The Transition from Law to Real Estate
On this episode of Next Level American Dream, Abigail and Sean are joined by Jeffrey Holst. Jeffrey started his career as a successful lawyer while traveling all around the world. At age 30, he was diagnosed with cancer leading him and his family close to personal bankruptcy. Over a decade later, Jeffrey is healthy, traveling, and a real estate investor. On this episode, he shares with us his journey from law, to real estate, and everything in between.
Key Topics
How did your mindset of life and career change?
How did you decide to move on from law to focus on real estate investing?
Now that you are in real estate, what do you focus on?
Connect with Jeffery Holst:
Instagram @jeffreyholst
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SUMMARY KEYWORDS
life, real estate, deals, money, people, leukemia, years, thought, Multifamily, bought, refinance, investing, cash flow, wealth, world, American Dream, diagnosed, building, week, started
SPEAKERS
Sean Thomson, Abigail Thomson, Jeffrey Holst
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. Our guest today has one amazing story, but first, please make sure you're subscribed if you haven't already done so. We love your feedback through likes, comments, ratings and reviews. Today, Sean interviewed Jeffrey Holst. Jeffrey started his career as a successful lawyer while traveling all around the world. At age 30, he was sadly diagnosed with cancer, leading him and his family close to personal bankruptcy. Over a decade later, Jeffrey is healthy traveling and a real estate investor. On this episode, he shares his journey from law to real estate, and everything in between. If you take value out of our episode today, please share it with a friend and help us grow. For more information about our sponsor, visit: thomsonmultifamilygroup.com to start taking your American Dream to the next level through passive investing.
Sean Thomson 01:27
Hi, Jeffrey, welcome to the Next Level American Dream Podcast. Thanks for being on the show!
Jeffrey Holst 01:31
Oh, thank you. I appreciate you having me!
Sean Thomson 01:34
Well, Jeffrey, we were scheduled to be on the show. And as we were preparing your, your sort of segment of the podcast, we thought we were kind of doing research and reading your bio. And we thought, you know, instead of asking you about real estate stuff, I would really like to hear more about your life, you've had a really unique experience through life, you had some success early on, had some failures early on, and you've kind of recovered from those and you're seeing success again. Now, you know, for our podcast, that's kind of a great theme or story is that success and failure and living out that American dream. So, if it's okay with you, we'll just talk about, you know, your sort of your sort of path through life and the things you're kind of experienced and done. Go over if you don't mind. So, you've climbed Mount Sinai, you've swam with sharks, you've done all these amazing things at a very young age. Tell me some of those younger years kind of how your path from college and all that sort of began.
Jeffrey Holst 02:23
Yeah, that's a that's a big topic. So, the, you know, Listen, I've always lived life a little bit different than some people I don't know why I've just had a passion for traveling and exploring and, and stuff. So, you know, even when I was in high school, we would take these like weekend road trips. I lived in Michigan at the time. And I remember one time, I was like 17. And I said to my mom, I'll be back in two days. And then we drove down to Tucson, Arizona and back in three days. And it was like, you know, it was like 36 hours of driving and like a 48-hour period or something stupid like that. I just always like getting out and seeing stuff. So, a lot of that stuff like climbing a mountain Sinai was just a byproduct of the fact that I was in Egypt. And I thought, Well, I mean, I'm in Egypt, I might as well go see what it's like to climb Mount Sinai. And you know, but what really happened was, I was going to community college, and I was 21 years old or something. I was in mice, actually in my third year of community college because that was a real overachiever. Back then I was just, you know, I was taking my time and I was I just didn't know what I wanted to do with my life. And I was listening to this professor talk about Michelangelo's Moses. This is a sculpture that Michelangelo did during the Renaissance. It's the centerpiece to Pope Julius the second tomb. And he was talking about how when they unveiled this, Michelangelo kind of went nuts. He was in front of the Pope. And he ended up screaming, you know, to the skull to the sculpture, he was like, move because he thought it was so realistic, he expected that they would get up and move. And I just remember thinking like, there's nothing in my life. I'm so passionate about that. I would like stand in front of the Pope and like, start screaming and ranting and raving. So, I was like, I got to see this thing. I don't know what I want to do with my life. But I know I want to see Moses. So that's the first time I traveled internationally, was like three weeks later, I literally took my income tax refund, bought a backpack and a round trip plane ticket. It was one 800 Priceline back before the internet days. I mean, the internet existed but is 99. So, you didn't have you know, the same kind of internet resources we have now. And I didn't even have an email address. I just called them up and I was like, I want to go to London, and I in 30 days, and so I did a 30-day trip backpacked around Europe wandered my way down to Rome, went in to see this. The sculptures actually on a little it's in a church called San Pedro inven Colet, and it sits on a hill overlooking the Colosseum. And I mean, I literally was thinking of this as like, like a quest to figure out what I want to do with my life. Right. So, I was that's why I didn't fly to Rome. I flew to London and I wanted to explore a little bit on the way, and I got there to this church. I walk in and I'm looking at the sculpture. And I'm like, yeah, it's okay. It wasn't like, I had thought it was going to be like life changing experience. And I got there. And I was like, it's a nice sculpture. I mean, in fact, Shawn, I'll tell you, it's probably the greatest single sculpture in the world, at least carved into marble, and you should go see it. If you're ever in Rome, you should absolutely go see it. But it didn't change my life.
Sean Thomson 05:25
It didn't give you that epiphany moment?
Jeffrey Holst 05:27
Right. I didn't solve it what I want to do with my life, I'm 21. And I'm, you know, young and healthy. And I live in America. So, my life was pretty good. But, you know, I just didn't know what I wanted to do. And so, I walked out of this church, and I sat down on the front steps. And back then I was a smoker because I was young and dumb. And I was smoking a cigarette, looking at the Colosseum, from the front steps of this church. And I thought, I still know what I want to do, but I like old stuff. So that's, that's how I ended up going to Egypt to tell I ended up going to I made a short bucket list at that time, the pyramids, Machu Picchu in Peru, and then Petra, in Jordan, which is like the Indiana Jones like, Last Crusade place. And so, I wanted to go see those things, really the only things I could think of that were old, and I was looking at the Colosseum at the time. So, it was very creative, right. And, and over the next several years, that's just what I did. I realized I just needed to make money so I could do those things. So, I went to law school, not because I wanted to be a lawyer, but because I wanted to make money. And yeah, I mean, I don't regret it because I met great people in law school. But there's a reason I don't practice law now.
