Fighting for Freedom and Stability
On this episode of Next Level American Dream, Abigail and Sean are joined by Doug Spence. Doug is an active Navy Officer and has recently acquired a few real estate properties after starting his real estate career in 2016. Today, he shares about working toward financial freedom after he finishes serving in the Navy and how he plans on achieving this.
Key Topics
Doug's career in the Navy
Building wealth outside of the Navy in RE
Financial Freedom in the future
Connect with Doug Spence:
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SUMMARY KEYWORDS
Real Estate, people, properties, military, turnkey, deals, buying, money, years, navy, American Dream, active duty, mastermind group, investing, goal, process, provide, moved, wealth, building
SPEAKERS
Sean Thomson, Abigail Thomson, Doug Spence
Abigail Thomson 00:01
Welcome to the Next Level American Dream Podcast brought to you by Thomson Multifamily Group. Your hosts, Abigail and Sean, will discuss how you can take your American Dream to the next level through real estate investing, business practices, and personal development. Join us as we share our experiences as a father daughter duo who are trying to accomplish our goal of financial freedom. We hope you learn more about how to define and achieve your American Dream. Here's another episode of Next Level American Dream. Welcome to the Next Level American Dream Podcast. We have a great guest for you today, but first, please make sure you have subscribed if you have not already. We also love getting your feedback through likes, comments, ratings, and reviews. Today, Sean speaks with Doug Spence. Doug is an active Navy Officer and has recently acquired a few real estate properties after starting his real estate career in 2016. Today, he shares about the work toward financial freedom after he finishes serving in the Navy and how he plans on achieving this. If you found any value from today's episode, then please share it with a friend and help us grow. For more information on our sponsor, visit: thomsonmultifamilygroup.com to start taking your American Dream to the next level through passive investing.
Sean Thomson 01:20
Hi, Doug. Thanks for coming on The Next Level American Dream Podcast. How you doing?
Doug Spence 01:23
Doing great, Sean, how are you?
Sean Thomson 01:25
Good. Well, Doug, let's start by telling the people of what your background is a little bit about where you come from, and then kind of what you have going on now.
Doug Spence 01:33
Yeah, sure thing. First off, thanks for having me on the podcast! I really appreciate the opportunity to talk with you and tell your viewers more about what I'm doing and hopefully provide value to them. I'm originally from Houston, Texas, born and raised in Houston, went to school at Baylor did my undergrad at Baylor University then went into the Navy in 2009 and I've been on active duty for about 12 years now. I lived in Pensacola first for two years as part of flight school, then moved to California for a year then moved to Japan for three years, then move back to Pensacola for a flight instructor Tour, which is where I bought my first property and then moved to San Diego in 2018. And I've been here in San Diego ever since and kind of started buying real estate with that that first property in Pensacola in 2016. And then really the real estate investing bug kind of bit me in 2018. And that's when I bought my first you know, dedicated rental property like out of state property. And it's just kind of been addicted to real estate ever since and just been trying to grow and try and learn more and help others ever since.
Sean Thomson 02:52
Let's talk a little bit about so what is your day like as a kid you're in the Navy, you're a pilot, you're flying, right? So talk a little bit about what your commitments are there. And then we'll talk maybe about how you're integrating your side hustle of real estate and how what is your date? What is your day look like?
Doug Spence 03:08
Right, so my background is flying. I haven't been in a flying job in a couple of years. I'll probably go back to one here in a bit. But I've been doing a great job here in San Diego with some grounded but, I do have a busy job being active-duty Navy, I travel a lot. So since I moved to San Diego in 2018, I travel one to two weeks a month. So even like in the last in the last year, I think I've done 13 or 14 work trips even with COVID and stuff, so it's been it's been a lot of travel you know my passion really is real estate. So, I wake up early every day I work on real estate stuff before I go into work. Maybe I'll be able to answer a couple emails or something, you know, while I'm their real estate related while I'm at work and then I work on stuff after work as well and then do some stuff on the weekends too. So that's kind of how I manage my schedule. I started off just with that first single-family home in Pensacola lived in it for almost two years and then rented it out to some flight students when I moved to San Diego so I've been self-managing that property ever since and then I got hooked up with Stu grazer and David Gutierrez, who own a fantastic turnkey company called storehouse 310 ventures back connecting with them in 2018. And I've since bought three turnkey properties from them in Milwaukee, Wisconsin. And those were all cash flowing from day one. And then last summer or last spring, I joined a real estate mastermind group designed for military members, both active duty and veterans and that inspired me to start burning my own deals and start a company and start you know website and thought leadership platform is as it's called honor and equity. And so I've really been growing a lot in the past year trying to learn more about real estate and acquire more real estate. So, it's really, really since 2018, is when it's really started to pick up.
