Join host Steven Pesavento in a captivating conversation with real estate entrepreneur Pace Morby as they dive deep into the importance of money, mindset, and community in achieving success in the real estate industry. Discover the transformative power of money and how it enables you to hire, experience freedom, and invest in yourself. Explore the role of mindset and the impact of surrounding yourself with successful individuals who can push you beyond your limits. Uncover the value of building a community and becoming a valuable resource to others, as Pace shares his personal experiences and the lessons he learned along the way.
Key Takeaways
Resources Mentioned
Interested in connecting with other like-minded individuals? Then join our VonFinch Private Capital Network. Learn more at http://www.vonfinch.com/invest.
About our Guest:
Pace Morby is a highly successful real estate entrepreneur with extensive experience in the industry. He has built a thriving business, employing hundreds of individuals and leveraging his expertise in creative financing. Pace is known for his commitment to providing free mentorship and value to the real estate community. With a strong focus on mindset, money, and community, Pace is dedicated to helping others unlock their full potential and achieve success in the real estate industry.
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00;00;00;00 - 00;00;25;01
Steven Pesavento
I being in a community like that, where people know that they can trust the other folks in the community because they're all on that same journey. They're all looking to accomplish some of the same things, can be a really, really powerful place to let go of some of those fears and adopt some new beliefs so that we can actually start having those conversations about money and investing that end up leading you to really changing your whole life.
00;01;02;03 - 00;01;06;05
Steven Pesavento
Got a very special guest in the studio today, Pace Murphy. How you doing today?
00;01;06;05 - 00;01;09;26
Pace Morby
Pace Love and life, brother. Thank you for having me. I appreciate it.
00;01;10;15 - 00;01;37;23
Steven Pesavento
Yeah, I'm excited to get in for you. For all of those who don't know Pace. He's an author. Investor and founder of Sub two. He's acquired over $250 million of real estate assets through creative financing. And he's the co-host of Annie's top performing show, Triple Digit Flip and Prolific out in the teaching and education space. You've helped a lot of people, a lot of my friends seeing a lot of your content.
00;01;37;24 - 00;01;41;16
Steven Pesavento
I'm excited to be able to dive into your story here. You ready to get started?
00;01;42;25 - 00;01;43;11
Pace Morby
Yes, sir.
00;01;44;18 - 00;02;00;22
Steven Pesavento
Well, before we get into all of the amazing things that you've done, I'd love to start out on a personal note by looking back at earlier in your life, what events or influences from your childhood shaped who you are today? And how is that impacted your money, your investing journey?
00;02;04;17 - 00;02;21;04
Pace Morby
Both good and bad. My parents taught me to work hard and not only work hard, but to enjoy working hard to a point where I grew up and became addicted to it. Like like it's a video game. And I never looked at it as a bad thing, where most people look at work as like, Oh, you need to take time off.
00;02;21;04 - 00;02;38;09
Pace Morby
You need to take time off, bro. If my work is my hobby, why would I take time off? Right. So there's good things there. There's a lot of really good things there. But on the bad side of it, what I was taught was to work hard. Not to work smart. Not my parents didn't teach me leverage. My parents didn't know to teach me leverage.
00;02;38;09 - 00;03;09;03
Pace Morby
And my parents also didn't teach me how to build teams and build companies. My dad, still to this day at 65, 66 years old, is a solopreneur. And so the bad side of that is through my twenties, I struggled and failed multiple times, not because I didn't have a good business, but because I could not figure out how to scale out of being the operator myself and doing everything literally myself until the point where I basically self-sabotage to every business I created until I figured out how to leverage teams.
00;03;09;22 - 00;03;30;18
Steven Pesavento
This idea of working hard and working all the time. A lot of successful people all feel that I know personally. I love what I do. It sounds like you love it as well. What do you say to those people who are listening? They don't love what they do. How can they get on that path towards being in alignment so that they can apply that hard work ethic towards something they enjoy?
00;03;32;16 - 00;03;53;03
Pace Morby
The older you get, the more unapologetic you become. So I apologize for not apologizing. I'm sorry for not being sorry to the people. And I say this to you, but you don't believe in your religion because you just woke up one day and believed in your religion. You don't have the political affiliation you have because you just woke up one day and believed it.
00;03;53;15 - 00;04;18;01
Pace Morby
Even to most people, the sports teams that you choose to root for the religion you're in, the schools you went to, your interest. The job you ultimately ended up in was because of your environment, your parents, your immediate circle of influence, the people on your street that you hung out with. We are a herd animal. We do what the herd does, and I'm no smarter than that.
00;04;18;27 - 00;04;40;28
Pace Morby
You just have to figure out which part of the herd you want to hang out with. And once I figured out that the people that were making the money to attain real financial freedom were not hanging out with the people I was hanging out with, I was like, Man, I'm in the wrong circles. And more and more often the older I get, the more I realize I had nothing to do with my success.