Sean Thomson 06:33
So, you How did you? How did you go from traveling the world? Looking at old buildings and old artifacts to law school? How did that how what triggered law school just because? A lot of money?
Jeffrey Holst 06:46
Yeah, pretty much. I mean, my dad was a lawyer. So, I mean, seemed like a default position, right? You know, you always default to what's familiar. And I was like, Well, my dad makes money. So, like, fee if he makes money, I should be able to do that. And, and I really thought I would go to law school. And I was like, Well, my dad's got this little law firm. And I'll just, you know, I'll go work for him for a few years and take over his law firm, and he'll retire, and I'll be able to, you know, make money for the rest of my life. I graduated law school in 2006, though, but in December of 2006, and the world was different than, so I started, you know, I did take over the law firm. And I started doing, you know, divorce and criminal work and bankruptcy, work, all this different stuff. And I quickly realized I didn't like fighting over children. So, I stopped doing divorces, and I didn't like dealing with criminals. So, I stopped doing criminal law. I didn't really like doing bankruptcies, but at least there, you know, I felt like I was helping people. And I wasn't causing more problems solving, because I, I mean, the problem with law is you have to have the right constitution for it. And I do not have that. Like, I didn't love it. I loved law school. I mean, I really loved law school. I love learning about the law. It's fascinating. If I gotten into like maybe corporate business law type stuff, I might have been in a different situation. But instead, my plan was to take over the law firm that existed. And it was fine. I mean, it was 2007 2008, we were finally bankruptcies like crazy, filed 400 bankruptcies in two years, I was making good money. We even had a television commercial; I hired a couple of other attorneys. So, we were growing the firm, and everything was going pretty well. And meanwhile, I was using the money to do things like go to Egypt, go to Machu Picchu in Peru. So actually, in August of 2008, I went to Machu Picchu, which is if you don't know, Machu Picchu, for your listeners, don't send ancient Incan city on top of the mountains in the cloud for us. So, you go up this mountain, and you're about 10,000 feet, and you're literally in the clouds. And there's the city that they discovered, you know, 1920s, that there's really no explanation for why it's there. It's very difficult to get to and it's really a mystical kind of place. It's really, really amazing to see. And you climb up above it, and you kind of look down on the city first. That's kind of the traditional approach is to see it from the top and then you go down and explore it. And I remember sitting up there thinking, this is literally the last thing on my bucket list. I'm literally at the top of the world here, right, like I've caught I've seen everything I want to see I've got a thriving law firm, everything's going super well, you know, and I got I'd gotten married in the interim, and we bought a house in the suburbs, and we had some dogs. I mean, my life was pretty good. And I was 30 years old. And I really was like, I didn't I still didn't really know what I wanted to do with my life, right? I was just like, well, I'm just going to keep traveling and you know, or whatever. I didn't really have a lot of purpose. And I kind of felt the same way as I did when I was sitting on the front steps of the church looking down at the Colosseum. It was like, now what do I do? Like, you know, I'm sitting here like, okay, I've done all this stuff, and I still don't really know what I want to do. And it turns out life has a way of teaching you lessons. And I came I came down from there. This is 2008. So, we didn't have international cell phones then we had gotten the internet. So, we had moved up in the world a little bit. But I remember I went and checked a payphone to check my voicemail. And there was a message from one of the attorneys that was working for me. And in fact, a month or so earlier, one of the attorneys had decided she was going to get married, she got engaged, and she was moving to Rhode Island, so she had already quit and moved to Rhode Island. So, we were down from three attorneys to the other attorney that worked for me, left me a voicemail giving me his two weeks notice while I was in Peru. And it was a week since I checked my voicemail. So, I had like, eight days until he was done working for me. And I was like, wow, this is going to be a trick. Now I've got to do the work of three people. So, I was trying to focus on that, but I was also not feeling 100% and I didn't really you know, ever since I got to Peru, I was very fatigued. And I thought I'm getting old, lazy, fat, you know, all those things. And also, the elevation, you know, elevation has a way to it can it affects you, right? I mean, you're 10,000 feet is not the same as sea level. But even when we came down like Lima, Peru is essentially sea level. And even in Lima, Peru, I was just I just didn't I didn't feel 100% so when I got home, I developed a little bit of a cough. You know, now we would think it was Coronavirus. But back then, you know, that wasn't a thing. So, we weren't thinking like that. I went to the Med Center. They said Oh, you probably picked up a, you know, a bug or something. And they gave me some antibiotics. And a couple days later I was worse. So, I went back to the Med Center as a Saturday morning, I did some blood work, they thought maybe I'd picked up a parasite because I'd been in the Amazon for a little while when I was out in Peru. So, they were doing different tests to see what was going on. And they sent me home and said, Well, I'll just keep taking your antibiotics, you'll probably be fine. And that night, I got a call at like 10 o'clock at night. So, this is like 10 in the morning, like 12 hours later, 10 o'clock at night, I got a call from the from the doctor. And the doctor was like, you have to go to the hospital right now. You have leukemia, and you have to go to the hospital right now. That's literally how the conversation went. I mean, I think you said something like, there's no easy way to say this over the phone. But you have leukemia, and you have to go to the hospital. And I was like, Okay. And we were watching heroes, I don't know if you remember that show heroes are watching heroes. And there's like five minutes left in the show. And I had a pause on my DVR. And my wife said what they want, I said, Oh, nothing, let's just finish watching the show. Like, I don't even want to think about it. And she's like, No, you got to tell me. So, I told her, you know, so I said that, you know, for the first time ever, you know, I have leukemia, and then of course she freaked out. But you know, I in retrospect, I should have been a little bit more freaked out. I think I was in a state of shock at the time. And you know, we ended up going to the ER, I never did see the end of that episode until like, a month later. But went to the ER, I found out that I was much sicker than what I even thought when they first told me when I was diagnosed with my white blood cell counts. It's a really the big indicator of leukemia, it's should be between like four and 10,000. And mine was 258,000. They said I probably had leukemia for two to three years undiagnosed. And what had happened is I went to elevation and white blood cells were crowding out my red blood cells. So, I wasn't processing oxygen as well as a healthy person would. And that's what really triggered the symptoms I was having. And we spent several weeks thinking that I had a very short amount of time to live. Like I remember I was in the hospital one day and my dad said to me, if you make it till February, this isn't September now. This is if you make it till February, I'll take you to Australia. And I said, I just hope I make it till Christmas. But that's literally where my mind was, you know, it's hard to imagine now it's been 12 years, you know, unfortunately, I didn't die I made it to Christmas and also to February, and then to Australia eventually, which was amazing. But the pro tip here is don't cross the last thing off your bucket list because everything falls apart. Like I'm like Machu Picchu. Okay, done. And then two weeks later, law firm falling apart. And you know, ended up as a bankruptcy attorney and because I didn't have any revenue coming in, and lots of expenses from advertising and television contracts and stuff. I ended up in personal bankruptcy A year later, so I'm going from like, pretty successful to dying and on my way to bankruptcy in like two weeks. Wow. Yeah, that's a that's a shocker for sure.
