Join host Steven Pesavento as he explores the journey to financial freedom through real estate investing with his guest Jason Lee. From starting out with the goal of retiring his mom to building a successful real estate brokerage and investment portfolio, Jason shares his experiences, challenges, and key insights on how to create passive income and achieve your financial goals. Discover the power of real estate, the importance of finding the right partners, and the balance between active business and wealth multiplication.
Key Takeaways
The power of real estate: Learn how real estate investing can provide passive income and financial freedom.
Partnering for success: Find out why partnering with the right people is crucial for fast-tracking your success in real estate.
Balancing active business and wealth multiplication: Understand the importance of allocating time between active income generation and multiplying wealth through investments.
Scaling through leverage: Discover how leveraging properties and utilizing strategies like 1031 exchanges can help scale your real estate portfolio.
Beyond real estate: Explore the significance of creating a well-rounded life beyond real estate and finding fulfillment through family, travel, and experiences.
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:
Jason Lee is a successful real estate investor and broker, known for his expertise in multifamily properties and investment strategies. Starting his journey at a young age, Jason has built a thriving real estate business, helping clients navigate the market and achieve their financial goals. With a focus on partnerships, Jason emphasizes the value of collaboration and finding the right opportunities to create passive income and long-term wealth.
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Steven Pesavento 0:00
I've had good partners, I've had bad partners, I've invested passively in deals that had terrible partners. I've invested passively that have amazing partners. And it really sucks. It just sucks. Because it's like, this could be so easy, we could make a lot of money, we could have a lot of fun doing it. But when you get, I'm Steven Pesavento. And welcome to the name your number podcast presented by the investor mindset. As someone who comes from a challenging childhood, I've spent my life seeking financial security, personal growth, and ultimately freedom, the freedom to not wake up worried about the next paycheck, but rather, with the confidence of knowing that my passive income pays my bills without the need to think about it. When you name your number, that you will learn passively, that creates your ultimate quality of life that I believe you've achieved. Real freedom. Welcome to my show. It's time to name your number. create financial freedom for over a million investors. And I'm excited. I've got Jason Lee in the studio today. How you doing Jason? Good, good. Steven, how about yourself? I'm doing amazing, man. I'm living a great life. And I'm honored to to be able to dive into some of your background here today. I think it's going to be really inspiring for folks.
Let's start off with what did you name first? What was your first target your first goal, the first thing that you were going after? Yeah, the first thing I was going after, actually was when I was in college, I just wanted to retire my mom. Because when I was growing up, she had a lot of failed businesses, a lot of struggles. raising me I was a pain in the ass. So I want to give back to her. And that was like my first like, big goal that I had in mind when I was younger. So you wanted to retire? Mom? Where do you feel like that came from? What? What gave you that inspiration to think you could even do that? It's a great question. I think it just came from just me growing up and realizing, becoming more empathetic, just like seeing
Jason Lee 1:59
you know how much my family struggled with money and how much I was a burden growing up. So I think I realized that when I went away from home, I'm from the East Bay Area, and I like San Francisco. But then I moved to San Diego for school. And when I actually moved, I grew so much closer to my parents because I didn't like I took it for granted when I was younger, being close to family, but I think that's when I really realized like and got the inspiration like damn, like, I wasn't, I was effed up growing up, I gotta really do something and you know, give back to my family and, you know, kind of pay her back for all she sacrificed for me? Isn't it wild? How, like, when you're at home, you're growing up, you know, even if there was a lot of struggles that your parents kind of brought to you. It's like, when you get out of the house, all of a sudden you're like, wow, okay, I have a little idea about what you're dealing with. And it's like the relationship change, I experienced that myself, I feel like, you know, as a kid, super rebellious, kind of always, you know, arguing want to do my own thing. And then I get out of the house, I kind of like run away and, and start kind of creating my own life. And then I have a new appreciation for kind of what they had to go through to even get me where I am now. That's that's like very similar. My situation. Yeah, you definitely take it for granted. And when you grow up, you kind of realize all the stuff they've been dealing with and the struggles they've had. And you kind of see it as you get older and older. So you wanted to retire your mom, how'd you end up going about doing that? Or where are you at along that path? Yeah, so I'm happy to say that I've you know, been able to do it. At this point. I've bought my mom an investment property down here. She lives off the cashflow. I've given her, you know, multiple six figures over the last like three or four Christmases. So the way I was able to do that was through the real estate. I mean, I first started through making commissions as a real estate broker. I sold apartment complexes around San Diego still do for investors around Southern California. And then I saved up and started flipping houses flipping small multifamily, and eventually went into buying bigger multifamily. And then
Steven Pesavento 12:46
Yeah, 100% you're able to retire your mom, you've built this incredible team of agents. So you've got a business going, you've got your investments. Where are you at today on the path towards hitting that number? Have you made it?
