TGCI 116: How Adam (a Civil Engineer) found a unique strategy to Financial Freedom?

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Episode 116: How Adam (a Civil Engineer) found a unique strategy to Financial Freedom?

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Summary

In today’s show, Pancham interviews Adam Zach – civil engineer and a real-estate investor.

Adam has been investing in himself when he worked with a business partner and has been growing continuously to where it is today – 26 properties in 5 different states! He has also been building the business (without needing the money!), has a flexible civil-engineering profession, and helps people on getting deals without sacrificing his quality family time!

Want to know his secret to success? Listen to this episode as he will share the business strategy that is too good to be true! He will also share its benefits and overall overview on what to look out for when using this strategy.

 

Listen and enjoy the episode!

PanchamHeadshotTGCI
Pancham Gupta
Adam Zach Head and Shoulders
Adam Zach

Tune in to this show and enjoy!

Copy of Quote #00 - 1 Guest

Timestamped Shownotes:

  • 0:51 – Pancham introduces Adam to the show
  • 2:02 – How investing in himself got him to where he is today
  • 9:34 – Discovering the lease option and contract for deed strategy
  • 12:26 – On dealing with decreasing property value
  • 18:11 – How these strategies are also beneficial to the tenants
  • 20:12 – Details on how the strategy works for him
  • 27:27 – How he balances his engineering and investing ventures
  • 29:33 –  How his morning routine helped him to be productive
  • 35:10 – Taking the Leap Round
  • 35:10 – His first investment outside of Wall Street
  • 35:29 – Questions he first asked when he started investing
  • 36:25 – How his one partnership didn’t turn out as expected
  • 38:04 – Why investors should fail their way to success
  • 39:27 – Adam’s contact information

3 Key Points:

  1. A combination of personal development and pursuing a purpose-driven investing venture can help lead to a fulfillment in life.
  2. The lease option and contract for deed strategy will benefit both the tenant and the seller so using this strategy will provide a win-win situation.
  3. His purpose-driven venture on educating people has motivated him to continue investing and providing opportunities to the buyers as well.

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Read Full Transcript

Welcome to The Gold Collar Investor podcast with your host Pancham Gupta. This podcast is dedicated to helping the high-paid professionals to break out of the Wall Street investments and create multiple income streams. Here’s your host, Pancham Gupta.

Hi there, I’m Robert Helms host of The Real Estate Guys radio program and if you want to have better results in your life you gotta put better ideas in your mind. You’re in the right place. You’re at The Gold Collar Investor podcast.

Adam: Hi, this is Joe Fairless. If you want to diversify out of Wall Street investments, then listen to The Gold Collar Investor Podcast.

 

Pancham Gupta: Welcome to The Gold Collar Investor Podcast. This is your host, Pancham. Really appreciate you for tuning in today. Too good to be true. Have you had that feeling after looking at a certain strategy online? I sure have and that is what my guest Adam thought when he looked at the lease option strategy for single family homes. So, Adam, you know, works 10 hours per week as a professional engineer, but dedicate most of his time to family learning and building up his real estate business. The business that has allowed him to semi retire with the with was his niche in rent to own investments, and creative financing by buying homes for people who can’t qualify for traditional bank loan. He holds 26 properties in five states at the age of 32. Adam lives in Fargo, North Dakota with his wife, and two young kids ages three and one. Adam, welcome to the show, man.

 

Adam: It’s a pleasure having me on Pancham. It’s good, too good to connect with you on a long conversation.

 

Pancham Gupta: Yeah, no, I, you know, we were talking just before we started recording, and you’re in North Dakota, I’m in New York. So, we’re going to have a good, you know, mix of both worlds here. And, you know, have a great conversation, and I’m looking forward to it. So, before we get started, are you ready to fire up my listener break out of Wall Street investments?

 

Adam: I think everyone should be.

 

Pancham Gupta: Alright. Yeah, exactly. Exactly. So. So Adam, tell our listener, you know, tell my listener who’s listening right now about your background, and, more importantly, the person behind that background?