Sean Thomson 05:12
So your daily life is it sounds like it's it's quite a lot of logistics moving around and mobile and stuff. So you must have, it must make it difficult to kind of have, especially if you're, if you're investing remotely, to kind of have things taken care of all the time when you need them taken care of and stuff. So you just work around your your daily schedule to kind of make sure that stuff is in place. And you're You said you're doing it you did turnkey, primarily initially, that probably helped a lot to kind of get you started. Because they would do a lot of the heavy lifting in terms of getting the properties, getting them fixed and getting them rented. And then you could just kind of take over and let the property kind of cash flow from there.
Doug Spence 05:47
Exactly. Yeah. I think Turnkey is a fantastic way for people to get into real estate investing, because you really let like you said, you don't have to have the full team together to do everything. You just have to have the money to make the downpayment on the conventional mortgage, and then you're just you know, you're working with property management, and you're kind of getting your monthly statements and all that see the impact and you know, see the cashflow, see the money coming in each month see the tax advantages at the end of the year. So for me, that was a huge, huge thing, recognizing all the benefits without having to put a team together and deal with contractors and find properties and all that, you know, that's the heavy lifting, involved with real estate, especially single family homes, I think turnkey is a great way to get into real estate but you have to have you know sound personal finances to be able to save up that, that that downpayment.
Sean Thomson 06:38
Now you're going deeper in the market, I guess in terms of where you're buying at is that is that causing? Is that making it it's making it obviously going to make it more difficult to do what you do, I guess, are you are you sort of automating some of your processes? Or how you kind of what is your strategy for for buying on your own and doing that construction and all that stabilization and stuff?
Doug Spence 06:58
Yeah, so that's a great question. When I decided that I was going to start doing my own thing and burning my own properties were safer by rehab, rent, refinance, repeat, I read David Greene's book or a book and David Greene's Long Distance Real Estate Investing, those are two great resources that that helped me out and gave me a roadmap and a strategy. But I he talks about, you know, putting together your core four, so your agent, your property manager, your lender, and your contractors. And I put those I put that team together, you know, pretty quickly I was, you know, starting I was pretty aggressive. And I interviewed property managers, agents and all that put a team together. And I quickly realized that their deals were really tough to come by, you know, this was I started put this team together back in probably September of 2020. You know, I had, I was like, Okay, let's do it got the lender got the the team got the property manager and no deals, you know, it was just it took me three months to get a property to get that first one under contract. And so I realized early on that I needed to create my own organic deal funnel to bring in leads, because if I was relying on the MLS, if I was relying on on wholesalers, I wasn't going to be getting a properties at the price that I needed to pay for them because you know, wholesalers that they have to make money. So they mark they mark up the properties. And so that's when I started putting together my own organic deal funnel starting last September of 2020. And I've been refining it ever since. And I'm to the point now where I have a team of virtual assistant provide Leads Leads for me, and that's how I source deals.
Sean Thomson 08:37
So what is it that causes you to kind of go off the turnkey model because of your position? Is it just a desire to create something more for the future? or What was it that caused you to kind of build start building your own? Because if you're if you're struggling with your day job and finding the time to do those things, making it more complicated would seem like a counterintuitive?
