What would the world look like if more of the rich and wealthy had hearts for their fellowmen? And what if those with hearts of gold had the skills to get themselves out of poverty? You think you know the answer? “No brainer – the world becomes a better place!” Or maybe… “There’d be chaos and imbalance, I think?” It’s out of curiosity for these kinds of questions that led Daniel Kwak to building an REI empire not just for himself, but in order to serve other people! Daniel Kwak first immigrated to the United States with his family at the age of 5. Due to afinancially disadvantaged upbringing, at the age of 20 he had a negative amount of $187.65 inhis bank account. Motivated by continued financial hardship throughout his life, he started learning about Real Estate Investing. For the first two years he learned everything he could, and at the age of 22, he made his first deal. By age 23 he had 83 rental units, along with having raised millions of dollars in capital and also having done a variety of different deals and strategies. At age 26, Daniel founded Miotti Partners Capital, a core satellite fund that has introduced theequities fund management model into the Real Estate space for the first time. He has alsotraveled across the country training and mentoring hundreds and thousands of aspiring realestate investors. For most of us, no matter our contributions, no one will remember our names. But that shouldn’t stop us from making the world a better place. We can’t bring money to our graves. Wealth will, one way or another, go back to the economy. So why wait to die before we learn to give back? But you can’t give back what you don’t have… No money to your name? Can’t get any credit? NO PROBLEM! The Kwak Brothers Duo will get you setup by teaching you how to raise a million dollars (in just a year) for Real Estate Investing even when you have zero experience in the craft! At the end of the day, it’s about following your curiosity in order to achieve financial freedom that allows you to follow your passion in uplifting lives and making the world a better place! Check these out to learn more about the Kwak Brothers Duo and their REI Empire: IG: www.instagram.com/thedanielkwak/IG: https://www.instagram.com/thekwakbrothers/YT: www.youtube.com/c/TheKwakBrothersWebsite: thekwakbrothers.com/ Tune in to learn more about the hottest and most relevant information on real estate investing! Thank you all for listening and I will see you on the next episode. When you're ready, head on over to https://billyalvaro.com https://billyssecrets.com To get some neat (and FREE) Tools | Tips | Tricks to help you in REI!
What would the world look like if more of the rich and wealthy had hearts for their fellowmen?
And what if those with hearts of gold had the skills to get themselves out of poverty?
You think you know the answer?
“No brainer – the world becomes a better place!”
Or maybe…
“There’d be chaos and imbalance, I think?”
It’s out of curiosity for these kinds of questions that led Daniel Kwak to building an REI empire not just for himself, but in order to serve other people!
Daniel Kwak first immigrated to the United States with his family at the age of 5. Due to a
financially disadvantaged upbringing, at the age of 20 he had a negative amount of $187.65 in
his bank account.
Motivated by continued financial hardship throughout his life, he started learning about Real Estate Investing. For the first two years he learned everything he could, and at the age of 22, he made his first deal.
By age 23 he had 83 rental units, along with having raised millions of dollars in capital and also having done a variety of different deals and strategies.
At age 26, Daniel founded Miotti Partners Capital, a core satellite fund that has introduced the
equities fund management model into the Real Estate space for the first time. He has also
traveled across the country training and mentoring hundreds and thousands of aspiring real
estate investors.
For most of us, no matter our contributions, no one will remember our names. But that shouldn’t stop us from making the world a better place.
We can’t bring money to our graves. Wealth will, one way or another, go back to the economy. So why wait to die before we learn to give back?
But you can’t give back what you don’t have…
No money to your name? Can’t get any credit? NO PROBLEM!
The Kwak Brothers Duo will get you setup by teaching you how to raise a million dollars (in just a year) for Real Estate Investing even when you have zero experience in the craft!
At the end of the day, it’s about following your curiosity in order to achieve financial freedom that allows you to follow your passion in uplifting lives and making the world a better place!