 

Adam: Sure. So, I would say I kind of was, had two different people, it was what I was originally born. And when I discovered personal development, I did not have you know, that bad of a childhood but it wasn’t anything spectacular. I was one of six, so there wasn’t a lot of extra around. And so being the middle child there, it was kind of just grind, do some work. And I felt like I passed the marshmallow test of, you know, I can delay gratification to not eat that first marshmallow to get the second marshmallow. I know, there’s that fun study of like a bunch of five-year-olds squirming you know, as the, you know, lab guys are trying to figure out, you know, how people can delay gratification and what that looks like. So, I was able to do that, because my dad trained that into me from a young age. So, it was like, okay, invest in myself. Okay, that means investing in college, then after I get that, okay, now invest in your job, and then invest in your 401k. And everybody’s like, Oh, that’s it. And I was like, Well, I don’t feel very fulfilled in this. I don’t want to do this for the next 40 years. And so, I picked up like Seven Habits of Highly Effective People. And that was my first true personal development book. And it was when I was 25 years old, I never thought I would read a book again on a college, but then I did that, and things really changed.

 

Pancham Gupta: Yeah, then you realize that you’re going to always read books. And you’re always going to work on your personal development, because you can always learn something new.

 

Adam: Absolutely. It was a big mental shift for me. 

 

Pancham Gupta: Right, so tell me about your like, after you graduated, what did you do? And how did you get to where you are today?

 

Adam: First of all, graduated with civil engineering, went and got my masters got a, got a reasonable job. I started off at like, $53,000 a year, which I thought was, you know, reasonable. And then you just slowly, you know, graduate up through it, found a house with me and some college friends that we just kind of wanted to party almost like playing beer pong and doing stupid college stuff. And because I really think there was much more to life is like, Oh, I got this newfound money, and I can do a few things. So really, it was just trying to extract as much fun out of life as possible, which nothing against it, but there wasn’t much higher purpose there. It was just kind of, let’s just have some fun. And then when I realized

 

Pancham Gupta: Where was this job, where was this house?

 

Adam: So, this one was in far or this was in Grand Forks, North Dakota, so it’s tiny. So, this was where I went to the University of North Dakota. I had then stuck around, and my all my buddies were teachers. And so, I had the highest income as an engineer, so I bought the house and then they were paying me rent. And that’s when I got like the first glimpse it didn’t quite hit like all of like, what that could be from a rich dad poor dad perspective. But once I kind of understood that, hey, I was living rent free for five years. That was pretty cool. 

 

Pancham Gupta: Awesome. So first five years. So, you graduate, you buy this house because you are an engineer, you got your master’s degrees, civil engineering.  Your buddies pay you rent, and you get this lightbulb turned on, right? So, what happens next? Like, do you buy another house? Like what’s going on in your head at that point?

 

Adam: Sure. So, it happened to be around probably the next best decision, which was the best decision that kind of prompted the personal development thing, which was proposing and getting married to my wife, which was around 2015. So, I graduated in 2010. And so, about 2015, I started like, oh, what’s it like to be married and start a family and so that it was about that time I was like, you know, if I was going to start a family, you know, maybe I wanted more freedom in my life. So, once we chose to buy our, and I’m using quotes our forever home in Grand Forks, which was like a five-bedroom, three baths. And it wasn’t very smart. Like, we’re like, now we had two incomes, so we could afford to spend more, you know, I bought a new truck that was like, on a on an auto loan. So, it was like a brand new $60,000 Ford F 150. And so, then I had that debt. And boy, there was just those were not like, if I’m looking back, I’m like, boy, that is just not the way to do it. But luckily, we were still able to, you know, overcome that because we had two high paying jobs. And then that was the last of our splurge is what I call it, of, you know, buying a home that we really didn’t need, but we thought we were going to stay in there. Turns out we lived in there for three years before we moved. So that’s, that’s how long forever is in today’s day and age or as far as we could plan. And so, then once we got that one, we decided to keep the first as a rental, like a true rental where we weren’t living into it. And we did that for a year. And so that was in 2016, to like 2017. And the tenants flooded the basement. And we were I remember pulling up carpet in the basement, like oh, I’m never investing in real estate ever again, to now having, you know, 27 homes in five different states. And so like, we were this close to being like knocked out of the game, and just being the traditional max out the 401k. And you know, never looking at a side hustle. And so, once we got over that little hump, that it was like, okay, we can do this, you know, it’s still this, the long-term play of real estate kept telling myself that. And then in 2017, bought our first true, like, just single-family rental that was like 140,000 and put 20% down, rent it out for like, $1400 put some college kids in there. And that one’s turned out pretty well. But that was kind of step number two in the journey.

 

Pancham Gupta: Got. So, after you bought that, and I heard if I heard you, right, you said 27 homes in five states. Is this right? Like so. Okay, so now you have that first house, where truly you know, where you were living and you moved out and tenants flooded your basement, and to this house that you bought for 140,000 to now 27 homes? What got you to where you are today? Like, you know what, what happened there? Like, you know, did you stop buying ford f 150s? 