And how are you tracking that progress towards? You know, getting to that six figures a month? Yeah, right now, I'd say I'm about
Jason Lee 13:11
I mean, passive income, purely not active income from my business, I'd say passively from properties. It's, it's right around that depends on the month, but somewhere in between 20 to 25,000 a month, depending on how the primaries operate. So I'm about a quarter of the way there. So gonna slowly just inch my way up and keep keep going. But yeah, enjoying the journey? Like you said, Yeah, I mean, that's such an incredible place to be. And did you, you know, how did you end up going about doing that? Obviously, you built the skill of being a realtor, being able to go out and find properties and get access to them? How do you actually go about becoming an investor taking that money that you earned in your career and starting to apply it to assets that would continue to pay you now and forever? Yeah, one of the best things my one of my investors ever told me was equal to, that you become wealthy from the things that you own, not from the things that you do. And when he said that, it struck me like a lightning bolt because I realized that I was just kind of in the rat race, just kind of finding the next commission doing doing doing spending, you know, 1214 hours a day trying to put deals together. But I was also at the time spending a good amount of money and not saving enough and not focusing on buying properties. So as soon as I heard that when I was, you know, beginning my career and kind of starting to kind of rise up and do more deals. I really focused on learning the skill of underwriting properties, analyzing what a good deal is, we're sort of bad deal is I bought my first property as soon as possible. And I bought it completely by myself made all the mistakes in the world, hired the wrong contractor.
yeah, that's kind of how I did it. The reason how the reason why I wanted to get into real estate was because I saw that all my friends at school, all their most successful, the most successful families either were in real estate in the business somehow or own rental property. So I thought there was something there. And when I ended up kind of interning at my old company and getting into it, I saw how powerful it was. So yeah, I'm just glad that real estate took me in the direction I wanted to go.
Steven Pesavento 4:36
Yeah, and I love your story too. Because you know you're a young guy hint at your age for the audience who's not watching. Yeah,
Jason Lee 4:42
I'm 26
Steven Pesavento 4:43
So you're 26 years old. You started doing real estate before even graduated. Such a cool way to start making money and really learning business because business is all about sales. It all comes down to Hey, can I find deals can I negotiate? Can I try to make some money from the earnings out of the equation, and then how do I actually get that money working for me and you started that really early
Jason Lee 5:05
100%? It definitely the compounding effect started early for me for sure. But the first two years were really tough for me, I think, you know, when I first started in brokerage, I had less than, like, 400 bucks, 500 bucks in my bank account. And it was a no salary, no hourly wage job, they just told me that they'd mentor me and teach me their skills. And if I was lucky enough to get a deal, I get paid on it. And the first six, seven months, you know, got no check no listings, after month six, got my first listing, and then, you know, month like nine or 10, and actually ended up closing. So the first year, I basically made no money and had like two little side jobs, part time gigs while being in school at San Diego State. So first two years are really tough. But I think those first two years was, was when I actually made the most amount of money, simply because that's why I developed the skills to start making money later in the future. And I think a lot of people in my generation don't understand that because they just think, you know, how much of a salary can I make day one, they don't think about what skills can I create to make myself more valuable to the marketplace 234 or five years from now?
Steven Pesavento 6:15
Yeah, I always am telling young people when I'm talking to them, don't focus on becoming a millionaire. Now focus on getting really good at something gaining those skills, that knowledge, that experience, and it's inevitable that you're going to make a lot of money, because, you know, you started young, so you got that repetition really early, a lot of people just keep trying to go after something only for the money without actually becoming the best at something. And from my perspective, that's what led to my success. I mean, you know, I didn't really start full time in real estate until I was 26. I'm 33 now. And when I started, you know, I was in the hole negative money didn't have any money to my name, when 40,000 in debt, you know, in marketing and expenses to build a company where I could go acquire real estate, I started out flipping houses, because that was the easiest transactional way to start making money and getting experience. And then people look at where I'm not where I am at now and where you're at. And they say, oh, man, that's so far. Like, I don't know how you could do it. And the way you do it is just start. It's true.