Check these out to learn more about the Kwak Brothers Duo and their REI Empire:
IG: www.instagram.com/thedanielkwak/
IG: https://www.instagram.com/thekwakbrothers/
YT: www.youtube.com/c/TheKwakBrothers
Website: thekwakbrothers.com/
Tune in to learn more about the hottest and most relevant information on real estate investing!
Thank you all for listening and I will see you on the next episode.
When you're ready, head on over to
To get some neat (and FREE) Tools | Tips | Tricks to help you in REI!
SUMMARY KEYWORDS
people, seller financing, real estate, daniel, landlords, years, money, business, deals, talking, seller, sell, investors, buy, learning, question, capital, investing, unstoppable, raising
SPEAKERS
Billy, Daniel
Billy 00:00
What's going on guys? Welcome back to another episode of Unstoppable REI. Well, this is Episode 69, where I'm interviewing a young Daniel Kwak. This kid came here with literally no money in his pocket as an immigrant of a pastor, and he went at 18 years old wanting to do this so bad. And within three years with a lot of intent behind what he did, he was able to grow a massive rental portfolio, most of it he was doing with seller financing with investors who had large portfolios that they wanted to sell, giving a lot of really good nuggets of tips and tricks of how he goes about doing the seller financing deals. And towards the end, he talks about how he raises capital and when you really understand the avatar that you're trying to raise capital from, and you reverse engineer how to go about speaking with them about what's important to them. You can literally raise millions if not 10s of millions of dollars. I hope you guys enjoy this episode.
Welcome to unstoppable real estate investing wealth My name is Billy Alvaro, a.k.a the unstoppable VA former billion-dollar mortgage banker gone bankrupt turn professional real estate investor, where each week you'll learn the tools, strategies, systems, and secrets of myself and other highly successful real estate investing entrepreneurs use to start, grow and scale their businesses creating massive profits and how you can too, and we'll teach you how to put those profits to work. So you no longer have to get ready to finally experienced financial freedom and generational wealth. Now let's get started. What is going on everybody? Welcome back to another episode of unstoppable Rei. Well, I'm your host, Billy Albury, the unstoppable VA here to bring it another episode and another special guest. Today I'm interviewing a young man, Daniel Kwak, who came to this country read your bio bro very impressed came here with like, not even two cents to rub together. And at 20 years old, you had a negative net worth. And now here you are, you know, many years later with a huge rental portfolio and you're teaching students all around the country.
Daniel, welcome to the show, bro.
Daniel 02:06
Hey, thanks for having me on. Man. I'm honored.
Billy 02:08
Appreciate you coming on. So listen, I'm just curious. How old are you now?
Daniel 02:11
I'm 27 and about to turn 28.
Billy 02:13
Damn primetime brother primetime. So take us back. You got into this business when you were 20 years old. And reading your bio, it said that you had like you were dead broke. You had no money in the bank. And you and your family, I think immigrated here. You were kind of like just really struggling to try to get yourselves together when you first came to the States.