Doug Spence 08:55
Yeah, so we my wife and I, my wife is also in the Navy, she's a jag we, we had a discussion about you know, where we want it to be, you know, 510 1520 years from now. And we wanted to be able to totally replace our Navy, W two income with passive real estate income by the time I retired from the Navy in the eight years from now, so 2029 roughly. So, you know, we established that as a goal. We wrote it down. We talked about it and then I soon realized there's no way I can hit that goal if I'm doing turnkey because, you know, maybe you can do one to two properties a year with with turnkey, but at that those cash flow numbers, I'm not going to hit that 20k you know, 20 25k estimate for monthly cash flow by the end we're done with the Navy. So that's when I realized I need to start doing my own thing I need to get more aggressive. I need to acquire more properties every year that I'm doing right because my original thought was Oh, just keep buying turnkey one to two a year. I'll have you know 10 properties or so. By the time I retire, but that wasn't going to hit that goal. So that's what inspired me to start start my own system in start buying more properties every year.
Sean Thomson 10:13
Yes, it seems almost counterintuitive, but you have to, it's a necessity in order to get deeper in the deal financials, I guess, you know, you have to get to make more money, you have to go deeper in the buying process. Right, because like you said, if you if you're buying from turnkey the turnkey guys buying it, you know, directed from seller, fixing it, you know, renting it, stabilizing it. So there's all that all that process marks the price up somewhat, right. So then you buy time you buy it, you're, you're buying it up here, you still it's still great business. But you need it to be deeper so that you're making a wider spread on the deals that you're buying. And you have that cash flow is increasing. It's also probably good idea to have your own systems in place so that when you do get to that retirement mark, you have it's you can just throttle it up and take off and then sort of accelerate that process too, right?
Doug Spence 11:03
Yeah, exactly. And I think that's something that people don't really think about, they hear Oh, you buy, you buy properties, like out of state that must be, you know, that must be scary to do, you know, that must be risky. But I see it, I see it as an advantage. Because if someone is buying properties, where they physically live, it's much easier for them to go over there and repair the toilet, you know, to talk to talk to the tenants themselves, manage themselves. But if you're, if you're investing out of state, it forces you to find the right people put the right processes and systems in place to be able to create a business rather than you, the owner or the entrepreneur working in your business. Because I think it's really important to focus on working on your business and not in your business, because otherwise you just have another job. So I think by investing out of state, and it forces you to, to create a legitimate business with people and processes, where the business, you know, runs on its own without you ideally, that's the goal, at least, you know, so that's kind of my take on that.
Sean Thomson 12:04
Right. So would you I guess if someone was in your shoes, have you what other what other real estate asset classes have you looked at? Have you looked at other things besides single family rentals?
Doug Spence 12:15
Yeah, so I have the one single family Pensacola three single family in Milwaukee, I have a duplex in Oklahoma City. That's that was my first work that I did last year. I closed on it last year, and just did the refinance on June 1. So that one just finished up about a month ago. And then I also invested in a mobile home park syndication in Colorado as a limited partner.
Sean Thomson 12:40
So do you like the syndication model at all?
Doug Spence 12:46
I like syndication a lot. I think syndication is a great model for people that are maybe high income earners, but don't have the time or the desire to do their own stuff. So it's a great place to put to put money, it's totally passive, you can't do anything with it, even if you want it to. Because, you know, the general partners are the ones that are that are running everything. So and the reason I did that is the I know the people running it, and I trust them, it's the same people that did the purchase the Turnkey properties from the Milwaukee, so I really trusted them. And I was able to save a lot of money on on deployment a year or two ago. So I just put that money with them because it's really trust those people but for now, I am focusing since last summer fall really focusing hard on the burn model for one to four unit properties in Oklahoma City and Tulsa. So that's where I'm focusing there.
Sean Thomson 13:43
And are you and you're, you're trying your own marketing your own your own systems in both those territories. Correct?
Doug Spence 13:51
Yeah, so I have you know, have the property management and have the agents there, I have some wholesalers that I that I you know, that I trust and that I work with, and then my through my property management company, and the agents that they they know contractors, they're in the area so that's kind of my team there. And then I hired a team of virtual assistants out of the Philippines to run SMS and cold calling for me so they do the marketing campaigns and then they email me leads and then I take those leads and I send them to my agents, they're in Tulsa, Oklahoma City, and then they they look into it, and then they make money off of the commission of you know, some really providing value to everyone all around.
