"Kickstart Your Wealth Engine" - How a Kia GM Built $10M in Real Estate While Running a Store | Tustin Ulrich, GM at Roper Kia
What if your success today could quietly sabotage your future, unless you build a plan beyond the next car deal?
In this episode of The Dealer Playbook, I sit down with Tustin Ulrich, General Manager of Roper Kia (one of the most dominant Kia stores in Missouri) and founder of The 1% Effect, a real estate investor concierge designed specifically for high-earning operators who don’t want to lose focus on today while building freedom for tomorrow.
This is not a conversation about selling cars.
This is a conversation about long-term thinking, generational wealth, tax strategy, leverage, and protecting your family’s future, without sacrificing performance in the present.
Tustin shares his deeply personal story, from childhood adversity and financial struggle to building a record-breaking dealership and acquiring over $10M in real estate while paying less than 1% in taxes. He breaks down exactly how high achievers in automotive can use real estate as a strategic tool, not a distraction, to create optionality, time freedom, and legacy.
In This Episode, You’ll Learn:
Why most high earners stay trapped in a short-term income mindset
How car dealers and operators can invest in real estate without losing focus on the store
What the 1% Effect really means, and how the top 1% preserve wealth for generations
Why 401ks and Roth IRAs alone won’t create true financial freedom
How leverage, 1031 exchanges, and tax strategy work in plain English
The difference between good debt vs. bad debt
Why real estate favors operators, even during recessions
How to think in multiplication, not cash flow
Why automotive is one of the only industries that enables this path
Timestamps
00:00 Hook Intro — Building wealth without losing today
02:00 Tustin’s story: from struggle to GM
06:30 Why high achievers need a future plan
10:45 The 1% Effect explained
15:30 Real estate, taxes, and leverage (simple breakdown)
22:30 Recession myths vs reality
28:00 Single-family vs multifamily investing
33:30 Living on debt & generational wealth
38:00 How to get started + final takeaway
Who This Episode Is For
Dealer Principals & General Managers
High-earning sales professionals
Automotive operators thinking beyond the next 30 days
Anyone serious about generational wealth, tax efficiency, and long-term control
Episode Brought To You By FlexDealer
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Episode Transcript
(Preview Intro)
What other industry can you think of that can take anybody from you?
You brought up like being kind of the bottom of your class.
I joke that I don't know how I graduated high school.
You know, I can't think of another industry globally that puts more people in a position of prosperity quite like the auto industry doesn't.
0:18
Speaker 2
The truth is, is that high achievers like myself, like you, were so focused on closing the month and hitting a new car objective and doing those things that we don't look up and think about what is 10/15/20 years from now going to be.
0:35
Speaker 1
You are motivated, it seems, by a vision of your family in the future, not necessarily just isolated to a vision for like the wealth creation.
0:45
Speaker 2
I'll never forget working three jobs, walking into Walmart with $26 in my checking account, knowing I needed to buy diapers and I wasn't getting paid for four more days.
0:53
Speaker 1
So talk to me a little bit more about your views on the deeper motivation for why you're operating the way you are today.
1:00
Speaker 2
So I told my wife five years ago, I said, Jess, we have two options….
1:05
(Intro)
Speaker 1
One of the things that I enjoy most about producing the Dealer Playbook is hearing from you.
The messages that I get of people who are getting so much value out of the podcast, applying it to their day-to-day workflows and finding a thriving career right here in the retail auto industry.
It means the world to me.
1:21
And you know, one of the ways that we make doing this possible is through my agency, Flex Dealer.
And of course, in the spirit of providing value, I think this is a perfect time to head over to triplew.flexdealer.com to show even further support for you, my beloved DPB gang.
1:38
Right now, if you go to my website, flexstealer.com, you can get a full free PDF of my #1 best selling book, Don't Wait, Dominate.
And the reason I think it's so special is that a lot of the topics that are discussed in this book are even more relevant today than ever with this surgeon, popularized AI, and people wondering, well, what can I do next?
2:00
How can I have a competitive advantage?
Well, that's all here in this book.
And so I'd love to be able to offer you a free copy of this if you go to flexsdealer.com.
It would mean the world to me because that is how we continue to produce this show for you.
2:27
(Episode Begins)
Tustin, You're Rich is the general manager at Roper Kia, a record-breaking Kia store in Missouri, and the founder of The 1% Effect, a complete real estate investor concierge.