Daniel 02:30
Yeah. But I mean, in hindsight, I look back and I'm super grateful and thankful. Right? Because I mean, I you know, if I didn't have the background, I didn't have I don't think I would have worked as hard as I do. Now I don't you know, and I definitely value the dollar. You know, more than, you know, I think most kids, you know, when I grew up, so yeah, you know, we emigrated to the country when I was five years old. And you know, my dad actually was and still is today. He's a church pastor. So you know, I'm a pastor's kid and whatnot. And I don't know if you know a lot about pastors, but they don't really make a whole lot of money. Unless you're one of the ones that are on TV, you know, asking people to buy this prayer rock and it's gonna, you know, help enhance your life and in your flying private jets. Right. Like it unless you're on TV. You know, pastors generally don't make a lot of money, nor should they, I believe, right. But so five years old, we're broke. Right? And I guess that's one way to put it. I mean, most nights we were sleeping, you know, especially during the winter in the car, because we couldn't afford to pay the heating bill and God no. And I remember one time, our family, we were at the park and I saw my mom. She was picking up these weeds. And she was putting them in this plastic container. And I was wondering, like what are you doing? And three hours later, I got my answer because it was on a dinner table. So it was a very interesting dichotomy that I grew up in, they'll tell you the experience that kind of shifted everything for me. You know, everybody has their origin story, right? Like Peter Parker has the story of the spider biting his hand. And you know, Batman has a story of his parents dying in the alleyway whatnot. And fortunately, that wasn't my experience. But we lived next to the first apartment we lived in, we lived next to let's call it I don't know how many kids watch your show. But let's call it a gentleman's entertainment center for now. And I remember I was six years old, this was still our first year living in America. And it was about 1:30 am in the morning, and I looked out the window, and I'm watching people leave this gentleman's entertainment center. And there was one guy that stuck like that caught that caught my eye, right? He stood out and this guy was stumbling out the door and it doesn't take much to understand that this guy had a really expensive suit on right like even at six years old, like you can tell if something's really expensive something's valuable right? And so you know, he's got a nice watch on really shiny shines on the street light hits it. Really nice to get in a really nice car. I don't remember what exactly the car was, but I do remember an L right as the envelope Aren't you flexes? Right? So he's getting in the car and whatnot. And I see his driveway. And what was really interesting was right after that, I turned 90 degrees to my left, and I see my parents who literally would give the last shirts off their back to help somebody else, you know, I mean, they were just the most god-fearing kind-hearted people. So I turned to my left, and I see my parents sleeping in a twin bed in a room that doubled as their bedroom. Actually not only just doubled, but it was their bedroom. It was our dining room. It was also our kitchen. Wow. And also part of our living room. And my brother and I, we even had a bet we're sleeping on the floor at the time and sleeping bags, because we can afford one right? So the question I asked myself was, well, what if Right? Like, what if that guy who stumbled out of the gentleman's entertainment center? What if he had the same heart that my dad did? And then vice versa? What if people like my dad, had this desire and this passion to help out their fellow man to impact communities? What if he had the skill set of the guy who's stumbling out of the gentleman's entity? Like, what would the world look like? How differently what people's lives look? How differently would the world look? And I'm convinced, and I'm on a mission, right to find out what that looks like. And to create that, right, because it's certainly not happening to its greatest capacity right now. So that was my background. Fast forward, as you said, I was 18 years old, had negative $187.65, in my bank account, and it wasn't that I was broke, it was more that I was farther away from creating that world where people who were wealthy also had the heart for good, right, I was farther away from that mission than when I was six because when you're six, I had zero money when I was 18, I negative, under 80 cents, or 65 cents, my bank account. So that's what got me to start learning about real estate and learning about finance. So probably 1819, that's when I really started learning about finance in general. And then at 20. That's probably when I learned more specifically about real estate investing because it took two years for me to understand that real estate was really kind of the best option there. When it comes to investing.
Billy 07:03
I find it interesting, Daniel, that at that young age, you were able to look and kind of make this connection. You know, I'm sure you thought about this as an adult, that one that was like a pivotal moment for you making that connection and I sees prior coming on to the show, he was speaking, like you're big in the community, you're giving back to students, and you're coaching and I want to get into that. But I can see why you're on this mission. And you're on this path because of how you were raised what you dealt with as a young man and seeing how it was a mom and dad was such a good heart being a good place. But yet, you know, financially not have the means to make that connection. Good for you, man.
