I know there’s a delineation between properties where when you get the loan on it, you’re personally guaranteeing the loan with your own credit score and stuff like that. I know at some point you get to the point where the loan is done on the property. And the numbers of the property? Where does that sort of shift happen in the types of properties you’re investing in?

 

Lane Kawaoka  30:05  

Yeah, so what you’re talking about is when you go over five units, so quad Plex or bigger, you’re getting what’s called a commercial loan, and it’s more asset base. But unless you go over like 50, or 60 units, those loans that’s like no man’s land in terms of lending world. So what I advocate for people is, get some experience, get your net worth up to half a million dollars, but then can still skip completely over this mom and paw investor world where you’re getting a six Plex at eight Plex as a 12, Plex, 32 Plex. And go just go on to being an LP in a syndicator’s deal a country club deal, where I mean, this is why I do what I do. Because we get loans where it’s million dollar loan size or more, that’s Fannie Mae, Freddie Mac backed, it’s 10 to 15-year terms, super low interest rates, interest only for several years. It’s phenomenal. And it’s and the biggest thing is non recourse. So we as the sponsors, put the loans that are personal names, and it’s non recourse. It’s amazing.

 

Richard Matthews  31:15  

Oh, that’s really interesting. So you’re getting into big properties then. And with non-recourse terms?

 

Lane Kawaoka  31:23  

Right, with better economies of scale, and just more stable assets, more institutional assets. But yeah, if you’re a lot of these by enters into the syndication.

 

Richard Matthews  31:35  

So I was gonna ask about those syndications? What’s the actual work involved for you to get into a syndication asset like that? Because I know you mentioned like, once the deals are done, you’re just cashing checks. But like, what does it take for you to actually get involved in one of those?

 

Lane Kawaoka  31:51  

You’re right, I mean, as an LP passive investor, you don’t do jack, you don’t do anything. It’s all the general partners, the guys flying in the airplane in the cockpit, they do everything they put the loans in their name, they operate the asset, they send out distributions, you’re just a passive investor. But all the due diligence and the hard work is on the front end, building your network with other people to figure out where are the trustworthy people out there? And there’s a little bit of legwork with that right? building relationships, getting out of your comfort zone talking to people, it’s not for everybody. If you can’t do that, well, that’s what the crowdfunding websites are, right? That’s the leftovers that people couldn’t find investors for, that they just throw out there on the internet. And you can invest $1,000 for the piece, but I wouldn’t necessarily say they’re good deals.

 

Richard Matthews  32:39  

Yeah, interesting. So there’s definitely a lot of really fascinating things to talk about when it comes to, investing the way the wealthy do. So what I want to do, since we sort of hit that that 30 minute point is where can people go if they want to learn more about how to take the money that either their business or their high paying jobs are throwing off and investing them into real estate? Where can they go to learn more about this from you? And maybe start actually taking some action on that?

 

Lane Kawaoka  33:06  

Yeah. So if your net worth is under half a million, I would say start off buying a single family home turnkey rental, that will likely be remote to you, I’ve got a lot of free content when I first started my podcast back in 2016, this is all I talked about. So it’s not a tactical information on their podcast is simple passive cash flow. I’ve got an course simple passive cash flow.com, you want to check that out. But those last few years, I became more of an accredited investor. So I’ve been kind of changing my style of investing. And I have kind of been doing it, it’s more in the tax, right? You start off with deals, right? You grow your net worth. But then you start to discover these other wealth building activities like handle taxes, infinite banking, passive losses. And this is kind of like the progression of investors. So they kind of listening to the podcast, it kind of goes through a story of kind of my investing story, but a lot of it’s free on my website, simple passive cash flow. And that was kind of a big passion of mine. I’m a little upset of like, how there’s bad financial advice out there, like buy a house to live in and invest in your 401k a lot of is just created by wall street so that all these hardworking Americans have to slave away at a job for 30, 40 years. Right? Imagine a world where you just bought a rental property. And then you bought a rental property the next year. I mean, most of my guys save 30 grand every year, 50 grand a year, so they can buy one or two rental properties every year. They just did that for a few years. They’d be set. Right? Society would not function. Nobody would make coffee at Starbucks if that was the case,

 

Richard Matthews  34:49  

Because everyone was investing.

 

Lane Kawaoka  34:53  

Exactly. But there’s a lot of hard working like I came from corporate America, where the A lot of hard working people that just slaved away every day and are so stressed out. To me, those are the people that need this the most/

 

Richard Matthews  35:09  

As a final question here before we hop off, how much time do you actually invest into your real estate business today?

 

Lane Kawaoka  35:17  

Well, I’m an operator

 

Richard Matthews  35:18  

on a daily basis?

 

Lane Kawaoka  35:20  

I have 4200 rental units and I have my education side. I work about probably 10, 12 hours a day. But I tell my passive investors in my mastermind I’m like, if you guys are spending more than like, a few hours a month doing this, you’re doing it the wrong way. Passive investing should not take you that long.

 

Richard Matthews  35:42  

I like it. That’s the next step I need to take I actually put it on my goal list for this next year is to start taking some of the profits from my business and putting it into real estate because I know that’s the next stage of growth for us is figuring out how to take what the business is creating and putting it into two investments that will last long term.

 

Lane Kawaoka  36:01  

Yeah, for sure. Man, if you need some help, let me know. I mean, it’s kind of like swimming right? Like I’m a horrible swimmer. If you watch me I’m just thrashing on the water. But like if you’d watch good swimmers there it’s like low speed high speed low drag right? Like they’re just there’s no noise right? I think that’s the biggest thing with real estate like there’s just so much noise about like if you don’t have any money and here are all these strategies which to me are just time wasters to me right if you’re higher pay higher net worth guys super simple.

 

Richard Matthews  36:31  

Yeah, absolutely. So thank you so much for coming back today. Lane. It was fascinating to talk to you. It always does to speak with people who are playing their game at a really high level. So if you are listening to this and you got a chance to your business is either throwing off the cash for your high paying job is throwing out the cash you want to get into real estate investing, definitely check out simple passive cash flow.com, I will make sure that there’s a link for it in the in the show notes for you. And again, Lane, thank you so much for coming on and sharing. Little bit more about some of these tactics and strategies today.

 

Lane Kawaoka  37:03  

Well, thanks. 

 

Richard Matthews  37:04  

 

Okay, Bye, guys.