 

Adam: That was true. Yeah, I think it was a combination of things. It was you know, the personal development. It was me personally investing in myself. So right now, I’m part of like four different masterminds.  A couple of them are real estate related, ones a dad related one, one’s just general freedom. And so, once I started investing in myself through books, audio books, coaching platforms, those different pieces, and then coupled with I formed an LLC with a business partner. And at the time, we didn’t really know that one of us was the visionary, one was the integrator, but we had two really good complementary roles. And so, we were able to pool our funds, and then pool our time as this became our side hustle where I basically worked from three to 6am. And then he worked from 6pm to 9pm. So, I had the morning shift, and he had the evening shift. And this was all kind of while we were starting a family. So really, it was that. And then we pivoted to some unique business strategies where instead of just dumping our own cash into it, we had a new model where for people that couldn’t get a bank loan, like somebody that just started their own construction business, we would have them go home shopping, buy a home for them and sell it on a lease option or a contract for deed. And then we would buy the home with commercial loans or private money so that we could basically have a turnkey property day one and then not use any of our own money. And once we started doing that in about 20, end of 2018 -2019, that’s when we started adding double digit homes per year.

 

Pancham Gupta: Wow. So, you said so many things in that little, you know, description, I want to break that down. So, you said that you found a partner that one is very clear. And then you were working two shifts very clear. And then you said you found this new strategy where you were not putting your own money in but still buying the place using lease option. So, can you break that down for our listener has never heard of any of that? Like, how do you do that? And what is this strategy?

 

Adam: Sure. it was completely new to us at that time. I had never heard of the word lease option or what a contract for deed was in my life. I just thought you could buy properties, and you had renters. And that was all you can really do. And so, what we eventually figured out was like, okay, we started listening like Kris Krohn or Joe McCall, who are different people that you know, are on YouTube, advocating for this, like, oh, here’s this new strategy where the tenant is actually acting like a homeowner. So, it’s kind of like a blend between a landlord and a mortgage company. And I thought that was kind of cool, because the mortgage company, if your roof leaks, you don’t call your banker, you know, you call a roofer, you call a contractor, you YouTube and go fix it yourself. Whereas if it’s your if you’re a landlord, and your roof leaking, you call your landlord, and they have to come figure it out. So, I really liked this blended model where it was, you know, I didn’t have the tenants took on more responsibility. And I didn’t have as much responsibility to do this. And so, I was like, well, this just seems a little bit too good to be true. And so, there’s, depending on what state that you’re in, most commonly, a lease option is two agreements. It’s just a normal lease. But then the second piece is a specific exclusive option, where the tenant has the first right of refusal that you agree on a purchase price. And let’s say we bought that home for 140, we would say we’ll sell this to you, anytime in the next five years at 150,000. And so, the benefits that we get is that, okay, we get a little bit of appreciation, and what the tenant gets is the option to potentially buy at 150. And if it ends up going to 160, 170, 180. Okay, yes, so is the investor lose out on that, and the tenant buyer, what we call gets the benefit, but at the same time, then then they’re taking care of like minor repairs, and maintenance anything outside of like an insurance claim. So, then we’re acting more like a mortgage company than a true landlord. And so that’s the lease with an option. And then contract for deed is, is kind of a similar version of that. 

 

Pancham Gupta: Got it. So, in other words, basically, there have, there’s a tenant and there is a lease, and then they have the option to buy the house, right at some point in the future for a predetermined price. So, you didn’t mention that if the house goes up in value, you lose that kind of, you know, upside, because you have this predetermined price. But the good side is, you know, your profit at the, you know, at the onset of this, and you have a tenant who’s taking care of the home as if it’s his own home, his or her own home. So now, what happens, let’s say the value of the house goes from 140-120. So, in that case, the tenant may just decide not to pursue that option, right? And he may start that’s keeping random, he may lose the motivation to take care of the home the way he would have if he knew that he is going to buy the house, right? 