Sean Thomson 14:37
Yeah, that's a good that is a that's a hammer blow reset to your life. I mean, that's not that's not a small reset. that's a that's a massive, massive reset in your in everything you're doing. You're you went from, like you said just hustling as a lawyer and traveling the world to Am I going to even survive you know? Yeah, incredible thing.
Jeffrey Holst 14:59
Yeah, it's Actually, in retrospect, probably the best thing that ever happened to me. I mean, it's easy to say that now it was tough at the time, obviously. But I will tell you, I didn't I have this thing when I was 17, I decided that I was never going to have a bad day again. And so, at the time I was diagnosed, I had 13 years of consecutive good days. And my brother came into the hospital the night I was diagnosed, and he said, I bet Today's a bad day. And I was like, actually not, I mean, most of the day was pretty good. I mean, I feel a little sick, but like, I did all this fun stuff. And like, you know, I was able to relax at home. And I didn't get diagnosed till 10 at night. So, you know, most of the day was good. And then the next day was a little challenging. But then I ran into, like, the nurse at the hospital was one of my childhood babysitters I hadn't seen in like, 20 years. And I was just so happy to see her that I like, didn't even really think about how I was, you know, dying in the hospital and, and then my family was there. And people were supportive. And I just kept thinking, I'm just so lucky, because I've already done everything I wanted to do, right? I mean, there's something to be said about that, like, most people live their whole life without going to Machu Picchu, or to see the pyramids in Egypt, right. And I did, I'd made a list of things I wanted to do. And I had accomplished them. And I was looking back at my life at that point and going, Man, I wish I had more time, but, but it's okay. And I was okay with it. I mean, I didn't love it. Like I didn't want to die, right? I knew that. For sure. 100% did not want to die. But I was also it's going to be alright. It is what it is. I was more worried about my wife, then I was like myself at that point. Right.
Sean Thomson 16:34
So how did you I guess you recovered? You went through the process of the treatments, those sorts of things, your health came better, right?
Jeffrey Holst 16:41
Yeah, so technically, I still have leukemia, which is kind of annoying, but it is a good daily reminder, because I have to take oral chemotherapy once a day. And that's a daily, I always consider it like my mortality reminder, you know, like, I take this pill or I die, those are my choices, I get to choose every day. If I didn't want to live, I could just stop taking my pills. And so in a way, it's been really focusing in my life. And what I learned was when I when I, what I learned is that you only do have this one life, right? And you really have a shorter time than you think any people might get 20 or 30 years, other people might get 80. But it goes so dang fast, right? Like 12 years since I was diagnosed, barely feels like it was like it just it was just yesterday. But on the other hand, you know, when you sit around and you sort of plan your life, it's really easy to be like, well, someday I'm gonna invest in real estate. And that's what happened for me, I read Rich Dad, Poor Dad when I was 19. I even flipped a single house when I was in law school to help pay some of the bills. But I just never really got serious about real estate until after I was bankrupt and dying. And I was like, well, someday might never come. And also, by the way, if I'd started investing in real estate, 10 years earlier, when I first started thinking about it, and I didn't have income from my law firm coming in, I would have still been paying my bills. And I was like, I just need to create wealth that outlives me. And I love about your show, right? Your show that The Next Level American Dream or whatever you call it, right?
Sean Thomson 18:17
Next Level American Dream, yeah.