Sean Thomson 14:36
Everybody's kind of waiting on their own process.
Doug Spence 14:39
Exactly because I mean that's the beauty with real estate is you can you know through the whole process from you know, the private lending through the agent, the property managers are making money you know, monthly with the management fees, the tenant is getting a you know, an update at home. So then you know, the business is getting cash flowing real estate. So, that's one thing I really like about real estate investing. Thing is, it's a team sport. And it's a team sport in which everyone can win, everyone can be happy so that I really liked that aspect of it.
Sean Thomson 15:07
So what does the future look like? So we, you know, you're you're, you're super busy with your military job. You've got, you've got systems in place, now that you're yours, you're executing, you're finding a little bit of success. You've got it. You're like you said, Your duplex and a few other things happening. What is what is tomorrow look like? Hopefully, for you, are you? Are you just hoping to acquire more properties and continue that process? or What does it look like for you?
Doug Spence 15:29
Yeah, so the goal for 2021 was to acquire eight properties in Oklahoma City, and I have done one. So I, like a lot of people, it's, you know, it's tough to find deals. So that was my goal at the beginning of 21 2021, still aggressively looking for deals there in Oklahoma City and Tulsa. So the goal is to just keep acquiring properties, keep growing honor and equity, and, you know, keep providing value to other people. While also you know, I write articles documenting my journey, what I've learned, the tools that I use, and I put all that up on my website, and on our Instagram page with the hope of helping other people, specifically, military members, and veterans, and show them that it's possible to build wealth through real estate investing while you're active duty. So just helping them with the process. I like connecting with fellow military members who are interested in real estate and kind of sharing with them what I've learned and helping them achieve their financial goals. So they can you know, spend more time with their family or do whatever it is they want to do.
Sean Thomson 16:37
Yeah, you work really hard in the military. But it's not exactly a wealth building activity. Right?
Doug Spence 16:42
Exactly. Yeah. A lot of people think it's, you know, they don't think of people building wealth when you're in the military. But I think there are a lot of advantages to being in the military that that people don't really think about. And there are a lot of ways to build wealth while you are military. And adding real estate is the best way to do it.
Sean Thomson 17:00
Yeah, of course, but you got to do it on your own. So it's great that you're sharing that your story with everybody that is in the military. So that, you know, because it's, you know, if you're in the military, for whatever time period, you're in there, and you're not, you're not building your wealth, when you when you exit the military, you have to start that process when you get out, right. So you're getting a head start on all that. So when you do get out, you already have a business in place that you can just kind of walk into. And during that whole time period, you've kind of been building a base for yourself to have some some growth on top of right? Yes, it's gonna be much easier. So I could see why using your model would be, you know, a good thing for someone that's in there that wants to kind of start that process of building their own their own side hustle, or their own wealth down the road, or their own business, or whatever it is, I did, I could see how that'd be beneficial for everybody to learn those things.
Doug Spence 17:52
Yes, it's really important, I think, for military members to start on before they leave the military, ideally, years before they leave the military, start working on that other purpose. Because, you know, you hear a lot about veteran suicide, veteran depression, I think sometimes, you know, it's not all just PTSD from war, a lot of it is, you know, guys and gals get their whole identity is being in the military and get out. And now that identity, that camaraderie, that sense of purpose is gone, and they're just at some desktop that they hate, and they don't have what they had in the military anymore, and they get depressed. So I think it's important for people to, while you're in the military cultivate that, that other identity, that that other sense of purpose, so that you can transition not just from a wealth building from like, you know, providing for your family perspective, from your own mental health. So that's kind of my, you know, I knew I didn't want to work a W two job forever. So if I'm able to build this port, this real estate portfolio, and then you know, I know, when I exit the military, I'm still going to be, I'm still gonna want to work. And I'm not just gonna sit on the beach, right? So I'm still going to work. But now I will have already established that, that other identity by that time, so that's something I think people don't think about that are in the military, or maybe they don't think about it until they're six months away from leaving, they're like, what the hell am I going to do.