00;04;41;18 - 00;05;03;29
Pace Morby
It was always somebody else's influence in my life that had everything to do with my success. And along the way, all year, I look at myself as Tarzan swinging from from vine to vine Divine and I will use one relationship in a positive way. And I'm hoping that that Vine that I'm holding on to that relationship swings as far as possible.
00;05;03;29 - 00;05;28;04
Pace Morby
I can hold on to that relationship, but at some point, if you're working really, really hard towards a goal, you will inevitably outgrow a lot of the relationships that you needed at some point along the way. And even right now I'm in a transitionary period. I'm one of my very, very best friends. I'm losing him as a very best friend because he chose to stop growing and he can't keep up with my goals.
00;05;28;11 - 00;05;55;23
Pace Morby
And so I have to go find people that are on a different wavelength so I can continue on the path that I want to stay on. So again, it goes all the way down to who you're hanging out with. If you're listening to this, you'll somebody already is nodding their head like, Yeah, you're right, you're right, guys. The last time I spend with my mom, my dad and my siblings, the last time I spend with my friends from my high school in college, the more money I make and the more time I spend with them, it doesn't mean I don't spend time with them and I don't love them.
00;05;56;21 - 00;06;15;15
Pace Morby
But guys, that money is everything. People that tell you otherwise are lying to themselves and they're probably broke. Money is everything. It's how you hire people. It's how you pay for experiences. It's how you buy your time back. It's how you like right now. I was going to my work, my morning workout, and I was going through what are the things I don't want to do today?
00;06;15;25 - 00;06;29;22
Pace Morby
And I go, Oh, you know what? There's 15 things I keep doing every week. I don't want to do those anymore. I'm going to hire somebody to do them. Guess what? I give somebody a job because I have the money to do so. Money is everything. It allows me to spend time with my family and my close relationships.
00;06;29;22 - 00;06;36;20
Pace Morby
So guys get it. You have to get around people that are making the money you want to make and doing the things that you are doing. Yeah. Are you want to do? Sorry.
00;06;37;06 - 00;06;58;22
Steven Pesavento
Yeah. And that's it's so true. Like money is such a powerful tool. And when you don't have any of it, you're missing the ability to have that that, that universal key that opens every door can solve most of the problems that you have in your life that can allow you to have the the ability to invest in yourself, to continue growing and changing or hire people that can help support you.
00;06;59;06 - 00;07;16;06
Steven Pesavento
But a lot of the times people get stuck, right? It's until you get surrounded with other people who are living that life and they're going out and they're making a lot of money and they're going and adventuring and they're loving the work that they do every day, that you don't really believe that it's possible until you see it.
00;07;16;13 - 00;07;35;01
Steven Pesavento
And when all of your friends are doing it. And every time you take a trip with your friends or you're going on some adventure or you're doing something that's that's exciting, and you look around and you're like, Yeah, man, we made it. We're doing it. We're doing it because we're surrounded by these people. And that often takes an investment.
00;07;35;02 - 00;08;09;05
Steven Pesavento
You have to bring value to that type of community. They're going to have to pay to be in a mastermind where other people are being curated. To be in that kind of group, you're going to have to be that type of person that other successful people are going to want to be hanging around. And it's it's so important for you, when you were growing that those early businesses before you got into the space and state that you are today, what was it that was holding you back from making those hires myself.
00;08;09;20 - 00;08;30;28
Pace Morby
Not believing that I had the possibility of hiring people, being afraid of being responsible for another human being, being afraid of if I hire this person, they have children, and if I fail, I will put them in a bad situation. So it was all mindset in not believing in myself. And then it was also a lack of being around other people that were doing it and doing it successfully.
00;08;30;28 - 00;08;49;25
Pace Morby
That gave me the blueprint because there's only so much you can learn on a podcast or YouTube or a book or a seminar. We are very physical people and so we have to be in the presence of somebody doing the thing. It's kind of like when I was trying to learn how to be a framer. There's books on how to frame like, you know, Framing for Dummies, right?
00;08;50;04 - 00;09;05;19
Pace Morby
And I could read a book all I want, but it's not until I have my boots on and I got my drill and I've got my hammer and I've got my nails and I've got the tools and I'm on the jobsite watching somebody else frame a house that I'm actually going to learn. And so for me, here's here's the big push.
00;09;06;16 - 00;09;24;12
Pace Morby
I needed somebody to push me. The guy who pushed me was a guy named John Boehm. I was paying him at the time. This is funny. I was forced to hire him because somebody I was working with at the time. Steve, Mike, Mike Starr. Steve Mike's a shout out. Steve Mike's. I haven't even said that name in probably ten years.
00;09;25;05 - 00;09;41;12
Pace Morby
Steve Mike's just as if you're going to be on my team as a loan officer. This is back years ago. I require everybody on my team to have a personal coach. I make a personal CA What do I need a personal coach for? I could watch YouTube. He's like, I'm going to say this one last time. If you don't have a personal coach, you're fired and you're off my team.