Jeffrey Holst 18:18
Yeah. So what I like about this is like, the that like the American Dream really is whatever it is that you want it to be, right. So you can sit there and you can say, Okay, what is it that I want to do with my life, and then you can just go do it. That's the great part about the American dream. And so, if you want to take American dream to the next level, what you have to do is you have to say, Okay, what are my goals for where I'm at. And when I was sitting there thinking about the future, when I thought I wasn't going to live very long, and I thought I might have a month or two to live. I was thinking, Okay, what can I do to make sure that my wife's Okay. And then even when I started to recover, right, and it looked like, I mean, the drugs that I'm on are, they were experimental at the time. They're, they're widely adopted for the type of leukemia I have now. You know, like, that's what that's the first line of treatment, because they're insanely effective. But at the time, it was unknown if they would work or not. And so when I started to get better, I said to myself, okay, I might die still, like, it could be next month, it could be two years, but, but like, this is gonna kill me. Like, I mean, we never thought that this would be the cure, even now, they don't think it's a cure, right? But like now, we're 12 years later, my levels are perfect. But I had an oncologist appointment last week, two weeks ago, and they told me that they can't even detect the Leukemia anymore. It's undetectable. I mean, that's insane. Like all I do is take a pill once a day, and I don't have to worry about it, I guess. And it might even be a cure, right? Like if it's undetectable. How do you even know you have it anymore. And this is like the fourth or fifth year in a row that we've had undetectably low level of leukemia. So when those tests that you are sensitive to like one in 400,000 cells, so it's theoretically impossible I'm cured, right? Not quite enough, theoretically possible that I'm willing to stop taking my drugs cuz I'm not gonna take that risk, but but the point is like, I thought I was gonna die still. And so I started thinking, Okay, I gotta figure out how to produce some wealth for my wife, because, you know, I was a lawyer, she worked in retail, she's hurt the quality of life that that I was able to provide for us before I got sick was much more than she was going to make ever in her life. She didn't want to be a lawyer, she didn't want to run a business, she just wanted to be a retail manager. And she still is, she loves it, she works for a makeup store. And she just a general manager of a makeup store. And she loves it. And so she does it. But but the quality of what we were able to provide was different and, and so I wanted to produce some wealth. So then I started investing in real estate. But of course, I had no money and no credit. So I had to get a little creative since 2010. And our first deal was like, early 2011. And it was I saved up a little bit of money from working, I quit practicing law, I took a job, I got a sign on bonus, I have an MBA also. So I was able to get a pretty good job. So I started making good money after I quit practicing law. And I just I saved up $20,000 in six months. And I went with a partner of mine, friend from law school, and we bought a condo in, in a nice suburb of Detroit, I was living in Chattanooga at the time, I'd moved down here, and I was buying stuff in Michigan, because that's the market I knew. And that's the market my partner was in. And we just bought stuff for cash. I mean, this is condo was $100,000 condo, three years earlier, the market was you know, at the bottom of the market, and it just just made sense. Just in new, objectively, that rich suburbs of Detroit, the property value shouldn't have gone down 70%. Right. But you just knew it didn't make sense. And it's probably a you know, probably $150,000 condo now we actually ended up buying another one in the same building, also a foreclosure. And we've we've that sort of formed the basis of our real estate investing is those two condos, that you know, we still own today, we ended up getting small mortgages on them later to, you know, sort of leverage up. But at the time, I didn't have any ability to even borrow money, right? I mean, no credit, like you just file bankruptcy, six, six months prior. And so it was a cash deal. And then we started doing private money stuff, you know, borrowing money from people to flip stuff, and then taking the proceeds of that, and investing it in other deals, and seven and a half years of never taking $1 out of real estate, put money in, we never took anything out which every dollar we made from whether it was from a flip or from rent collections, or whatever it was, we just kept putting it back in. And we just kept buying and accelerated. And then 2017. In the spring of 17, the company I worked for was getting sold to a bigger company, and they offered me a job in a big company. I was working at a small company, or I could get a buyout for six months of my salary. And I was like I'm out. I don't want to do that anymore. And you know, it's default, I planned on making money so that my wife wouldn't, you know, have to worry if something happened to me. And it turned out being now I don't have to worry.
Sean Thomson 23:12
Right? Yeah, exactly. You were able to amass enough assets, I guess to to generate the income that you needed to provide. Yeah, lifestyle that you were hoping for, for her. And now you get to benefit from from it as well. You saw you still, I guess until 17 you just made real estate your full time, your goal and how did that change your business?
Jeffrey Holst 23:33
Oh, changed a lot. So before that we had all single families and a couple of duplexes and we had mostly free and clear assets. We had very little financing. We had one private money lender that had lent us about a million dollars 6% interest only. And so we did have that debt, but we had 50 some paid off houses and they were, you know, super significant assets, you know, more than enough to cover that on that loan, and then some, and we still hadn't taken any money out. So I had to figure out how to get money out of my business, which seems weird because you have all this, you know, equity and you have producing income. But I also had partners at that point, a couple of different partners. And our strategy has always been to reinvest everything and they weren't really ready to quit their jobs and live off of the income. And so I had to figure out a different way to make money but I knew that if I had the freedom to focus, I wouldn't be able to figure it out. So I took my severance check. And I bought a duplex which I did a burst strategy on. So that was like one of the first deals that I did afterwards is I bought this this really bad duplex and fixed it up and said we just sold it a month ago. And we paid 58,000 for it. It was my dad and I we split it 5050 we paid 58,000 put about 30,000 and we refinanced it and got all but like 6000 back out at the refinance and then you know collecting rent on it. For three years, so we just sold it for 175. So that was pretty cool. And we took the money when we refinanced it, and we put it down on a 12 unit building. Because I looked at real estate and said to myself, the only way I'm gonna produce really controllable long term wealth is multifamily real estate. So I was sick, I need to learn about this. And so I went and bought a 12 unit to practice. Like, I know, that sounds weird, but I was like, if I'm gonna get into syndicating and raising money, I need to have some real estate. I mean, I had real estate already. But I needed to be able to say to my potential investors, I know what I'm doing. And I have proof because I have this building, right. And we and I wanted to target you know, 1 million to $5 million value add B class real estate. So that's what I bought first was a, you know, 650,000, our B class real estate, you know, with a value add component. It's turned out great. I still own it. A couple months later, my partner the one that I did the first condo with, and I bought a 19 unit in Michigan. So I have this 12 unit in Ringgold, Georgia. It's like Chattanooga area, like 1015 minutes from here. And then I bought the other one up in Michigan. And then three or four months later, we actually sold some houses in 1031, into a 32 unit building in Michigan. And those those three transactions that buying the three multifamily have produced in the last few years, significantly more wealth than all of the real estate investing. I've done my whole life before that. It's unreal, it's unbelievable how much value there is in multifamily for producing real wealth, because you know, you raise rents and the way that the cap rate stuff works. You get forced appreciation, the 12 unit, we just refinanced. We took out more than our original downpayment, we still own it, it's still cash flows, right? And we can use that money to go buy something else. And in fact, that's what we did. We bought another 12 units. So the 12 unit just turned into 24 units, right? all on its own. Yeah, yeah. all by itself in I bought it in October of 17. And so we're Three years later, and it's doubled in cash flow and equity is five times what it was when we bought it. And it's the same thing with the 19 unit, we refinance our 19 unit, which we bought november of 17. And we pulled out about 50,000, more than our initial downpayment. And we've used that money for purchasing another building as well. And we did the same thing with a 41 unit that we bought two years ago, we were able to just we did that one with some investor money, we were able to pay the investors off 100% and still have, you know, our share of the equity. Right. And we had it for two years. I mean, I don't know where I mean, no, the markets been super strong the last couple of years. So that's obviously worked to our advantage. I mean, my timing is like, really, really good. But also really, really lucky, right? Like, I mean, I got into single families at the bottom of the market, but not because I'm brilliant, but because I got diagnosed with leukemia and ended up bankrupt at that time. If I had been bankrupt four years earlier, it wouldn't have worked out as well.