Jason Lee 7:23
It's a fact. Yeah, you just got to start. I think a lot of people struggle with also learning, learning, learning, but never actually doing doing doing, they just learn, learn, learn, but they actually never take the first step to actually start climbing the mountain. And I've seen that many times when I work with, you know, first time clients looking to buy their first investment property. They're on bigger pockets, they listen to every podcast out there and listen to your podcast, but they never actually buy their first deal. So 100%
Steven Pesavento 7:50
Alright, so what's your number? What's your number? Now, at the point at which you've made it that you don't ever have to work again? What's your number?
Jason Lee 8:02
I think I don't have the exact number. But I think if I'm, I think if I can make, you know, six figures a month in cash flow, I don't see myself wanting to, you know, grind ever again. So that's kind of, that's kind of it for me, if I have a lot of passive income, I don't see a point in grinding it out every single day like I do now.
Steven Pesavento 8:22
So is that 100,000 of passive income or 500,000? of passive income?
Jason Lee 8:28
Yeah, like, like 100 Some?
Steven Pesavento 8:30
Yeah. And when you were first starting, did that even seem achievable?
Jason Lee 8:36
That is a fantastic question. When I first started, if you'd asked me that question, I probably would have said, like, if I'm making three grand a month in passive income, I'd be stoked. So I think as you grow, and as you, you know, achieve your goals as you kind of step up the ladder, your kind of goals get bigger and bigger, and you think of a better and bigger life for yourself. So although that number might sound arrogant, you know, when I first started, my number was like, 3000 a month I'd be, I'd be happy. So now that I've seen success, and I've seen the potential real estate, and then I can get there without, I can scale pretty quickly and not being able to scale like real estate and some other industries. I like real estate because you can scale fast. And that's what that number seems pretty achievable within the next, you know, five or 10 years,
Steven Pesavento 9:27
man, it's just such a fun industry to be in because there's so many people like you and me who are dreamers who want to go and create something bigger and it's an industry where you really can do it. I remember for myself, you know, I was in Hawaii. It was 2020 lockdowns were in were in effect, and I somehow got onto the island. It was super hard to get on. But we found a way on and I'm sitting there with this, this older gentleman now a great friend almost like family, and he's probably in his mid 50s. And, you know, he was a builder and had a lot Success in it kind of hung it up and, and retired, you know, he had hit his number and he asked me this question. He said, Hey, Steven, well, what's your number? Obviously, you're super driven, you're going after it, like, at what point? Is it going to be enough? And it kind of hit me, it kind of hit me because I had a number. I was like, yeah, a million bucks a year in passive income. So if I back into that, that means, you know, 10 million of assets that are generating me, you know, eight to 10%. And, and I'm good, and I'm covered. And but it really kind of led to well, how do we actually go about doing that? And then what's the point of it? So for you, I'm curious, what do you really want your life like, what? What are you going after? And like, why is it so important to continue to do the effort to building that life?
Jason Lee 10:45
Yeah, I mean, that's, I mean, that's a great segue, I think the my number when you ask me, like I do have a number in mind where I feel comfortable, but I wouldn't stop after that number. Because I'm really happy with the way life is going. Right now. I'm a people person, I'm more about meeting great people and having great conversations and kind of opening doors for myself and for other people. So I've been doing that lately, with through, you know, my company, I have multiple agents, multiple employees working with me, and seeing them grow and mentoring younger people that are trying to get into the business, trying to get their feet wet, has been the most fulfilling thing for me. So I know that I can get to my number just by keep doing what I'm doing. But once I get there, I'll probably just, you know, do a little less, spend more time with family, start focusing on starting my family, like having kids stuff like that. But I think there's a lot more to life than just real estate. So I definitely want to, you know, have that, you know, passive income. But I also want to keep doing real estate, but also have time to travel and experience all the other like wonderful things about life, because real estate's a very tiny little sector of life. And I think some people that I know, like, my clients are so obsessed with real estate, they're in whole life that they didn't get to experience all the other, you know, amazing things that life has to give.
Steven Pesavento 12:07
Yeah, it's so true. I mean, people sometimes forget that this is a vehicle, you know, you can get in a lot of different vehicles to drive where you want to go, this one just happens to be pretty nice. And you can go pretty fast. And there's a lot of different options of what you can do with it. But it really comes down to that life that you want to create. And you know, when you get clear on what that's all for, it drives you. But something that you said that I want to point out for the listeners is something that I hear from so many successful people, I feel it myself, it's like, once you get into something that you love doing and you're good at, you kind of don't really ever see a point where you're going to stop. You feel that?