00;09;41;20 - 00;10;03;12
Pace Morby
I go, Fine, give me a referral and I he's given me a referral of a guy named John Boehm. And now just to give you the quality of this human being, John Boehm is now the head mindset coach of the Phenix Cardinals or the Arizona Cardinals. And but at the time he wasn't a big prolific name. And I would pay this guy $500 an hour to sit in a Starbucks with him.
00;10;03;20 - 00;10;28;24
Pace Morby
And the first time I sat down with him, I internally, in my mind, I'm like, Wow, what a waste of money. This guy's a con artist. He's convinced these people that $500 an hour, them not even sitting in a real office is worth his time. And I'm telling you, within 15 minutes, that guy changed my life. Mm. He was, he was a non interested third party that didn't have any opinion about my life, my religion, my, you know, any of my path.
00;10;28;24 - 00;10;46;04
Pace Morby
He just, like, spit complete facts at me and the second I loved every minute of he altered my brain, told me, you know, you should do this, you should do this, You know, very technical. I'm a very technical guy. You can't just tell me. Go do better. And I go do better. That's not how it works. You need to tell me.
00;10;46;14 - 00;11;07;15
Pace Morby
You need to hire an executive assistant that does these 15 tasks. Here's how you manage. You're like, That's how I learn. You have to be very specific with me. John did that in our first meeting. He goes, I can already tell you everything you're failing at. You don't have anybody helping you. You're doing it all yourself. This is back when I was a contractor slash like loan officer on the side, and he says, Go hire somebody.
00;11;08;25 - 00;11;24;19
Pace Morby
So I go, All right, cool. No problem. I come back 30 days later for my next meeting, 500, another $500. And he I walk in and he stands up from where he's sitting and I'm thinking it was to greet me. But he says, Don't sit down. This is the last time we're going to meet.
00;11;25;06 - 00;11;25;15
Steven Pesavento
Mm.
00;11;26;03 - 00;11;44;21
Pace Morby
And I'm like, What? What do you mean? This is the last time we're going to meet? He says, I can tell by the way you're walking that you did not hire anybody in the last 30 days. And I do not want to do business or be around people that don't do what they say they're going to do and do not value 30 days of their life doing things the wrong way.
00;11;45;11 - 00;12;05;21
Pace Morby
And I said, Oh my gosh, no, man, I value you. The last meeting we had was so beneficial. He's like, It's only beneficial if you put it to action, you asshole. And he sits there and is cussing me out in Starbucks and man, am I grateful for him. He goes, If we're going to meet, sit down, open up your phone, put an ad out right now and watch you like a child.
00;12;06;26 - 00;12;22;03
Pace Morby
Okay, I'm going to watch you like a damn child and you're going to put an ad out. We're going to hire you an executive assistant today and do not come back and meet me next month if you don't have somebody in place. Bro, I was so afraid of hiring somebody at $3,000 a month just to get started with me.
00;12;22;19 - 00;12;40;20
Pace Morby
That's how small my mindset was. And I end up hiring this girl. She tripled my business in 30 days. You know how she triple my business is because she actually picked up the damn phone and she would collect the bills and she would do all the things. And I'm like, Oh my gosh, what about what have I been doing for the last seven years?
00;12;41;12 - 00;13;06;29
Pace Morby
And it wasn't until John Boehm Force it wasn't El Steve Mike to force me to hire a coach. And then John Boehm treated me like a child, which is what I needed, that I finally changed my life and started put it, start putting pieces together and thinking intelligently. And at that point I was like, Wow, okay, spend money, be around the right people, spend money, be around the right people, spend money, be out there around the right people.
00;13;06;29 - 00;13;10;23
Pace Morby
And now, sorry to give you such a long answer to this, but it is such a great question.
00;13;10;23 - 00;13;11;17
Steven Pesavento
Oh, this is great.
00;13;11;18 - 00;13;32;10
Pace Morby
Now I am at a point where I spend this year I join the mastermind. That's $100,000 a year. It's the most I've spent on a mastermind, but I've spent a lot of money on masterminds. And here's why. Just like if I go to Instagram right now, it's going to feed me very specific things based on what I have set my intention for.
00;13;32;19 - 00;13;54;23
Pace Morby
I spend more time looking at people that are talking about real estate or market updates or whatever else. So all of sudden the algorithm starts feeding me and feeding me, feeding me, feeding me right? Then the longer life goes on, the more we all become segmented, right? Why? Certain people only watch CNN, certain people only watch Fox. And so the whole world is becoming so fragmented because the algorithm of life is putting us in our own little buckets.
00;13;54;23 - 00;14;17;08
Pace Morby
Right? So I realize I have to go choose which buckets I want to be put into. And so I found a mastermind this year that requires you to be generating $5 million a year in revenue in your business just to be able to get into the mastermind. And I'm like, that's a filter or an algorithm that I'm willing to invest in.