Sean Thomson 28:05
Well, it depends. Yeah, you may have you may have had the same success. It just might have been a little bit bumpy road. Yeah, exactly. Real Estate, real estate up or down can be if you're if you're doing it correctly, it can still be good for you.
Jeffrey Holst 28:17
Oh, it's super Listen, I always tell people buy whenever I mean, doesn't matter. Whatever you buy, just only sell when it's high. Right? I mean, if you if you just follow that rule of timing the market, it's actually not that difficult. It's it's just you can't know when to buy like the market might be at its peak right now. It might it might go off for the next two years. I have no idea. Yeah. I don't think anyone knows. But I do know this. If I buy something today that cash flows, pays for itself. And I have adequate cash reserves. And I have good long term financing in place. So I don't have to refinance three years from now in the middle of recession. Right, then it's pretty forgiving. Because Okay, yeah. If you bought in 2006, and you had to refinance or sell in 2010, that didn't work out well for you. But if you bought in 2006, and you had to sell today, you're super happy.
Sean Thomson 29:05
Yeah, exactly. Yeah, yeah. Yeah.
Jeffrey Holst 29:11
Yep. Just conservative cash flow. Because I look at cash flow. Most people try to live on cash flow. I think this is a mistake. Actually. I've never been one to live on cash flow, which partly by default, because we never took money out of our deals. But I don't think you can live on cash flow very easily. Because cash flow is really your that's your safety measure, like the cash flow is what makes sure that you don't lose your asset. So to me, it's fine to take cash flow out once in a while. But you if you start getting dependent on that stream of cash flows, and then you need to put a new furnace in your building or whatever or new boiler or something, then your cash flow can go away for like a whole year. Right. And so, the way I look at it is it's really the equity build where you really get the wealth, and if you can live on and most people think I'm crazy when I say this, I think I think you're actually better off living on refinancing than you are on cash flow. Like, make sure you have good solid cash positions so that you can weather like ups and downs of cash flow. And then if you need some cash go go pull some money out somewhere.
Sean Thomson 30:14
Yeah, we do something similar. I keep a very large reserve. Now, yeah, would accommodate that would accommodate any of the worst catastrophes I could imagine in my, my business flow. And then I can trim off the top if I need to. I don't generally do that. But I can trim it the cash flow out if I need to, but I am certain that my I make certain that my portfolio is covered by any sort of catastrophic issues with a reserve, you know?
Jeffrey Holst 30:41
Yeah, reserves are super important, too. So that's what I always tell people. It's like, good cash flow, adequate reserves. Yeah, long term financing. If you have those three things in place. Real Estate super forgiving. And you make a lot of money. Yeah, like even if you overpay like you overpay today. If I mean, I don't know anyone that bought a house 50 years ago, that's disappointed with the results. Like, I guarantee you if I could buy stuff in 2000 prices right now, I don't even have to know what markets and I don't even know, you know what the deal is? I just know if I paid the price that it costs in 2000. I'm probably gonna be fine.
Sean Thomson 31:17
Right? Exactly. You know, the other smart thing that you did is that you've I think a lot of people make a mistake, especially they're getting started. Everybody wants to, you know, start in real estate with no money, no credit all these things. And they start wholesaling properties and flipping properties, because that's really kind of the easiest entry. And I think what most people make a mistake on is that's not really wealth building, right? You're not building an income strategy or a wealth strategy, you're just essentially flipping deals and making money. Right? Yeah, that's a great way to make money. But I think that what what they're missing is that that element of long term growth, wealth type building, and I think what you did is smart and just accumulating assets, and just hanging on to everything that you could and reinvesting everything you could into into more assets that you hang on to and keep, you know, you just kind of keep...
Jeffrey Holst 32:03
It accelerates, right? I mean, the longer you can hold off on taking money out, the more you the, the better off you are. Because if you can reinvest money at you know, and I think it's reasonable to assume if you're an active real estate investor, you can get 15 to 20% annualized returns, if you're reinvesting at 15, or 20%, annualized returns, the more money you put away, the faster you get terrible, right, and it compounds really fast. So if you don't take if you take out $10,000, today, that $10,000 is gonna double in the next three or four years, right? So then, so your 10,000, today cost you 24 years from now. So the longer you can hold off on pulling money out of your business, the better off you're going to be as long as you're getting reasonably good returns. And you know, you can get better returns.
Sean Thomson 32:49
Yeah, and as long as you're able to sort of hoard assets and accumulate assets as rapidly as you can, as long as you're able to accumulate assets, and leave the money in those things, and are reinvested in other things as you're refinancing or doing those things, you know, as long as you're able to accumulate more and more and more, it's gonna be better for you down the road, if you're if you're not able to, if you got all your money invested, and you're not able to extract any of that refinance or sales, and you're not able to accumulate assets, that kind of that kind of stuff. But you want to keep accumulating those.
Jeffrey Holst 33:18
So, you definitely have to be thinking about your return on equity too. Right. You know, if you had a paid off $2 million building, it would cashflow really well, probably Yeah. But but it's not necessarily the best allocation. Right. You know, there's there's advantages to leverage. And so you do think about return on equity a lot. And the other thing I think, is, if I were to be objective about it, if I could do it again, I would focus more on on the active stuff like flipping to pay my bills, my personal stuff, right? And I would, I would look at that as my job. And that's what I try to do now. So, so I live off of my real estate, but my goal is not to deplete my assets, right? So I might flip a house, this is what I try to flip about four deals a year. If I flip four deals a year and make 25,000 a deal, then Okay, that's 100 grand a year. And I can live on that 100 grand because it doesn't affect my investing. That's that's the money. I used to pay my bills to go to Egypt, whatever it is, but last year, I took a month off I will this year, actually, I mean, it's almost last year, but in February, I went to Africa for the entire month of February. Glad I went in February and didn't try to go in March or April when the roads shut down. Right.
Sean Thomson 34:29
That's true.