In this episode, we're chatting about exactly that, how high achievers can invest in their future without losing focus.
2:48
Today welcoming back to the show, Tustin, my good friend, Thanks so much for joining me on The Dealer Playbook.
2:54
Speaker 2
Oh man, I appreciate the invite back.
It's always an honor.
2:58
Speaker 1
You're doing something so unique.
And I mean, obviously when we started the playbook 12/11/12 years ago, I learned quickly that even in the context of our industry, there's only so many, many ways I can talk about negotiating a car deal and penciling it and marketing.
3:17
And so the reason I wanted to invite you today, we were recently at an 800% retreat in Pigeon Forge, Pigeon Forge, TN and, and our, our friend Glenn put you on the stage and you engaged a room of car dealers in a way that I've never seen in that, I think you really struck A chord.
3:41
I want to talk to you about specifically the, the framework that you've founded in 1% effect because hey gang, we're not talking about selling cars today.
We're talking about how you, as a high achiever, somebody with ambition, capabilities, goals, desires, can build the framework for yourselves that really takes care of you into the future.
4:09
Tustin Ulrich's Deep Motivation: Building Generational Wealth for Family
So I want to turn it over to you.
Can you maybe start at the beginning?
I know you are actively working, operating a successful Kia store, but you're also a very, very savvy and probably the most creative real estate thinker I've ever met.
4:31
How does this all start?
How did you get into this?
How do you, how does a car dealer go?
Yeah, and also I want to I want to buy real estate and invest and, and I just need to know the whole story.
I think everyone that listens and watches the playbook needs to know what the heck is going on.
4:49
Speaker 2
Yeah, those are first of all incredible introduction and thank you.
I'm honored to hear you say such amazing things.
So I love the opportunity to talk about it just because I am so passionate.
So a little background on me, I, you know, my parents gave me up when I was 10 months old.
5:07
I bounced from house to house until I was 7.
And you know, it's seven years old.
There's, I feel like there's key days in someone's life that defines who we are, right?
They are pillars, they're foundational.
Every decision we made is resonated against these days.
5:24
And so, you know, for me, I'll never forget being seven years old sitting on the bed of an aunt and uncle who took me in and raised me as their own.
I'm super grateful for it.
But at 7 years old, asking my uncle if I could call him dad and him saying no.
And that laid a foundational block for me that my kids will never have to ask who Dad is.
5:45
And so that just lives through for me.
And then I'll also never forget when we decided that Jessica was going to stay home and be a stay at home mom with her oldest daughter and all of our kids and me working three jobs.
I was selling cars during the day.
When I got off work, I would change polos.
6:01
I would go to Pizza Hut and deliver pizzas until midnight.
And then I would change, go home, sleep for a few hours, wake up, go throw papers for the local newspaper.
It was a physical route.
I could all the tricks of throwing newspapers.
I could teach you own a car with a sunroof.
6:17
It makes it easier anyways.
I'll never forget working three jobs, walking into Walmart with $26 in my checking account, knowing I needed to buy diapers and I wasn't getting paid for four more days.
Like, I'll never forget being a freshman in high school and not having enough cash to buy a meal when I was on an event with a sports team.
6:39
And I'm not mad at anybody about the circumstances, the cards that life dealt me.
It is what it is.
You can either decide to use those moments to be catalyst for growth and change, or you can say life sucks and life happens to me.
And so, you know, I knew I wanted my kids to be in a position to buy however many meals they needed to when they were on the band competition.
7:03
I knew I wanted to make sure I was present and in my kids lives.
And I knew I wanted to create generational wealth so that the generations after me would not have to worry work provided that it wouldn't be the same toil that I had, right?
7:22
Not the same launching pad that I had.
And so got an automotive back in 2006.
Started in the first iteration of the BDC at the dealership that I currently run.
Worked my way up on the variable side pretty much in every position.
7:38
Got fired from that store.
Got hired back to that store 2 years later and taking it over and now we're the number one store in our area.
We sell more new cars than any new car franchise.
Same with pre owned.
We continue to deliver at a high level because we focus on if I can make help people become better dads, better husbands, the end result will be a better an employee who's taking care of our guests at a different level.
8:04
And that's going to resonate throughout our business model.
And that's what we focused on for the last seven years is what we've created and it's been amazing.
8:11
Leveraging Real Estate for Tax Savings and Generational Family Wealth
How does all that lead to real estate?