Sean Thomson 19:25
The transition ou to nothing is much more difficult than transitioning out to something that you have established, that you enjoy, that's making you money, you know, doing all those things, so I could definitely see the benefits of doing that. Yeah, you know, and being I think would be in the in the military, you would that would be a scary thing going from this sort of stable work environment that has a mission that has purpose and then going into just like, what's next right, that would be a very scary thing.
Doug Spence 19:53
Yeah, exactly. And it doesn't have to be real estate. It doesn't have to be you know, it can be whatever individual passion is maybe it's philanthropy, maybe it's volunteering, maybe it's writing, you know, it doesn't have to be you know what I'm doing. But I think it's important to people, for people to have that sense of purpose. And if it's a strong sense of purpose that also provides strong income, so you can spend more time with your family, then that's even better. And I feel fortunate that, you know, not only does real estate, you know, make money and provide wealth, but I really enjoy doing it, I enjoy connecting with people and enjoy the process of closing on a deal and, you know, and all that stuff, so I feel thankful for that.
Sean Thomson 20:35
Yeah, there's a lot of there's a lot of things to real estate that people don't really understand until they get into it, you know, one of my favorite things is that I get to provide housing for people. And, you know, I, I set really high standards for, you know, if something breaks on one of my properties, I'm there right away, or I have someone there right away, you know, I try to provide a place for someone to live that they really enjoy. Right? That's To me, that's to me, that's awesome. My tenants have been with me for years and years and years. And they love it. You know, I, that's my favorite part of the whole thing of well, you know, I obviously do this to make the money. But you know, the side benefit is, is providing someone with a with a wonderful place to live, you know, and if as long as you keep that as part of your core tenants, I think that's, you know, for me anyway, that's one of the best things. So there's, like you said, there's, with real estate, there's a lot of things that people maybe they see it as this one thing, but it really does a number of other things. Real Estate's you know, shelter is an important part of someone's life. And if you can provide somebody that wonderful shelter, it's it changed, it can change or help them change their own lives, too. Right. So if someone lives in a place that they don't like, they don't feel safe there, you know, that they don't enjoy anything else about their life, you know.
Doug Spence 21:43
yeah, I think sometimes landlords can get a bad rep, because you have the, you know, the slumlord types, they're trying to do as little improvements as possible, trying to, you know, make as much money as possible. And so it's good to have people like you out there that, you know, genuinely care about meeting a, you know, safe, pleasant place to live for their tenants.
Sean Thomson 22:06
That's just one of the little side benefits of real estate that people don't think of a lot of times, I think, yeah. Well, thanks for sharing that. So I asked everybody on the show, what is the American Dream mean to you?
Doug Spence 22:21
So we talked about this a little a little bit earlier, but you know, it's definitely changing, you know, the, the American Dream, what it was 50 years ago is different. And I think I am no exception. You know, my, my wife and I both work full time, but family is very important to us, you know, the I think the American Dream has definitely changed. But one thing that hasn't changed is the importance of family. So I think for, for us, our dream is being able to have financial freedom through real estate so that we can spend more time with family and doing things that we enjoy doing. Neither one of us really wants to just be, you know, a W2 employee until we're 65. And then, by that time, we're, you know, maybe our health isn't as good and we can enjoy life as much. So I think for us, the American Dream is being able to spend as much time with with friends and family and not be trading time for money at some some big corporation.
Sean Thomson 23:19
Right? Exactly. Yeah, that's good. Well, so if someone were in the military, like, like, you are in there, and they're, they are trying to find that next thing, what do you what would you maybe recommend people? What would they start? How would you say, hey, go here, right away, and start doing this, to get to kind of get started on their education?