Jeffrey Holst 34:30
But I mean, I was able to go climb Mount Kilimanjaro, the highest mountain in Africa. I mean, this is the kind of stuff that you get to do if you create a lifestyle for yourself that fits with whatever it is that you perceive the American dream to be. Right, exactly. And not everyone in the world gets these advantages. I mean, I do think there are a lot of places in the world where people can make decisions that benefit themselves. In fact, I think anyone can do that anywhere. But you know America, we have this unique ability to produce a tremendous amount of wealth, if that's what we want, but also a lifestyle that's extraordinary. Whatever that is. And, you know, I actually started a show, it's called last life ever, where we, you know, it's not a real estate show, we literally just talk about having helping people live the best version of their life, whatever that means to them. I mean, if your dream is to, to travel the world, maybe you should be a travel agent, right? I mean, get free trips and stuff like that, you don't have to make very much money. If you get free trips. You know, it doesn't matter what it is, like, you just got to figure out the lifestyle that fits you, you're what you want. And a big part of that is, for me, it's multifamily, because it creates multi generational wealth. And I'm a big believer that people should, they should be thinking about the next generation, they should be thinking about how they can benefit the world, they should be thinking about how they can benefit their families, because ultimately, the trick to life, which I realized, you know, much too late, and only because I got sick, is figuring out how to buy back your time. So you can do what you want with your time. It doesn't really matter how you do it. But like time is the one thing we only get once, right, that's, that's the point of last life ever, we get one shot to live. And if we waste our time, we say we're gonna do this someday, or when I retire, I'm going to do this, even if the American Dream is you work at the same company for 30 years, and then you retire with a pension, which is what a lot of people think it was. That's not a good strategy, because you just gave up 30 years of your life and frankly, the best 30 years of your life, right? Doing something that you did just to trade your time for money and trading time for money is, I mean, it's a necessary evil, but it's something that we should try to minimize as much as we can. because money is infinite. And time is definitely not.
Sean Thomson 36:52
Yeah, even if you even if you're a career person, and that's what you you've chosen to do. Like you said, we're corporate jobs for 30 years, but it's imperative that you do something that's going to like, like you were saying, create that wealth and give you that income and that freedom, I think almost everybody I talked to on our show. And I asked them, you know, what is the American dream, they always say it's freedom to do what I want to do, right? It's that freedom. And it's essentially, like you said, the time, I want to have the time to do what I want to do with the people that are most important to me. And if you don't have a, if you don't have a method of earning that income, that gives you that freedom, you're you're kind of you're not leaving out that that that friend, that American dream that you want, you know, yeah, I think real estate for rental, I deal with a lot of real estate people, because that's what the business I'm in this business you're in. And I think real estate is one of those things, that's it's it, it gives you that freedom to do what you want to do, because it doesn't take a lot of your time, it's flexible time. And you can make good money with like you said, flipping a couple houses a year you make 100 grand. And you can also at the same time, sort of develop a wealth strategy that he's gonna give you that, like you said, generational wealth for the future, and something that you can live on, if you need to, if you needed to live on that cash flow of your properties. I'm sure you could, to some degree.
Jeffrey Holst 38:09
Oh yeah, no, for sure. The The reality is right now, you know, because I don't have children, you know, I forgot sake, we made a decision. We didn't know how I was gonna be around we did we want to wait and see. And then we got older. And then you know, we're like, well, we like our life. So we never had children. Because I don't have children, I don't really have to worry that much about multi generational wealth, right? Like, it's cool if I can give back to my nieces and nephews and stuff, but I don't have to, I don't have to stress on that. So my strategy has been, I have a certain amount of, you know, residual cash flow, that when I get to that point, then I can go live on a beach in the Caribbean and go diving every day, then that'd be cool. Right? But that that was my strategy, you know, five years ago, and then I when I finally got to where I didn't have to work, I thought to myself, geez, I'm kind of bored, like sitting at the pool all day long. I gotta go do something else. And that's how I got into multifamily, because I wanted to help other people. And I knew that that that was one way to really accelerate your wealth. So I want to help other people be able to get exposure people that frankly, like maybe they have a lot of money, but they don't have the desire to go out and find deals and you know, fix them up and you know, raise rents and do all kinds of stuff that you have to do to really make money in that because there's a thing I always tell people and you know, people always say well, I want mailbox money or I want passive income. I don't I don't think that that really exists. I think there's like a passivity scale, right? Like on one hand, you can you can be really really active like you can be you know, finding deals renovating them yourself like literally swinging hammers, and you know, you're gonna get a better return because you're gonna put your time in and you're gonna get a return on time also. But on the other hand, you can be more passive, right? Like you can be somewhere in the middle. You can invest in, you know, some turnkey properties or something, but you You still have to do due diligence, you still got to, you know, you still got to work through that process. And you still got to stay on top of your property managers and stuff because no one's gonna look after it the same way you do. And so it's really a function of deciding where you want to fall on that impassivity scale. And one place you can do is investing in other people's deals. So you can take and say, hey, I want to invest in a deal with Sean, right? Like, I want to do that, but invest with Sean on his deal, or whatever, right? And, and, and that's fine. And in the month, you might get a slightly lower return, because somebody else you're carving the deal up a different way, right. But you're getting a better return than you would have elsewhere. And you're able to free up your time. So for me, I've been really focused lately on freeing up my time. And I don't care as much about the returns, because we've got to the point where like, objectively we can live on less than we have coming in, right. So if we can do that, then then we can free up our time to do things like go to Africa for a month, or, you know, spend more time in the Caribbean on the beach. And this year, we haven't been able to do any of that, because the world's been shut down. But but we'll get there. Hopefully, by mid part of this next year coming up, we'll be able to do that, or, well, I don't know when this comes out. It's probably 2021 already now.
Sean Thomson 41:16
Well, you know, a lot of our a lot of our investors in our business are, you know, computer programmers, we have teachers, we have guys that are retired. Sure. And like you said, we're helping them with their investment strategies, right. So they're, they're trying to do the same thing that we're doing, but they, you know, the education that I had to go through for myself, and the time and effort that I had to go through to get good at this business that you know, it's been, it's been years and years and years of development just to get to a place where I'm, I'm good at this, right. And someone who is a teacher by day, that just have the time to commit to to being really good at real estate, right. So it's, if you can, if you can find someone that can help you with those development of your own. Yeah, well, strategies through their own syndications. You know, I, I need their help as investors and they need my help, as you know, as an investor, right, so that's the symbiotic relationship.