I'm glad you asked. 2019 have my best financial year ever.
Had to write my first really big check to the IRS and said I'm never going to do this again.
This.
There has to be a way to figure this out.
So we start digging into the tax code, understanding the long term benefits of what real estate is and creates.
8:32
And so started running down that path about our first rental in January of 2021 and it just escalated from there.
And so over the last four years we've saved a significant amount and taxes I paid less than 1% in federal and state income taxes.
8:50
That's why the name is the 1% effect.
By doing that we've acquired just over $10 million worth of real estate multi 7 figures of of equity in there that will continue to scale and grow tax free.
And now that I've understood this model and understand what's capable of it, I want to help other people do it.
9:12
The truth is, is that high achievers like myself, like you, and which is what the beauty of the auto industry is, right?
I don't know many other industries that can allow people.
I graduated in the bottom 10 of my class in a school of a class of 35 people like it's automotive gives anybody with the drive to get stuff done the opportunity to grow and earn a significant amount of income.
9:38
But we're so focused on closing the month and hitting a new car objective and doing those things that we don't look up and think about what is 10/15/20 years from now going to be.
And I also am not a believer that a Roth IRA or a four O 1K is going to be enough to allow you to retire and enjoy your life.
10:01
And I love automotive.
I love people.
I have no interest in working till I'm 60.
I just don't.
I love work like I love digging in and solving a problem and doing the things.
But my youngest is going to graduate high school when I turn 46 and I would love to have the time to travel the world with my wife and enjoy the life that we've created.
10:22
But if we're so focused on today's car deal and not focused on the future, then it's really hard to do that even at a a dealer level, they're so focused on today.
So the 1% effect is designed to be a full concierge to help teach people the lessons that we've learned and help them acquire the real estate.
10:46
We are doing the whole thing.
We have found the deal, we're working with the builder, signed a bulk contract, we help arrange financing, we property managed on the back end and we help high achievers grow generational wealth and run the playbook for them.
11:03
It's a lot.
I'm sorry so many no.
11:07
Speaker 1
Don't, don't apologize.
This is why I love you starting here because there's a couple of things I want to unpack in a little bit more detail.
You started with family and you, you wrapped it all the way back to family again.
You know, family to me.
11:22
We talk about family a lot on the show because the implications of leadership, of counsel, of working together where it really matters most has a real interesting downstream effect to how we operate in business.
11:41
I'm a huge advocate for the family because you know, when we when we see individuals and you know me, I can be a little avant-garde sometimes for, for the stick of things.
But when I see all these business Titans talking about you got to grow your business, this and that and the next thing, and then you find their families are falling apart and their spouses are leaving them.
12:01
I'm like, get out of here.
Talk to me about the easy stuff.
You know, you started with family and I want to bring it to this because, you know, you said obviously, like there is an aspect of you have to focus on today's car deal.
12:18
You are motivated, it seems, by a vision of your family in the future, not necessarily just isolated to a vision for like the wealth creation.
It's like driven by, like I've heard you talk about visiting grandkids in the future and how real estate is going to help facilitate that and so on and so forth.
12:40
So talk to me a little bit more about your views on how on the deeper motivation for why you're operating the way you are today.
12:50
Speaker 2
Yeah, so the big, the big hairy goal is I, I, I love board games, so I'll start with that.
I love critical thinking games, card games.
And ever since my kids were young, those have been a staple in our life.
We have an entire closet in our home dedicated to board games, and it's because I feel like a lot of the value I bring to a car deal.
13:13
Let's bring it back to that.
What made me valuable as a used car manager in 2015?
I could look at a credit profile, a car deal, a unit, an LTV and recognize something different and be able to call a bank back then when you could do that and explain why this deal made sense to get a deal bought in.
13:31
To put it in basic terms, I think my mind looks at a Rubik's Cube in a little bit of a different way than most mines.
So because of that, I can solve a problem in a different way than they can.
So with board games, I love teaching my kids critical thinking.
I want them to see a strategy different than mine outside of the box, outside of what the world shows them.
13:52
Because the people that are, that are generationally gifted, that shake up the world, that change things, are the ones that view it from a different landscape.
So how can I create a world that's a different landscape than the world I had to see as a 7 year old and then and then help compound that growth.
14:13
And so for them, I think there is 0.0% chance all four of my kids stay in the Joplin, MO zip code.
It's just not going to happen.