00;14;17;15 - 00;14;35;00
Pace Morby
And now I'm only going to be rubbing shoulders at these masterminds with people that are doing 5 million a year or more in revenue. And I'm sure that next year I'll go and upgrade to a $300,000 mastermind where I only spend time around people that are doing 20, 30, $40 million a year in revenue. So it's just a compounding.
00;14;36;10 - 00;14;45;20
Pace Morby
Essentially. It's just a goal of how do I elevate my surroundings every year and then how do I put into action all the things I'm learning in those surroundings as quickly as I possibly can?
00;14;46;23 - 00;15;12;13
Steven Pesavento
Yeah, there's two really big takeaways there. Pace. It's like there's nothing more powerful than having somebody in your life who can give you that real direct feedback the way that you need to hear it, hold you accountable to taking the action and be willing to walk away because they set a hard boundary that they're not going to mess up their record by working with somebody who's not going to actually take the coaching and the mentorship and the advice and go and do it.
00;15;12;20 - 00;15;41;18
Steven Pesavento
Because after that happened, you took an immediate action. It got uncomfortable. You didn't really want to do it. It was a little bit scary. And so many of us are listening to this and thinking, Man, that's kind of harsh, but that's exactly what you needed in that exact moment. And you need those people so that you can truly step into what you were meant to be able to do for you to be able to have that experience of hiring that person.
00;15;41;18 - 00;16;06;25
Steven Pesavento
And obviously this point you have hundreds, if not a thousand plus people that are working for you and on your team because that lesson ended up leading you to the place that you're at today. And I think the second big takeaway is when it does come down to the power of community, the power of the people you surround yourself with, sometimes you have to have a filter like that where somebody else, where somebody has taken the time to put together a group of people.
00;16;07;06 - 00;16;24;01
Steven Pesavento
They've attracted people who are at a very high level. So you can be in the same room in some, you know what I hear $100,000. I've spent a lot of money on a lot of masterminds and coaching, and I'm a big believer in it. I know that when some people hear $100,000, they think, well, that's insane, that's crazy.
00;16;24;01 - 00;16;43;13
Steven Pesavento
That's so much money. But the outcome, the upside of that investment is that you get to be not only stepping up yourself to another level, you're going to see things that other people who are not in those groups don't see. You're going to be having conversations at a higher level. But those relationships, you never know where a connection can come from.
00;16;43;23 - 00;17;11;13
Steven Pesavento
I know that's a big part of your business. You've really done a phenomenal job of building a community as well as going and tapping into other people's community to help other people get what they want so that you can get what you want. I'd love for you to talk a little bit about the power of being a valuable resource in communities, because I know through the creative financing space you've really set yourself up as that go to person in a lot of other people's circles as well as your own.
00;17;11;22 - 00;17;28;12
Pace Morby
Again, out of out of necessity. I built my own community and then I, you know, now you have a lot of people in the real estate space emulating me and going, Oh my gosh, pieces figured it out. I'm going to copy them. Good for them. I'm happy that they they are you know, it's a positive direction. I two things happened to me.
00;17;28;12 - 00;17;48;16
Pace Morby
One, I took a mentorship. It was $47,500 for a guy here in Arizona, an absolute waste of my money. The guy hadn't done a real estate transaction in over ten years, wasn't keeping up on, you know, state laws would only meet with people one time per month for six months for like $47. I didn't know any better. Right.
00;17;49;02 - 00;18;12;13
Pace Morby
And so I said, I got burned so bad. How about I create a free mentorship for people on my YouTube channel and I have a free creative finance Facebook group to essentially eliminate the guys out of the industry that are charging people $50,000 for a worthless mentorship. And I want to provide more free value to everybody than most people have the ability to pay for it.
00;18;12;13 - 00;18;34;12
Pace Morby
Like, it's insane. So I did. That was a necessity, number one. So I created a lot of free value. And then the second necessity is that I found that when I was doing deals across state lines, I had a lack of collaboration. I had nobody I could rely on through a vetted process. In fact, what I did is I had a deal that was in Denver, Colorado, the Phenix.
00;18;34;12 - 00;18;53;14
Pace Morby
The deal was in Phenix, but the seller lived in Denver, Colorado, and it was a secondary home for him. He and his wife fell ill. They decided, hey, we're not going to go on any more vacations. We're getting too old. Let's sell this home in Phenix, our vacation home. So I strike a price with them. And I said, Hey, I'll send over the contract.
00;18;53;14 - 00;19;10;03
Pace Morby
He says, No, you're not sending over the contract. You're going to meet me in person to sign the contract. And I was like, Okay, he doesn't like DocuSign, he doesn't like the digital stuff. Okay, no problem. And I said, okay, I'll send you a document. You know, if you're not here physically in person, I'm not signing the contract, am I?