Jason Lee 14:55
got the wrong loan on it still made great money on it, but made all the mistakes. And the way I scaled my portfolio fairly quickly is we actually didn't raise any capital from investors in the beginning, my partner and I, we found really good properties to purchase. But we partnered 5050. And we got very high leverage on really good deals, where our equity multiple on the money we put in with super high because leverage is a double edged sword, right, the higher the leverage, the higher your equity multiple can be. But higher the leverage, the higher the risk. But if you're buying things that are below market value, the risk goes down significantly. So that was how we were able to scale our portfolio fairly quickly.
Steven Pesavento 15:36
So from a from an investment strategy, it sounds like you were you were flipping, or were you doing kind of a renovate to hold type strategy.
Jason Lee 15:45
Yeah. So it was half and half. So some were renovate hold, and refinance and pull our capital out. And then some were hold for one or two years sell and then do a 1031 exchange tax deferred exchange into a larger assets. So we never cash out, we always want to keep our money rolling with rolling forward tax deferred. So yeah, we haven't cashed out on any properties.
Steven Pesavento 16:09
Yeah, 1031. It's such a powerful tool. So when you were going in and actually flipping those houses, you'd hold them for long enough? And then you 1031 into the next deal? Exactly, yep. And when it comes to your time, your your, your split of your time, right, you're you've got an active business, your real estate agent, you're creating some great content, you're teaching people about how to think like an investor, something that I'm a big fan of with the investor mindset. But on the other side, you're also an investor. So how do you split your time between, you know, the things that you're doing to make and earn money versus the things that you're doing to multiply your money and grow your wealth?
Jason Lee 16:50
Yeah, I think it's, you know, it's tough to measure. But I'd say I spend, I spend time every single day on both sides of the business. So I'd say it's somewhere around 5050, some days more than others on one side versus the other. But I'm still fairly active in growing both sides of the business, the investment side and the brokerage side. So I'm definitely active in it every single day on both sides.
Steven Pesavento 17:13
And do you feel like one is a higher priority at this point in your life than the other?
Jason Lee 17:20
Oh, I've never been asked that before. I think, priority wise, I think they're equal in different ways, I think priority for being able to become, you know, more and more financially free as I go more and more wealthy, the investment side has much more benefits. But the brokerage side, my business side has other priorities, because like I said, Before, I prioritize people, and if people are taking a chance on my company and working with me, I want to make sure that they succeed. So I do a lot of hire, I do a lot of managing, training, hiring, redeveloping systems, trying to mark as much as I can to give leads my agents. So I'd say both are a priority, just in different ways.
Steven Pesavento 18:07
Yeah, you know, and it's such a, it's such a hard question to answer. Because, you know, I've had that same question asked to me. And, you know, I've obviously, in the business, we run a private equity company, we buy a large multifamily in Denver and around the country. And then I've got, you know, an education company where we're teaching people how to think like an investor, and invest in those same type of deals. And when somebody asked the question, hey, well, what's your priority? If you have two priorities, you have no priorities? And it's so hard to answer because it's like, no, but the education is so important, because it's like literally changing the way people think. So they can actually go and do the things, it's going to change their life. But yet, the private equity company is the place where, you know, we earn the most wealth, it's your, you know, your equivalent of the investments that you're doing. And so it's, it's always hard to be able to balance that yet, you know, in your business, you know, I would imagine that the brokerage business is quite profitable, you know, you're out there making great commission, you're earning immediate money, the ability to make that money and earn it allows you to then have money to then go invest and begin that process of multiplying. And when done correctly, your broker should be able to sell just as many properties as you and you can get that VIG that percentage on top. And in the end, you'll earn more money there, but then you'll be able to, you know, reduce taxes and do a lot of other stuff on the investing side.
Jason Lee 19:35
Exactly. Yeah, very well said. How's your education business? Is it pretty is that one pretty profitable, too.