They're going to be shakers and movers.
They're going to want to go dominate the world.
14:30
So I told my wife five years ago, I said, Jess, we have two options.
We can either A, go visit our grandkids when American Airlines tells us it's acceptable and hope they don't cancel our flight or B, we can build a real estate portfolio so big that it buys a jet and then it buys commercial real estate where our grandkids live.
14:50
And then we fly our company jet to go check on our commercial real estate.
And it's all a write off.
And you create this endless evolution of ability to live the life that you want to live.
So I just started running towards real estate as fast as I can because the benefits, the tax benefits and the real estate code, I mean, they've been built in for over 100 years.
15:14
Like it's this stuff isn't going away.
The 1% effect is also understanding how the true 1% stay wealthy for generations.
And it is all through property and real estate and how it's leveraged.
And when you can wrap your mind around that, the possibilities are endless.
15:34
Speaker 1
Does your marketing agency suck?
Listen, before we hop back into this episode, I know you know me as the host of the Dealer Playbook, but did you also know that I'm the CEO of Flexdealer, an agency that's helping dealers capture better quality leads from local SEO and hyper targeted ads that convert.
15:50
So if you want to sell more cars and finally have a partner that's in it with you that doesn't suck, visit flexdealer.com.
15:57
Understanding Good Debt, Leverage, and 1031 Exchanges for Wealth
Let's hop back into this episode.
This is good because this kind of leads to the next question, which you've just kind of partially you've wet our whistle on, which is I really feel like why?
Why is real estate the perfect mechanism?
16:16
And it's because it is the one thing that both sides of the political aisle here in the United States are never going to tamper with, because it's also how they've all built their wealth.
16:26
Speaker 2
Yes.
16:28
Speaker 1
It doesn't matter how you lean politically because they're never going to touch it.
So talk to me about some of the mechanics.
You know, you talked about the the jet buying commercial real estate, the write offs.
Who are we specific?
16:43
When we say high achievers, who are we specifically talking to?
Is it a dealer?
It is it somebody that's self-employed?
Can this work for somebody who's employed bring me into maybe some of the nitty gritty of of how who this can work for and how and what the entry kind of point would be for somebody who hasn't ever invested?
17:08
Speaker 2
Yeah, I don't think what's hard is like, how do you I, it would be hard for me to define an entry point like high achievers are at all different levels of income and making $100,000 in Joplin, MO is significantly different than making $100,000 in Dallas.
17:23
And so because that like there are various levels through this, you know, I think it takes $600,000 a year to be in the top 1% of earners in America.
But when you look at the tax code and when you start to understand the tax code, once your income gets above a certain number, you are significantly more penalized by paying taxes.
17:49
Once you earn a married violin joint, when you go over $389,000, you click into a 32% tax bracket.
That's expensive.
I mean, you're giving up a third of your income.
That's if you don't have state taxes on top of that.
That also doesn't include Medicare or Social Security and so it gets very expensive very quickly.
18:08
There is an umbrella approach to get your tax bill less than 1%.
I've done it five years in a row.
It is multi layered and multi faceted and there are a lot of things to it.
But even if let's say you're a single human, not married, you're selling cars, you're still doing great making 180, two, $100,000 a year.
18:29
You are so penalized from a tax perspective to just play the game.
And the pain that a lot of people feel is that you're working so hard every day to earn, earn, earn, earn, earn.
You'd never look up and you never think.
18:45
And so the IRS hit you with that tax bill.
Or you see, at the end of the year on your W2, I made 200 grand, but I paid $60,000 in federal income taxes.
This is 5 grand a month.
I didn't get anything for it.
So what if there was a way to reduce your tax bill and gain an asset?
19:02
But for some people, that's not the case.
For some people, you can't use the tax saving strategy.
And so for them, it is just a different saving mechanism.
When we look at the housing market, do you know, Michael, the longest housing recession in the history of America?
19:19
Speaker 1
No, I don't.
19:20
Speaker 2
2008 it was like 17 months.
So when we look at long term rentals and we look at a long term scope of what does retirement look like?
If you're someone that's 20 years old, 22 years old and you want to find a way to own $1,000,000 worth of real estate by the time you're 30 and do it the least expensive way possible, then there's a path for that.
19:43
Let's talk through that.
If if you're married and you're able to use some of the tax codes, then it'll be even faster.
So the answer varies.
What are your goals?
What do you want to be?