00;19;10;08 - 00;19;30;14
Pace Morby
Okay, cool. I'll send a mobile notary. He's like, No, I want to look the man in the eyes that I'm doing a real estate transaction with and shake your hand like we should. Like men. And I was like, Okay, great. No problem. He said. I said, I'll send my either myself or my partner to Denver to meet with you.
00;19;31;18 - 00;19;52;26
Pace Morby
And what I was thinking, I was thinking, okay, I'm going to go find somebody in Denver that can go and meet with this guy So I don't have to fly out there, drive out there and do this whole thing. So I go on. At the time, the only place that you could get any sort of help in real estate was this website That was just a bunch of it was a forum, kind of like a Reddit forum, but only for real estate.
00;19;53;20 - 00;20;13;29
Pace Morby
And I go on there, I ask for help and I say, Hey, I've got this property I need to get somebody to basically might be my JV partner, my joint venture partner on this one deal alone will split the profits 5050. But I need somebody go and meet with this guy face to face. And number one, I had a ton of people ridiculing me, like, why don't you just go do it yourself?
00;20;14;00 - 00;20;30;06
Pace Morby
You're you lazy, blah, blah, blah, blah, blah. Just ridicule, really ridicule, ridicule. I'm like, Dude, I'm just trying my best here, man. Like, where's the love? Like, where's, where's the help? And after three days, the guy, the seller calls me up. He goes, Hey, we're meeting tomorrow. We're meeting in two days. Are you coming up here? Yeah. Yeah, I got.
00;20;31;08 - 00;20;48;12
Pace Morby
Don't worry, I'll figure it out. And that day, like maybe four or 5 hours, I had a guy see my post, calls me up. His name is Steve and Steve calls me up and he goes, Hey, I saw your post. I'll be your JV partner. I'll go meet with the seller. I go, Thank goodness. Amazing. This is so helpful.
00;20;48;12 - 00;21;07;24
Pace Morby
Thank you so much, man. So what is Steve do? Well, Steve goes to the property, He prints out my forum post and he shows it to the seller and he says, Hey, faces and intending to buy your property. He's actually just fishing for other people to pose as his partner. And I just want to buy the property with you directly.
00;21;07;24 - 00;21;17;20
Pace Morby
Let's cut piece out of the deal. Uh, well, welcome to real estate. Like, yeah, five years ago. Okay, that was real estate five years ago. And so I.
00;21;18;11 - 00;21;18;15
Steven Pesavento
In.
00;21;18;15 - 00;21;34;22
Pace Morby
There. How did I find this out? Well, this the seller calls me and he says, Hey, Pace, I promised you I'm a man of my word that I was going to sell the property to you. This guy Steve, that you just, you know, tried to partner with just went around your back to try and steal this deal from you.
00;21;35;00 - 00;21;49;11
Pace Morby
And I'm a man of my word. I'm still going to sell the property to you. I don't care what you do with the property, but we have a price I've agreed to. You still need to get here. Well, now it's Thursday night, and he told me he's going to signs it was me or somebody else. By Friday at 5 p.m..
00;21;50;21 - 00;22;11;01
Pace Morby
So I drive all the way up to Denver, Colorado, 16 hour drive because I couldn't get a flight at the time. And I go meet with this guy, get the deal signed, shake his hand, and I'm driving home 16 hours. And I was just so aggravated by the fact that there was no way for me to collaborate with people across the country.
00;22;11;01 - 00;22;37;19
Pace Morby
And all I could run into were a bunch of shysters and backstabbers. And so for that whole 16 hour drive back home from Denver, Colorado, I dreamed of a community of people that were going to be vetted, go givers that will go out of their way to help you across the country. And now I've built it. I've built a community of 10,000 people that like yesterday, I go to Vegas and I post one.
00;22;38;07 - 00;22;54;05
Pace Morby
I make one post on my private Facebook group in my community. I go, Hey, guys, taco party on me at noon. I'm looking at properties. 150 people show up in like 45 minutes and I'm sitting there watching them. They're all doing deals with each other. They're all hugging each other. They all get to see each other all the time.
00;22;54;16 - 00;23;22;20
Pace Morby
They're not they don't own businesses together, but they're trading deals like Pokemon cards and they're doing it. And I'm like, This all came because a guy stabbed me in the back and I had to build my own community out of necessity and fight the way that the natural human tendency is to fight for your own. But the proper way that the universe will reward you is you go out and you build something for somebody else and you do everything and and you create an ecosphere and people will come to the highest quality.
00;23;22;20 - 00;23;42;11
Pace Morby
People will come to this community. And unfortunately, I have two people inside my community. Their full time job is to vet people into the community and then vet people out of the community that are not go givers and are not giving back. And it's been a lot of work, but it's how I've amassed a lot of real estate is because I've taught these people in this community how to trade deals with each other and help each other out.