Daniel 07:40
Yeah. And for that reason, because when you're a kid, it's just an observation, right? It's just like, well, like your red is red, the sky is blue, the grass is green like it just is literally making an observation. And it seems so simple. But yet it's so interesting. Like, I get flack for saying this. And this is a bit of a controversial statement, I cannot stand the word legacy. Like when people like to use the legacy as their motivation, I can't stand it. Because at the end of the day, unless your name is, you know, Jesus Christ, or Mahatma Gandhi, or, you know, one of these, or even Martin Luther King, 50 100 200 years from now, no one will know who or who we are. Like, it doesn't matter how much money you make, doesn't matter how much you how big you try to make yourself at the end of the day, like, no one's gonna remember our name. You know, like, I have a buddy named Alex, who recently said on another podcast, Life is like a casino, right? As you go in, you play your cards, you get your chips, and you accumulate as much as you possibly can. But instead of cashing out the casino, like you originally, would you actually move your chips all the way back in the middle of a table for everybody else to win. Because that's what happens when you die. All the money that you accumulate, either goes to your benefactors, or it goes to charities as some sort of re-enters the economy, right? So for that reason, that observation I made when I was six years old was like, alright, like, while I'm here, you know, on this earth in a very short span of time, because I mean, every 60 7080 year old that I've talked to throughout the years, they're like, Yeah, you blink, and you go from somebody your age to somebody my age, you know, I'm here for a very short time, like, I might as well try to make this place better, right, as opposed to trying to make money so I can drive cars that I don't really need to drive or live in houses I don't really need to live in. But that makes sense.
Billy 09:16
Hunters said Daniel 100%. I love it. Let's get into you started looking at finance at 18 years old. Who did you study? What got you motivated at 20 years old to get onto this road to financial freedom and creating massive wealth where your the way you're doing?
Daniel 09:31
Yeah, so it's one of the things actually, I wrote I wrote a book like two years ago, two, three years ago, and it's free. That's why I mentioned it, it feels like false charging. I'm like, Alright, maybe I wouldn't mention it. But it's free. So I mentioned the book. So you ever heard the phrase, follow your passion? And the month will come? Yeah. So I'm not the biggest believer in that statement. Because I love the idea of following your curiosity and not your passion. Because at the end of the day, when I was studying finances to answer your question, I was 1819 years old. I was just trying to figure out why my parents and my family grew up broke while everybody else did it. Like that's, that's what I'm ultimately trying to figure out. And that was the question that I was trying to ask. So I would read, listen to anything and everything I could find on finance, you know, I mean, I would go, I would go to the library, I like I would, you know, pull the old-fashioned card. I go on YouTube, I listened to guys like, I mean, it didn't matter who they were right, whether it was Tai Lopez or Grant Cardone, or, you know, Jordan belt, like any of these guys, I was anything I could get my hands on. I will listen to them, right they knew something I didn't clear.
Billy 10:33
I love it. And so what made you decide to get into the real estate world? It's funny, like, how did that happen?
Daniel 10:37
Yeah. So I read an article when I was 17, by Forbes magazine, that says that like 76% of the top 1% made their money by investing in real estate. And not only that, but I'm gonna die. I'm being from Chicago. I'm a diehard Chicago Bulls fan. And I know he didn't have that great of a season. But hey, but our owner, the guy who owned the bulls since like, 1984, right. It's a guy named Jerry Ryan store. And he actually made his money investing in commercial real estate and in the Chicagoland area. So I was like, oh, but like if the owner of the bulls, right, which is like, I'm a diehard fan of, you know, made his money by investing in real estate. And that's how we bought the team. And, you know, the top 1% of people, they made their money through real estate, you know, because we're talking about wealth here, right? Like, that's where I want to be at, I want to be at, you know, that level, and I want to stay the things that whatnot. So I studied a lot of different things in finance. And then I learned actually learned that because real estate, for me, it's actually not the end goal. So last three years, my focus wasn't even on real estate was actually on buying and scaling businesses. But I've learned that real estate is a lot like, so a lot of my martial arts fans will appreciate this, but it's a lot like learning wrestling, you know, so if you're trying to be in the UFC, or trying to be an MMA fighter, learning real estate's like learning wrestling, it's such foundational for everything else that you're going to learn, you know, it's kind of like learning the piano before you learn every other instrument. Because at the end of the day, you know, when you're buying businesses, or when you're really in business, in general, you learn in real estate, such valuable tactics, like how to analyze an income stream, how to assess the risk, you know, how to assess the reward, how to do value, add how to increase ancillary income, you learn so many different things, how to read a market, you learn so many of these fundamental things in the world of real estate. And if you learn, you can apply it to everybody, everything else. So I had a mentor of mine that told me that, you know, very early on in my career, so that's why I was like, Alright, I'm going to be really successful in real estate first, because I know that's going to set the foundation for me in any and every other industry. I love it.