I think someone as young as 2122 years old, it's just starting out selling cars.
20:00
It's finding some success and making some decent money, and they will learn what it's like to build a real estate portfolio slowly.
It's not complicated, it's just understanding the path and committing to it for someone who's a little bit older.
A little bit more seasoned and has a higher income, same thing.
20:18
But what the beautiful thing about real estate is, is how we can grow wealth tax free, How we can treat this as a retirement account that we can borrow against and create income in the future that is non taxable income.
That's the big one.
20:33
It's not necessarily what I'm earning today.
It is what is 1015 years from now going to be.
And I do think that's where a lot of people get mixed up and I've heard it several times.
Why would I invest 20, thirty $40,000 down payment to make 100 bucks a month?
You wouldn't, I wouldn't.
That doesn't make any sense.
20:50
But there is a much bigger picture at play here.
You just need to wrap your mind around it.
20:55
Speaker 1
Well, two of the things that you've taught me is leverage and multiplication.
Talk to me about because I think that's the side of it.
You know, I talk to people and they're like, well, you know, don't you know, everybody's got an opinion.
21:11
And I like that you're bringing up, you got to pick the path that you, you know, because there's a lot of paths.
We all know this, but you've picked a path in which there is a lot of leverage and multiplication.
Talk to me about that and why you see that as a kind of a common sense approach.
21:30
Speaker 2
Sure.
I don't know if I would say common sense.
I would say risky approach.
I mean I I do love a risk, but for me debt is free.
So if a bank is willing to give me 8085% of the value of a home and I only have to fund 15%, but I get the asset, and with the asset I get someone else paying the rent payment, which is paying the debt down.
21:52
I have someone else covering the property taxes and the insurance at the same time that property's appreciating.
Let's say it's 5% a year on a $200,000 property.
When you get to the point, let's say we walk you through steps of getting to $1,000,000 of real estate over the course of three years.
22:11
Every year that real estate sits in the market at $1,000,000, it gains $50,000 of value.
So you're making 50 grand.
Now are you putting that in your checking account?
No, your that's your retirement account.
You're sticking that down the road at the same time with decent rates.
22:29
Someone else is paying down the debt service on that.
And let's say that numbers, you know, fifteen, $20,000 a year that the debts being paid down at the same time.
So now we're making $70,000 a year.
Are you making that cash?
No, but you're making that in future money.
22:46
And so I want to leverage myself as much as I can tolerate from my risk because I know in the end I would much rather have more doors than necessarily fewer doors.
Now the reason that is for me the the big unlock, all this is called a 1031 exchange.
23:05
That's where the government allows you to move investment real estate.
The technical term is like kind real estate from one investment to another tax free.
So if I make $50,000 on a property, I don't sell that property, pay taxes on the 50 grand, and then go buy another property.
23:23
I sell that property and go buy the other property and skip the tax step in the middle.
That's been around since 1929.
It's not going anywhere.
So because the government wants to keep investors in the American market because that's what helps bolster growth, right?
It keeps the money here, keeps it invested, keeps transactions going.
23:42
So when you start executing those 1031 exchange, I'm of the belief under the model of the 1% effect, that one house you buy today with no additional cash down payment invested could equal 4 houses 10 years from now.
23:58
So why wouldn't you try to buy 4 today at a less down payment knowing that's 16 houses 10 years from now versus buying 1 today that made net cash flow a few hundred extra dollars a month when it's only going to be 4 houses 10 years from now.
24:15
So it all depends on what your goals are.
And that's part of the concierge service.
We have that conversation.
We talked about what is your end goal?
What does that look like?
How far it is that so we can tailor it to you.
But yeah, I multiplication is easy when the government lets you do it tax free.
24:31
Speaker 1
Some people wonder what's the end game?
Is it tax free or is it tax deferred?
And if it's tax deferred, what do I do with my kids?
Are they going to inherit a massive burden?
24:45
Speaker 2
Actually, yeah, this you start leveraging things like trust and doing those type of things so you can move those assets forward.
It is tax deferred.
Like at some point if someone sells the real estate and and that's a realization for me, right?
25:01
I'm building this portfolio, I'm taking these steps, I'm working towards this every day.
There's a legitimate chance that I die and my kids be like, real estate sucks.
So tax bill, we'll catch money and move on.
And listen, if if they choose that and the four of them decide that's the best path for them, more power to them.