00;23;42;26 - 00;24;04;04
Pace Morby
And now we do. I think it's 36 zooms a week with each other, like tonight, I'll do it. We'll do six zooms today and I'll do one zoom tonight. That's 5 hours long. Just helping people do deals all over the country. And so community for me was everything. It was how I went from doing 5 to $10 a month to now doing 20 to 25 deals a month because I can rely on a community of people.
00;24;05;05 - 00;24;30;19
Steven Pesavento
Well, it's so it's so true. And unfortunately, I've experienced that buying deals, having people try to circumvent you or or try to get around something and it's unfortunate. But what's so powerful about what you're saying is that there's really something in the tribe mentality when there's when there is a clear tribe with a set of values and knowing that if you don't hold those values, you're going to get removed.
00;24;31;01 - 00;24;56;28
Steven Pesavento
And that keeps people honest, that keeps people who have those same values moving in the same direction. And I think the really important example that I see within this is that if you're somebody who's just getting started in real estate, you're somebody who's looking to continue to grow your business and do more deals and and you're more on the active side, it's super important to have those people in different places that you can be able to share ideas, but also being able to trade deals.
00;24;56;28 - 00;25;18;15
Steven Pesavento
The fact that you can call upon people across the country and come in and add value and support to those individuals while they also add value and support back to you. It's so key. And a lot of times people when it comes to money and investing, there's a lot of fear around talking about money. There's a lot of fear around sharing openly how you're doing.
00;25;18;15 - 00;25;49;19
Steven Pesavento
And and I really see that as kind of a middle class mindset. That's the way I grew up learning. Like, let's not talk about money, let's not talk about success. Let's not talk about how much this thing cost or what this thing was. And I think that's something that a lot of people need a break. And by being in a community like that, where people know that they can trust the other folks in the community because they're all on that same journey, they're all looking to accomplish some of the same things, can be a really, really powerful place to let go of some of those fears and adopt some new beliefs so that we can
00;25;49;19 - 00;25;56;29
Steven Pesavento
actually start having those conversations about money and investing that end up leading you to really changing your whole life.
00;25;59;12 - 00;26;01;00
Pace Morby
Yeah, 100% agree with that.
00;26;02;00 - 00;26;32;00
Steven Pesavento
So, Pace, when it comes to your specialty, you have really become one of the go to people, if not the go to person for creative financing and real estate. As we're getting close to the end of the episode, I know there's a lot of listeners who, you know, they're earning some good money in their career, but they don't really quite have the cash that they would need to start investing passively or starting to really grow their wealth just from investments that are more hands off.
00;26;32;16 - 00;26;57;09
Steven Pesavento
I always see creative financing as a great way to get involved in real estate so that you can not only continue to increase your income, but you can start to really be able to create a great skill. So could you share a little bit about kind of what we mean when we say creative financing and and why you think it's such a valuable skill for people to learn if they want to become an active real estate investor?
00;26;59;20 - 00;27;20;29
Pace Morby
Okay. Yeah, no problem. Creative finance is the process of buying anything cars, businesses, real estate without going out and getting new debt. Okay, so for example, if I want to buy a car, I go to the bank and I go, Hey, Bank, I want to I need 20 grand to go buy this $20,000 car or that's that's the traditional way, right?
00;27;20;29 - 00;27;44;26
Pace Morby
And I need credit. I need some cash as a down payment and I need some credentials. They want to see that I have the ability to pay and they want to see my W-2. They want to see my tax returns, create a finance, obliterates all of that. I just go directly to the seller and I go, Hey, will you either A, let me take over your existing car payments and I'll give you like a thousand bucks and I'll just take over your existing car payments.
00;27;45;06 - 00;28;05;17
Pace Morby
I have a lot of not examples, but very specific stories within numbers and everything on my YouTube channel. You can go and watch. I buy I bought, I bought, acquire multiple Priuses, motorcycles, golf carts. I just bought a 2023 Escalade by just taking over somebody else's payments. And I become the owner. That's called subject to I'm buying something subject to somebody else's debt.
00;28;06;02 - 00;28;33;18
Pace Morby
That's what I do in real estate. I find real estate. It's so there's so much of this that I don't do any traditional real estate. That's that's how possible this is. So I find sellers that are in a situation, whether it's they bought the property a year ago and the property hasn't gone up in value yet. So they owe just about as much as the house is worth and they're like, I don't want to sell my house because I don't have any I don't really have equity.
00;28;34;02 - 00;28;49;23
Pace Morby
I okay, no problem. I'll just take over your payments. We probably do one of these a day. Just my little team does one of these a day, but I see thousands of them all over the country every single day, all the time inside of our community. So I just take over somebody else's payments. Nobody checks my credit, nobody checks my credentials.
00;28;49;23 - 00;29;11;26
Pace Morby
Nobody cares if I have a job history. They don't look at my bank statements. They don't look at my tax returns. They don't look at anything. And a lot of the times we buy properties with no money down and then we turn it, we put a renter in the property. The renter not only pays the payment that I just took over, but I have the additional spread of the passive income, which is great seller finance.