 

Adam: For sure, yep. And so that was our first experience is the first and only property, the date that someone has not exercise their lease option or isn’t still currently in it is our very first lease option. And it wasn’t using the same model. Like we just had a home and we just said lease option. Like we just started advertising on Zillow and Craigslist. And turns out a lot of people hear that word, and you get a lot of people picking up in and ringing your phone. And what we failed to do is we thought that this strategy was so cool that they were willing to take on everything, but we never screened them. And I would say this wasn’t a problem from a lease option. It was more just our own, like we didn’t put them through cozy, we didn’t do a background check. They just, you know, they pulled it the heartstrings. And we gave in and that was just a hard, hard lesson for us to learn. And turns out, you know, they just recently got evicted from their own place that they were moving from. And so that was a disaster in and of itself. But you’re absolutely right that if the property goes down, and they just stopped taking care of it, they have the option to buy it, but they’re not required to buy it. And so, they just walk away, and you know, no problem. And so, the new model that we’re doing is having them put down what’s called an option consideration, where they can put 1%, 5% or 10% down depending on how they look on paper so that if they choose to walk away, they’re now leaving money on the table almost like earnest money so that they have some skin in the game almost like a down payment. And it’s non-refundable. So, if they use it, great, if they don’t use it, then they lose it so that the landlord isn’t out, you know, all of that because that’s now there, that’s kind of the price they’re paying to lock in that price.

 

Pancham Gupta: Okay, so that’s like the option price and that they are paying at the time of moving in, basically 

 

Adam: Correct, yep. And the part that we liked is instead of one month security deposit, you can put almost anything that you want, like instead of it being $1400 on $140,000 house, it could be 10 grand as an option consideration. And they get, you know, either all or parts of that back from their purchase price. So, let’s say that they bought it for 150 they put down 10,000 as an option. Okay now when they go to the bank and say hey, I want to buy this home it’s either at 140 or if they can use that as their down payment, there’s some kind of trickier ways of making that work just from a loan origination standpoint but they would get part if not some of that back, all of it back I should say

 

Pancham Gupta: So, what is the second thing that you said that you started doing which is contract to deed

 

Adam: Yeah it’s either called contract for deed agreement for deed installment sale depending on what area of the country that you’re in and where’s the lease with an option according to my knowledge and so on I’m not the expert on this but it acts more like a lease and the argument is you don’t have equitable interest in the property and so if you had an underlining loan that says you know you cannot sell this property to anyone else otherwise we’re going to trigger our due on sale clause you know the argument is that a lease option still fits that model because they have the option to buy it but they don’t have to. On a contract for deed this is truly like a this is your down payment here is your interest rate, you still the seller still keeps the title but they’re selling they’re saying that you get the title assuming that you fulfill the terms of this contract and so that contract would actually get filed at the county and it’s very similar to owner financing so the title stays in your name as opposed to the title changing and then you know just taking a position mortgage or promissory note on it

 

Pancham Gupta: Got it, got it. So, in other words, in lease option there is this issue with some lenders potentially where they can like go and have the due on sale clause kicked in which is basically it’s potentially a sale, right and they can do they can call for all the money that you have they’ve lent you back because you’ve kind of sold the house even though it’s an option to purchase okay.

 

Adam: And to date, with all of my experience I have yet to see one bank at least anywhere that I’ve run into and so this would be maybe hundreds of people, I’ve never seen a bank be like you know what you’re making your payments on time but we want to call your balance due because we found out that you have a lease option or even a contract for deed as long as you’re making your payments I don’t know that would be any concern but that was always a risk for me and then a little bit more of a clarification is a lease option still acts more like a rental agreement so if you had to evict someone it’s more like an eviction, whereas a contract for deed falls in between somewhere between a foreclosure and an eviction or just a you know breach of contract and so I know different investors that use those two tools or contracts very particularly depending on what state they are because some states and eviction is three weeks, in some states and eviction or foreclosure is six months and vice versa like there’s a moratorium where you can’t evict someone but as far as foreclosures you know that can proceed as normal so people investors specifically you know get very choosy on what their state requires for if someone doesn’t pay on a lease option or an agreement for deed

 

Pancham Gupta: Got it. It’s a great strategy so let’s talk about on the tenant side the person who’s getting into why someone would do this.

 

Adam: Sure.  So we started a podcast dedicated to this specifically to try to educate people because we felt like there was a lot of predatory landlords out there they’d be like oh yeah here’s a lease option you can buy it for 150 but you know they knew that the person was never going to do it or the price was so egregious that it didn’t make any sense or the tenant didn’t do any inspections on the properties they didn’t really know what they were getting into and so we felt like this was just a poorly served market because they, a lot of times can have bad credit score or low financial prowess some of them were really good but they were just kind of in a tight bond because they couldn’t get a bank loan and so really what we’re trying to do is do it the right way where we are only doing this for people that can get a bank loan and you know one to five years and it’s not just you know setting it up so that it’s just a hey we can we can get their option fee we get a month.  We evict them because they didn’t exercise their option, or we didn’t renew their lease and then we just go around and do it again and so from that standpoint if you were like in California or Florida where the prices can go up super-fast, but they can also drop really fast.  If I was personally buying a home, I would love to buy a home in New York,  Florida or California on a lease option where I could lock in a price at $200,000 and if the property’s dropped by 30% because there was a correction, well then I can just walk away but if the values keep appreciating at something insane like 8% per year, double digit per year well then that affords me the benefit where I’m controlling it with not actually owning it and there can be some legal things that if you’re not careful they may like not pay The underlying mortgage or they might try to sell the property anyways, because it’s worth more. So, for me personally, I was trying to buy a property in those areas, I would enjoy doing a lease option.