25:21
Like at the end of the day, if I can bless them and bless their kids and give them something to go buy a new truck with.
I mean, it is what it is.
That's that's their decision.
I don't think that'll be the case, but it is tax deferred.
25:37
But as long as you continue to play the game, there are no taxes involved.
Let's say you don't want to run this out 10 years and you don't want one house to become four.
You want one house to become two or three and in a 10 years you want to cash out your first amount of money you can.
25:54
That's the whole goal.
If we can build a portfolio worth a million, let's say we buy $1,000,000 worth of houses today and five years from now that portfolio is worth 1.3 million.
That's steady growth.
The $1,000,000 you own today, you owe 808, fifty on it.
26:13
By the time someone else has paid down the debt over the next five years, that's going to be closer to 700.
So now you have a $1.3 million portfolio that's worth 700.
You go back to the bank, you do a cash out refinance, you take your loan back up to 85% of what the 1.3 million is.
26:30
And then the cash that's leftover between 700 and what you're borrowing, you get to buy a jet with in my, in my analogy and my goal, I mean, debt is tax free.
So you can borrow against your portfolio, take the cash that the portfolio is in, paying back down the debt on.
26:50
And it's just an endless cycle.
It's just deciding when you want to put stop, press stop on acquisition and start pulling those dividends back in.
26:58
Navigating Recessions: The Housing Affordability Crisis and Smart Investing
I think the important thing to note here is, yeah, there's probably some skeptics of, of all of this if this is a new concept.
But I think, you know, to your point, we've we've singled, you know, boiled it down to high achievers and higher achievers are looking to keep more of their money and or have more options.
27:18
And I don't think a lot of people realize that this idea, you know, when the news says Mark Zuckerberg is worth whatever, he's worth $200 billion.
The number of people that actually think there's $200 billion sitting in a checking account somewhere or Elon or Bill Gates or any of these people are shocked and, and somewhat skeptical when they find out these dudes probably have 50,000 sitting in a bank account or maybe, maybe sometimes even less.
27:50
Like Elon still sleeps on his buddy's couch when he goes to Silicon Valley, for crying out loud, because that's just the value of the notes that they're they're holding, right?
That these men are not fools either and are using that value to leverage and get debt.
28:12
I don't think a lot of people realize the wealthy are living on debt.
28:16
Speaker 2
Yeah.
28:18
Speaker 1
They're, they're not living on, they are putting their earned income like Grant Cardone used to talk about this all the time.
They put their earned income into cash flow producing assets or equity building assets and then they leverage the equity building asset.
This is what you're talking about.
I, I, I think this is how it's tracking in my mind anyways.
28:37
You're putting to work the the equity building or cash flow producing assets to get more debt, and the debt buys the life that you want.
28:46
Speaker 2
Yes, but there's such a like there is such a belief you look at oh, his name's escaping me.
Dave Ramsey, thank you.
Look at Dave, right?
Dave Ramsey is all about debt free, six months in the savings account.
29:03
And there's some of those things that certainly make it a great amount of sense if you're not good at managing money or following a budget or doing any of those things.
If you look at like Maslow's hierarchy of needs, like you have to Chuck off some of those basic boxes.
29:18
Speaker 1
Yeah, physiological.
You got to get past all that.
Yep.
29:21
Speaker 2
I'll turn food like those things have to be stable, but when you can leverage, Dave Ramsey went on the path that he is now because the debt that he was taking back then was so high leverage the bank could call the note immediately.
He had people calling his note in 30 days and he had to, you know, produce $100,000 cash, which he didn't have or he was in trouble.
29:43
Like that's that is bad debt.
There are definitely things that are bad debt out there.
You just have to learn to leverage what good debt is and an asset that is always appreciate it is always appreciating, even in the worst.
If you, if I could go back and rewind the calendar and buy every house I could for top dollar in 2007, write out the recession and sell it today, it's a completely different conversation.
30:12
So even in the greatest real estate recession of our generation, it's still a significant, massive, massive, massive win.
You just have to look up to see it right?
30:27
Speaker 1
And we'll talk about that for a minute because I think there's, you know, there's rumors of constantly of a looming recession.
Sure, some people are saying, well, what happens there?
30:38
Speaker 2
Yeah, I think it's a, to be honest, I think it's a great thing.
Let's look back at COVID in 2021, what was the average house press in 21?
It was in the two hundreds.
That number now is north of 400.