Steven Pesavento 19:40
It's profitable. It's a lot of fun. I haven't invested as much time building that as I have building the private equity company. But the people that I've been able to work with over the years, It's so fulfilling, like, I can imagine when you're putting out content, you get the comments back and people talk about you know, I'm referencing you as somebody that was able to make a change in their life like personally, that feels good. Like it feels good to be able to give back and, and know that all these years spent learning things I'm able to pass along to other people, I make way more money in the private equity business. But you know, the training business doesn't do too bad. Amazing. It's good stuff. When you're looking, you know, you're you're young, but you've obviously tried a lot of things in a short amount of time, you've had some good success, we've been on a great bull run, since we've both gotten into the real estate game. Talk to us a little bit about what hasn't worked in the past when it comes to making and multiplying money. I
Jason Lee 20:40
think what hasn't worked was partnering with people that I didn't fully align with. So I think the only the only deal where I partner with one person that I wasn't too familiar with just didn't work out. Well. We both got on each other's nerves. We both kind of saw things differently, gotten arguments. And even though we did okay, on the deal, I thought we lost because it just took a lot of mental bandwidth out of my day. So that was something that took up a lot of my time and a lot of my energy. So that was one,
Steven Pesavento 21:15
what happened with that deal that made it stressful. Yeah, so
Jason Lee 21:19
it was a big renovation project, we were going to add two units and renovate the existing four units, all three bedrooms. And so a development deal, the contractor that, yeah, the contractor that he chose, just did not work out. He was like six months behind on everything. It was a nightmare to work with them. And nothing was done properly. So and then no one was listening to me. So I would put in my input, I would try to change things, I'll try to do things differently, because it just things weren't working. But they on the other side, were not receiving it so that I think a lack of good communication, a lack of trying to help each other out was bad. I mean, obviously, I had some faults, too. But I think that when both partners don't want to listen, it becomes a very big issue. Yeah,
Steven Pesavento 22:10
it's so true. I mean, you know, partnership, good partners, I've had bad partners, I've invested passively in deals that had terrible partners, I've invested passively that have amazing partners. And it really sucks. It just sucks because it's like, this could be so easy, we could make a lot of money, we could have a lot of fun doing it. But when you get out of that values, alignment, you end up it just creates so much resistance. So I'm curious what what advice would you have to people who are looking to move into real estate, you know, your strategy is very active, you're going to kind of be the person to maybe go find the deal manage it and really create that value, you've got that business setup, what would you recommend to those people? And what would you recommend to the people who, you know, they're making a lot of money, and they don't really have time or interest to go down that path to do that.
Jason Lee 23:01
Yeah, so if you're just starting in real estate, and you don't have it all the time, but no money, I think the best way to get your feet wet is to learn some sort of skill in real estate that adds value to a future partner. So whether you're on the debt side, the equity side, finding properties, raising money, whatever it is, operating properties, whatever it is, find a niche in real estate that will add value to a partner constructions a big side to everyone's struggles with construction. So if you're a master at construction, you got a great company, that's a great way to add value to a partner. So that's number one. And then two, I'd recommend not doing it on your own. If you're just starting, I'd highly recommend working with someone who's more experienced than you, because they've done deals you haven't, they know what it's like to get a deal from start to finish. And when you've never experienced that before, and you go through that journey alone, like I did, you will go through a lot of mistakes, a lot of problems, a lot of hurdles. And partnering with right people is the fastest way to fast track your success. And then for the person that's in a different scenario that has a lot of capital doesn't have time. You know, you got to invest to people that have time. So you gotta invest people that are in the business every single day that are finding deals that are operating the properties that are in the business every single day. Because if you can't be in the business every single day, someone else needs to be because real estate is never fully passive. You got to have an operations, you got to have systems. So you got to have people that are actually running the day to day and asset managing the properties.
Steven Pesavento 24:43
Yeah, yeah, I think it's really good advice because oftentimes people kind of get hoodwinked into thinking that real estate is all passive income. And the truth is it can create massive amounts of wealth but usually real estate's pretty active. Somebody's got to be pulling the strings and Following up with the manager and the contractors and making sure all those things happen, because if you don't, things don't work out, contractors don't show up. Property managers don't make great decisions. They spend money, they don't need to, because they just don't have good alignment of interest. And so when you're that partner, when you're the person who's making those individual decisions, or you've got a great partner who has that experience, who's out there in the field, and they're aligned with you, because they're going to make money only when you make money, that's how you know you're actually going to be protected. Exactly. And so, you know, you've you've grown a lot within a very short amount of time. What do you think was it that that really was one or two of those big catalysts? Today's episode is sponsored by Vaughn Finch capital. If you're interested in investing alongside me in the same type of real estate opportunities that I personally invest in, then head over to Vaughn Finch capital and join their private investor network. You can do so at Vaughn finch.com/invest. Join me on that next deal. I look forward to seeing you on the inside. Thank you for listening. If you like what you heard, make sure to rate review, subscribe and share with a friend. Head over to the investor mindset.com to join the insider club where we share tools and strategies from the top investors and entrepreneurs and how to take it to the next level.