Jeffrey Holst 42:07
It's the greatest part about real estate is I mean, real estate is a team sport anyway, doesn't matter if you're hating or doing anything else. It's a team sport. You can't do it on your own. But, but it's 100% true, that when you structure deals correctly, that everyone benefits, right, yeah, everyone benefits and it's so great. I mean, it's really, it's fantastic. Like I was saying, in the last few years not working, I've made more money than I ever have in my life, by not working, because I'm able to dedicate my time to focusing on coming up with some creative strategies to set the deal, how I need to set the deal and things like that. I mean, it really has been really, really fantastic. And yeah, and it's just great to be able to give back to I mean, to help people like you said, teachers, doctors, lawyers, whatever, people that just don't have the time, or they don't have the energy to learn what we've had to learn. I mean, I've read hundreds of books, I've watched, you know, 1000s of hours of YouTube videos, I've you know, and then also, I've spent the last decade actively investing in real estate and seeing what works and seeing what doesn't, and I'm sure every one of you, it's the same thing. It's constantly learning constantly getting better. And because the markets always changing, and if you don't stay on top of it, you're not gonna succeed long term.
Sean Thomson 43:20
Right? Yeah. So it's Yeah, it's the same for me. It's just your everyday you're, you're trying to consume something that's gonna make you a bit better today than you were yesterday, right. That's the whole idea. And it's been years and years and years of doing that, you know, and actively everyday looking at deals, hunting for deals, buying deals, selling deals, you know, all that stuff that you're going through, and making, refining your technique and your business to a point that, you know, hopefully you're good at it. But at this point, you know, right, so.
Jeffrey Holst 43:48
Well, I'm feeling good, okay. But I still think there's stuff I can do better. And I'm constantly learning. It's actually one of the main reasons I come on shows like yours. And the same reason I have a real estate show of my own is that when you expose yourself to people that are doing what you're doing, right, learn from them, right period doesn't matter. Like, can you build relationships with people? And I don't know, maybe next week, you're gonna call me up and be like, Hey, I found this deal in Chattanooga. I don't I don't invest in Chattanooga, like, what should I do with it? Right? And so it's just about getting out there and networking and talking to people. And this year in particular, you know, networking. Gotta be online, like I'm a big fan of like real estate meetups and stuff, but those aren't happening right now.
Sean Thomson 44:30
Well, what are you focused on now? Are you are you see, are you hunting for deals in multifamily space? Are you are you focused on your radio show or your podcast? Or what do you focus?
Jeffrey Holst 44:39
Yeah, I mean, I listen, I love my podcast. Those are my babies, right? I've got the old fashioned real estate show where we just get drunk and talk about real estate like we drink bourbon old fashions and talk about real estate. So that one's fun. That's a YouTube thing. And I love that it's super fun to do. And it helps me both because it's educational. But but ya know, I'm looking for deals I've got In fact, I have two small multifamily is under contract right now a 10 unit and a 20 unit, both local and Chattanooga, one of them, we're just taking down ourselves, just me and one partner, and the other one we're doing a small raise for. And so we have those going on. I've got aggressive goals for 2021. You know, I want to like, I would like to add 400 units Actually, that's that's sort of the goal, which is more than I have now. Right? A couple 100 right now, and I'm like, I want to go to 400. I don't not not go to 400. I want to add 400. Right. So something like triple up how many units I have in 2021. And I think we can do it. I mean, we've spent I mean, it's about Foundation, right? It's about spending the time to build the networks, like we're getting opportunities now that we didn't get two years ago. And I know people say deals are hard to find, and they are hard to find, but but when you build a reputation for the people that are doing the kinds of deals, then when deals show up, you get first look at them, right? It just takes time. And you just got to keep doing it, keep networking, keep talking to brokers, keep talking to people that own buildings, keep talking to other investors, you know, and also you have to be constantly networking, with people that want to get involved in investing that aren't involved, right, you know, your teachers, your doctors, or lawyers, these people that have some cash to the side that don't know how to expose themselves to real estate. Because that's the other thing. Like if I found a $20 million deal tomorrow that I thought was just like a homerun, I got to raise $5 million, because I don't have $5 million in cash in the bank to put down on it right. And I'm gonna need that kind of money if I have a $20 million deal. So So I've got to be building a network of people there too. So my focus right now find big deals, and stick in my sweet spot. You know, I love those 2030 unit deals, I think they're, there's less competition. And there's tons of upside. And rents are going up so much that you can pick up mom and pop owners that you know the rents are below market. And it makes it an easy value add. And those are if you can find those those those are fantastic. I mean, they're hard to find. But I mean, it's like anything just go out and do it.
Sean Thomson 47:01
And then talk about your You said you had a radio or not. I keep saying radio guy. He told my age, I guess but yeah, podcast about lifestyle design. Is that what you're?
Jeffrey Holst 47:09
Yeah, so yeah, it's called last life ever. And what we do is we interview people that are doing extraordinary things, period, whatever it is, one week, it might be someone who's an expert at getting good night's sleep. And in fact, that episode was amazing. We had this lady Marissa Wilkie on, and she just taught us, you know, tips and techniques to get a better night's sleep, it benefits our crowd and benefits our community. And so that was a great guest. But then other weeks, it's you know, someone who's a Broadway musician, or we had TJ Miller, the comedian from, you know, from Silicon Valley, Deadpool all that on one time just to talk about like, what, how he got to where he is, like, you know, he's developed a career in Hollywood, because he wanted to do that. And that's the thing, right, like, last last week we had on Lee Abba Monty who is the youngest person to travel to every country in the world and the north and south pole. He did it by 32 years old. Wow. I mean, so like, we're just trying to find people that are doing interesting and exciting things and expose people to that. And we have a Facebook group last night ever, you know, private Facebook group that people can join, and just, it's just positive, encouraging stuff. People go in there and say, hey, these are my goals. And then people check back in with them and say, how are you doing on this goal or that goal, and I feel like that, to me long term is where my real passion is, my love real estate, I'm always gonna invest in real estate. But I really love helping people live an extraordinary life, like, and part of that is, you know, figuring out the right career. And that right career, for a lot of the people listening to this show is gonna be real estate. Like, if you have a passion for real estate, real estate is fantastic. It's one of the greatest things you can do with your time. But if you hate real estate, you should not be investing in real estate. And I'll probably also apologize for not listening to show. I mean, if you're not, if you don't want to be a real estate person, then this is not the right place for you. And I think, you know, the mistake I made originally was, I thought everyone should invest in real estate. I don't believe that now, I believe. Many, many people should invest in real estate, but not everyone, and people need to figure out what's right for them. If you're the next Mother Teresa, you might die poor, but you're gonna make a disproportionately amazing impact on the world, right? Like, Mother Teresa didn't need to invest in real estate, she needed to go live out her life's purpose. And that was feeding poor people in India. And and to me, if I can interview anyone in the history of humanity, that might be the one right like, that's the person I want to talk to you someone who lives their life in a way that you know, they gave everything they could to live in the best version of their life. And if we do that, you know that, that we're benefiting the whole world, not just ourselves, our life becomes extraordinary. But but by shining out and doing the things that we're called to do we make the whole world better.