 

Pancham Gupta: Got it.  Some great points there. So, you know, can we walk through one example of a deal, or you already gave one example, like more numbers are like you know exactly what a deal that you’ve done or a hypothetical deal. Preferably a deal that you’ve done that where, how much you put down on your side, and once you put it out for lease option, how much a tenant paid and what was then, you know, price, -inaudible-

 

Adam: Sure. So, our latest one that we closed was in, was in a Festus, Missouri, where somebody was referred to our program. And so, what we did is we screened them and said, okay, him or her in this case, it was it was a gal who owns her own business, but it only started taking off in 2020. So, she didn’t have two years of taxes to show the bank that, hey, I’m making, like $15,000 a month. Well, the bank didn’t really care, because you didn’t have your 2020 -2019 taxes. And so instead of renting, she’s like, okay, what would it look like if I bought a home for you. So, what we said is go pick out any home on the MLS for her it was 10% down, and 1% of the purchase price is what her rent was. So, she picked a $200,000 house, she did the inspection on it, we ordered an appraisal, we sold it to her for 205,000 on an option that she can buy at any time in the next five years. And her monthly payment is $2,000 a month. And she gets a credit of $200 a month for every month that she pays. So, her effective payment is $1800 a month for a $200,000 property. And so, the that’s what her side of it looks like.  For us, we went and found a portfolio lender, so this is different than the agency loans of Fannie Mae, Freddie Mac, because they don’t, they don’t play by the same rules. And now that no longer have a W2 job can’t really qualify for those. So, we found an in-house portfolio loan who said okay, we’ll give you a loan 80% loan to value at an interest rate, I think we got it at like four and a half percent. And it’s fixed for five years amortized over 25 years. And so that works out perfect, because our interest rate is fixed for five years, their lease option is for five years. And I think our mortgage payment is something like $1200 a month. And so, there is you know, a spread of anywhere from $600 to $800 of just if you went strictly principal interest taxes and insurance versus their payment. And then depending on how you want to look at this from a lease option perspective, she was willing to take on that responsibility of the added, you know, maintenance and repairs. And so that’s how it, you know, profits us from our perspective on what the numbers look like. And then even addition to that, so if we had to come up, if the bank gave us 160,000, she put down 20. So now instead of putting down 40,000, we’ll have to put down 20,000, which, you know, just keeps helping our numbers. But then in addition to that, we raised private money lenders, where we gave out a certain interest only loan to help cover that second position, realizing that they’re aware that they’re in a second position, you know, on that property, so that we did like I think it was a $20,000 at a 10% interest only loan. And so that’s how and then we have that payments, maybe $150 a month. And so that’s essentially now how we’re buying homes with none of our own money by leveraging commercial lenders, individuals that can’t get a bank loan and private money to essentially scale this to a much larger network. And I realized that there’s probably some things that I skipped over. And there’s some pros and cons with it. But that’s if I was trying to break down the numbers. Hopefully that made sense as I jumped all over the place there.

 

Pancham Gupta: No, no, it made an amazing, it’s an amazing strategy. So, I can you know, summarize it really quick on your side. So, the home was for $200,000 she, the lady who’s getting in, she paid you, you know 10, 1% so that’s 20,000. Right?

 

Adam: Yeah, 10% percent down was 20 Grand.

 

Pancham Gupta: Yeah, 10%, sorry, not 1%, 10%. So that’s 20,000. And now you got a loan for 80 LTV, which is 160,000. So, you actually have to come out of pocket for you know, $40,000. Twenty came from her. And for the other 20, you actually went out and raised that capital from private individuals at a second lien position for 10% interest rate. So that’s whatever that comes out of $150 a month. And then on the commercial side, you got it for four and a half percent $160,000 that comes out around $1200 a month. So, all in at $1350 a month. For a total of 160 plus 20,000, which is $180,000 worth of loan, and none of your own money in. And she’s paying your rent for, you know, about 1800 a month, plus 200, which is going towards her equity. So, 1800 minus 1350, about 400, whatever, 550 is what you’re making without putting any dime. And that’s about $6000 $7,000 a year. And yes, she is very happy that she got the loan, the house and which she wouldn’t have otherwise got. And you’re very happy that you are making $6000 or more dollars without putting any of your money and just the time. So, does that summarize it? Okay.