Doug Spence 23:32
The biggest thing someone can do if they're military or veteran, and they're interested in real estate, is join a Mastermind Group. I did that last spring. And I've gained so much value from just being surrounded by like minded people, people that are motivated people that are knowledgeable about real estate in my Mastermind Group. There's a whole spectrum of people, there's people that are doing RV, parks, mobile, home parks, apartment complexes, all while active duty, and then there's people that are just looking for their first deal. So being in an environment where you can network, we can learn from others, people are doing deals together, you're seeing people that have achieved what you want to achieve, you know, maybe someone just wants, you know, five properties. Well, there's plenty of people that have you know, that are in that situation, see, so you're able to see and talk to people that have already done what you want to do and get support from them. So I think in whether someone is in the military or not, there are plenty of Mastermind Groups out there and and I have great gain tremendous value from being in a Mastermind Group. And so I highly recommend that to anyone out there looking to progress in their real estate career.
Sean Thomson 24:46
Yeah, I'm in a couple Masterminds I've been in a Mastermind for, you know, years and years and years. I try to keep that as part of my life. I've moved to a couple different ones, but that's right. It's what you're saying is true. You know, you get into a room with 50 people that are hustling like you are every day and out doing the same things, you know, advertising and you know all these little tricks and, and you know different things that they're having success with that you may not have known about and learning all that stuff, it really accelerates your your, your your learning and your growth. But by being around those people, you know, discussing those things that are working in those things that aren't working and those markets that are working, or whatever it is, you know, sources of money, sources of capital masterminds are a great place to get started.
Doug Spence 25:35
Yeah, and I think one, I don't think I would have started doing burrs on my own if it wasn't for this Mastermind group, because before the Mastermind I was content. I'll just keep buying turnkey one to two properties a year because I'm, you know, compared to the people that I'm surrounded with, that's like, way more than anyone else is doing. But then I get into the Mastermind group, they break us out into these squads, five or six people that we meet with every week. And there's one guy in my squad, he's active duty Air Force. And he was telling us about the 18 unit apartment complex, he was about to close out and I'm like, holy cow, this guy is doing apartment complexes, like, you know, essentially by himself. I mean, he has lenders and stuff, but he's doing these small, multi families by himself. And there's guys doing syndication. So you really see like, what's possible, and it really makes you stretch, stretch your goals and raise your goals to better align with with the people around you in the Mastermind. So it's it's tremendous for the mindset shift as well, not just the networking and all in what you can learn, but just the way it changes your mindset. And you kind of grow your your goals, and it changes what you perceive as possible.
Sean Thomson 26:44
Right, it expands on what was possible. Yeah, mindset, right, for sure. Well, Doug, I think you mentioned earlier, you have a blog and a few other things. If someone wanted to kind of reach out to you and maybe get some advice from you, or just learn more about you. How did How do people reach out to you and get in touch with you?
Doug Spence 27:02
Yeah, so I have a website. It's called, www.honorandequity.com -- Then, we also have an Instagram page, it's @honorandequity -- and just feel free to shoot me an email at that email address: doug@honorandequity.com or just send me a message on Instagram. I like chatting with with people I like chatting with really anyone about any kind of real estate, just really enjoy those discussions. So feel free to reach out. And yeah, just check out the website. I've got a lot of articles on there just documenting my personal real estate journey, and all the things that I've learned. So hopefully, people can can gain value from that and the Instagram page.
Sean Thomson 27:42
Yeah. So they can kind of read about where you came from how you kind of gotten to where you are. So like, maybe that's a good place to get some information about if they're wanting to do the same thing. That might be a good idea. Yeah, that's awesome. Well, Doug, thanks a lot for coming on. I really appreciate you sharing your story with us hearing what you have going on. It's amazing. I know you're super busy during the day, but you're still finding time to take yourself to the next level. And it's a great thing, I think, and I hope you have a ton of success. Anything I can do for you. Of course you'd let me know. And thanks for coming on the show!
Doug Spence 28:11
Yeah, I appreciate it. Sean. Thanks. Thanks again for having me on!
Sean Thomson 28:15
Talk to you soon!
Abigail Thomson 28:16
Thanks for joining us for another episode of Next Level American Dream. If you would like to learn more about what we talked about today, want to contact the team directly, or are interested in passively investing and being a part of our deal room, head over to our website at www.thomsonmultifamilygroup.com -- Before you go, please leave a review! Your comments help us create more episodes for you to enjoy.