It's no different than than what the average price of was a new car four years ago was in the 30s and we just this month eclipse $50,000 is the average price of a new vehicle.
30:59
It gets gotten astronomically higher.
OK, How does that work in housing?
In housing, I think builders in 2020-2021 realized what was happening with COVID and they stopped the building $200,000 starter homes and started building 4 and $500,000 starter homes because there was so much cash being printed.
31:18
Those houses were flying off the market at astronomical numbers.
And so we don't, this is my fundamental belief.
OK, so it, I mean, just take that for what it is.
I believe we don't have a housing crisis in America.
We have an affordability crisis.
31:35
We have too many houses in Dallas and Denver that cost $500,000.
And to people that are 21 years old getting in their first corporate job making $80,000 a year, they can't afford that and buy food at the same time.
And that's what you know, the 1% effect.
31:50
We're buying real estate here in Joplin, MO.
Well, the houses we're buying are $223,000 apiece for a three bedroom, 2 bath house with two car garage that has a good yard.
So our homes are so much less expensive here and it's not because this is a poverty area, our incomes on the increase, our unemployment is down, The people moving here is going up year over year.
32:14
Like there's so many indicators that it is an affordability thing.
So when we have an affordability crisis, not a housing crisis, and we know there's a housing shortage out there that is factual, then why not go to where homes are affordable and immediately invest and just pick up on all the wins of the appreciation tomorrow?
32:36
Scaling Real Estate: From Single-Family to Multi-Family Investments
Do you think This is why Cardone is is like against single family though?
Because he's he's just working a different strategy.
He's all about like today, cash flow.
32:45
Speaker 2
Yeah, well, in the apartment world.
Now, granted, what Grant Cardone has built is massive and incredible and more power to he's buying 1000 doors at a time.
I'm talking buying two or three doors at a time.
But what Grant is doing is he has the ability to take the risk and in commercial real estate and in apartment real estate, the values are completely different.
33:07
Your, your valuation on an apartment building is based off of rent roll.
It's not based off of square footage.
So there is a big benefit to that because you can come into a property, you can spend some money and renovate it.
If you can double your rent, you can double your valuation and you scoop all the cash.
33:23
So it's a big win when you take those big swings.
But to someone right now who's the 25 year old guy making 200 grand selling cars, the idea of buying a seven $8 million apartment building, a $2,000,000 apartment building is so far out of reach that you can't even see it.
33:42
So the nice thing about single families is it allows us to start today stacking equity from zero and then we can take that equity, use 1031 exchanges 5 years from now.
If you can buy 5 properties and you can create half $1,000,000 of equity over the next five years.
34:00
And then you find an apartment building you want to buy and you need to half $1,000,000 of equity.
It's easy.
We sell the five homes we 1031 exchange to equity tax free and we go by the apartment building and then you can be mini Grant Cardone like it's possible, but I think sometimes those goals are so far out there that you can't you can't see it grants beyond single family homes because his career is in a position he no has no longer has to look at single family homes.
34:26
That doesn't mean there's not a significant amount of value in those today for you and me, right?
34:30
Speaker 1
And I mean, his entry point, if you think about it, is like I think people gloss over the fact that I mean, he practiced what he preached.
He took his earned income and he turned it into real estate.
What I think sometimes people don't realize about Grant is that the, the earned income he turned into real estate was a seven and a half million dollar mansion that used to be owned by, you know, I, I can't remember that he's a judge on American Idol now.
34:55
Lionel Richie, He bought Lionel Richie's for seven and a half million and then turned around and sold it I don't know how many years later for 18.9 million when everyone said that wasn't going to be possible.
Kudos to his salesmanship.
He made it like I, and I'm not saying any of this to, but I think it's important to distinguish, well, a 1031 exchange with, you know, 9 million dollar, $8 million of cash, you know, liquidity puts you in the game where you can buy 32 doors immediately.
35:30
And now if you look at it today, well, he's raising, yeah, he's leveraging himself, but he's also raising money from his community to go and buy these $47 million properties, right.
35:45
So it's, it's just a different path.
I mean, I'll speak to I'll speak to my own experience because I'm a use case here.
I went from 10 years ago listening to Grant and feeling like, yes, this makes all the sense in the world to me.
Putting my head down and working because back then new family knew, you know, starting out, no income really, just enough to make ends meet.
36:07
You know, the the things you talk about.