 

Adam: Very well, very well. Yeah.

 

Pancham Gupta: Okay. All right. So that’s an amazing strategy, I can totally see how much blood sweat and tears that goes behind putting something like that, together. It’s not easy, for sure. But once you have the system set up, you can do this all day, any day of the year, for many, many years, because you’re not putting any money in and it’s a win win situation, commercial lender is happy. The second lien position, guys very happy because and you have planned exit sets, it’s very nice, actually, you know,

 

Adam: and if I could add one thing on there, when we first started doing this, it was strictly like, okay, we wanted to leave the W2 so how could we, you know, financially get enough passive income where we helped enough people. But then once we started getting to the closing table, and these, what we call kind of the tenant buyers, because they’re both the tenant and they’re buying it, when they’re that excited about actually getting into a home that they own control, you know, already making improvements can, you know, do landscaping can do whatever they want to now make the home worth again, it’s worth like 225,000 was the last estimate that we had, it was, you know, good for them, and good for everyone. So now it’s more of a more of a purpose driven business model, as opposed to just getting, you know, enough passive income to just quit the job, even though that was for sure, the whole incentive, like where we weren’t altruistic from the very beginning, you know, it was really one of the passive incomes. But now we have a little bit more to it.

 

Pancham Gupta: Oh, absolutely. That’s, that’s awesome. So, you know, that’s what they said, you have to get started. And you got started, and you actually found your purpose along the way. So that’s, that’s awesome. So let me ask you this. This is a good segue to that. So, have you quit your full-time job at this point? Or are you still working in your civil engineering job?

 

Adam: Yes, so that’s another fun story.   On November 20, 20th, I said, I’m going to be done January 1, 2021. And just kind of left it at that, and I got coached early on that when you’re in your job, make sure that they’re still getting the better end of the deal, even if you are planning on leaving, because I’ve heard of a lot of people just kind of milking it and like kind of maybe lying on their timesheet a little bit. And eventually, they’ll either get let go or fired or something and then like, okay, now I have an excuse to do real estate. Well, in this case, because I had still honored, you know, my employee status, you know, to the very end, they asked, well, what would it take for you to stay. And so, then that was that that was kind of a fun conversation. So right now, my employment status is I can work zero, or 20 hours a week, at an agreed upon, you know, hourly rate. And so that’s been really fun for me, where, you know, this week, it’s like two hours of work. And sometimes if I want to do 20 hours to get, you know, a certain, you know, just chunk of cash because I want to, I can do that. And now it’s you know, not going into the office. So, it’s really kind of like a Tim Ferriss four-hour workweek approach where I just said, Hey, you know, I’m done. But they said, what would it take to stay and so now I have no benefits, none of that it’s just a strictly almost like a 1099. But I’m still technically employed. And I’ve been averaging maybe eight hours a week as a civil engineer, which is, which has been fun to, to do this real estate thing and just enjoy life with my family got a three-year-old and a one-year-old. And so that’s a that’s a fun challenge in and of itself in spending more time with them.

 

Pancham Gupta: That is such an amazing thing that, so you have, you’re doing all these deals where you don’t need the money. And then you have this job, which is very flexible. And then you’re doing this mission driven thing to help people out. So, it’s, it’s all around pre awesome. Okay, great. So let me ask you one last question before I move on to the next section of the show, which I call taking the leap round. My last question for you is do you have a morning routine that you follow? If so, what is it? And do you think that attributes to your success?