00;29;11;26 - 00;29;29;11
Pace Morby
So that's subject to taking over somebody else's payments. Seller finances. If I go to the guy who owns the car and I go, Hey, how about I take over your payments? He goes, I don't have payments. I paid my car off free and clear. I go, Okay, well, why don't you just let me make payments to you 500 bucks a month for the next 40 months, right?
00;29;29;12 - 00;29;51;17
Pace Morby
That's seller finance. And so I do that with real estate, I do with multifamily, I do with RV parks, I do it with if I open up my email inbox, all my email inbox is full of his dozens of deals. 12 Plex's RV Park, single family homes, multifamily properties. I've got a 24 unit in San Antonio. My biggest deal I've done with creative finance is a $20 million 256 unit multifamily deal.
00;29;51;29 - 00;30;11;11
Pace Morby
I'll do bigger ones, right? The better I get the the bigger the deals will get. And so I look at all the other real estate strategies and I'm like, Why would anybody do any of this? I don't I don't it doesn't make sense for me to go to a bank and acquire debt. My, my average interest rate that I'm taking over on people's existing payments is 3% interest.
00;30;11;28 - 00;30;37;01
Pace Morby
So while everybody else is going to the bank and saying, I want to go buy this rental property and put 30% down, welcome to being a real estate investor, you're not getting a 20% down loan, you're getting a 30% or maybe a 35% down loan right now at 8% interest. I'm getting properties at 0% down, maybe upwards of 10% at the very, very, very highest, including my closing cost, including my furniture, including everything to get it ready.
00;30;37;13 - 00;30;54;21
Pace Morby
And my average interest rates 3% that I'm taking over. I bought a property in Hawaii, 2% bought a property yesterday in Vegas, 2.75% bought a property today in Phenix, 2.5%. So I'm just taking over existing debt and putting a tenant in it that pays it and then gives me the rest of it goes to me and passive income.
00;30;54;21 - 00;31;04;03
Pace Morby
So for me, I don't know why anybody wouldn't be doing the strategy. If you're in real estate, it's absolutely crazy for you to do anything else.
00;31;05;04 - 00;31;27;28
Steven Pesavento
Yeah, well, I think it's such a strong strategy, especially right now. I mean, it's good in any kind of market, but what we're seeing is, you know, the last three or four deals that we've purchased have either been have all been seller financed, all between 2 to 4% rates and, you know, interest only payments or taking over, you know, an assumption of somebody's loan.
00;31;27;28 - 00;31;51;15
Steven Pesavento
And these are some of these are smaller deals, 50 units and some of these are much larger deals. But right now with the current debt market, a lot of deals don't make any sense. And so when you can come to the table and be creative and be able to make those kind of offers to sellers whose properties are sitting and they want to sell, they want to be done, it makes so much sense.
00;31;51;21 - 00;32;17;19
Steven Pesavento
It really, really is a phenomenal strategy in it. And those folks who are active in real estate who aren't doing it, you're absolutely missing out. And for those of you who are investing passively, it's great to know a little bit more about why these strategies are so beneficial, because when you can buy a property and you can get it 2%, 3%, 4% loan, and currently we're seeing, you know, six or 7% loans.
00;32;17;29 - 00;32;33;17
Steven Pesavento
That's a huge savings, especially on big deals, but it's great on small deals as well. Pay pace. Well, we're just about to wrap up here. I've got one last question. Would you share with the audience how they can follow you or or get in touch?
00;32;33;22 - 00;32;47;28
Pace Morby
You can always follow me on YouTube. I also answer all my Instagram, DMS. If you guys ever have a question about anything, just do me on Instagram. I literally, as I was coming on the show today, just answering people's DMS the whole day. So I love answering DMS, helping people, whatever you guys need help with. I'm. I'm here.
00;32;49;17 - 00;32;51;21
Steven Pesavento
Yeah. And what's that? What's your handle on Instagram?
00;32;53;06 - 00;33;12;20
Pace Morby
Know just pays more. Be everywhere. It pays more with Twitter, Tik, Facebook, YouTube. Everything's based more on YouTube. I think we've got like think we're at almost 200,000 subscribers and we get about four and a half to 5 million views a month. So people seem to like our YouTube channel. So if you guys want to learn more, I'm crazy.
00;33;12;20 - 00;33;30;14
Pace Morby
Like, I will give you all my addresses I buy, I'll give you even people go, This isn't possible. My great. Here's a settlement statement with the title company. It's been recorded public record. Here's the address. Here's the settlement statement shows I have put in $0 down. I own the property. Go look at public record. You can see my LLC that owns the property.
00;33;30;24 - 00;33;36;16
Pace Morby
I'm crazy. So when people like this doesn't sound real, I just say, go to my YouTube channel. I give it all away for free.