Sean Thomson 49:55
Right? Well, Jeffrey, before I let you go, I want to circle back we started talking about purpose. You You had mentioned when your law practice was, was falling apart and your and your you were sick in the hospital, that you really kind of hadn't identified your purpose in life. You were a lawyer just by default. Yeah. And you were kind of just autopilot through life? Did when when did you sort of define or identify a purpose for yourself? Was it after your illness?
Jeffrey Holst 50:20
So, when I got sick, my first goal was just to make money, right? What I really figured it out was when I didn't have to work. I had time to reflect, you know, I did some writing, and I did some thinking. And that's really when I came up with the last life ever philosophy. You know, what I really clarified, it was when I started to write a book, which I still haven't put out, but it's mostly done. But I mean, it's like the last couple years. I mean, and I think, there it's a misnomer to say you have a single life's purpose. The trick to life is to figure out how to get a little bit better all the time, just like you were saying about multifamily right, get a little bit better at your investing, that's great. But get a little bit better at life. If you keep getting better at life, you get to have a better life.
Sean Thomson 51:03
Right? So you haven't really identified Hey, my purpose is to do this, but your purpose is more of just a daily improvement and to and to try and and I don't know what to say best life live your best life every day.
Jeffrey Holst 51:17
Yeah. Well, no. I mean, that is kind of it though. So like, if you if you push me on purpose, my life's purpose is to help other people find their life's purpose.
Sean Thomson 51:26
Right? Yeah, that's beautiful.
Jeffrey Holst 51:28
it's really I mean, I just, I just want to help people live the best version of their lives. So we say that every every video we do on the show, we always say, you know, it's your last life ever. You have to live the best version, your life, something along those lines, every time it's not a canned speech. It's just like, every time we're always saying, Hey, you know, go out there live the best version of your life because you only get one shot and and you can't just say oh, I'm gonna do this later, because later might never come so.
Sean Thomson 51:53
Right. You're I'm sure you're familiar with the I'm, I like to get drilled down to the essence of some things, you know, and a lot of these has self help books and things like that are rooted in Buddhism and stoicism and all these other ancient philosophies. Are you familiar with? Was it momento? Mori?
Jeffrey Holst 52:10
Vaguely. I never read. I never read it.
Sean Thomson 52:13
So you lived. I think you lived it is what it is. It's so yeah, every day for you is a reminder that hey, today is you know, I could it could be my last day, I'm going to try and be the best I can.
Jeffrey Holst 52:23
Yeah, ya know. So that's that. That's why I said, you know, that's why I said getting sick is one of the best things that happened to me. Because every day I take chemotherapy, and every day when I take my chemotherapy, I stopped for one second. And I say to myself, this is this is it, right? Like you get one life and like, I don't take this pill like I could die. Right? And by the way, I could die anyway. Right? Okay, by media right now, like it could happen, right? The second, you know, or whatever. And, and it's nice to have a daily reminder of your mortality. It's it's actually really useful.
Sean Thomson 52:53
Right? Yeah. And it's it propels you, I think it propels you into, I guess it can, it can propel you into into the negative direction as well. But the direction of hate let's make this the best I can, you know,
Jeffrey Holst 53:06
yeah. So So and I have to I have to run I apologize. But I do want to say that say this, I think the trick is to recognize that you how you respond to the adversity you face is all that matters. You can't control everything, but you have to accept responsibility for everything in your life. Because you know how Elrod has this quote in Miracle Morning, where he says, The moment you accept 100% responsibility for everything in your life is the moment you can change anything in your life. Yeah. So I mean, I would leave people with that, like, think about that. Like, if you blame the outside world for whatever you're going for, you have no control over it. You need to accept what happened. And then you need to respond in a way that allows you to get the best result possible. Yeah, if you get leukemia and die, that's not great. But if you get leukemia and you have an option of like seeking out experimental treatment, versus you know, giving up you should choose to seek out experimental treatment. I promise it worked out better for me that way.
Sean Thomson 54:06
Right? Well, Jeffrey, yeah, thank you. I've been keeping you longer than that. I need to I'm sorry. I missed you Yeah, I'm sorry about that. I was I was just engrossed with talking to you. It's a great story you have It's amazing. The life you've kind of created. It's It's fun to hear someone talk about this stuff. It's great. So I apologize for keeping over time but we'll have you back on maybe or something like that. Like
Jeffrey Holst 54:29
I'm happy to come back on anytime and listen if people want to reach out to me, www.jeffreyholst.com is probably the easiest place to find me or the Last Life Fabric Group on Facebook.
Sean Thomson 54:38
Yeah, we'll try and put those in our in our show notes too. So we can kind of can kind of connect with you. I think this is a great thing you know, sort of designing a life that that is is good and positive in your in your life is most important thing I think for me.
Jeffrey Holst 54:51
Yeah, well, and if people email me too, we have a discover your life's purpose ebook that we put up for free. We don't have the landing page up right now. Are redesigning our website. But if people email me or reach out to me through the contact forms, I'll get them that as well.
Sean Thomson 55:06
Okay, perfect. Yeah. Wonderful. Well, thanks, Jeffrey, I appreciate you coming on. And sorry, I kept you long!
Jeffrey Holst 55:12
No, no problem. Thank you for having me on, Sean. I appreciate it!
Sean Thomson 55:15
It was great to talk to you. We'll talk to you soon.
Abigail Thomson 55:17
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.