 

Adam: Oh, huge, huge morning routine, so and it’s tough because I feel like you go through the four seasons where you’re like, it’s winter. I have no routine life just sucks and here it gets really cold. So, it’s like, oh, you just wake up enough just to shower, get the kids ready and you’re out the door and life just happens. Okay, that’s, that’s one way of doing it. But in, in my prime, it was waking up. And I would say maybe 75% of the time over the last three years, it was wake up somewhere between 3am and 5am. And it was do the Miracle Morning, where it was, you know, you’re journaling, you’re getting exercise, you’re doing your affirmations, you’re getting your most critical work done. You’re reading, you’re basically doing almost a four-hour workday before most people wake up. And then you eat breakfast, and then you start your day of like your normal day. And so that was very much my routine, whether you know, whether you follow the Miracle Morning, or like the Five-Minute Journal, but really, it was a combination of that where it was journal, meditate, work out, use your critical work done, there is the Five-Minute Journal right there. Yeah. And that was a key piece that I noticed that once I got that done, he feels like he has such a good edge on the world. And I was, uh, I don’t know if that was always a morning person, but I had such a drive to get financially independent, that waking up at 3am wasn’t an issue. And I always say this to some of my other engineering friends like, well, if you think that’s an excuse, I was doing this while becoming a father and still being active to my three and one year old. So, like, yes, there was times were like, oh, yeah, my one-year-old is teething and never sleeping. okay yeah, that day, maybe didn’t work because we were up for four hours, you know, that night trying to make sure that that the one-year-old was being okay. And so that was definitely a trying time. But at some points, I just like, you know what, this might be the greatest time of my life like I’m growing a family, growing a business, got this side hustle got all this ambition in life to get somewhere. And so that that’s what really fueled me but having a morning routine. It’s a great question, Pancham.

 

Pancham Gupta: That’s great. So, you, you mentioned you were doing this, you’re still doing it, or you changed it, or this is still stayed the same Miracle Morning,

 

Adam: In the current phase are one and a half year old, is having some sleep challenges. So, it’s maybe closer to like five to six. And then when that’s the case, I can only like pick which ones I want to do to I want to work out or do I want to get some business done, or do I want to read and so it’s kind of like half a Miracle Morning. But now, now, it’s a weird position that, you know, nobody feels sorry for us at all. But it’s like, oh, I can just go drop off the kids and I have eight hours free. And so, it’s like, Okay, well, the motivation isn’t exactly there was before I had to go to jobs. So, it’s like, I didn’t matter. I had to get everything done before I went to work. But now it’s kind of like well, I can maybe just slide in. It’s actually a little bit weird because I’m such a highly driven ambitious person. But it’s actually a little bit depressing when I’m not waking up at four o’clock in the morning. And I feel then I feel off I was like oh I got all this time, but I still feel the need to get up super early because it’s like okay, well one of my I did all this to get financially free okay, what now What now? What are you going to do it so it’s that next thing in life?

 

Pancham Gupta: I totally see where you’re coming from kind of similar thing happened to me as what I’m trying to get back to 4am getting up. Alright, great. So, we’ll be back after this message. . Do you ever feel overwhelmed by the thought that you have no time after work, and family time to learn about investing? Do you feel left behind that you are not putting your money to work for you? Do you want to create passive income, but you do not know where to start? If so, I have good news for you. I have created an investor club which I call The Gold Collar Investor Club for accredited investors. I will be putting together investing opportunities exclusively for this group. These are the opportunities where I have done my part of the due diligence for you and will be investing my own money alongside you. If you are interested, please sign up on thioglycolic investor.com/club. I repeat, thegoldcollarinvestor.com/club. I will reach out to schedule a 30-minute phone conversation to discuss your investing goals once you sign up.  This can be a good opportunity to diversify and take some chips off the hands of Wall Street to produce some cash flow. And in case you are wondering what an accredited investor is, accredited investor is someone who has earned more than 200,000 as filing single or more than 300,000 filing jointly for the last two years. Another way to qualify as an accredited investor is if your total net worth is more than $1 million excluding your personal home. It includes your stocks, 401k’s, IRAs, cars etc. Just not the equity in your personal home. If this, is you, I would highly encourage you to sign up…? So, Adam let’s move on to the second part of the show which I call taking the leap and I want to ask these four questions to every guest on my show.  My first question for you is when was the first time you invested outside of Wall Street, was it that house you bought with your buddies?

 

Adam: Yep, and I didn’t know that it was an investment at the time but for sure it was you know bigger pockets would call it a house hack room rental, that was for sure my first investment yep

 

Pancham Gupta: Got it, cool.  Did you have to overcome any fears to when you when you first invested in that house?

 

Adam: it was just the first time buying a house was big like it was this for my family, is this an investment? You know what area do I want, and I would say the first true investment was, are we going to truly keep this as a rental and walk away from it? Or are we just going to do what everybody does, sell their home, use the equity to upgrade and put a down payment on the next home. And being consciously saying okay instead of putting 20% down on our next home, we’re going to put 5% down because we’re going to keep this one as a rental, that took a lot my wife and I have very different risk meters.  Mine is almost unmeasurable. I’ll take on any amount of risk to the detriment of a lot of things and my wife is very much a security gland like why in the world would we ever do rentals especially the way that I was proposing on doing them. So there was there was a lot of debate and discussion on that one for sure

 

Pancham Gupta: Got it. Cool so my third question for you is can you share with us one investment that did not go as expected?