00;33;37;10 - 00;33;55;16
Steven Pesavento
Yeah, well, the last question is on passive investing, and I just wanted to make sure people have that. We get to the last question. But what I'm curious about, and I know the audience is as well, is that you're the creative financing. KING And so how does creative financing lead into you being able to actually use it to create passive income?
00;33;55;16 - 00;34;04;00
Steven Pesavento
Because I think a lot of people have a belief that if they're going to go and use creative financing, they're going to be stuck doing the day to day management, making all the decisions along the way.
00;34;06;12 - 00;34;28;15
Pace Morby
I have roughly 1800 doors, which sounds daunting to even say it. And if you told me that four or five years ago, I'd be like, You're crazy. I won't get there. That fast. So it sounds crazy, but I don't know one tenant's name, not a single Denny's name, nor have I ever known a single tenant's name. I've never been over to fix a single thing on any property.
00;34;28;25 - 00;34;52;19
Pace Morby
Guys, welcome to 20, 23, 2024. Everything is managed by other people. Technology has taken over all this whole thing of like, oh my gosh, of the tenants are going to reach out to me. Okay, I use a company called Mind Property Management, NY and Nationwide. They handle all my traditional rentals. I use a company called pad split dot com for all of my co living business, are all my CO living houses.
00;34;53;14 - 00;35;14;13
Pace Morby
And then I have other management that do my Airbnb BS and all that kind of stuff. I literally don't manage anything. I truly am a passive investor. I hear this all the time. People are like, Oh, real estate's not truly a passive investor investment. I go, Oh, you must not be a real estate investor. You must be a real estate hobbyist, because I actually have people that manage my assets that keep me passive.
00;35;14;13 - 00;35;32;13
Pace Morby
And I get a weekly report every Friday. If there's a maintenance request, somebody else handles it. I'm not involved. I all I do is I get the actual passive income and when I want to, I'll send Molly my SEO, I'll send her a text message. I go, Hey, do we have any vacant houses we've recently recently purchased so I can go and do YouTube content?
00;35;32;19 - 00;35;51;24
Pace Morby
And then I have to call her and go, okay, what's the story on this house? I'm we're at a point now, I don't even know how we got the house. It's like I have a team of acquisition people. They're closing it. We're going through the whole process welcome to running a business, right? It's like a Subway sandwich franchise owner saying, I don't want to own a subway for the franchise because I'm going to have to make all the sandwiches.
00;35;52;09 - 00;36;10;10
Pace Morby
That's such a stupid it meant you. You own the business, you hire people to run it and you check in on it from time to time. I'm at a point now where somebody else checks in on it and then just gives me the report every Friday. So, yes, real estate, creative finance, it truly can be a passive thing.
00;36;10;10 - 00;36;28;09
Pace Morby
Contrary to what Dave Ramsey will teach you and put you into his mental scary present of appealing to your lizard brain. So you'll buy his $35,000, you know, financial, you know get out of jail course or whatever it is that he has guys do real estate truly is the only passive investment I've ever been a part of.
00;36;29;15 - 00;36;45;12
Steven Pesavento
Yeah. And what I'm hearing from you is really it's passive when you build the systems in the business, when you have the people that can make those decisions on a day to day business, it can put you in that position. I think that's the fear a lot of people have, is they've gone and owned rentals or they've got had done some of this stuff.
00;36;45;12 - 00;36;57;20
Steven Pesavento
But then at the end of the day, they still have to be the one making the decision to oversee, making sure that property manager does the things. But that's like any business. You have to put the right people in place and you have to be able to manage those people.
00;36;59;11 - 00;37;14;23
Pace Morby
Yeah, and for me, we own multiple businesses. Real estate is my favorite one because it is passive compared to all the other ones. The other ones I'm dealing with human beings and their emotions and I want to raise and I want more time off and I want this and I. Why does that person make more money than me?
00;37;14;24 - 00;37;32;06
Pace Morby
And you deal with all of these things in all of your all of our other businesses with employees. So for me, real estate, I don't deal with that. A a management company deals with the tenants management company, deals with the with the issues and the tracking and all that kind of stuff. And the technology lets them deal with all the maintenance.
00;37;32;10 - 00;37;51;13
Pace Morby
And every Friday I get a report, Here's what's happening on all your properties, here's which ones are vacant. They fill the units, they turn the units, they do the carpet, they do the paint, they literally do everything. And it just comes out of the cash flow that comes from the property. So I don't know, another business, at least I haven't found one that is truly as passive as real estate.
00;37;52;20 - 00;38;08;24
Steven Pesavento
Yeah, it was so one of the reasons I love it. There's so much potential. There's so many different strategies. PACE It was so great to have you on the show. Thanks for joining us. Definitely go follow pace more, be on all the channels. It's got a lot of great content out there and thanks for listening. We'll see you guys on the next episode.