I remember going and having to buy baby formula and I'm like this tin of baby formula is $16.00 and I need 2.
These kids got to stop eating so much.
Like I don't I'm not like every Italian that thinks you got to have a fat baby.
36:24
You lose a little weight.
Then getting to a place where where I'm like, wait a minute, then this might be possible or, or feeling like I can get close to the ambition and then in the middle of it four years ago moved to America and effectively and not start from square one, but start with zero credit, start with, you know, not established again, all these sorts of things to, to now.
36:46
I mean, by following your framework and your guidance, I'm going to have five homes by the end of this year.
36:54
Speaker 2
Yes, Sir.
36:55
Speaker 1
Which just like blows my mind.
And I know we're going to be chatting soon about what, what's next year's plan?
And what I love about it, Tustin, is I, I said common sense earlier.
To me, it feels like a common sense way to, like you said, get started.
37:11
Is there risk involved?
Of course there is.
But guess what, guys?
There's also risk involved in draining your entire paycheck on a fluorescent yellow suit because you you wanted to stand out at the store and feel good about yourself or buying the luxury watch or, or, or all of these things.
37:30
And I don't say any of that judgmentally, But that to me is way riskier than taking that earned income, turning it into a property, an equity building property that you can leverage tomorrow to do to, to build the life that you want.
I think it's just, it's a no brainer for me.
37:48
This is why I wanted to get you on the show today.
37:52
Don't Outrun the Hamster Wheel: Connect with The 1% Effect
We've covered a lot of territory, taxes, tax deferral, leverage, multiplication, future building, wealth creation.
As we wind down.
I I know this is peaked audience interest, which is why I wanted to get you on and talk about this.
38:11
This is possible because of our great industry that you brought it up in the beginning.
What other industry can you think of that can take anybody from you?
You brought up like being kind of the bottom of your class.
I joke that I don't know how I graduated high school.
38:28
You know, I can't think of another industry globally that puts more people in a position of prosperity quite like the auto industry does.
And so I know there's people in our that that are listening in that are be interested in this.
Having said that, how can those listening or watching connect with you and learn more about the 1% effect?
38:47
Speaker 2
You can go to 1% effect.com, you can book an appointment.
I'd love to sit down and have a conversation and just talk through what are your goals With every person listening today, your aspirations are different.
You may have 0 interest in flying a plane because that might terrify you and I completely understand.
39:06
That does not mean you can't mold this and make this exactly what you need it to be to accomplish your goals in the end.
And ultimately we get so convinced.
And I think the system is built this way.
The system is built to start when you're 5 years old to go to school Monday through Friday to 8 to 4 and teach you to live in this world and just put your head down and go to work.
39:29
And that you're going to accomplish this American dream and own a home with the picket Pence and be happy.
And if you invest in your 4-O1K, you'll win.
Jim, I, I dare you to find a four O 1K calculator and enter in how much money you have today at an average return of 8% until the day you plan on retiring.
39:49
And it'll show you you're going to have $2.4 million.
And when you find the right calculator, it'll say in today's spending power that is $460,000.
When you realize that you cannot out earn or outrun this hamster wheel without putting a little bit of emphasis in the future, suggest you give me a call.
40:13
Go to the website, fill it out, book the appointment because there are easy steps we can take to help set you up for a future that I never thought I would have a 7 year old me sitting on the bed asking my uncle if I can call him dad.
40:29
Never thought I would be in the home that I'm in.
The life that I have, the marriage I have, the kids that I have.
I love life, I love my family, I love the people.
I get the impact.
It's it gives me goosebumps thinking about it.
Be no different for you.
40:45
I didn't and I didn't.
It's never too late.
I didn't start my real estate path until I was 35, so I'm 39 now.
A lot of movement in four years and so.
40:53
Speaker 1
Gary Vee says you got time.
40:55
Speaker 2
You got time.
40:57
Speaker 1
Man, thank you so much for joining me.
Guys, don't sit on this.
Go to the 1% effect, 1% all written out, 1% effect.com Tustin man, thank you so much for joining me on the Dealer Playbook.
41:10
Speaker 2
Thank you very much.
Thank you.
41:11
Speaker 1
(Outro) Hey, thanks for listening to the Dealer Playbook Podcast. If you enjoyed tuning in, please subscribe, share and hit that like button. You can also join us and the DPB community on social media. Check back next week for a new Dealer Playbook episode. Thanks so much for joining.