 

Adam: Oh I have probably six or seven of them but for me I am a huge fan of partnerships. So, I’ve done probably five different partnerships whether that’s joint venture where I’m privately lending where i’m forming an LLC and so far, all of them have gone well except for one.  And most individuals have always coached me to never partner with someone because it’s just, it’s almost like a business marriage and 50% of them are going to fail and it’s just going to be a nightmare, disaster and I look at it a little bit differently that if you just approach it and make the other person get the better end of the deal, they’ll be grateful, and you’ll end up working in a good relationship.  So, my investment, although there’s multiple rental properties that we bought out of that 26 they’re going to net us $0 but it was a great learning experience. One that I would share is if you’re going to get into a partnership with someone, just agree to the terms and make sure that everyone has some skin in the game because what I did is I was going to bring my capital and experience and somebody else was going to bring their hard work and ambition and time and essentially we started out I invested some capital and they kind of said you know what I’m just really not into this anymore and they just kind of walked away because they didn’t really have, uh

 

Pancham Gupta: Skin in the game

 

Adam: Yes, skin in the game or their just priorities change which I get happens with a 22-year-old, but I just thought that you know that was going to be a great pairing or somebody that want to get into real estate could almost act like an apprentice but then they ended up just kind of walking away

 

Pancham Gupta: Got it. Yeah, you do, and you learn, right? 

 

Adam: Yep. 

 

Pancham Gupta: So great advice there.  So, my last question for you is what is one piece of advice would you give to people who are thinking of investing in main street that is outside of Wall Street?

 

Adam: So, I’m curious to your answer to this one Pancham and if you’ve answered this already, I should have heard the episode, but I hear you I’m curious your answer first before I go

 

Pancham Gupta: Okay my answer to this question is that if you’ve never done anything around this like just educate yourself and learn from people who’ve done it before whatever that is whether you want to you know if you want to you know fly people to Mars then yeah definitely try to learn from Elon Musk but if you have anything as he had, there are many people out there who’ve done it. So just learn from them.

 

Adam: Sure, and I have something similar where it was, I read the book Go for No which was essentially fail your way to success but make sure that the failure is a learning opportunity where it’s heads, I win, tails I break even and learn something and so that that disproportionate reward to risk was something that I really enjoy doing with any type of investing where if it goes really well, I might make a certain return.  If it goes really bad, I might just break even or lose my time but I’m not going to lose you know 50% of my investment on something

 

Pancham Gupta: Great advice.  Thank you for sharing your knowledge, Adam.  That’s great, Adam so how can people connect with you if they want to learn more about you and you know the books that you recommend, I know you’re huge into personal development how can they get hold of you?

 

Adam: Sure yeah. If they love some, the number one question I get asked is what books you know do I enjoy reading so have that or if you’re looking to connect with me, the best way would just be as so that’s my first initial, last initial of Adam Zach at the golden, or thegoldcollarinvestor.com, so az@thegoldcollarinvestor.com. 

 

Pancham Gupta: Great! Thank you, Adam for your time here.  You’ve added a ton of value and this strategy that you mentioned is amazing for someone.  You know if you want to learn about it definitely reach out to Adam at az@thegoldcollar.investor.com

 

Adam: Yeah, thanks for having me and just appreciate you keeping putting out the great content.  Follow you a lot and just want to say I love the personal development plus the interviews.  It’s a great combination and super helpful.

 

Pancham Gupta: Thank you Thank you for your kind words and for your time today. Thanks, Adam.

 

Adam: You’re welcome.


Pancham Gupta: Thank you for tuning in.  To listen to Adam’s journey and his unique strategy with you know, rent to own option and definitely check out his guide on you know, his top book recommendations and guide for engineers. It’s you can get it at az@thegoldcollarinvestor.com. Again, this is Pancham, email me if you have any questions at p@thegoldcollarinvestor.com. Signing off. Until next time, take care.

Thank you for listening to The Gold Collar Investor Podcast. If you love what you’ve heard and you want more of Pancham Gupta, visit us at www.thegoldcollar investor.com and follow us on Facebook@thegoldcollarinvestor. The information on this podcast are opinions as always, please consult your own financial team before investing.


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