Billy 12:32
So your focus has been what buy and hold single families, and multi-families to talk to us about that.
Daniel 12:38
Yeah, so it's been buying hold, because, at the end of the day, that's the vision that I have for my life, right. I mean, we talked about having a vision and a mission for our businesses. And yet, we never have a vision and a mission for our personal life, which I think is actually even more important, because it's the personal life that drives the business decisions. So my schpeel my philosophy is I do something that the 10-year-old, older version of me is going to thank me for. Yeah, I very seldom sell a business, because I don't know, I feel like if I sell it, and I walk away with a bunch of money, you know, it's like the ability to impact people, whether it's the employees with tenants, you know, it minimizes, right. So that's, that's my philosophy, I do buy and hold real estate nowadays, you know, for we're gonna get into like what the markets doing. Nowadays, I actually focus more on intrinsic value, C to be long-term fixed rate seller financing deals, that's what I'm focusing on today.
Billy 13:29
So I want to give so now I want to get into the teaching part, I got your background, and it was I went up to this point, I want to start giving some real meat to listeners like the how to use the tools, the tips, the tricks, system secrets, what do you do specifically, seller financing, walk us through deals, I want to get some coaching in for that.
Daniel 13:49
I love it. And that's actually one of the questions I get a lot is like Daniel, how do I get seller financing? How do I convince the seller to do seller financing with me? So first and foremost, I'm not a great salesperson, I think I'm a good salesperson, but I wouldn't classify myself as a great salesperson. What I am really, really good at though is creating a situation where people want to buy from me, that's what I'm really, really good at. So let me show you how that applies to seller financing. So by the way, when I was 20 years old, I had a conversation with a mortgage lender or a commercial lender. And he literally laughed in my face, right? Because I told him that I wanted to get a loan to buy an apartment building and I told him about my DTI and my, my liquidity situation. He's like, Yeah, kid, you're not getting it. So I actually had to do seller financing. So I reverse engineered I didn't know I was doing this at the time, but you got you can actually and your listeners can actually use this today. So I asked myself, okay, how do I create a win-win scenario for myself and the seller if we're doing seller financing, because I knew with research, I knew that seller financing had a bit of a negative connotation with a lot of sellers out there. You know, they weren't the biggest fans of it. You know, they're very hesitant as I found so I researched for about two weeks all the benefits that seller financing has for the seller, and I came up with the Top three. So one of them was tax difference, potential tax difference. Number two was making money as the bank. You know, at the end of the day, the banks are the richest entities in the world. So I knew that had some pull. And then number three is the continuation of passive income. So I wrote those three things down. And at the end of that I wrote like, 1520, right, and a lot of them, like, half of them were a bit of a stretch, but I wrote them down regardless. So spent two weeks doing that. And then I asked myself, who are the people that are going to resonate the most with that message? Because one of the things I don't think people talk about is, you know, a lot of people know how to do deals, but they don't really know how to build a business. Because if you're talking about real estate, investing, wealth, you know, unstoppable real estate investing, well, you know, you got to build a business, you can't just continue to do deals, you'll get rich doing that, but you won't be wealthy. And there's a difference between rich and wealthy. So I spent about another week deciding who resonates with that product. Because we're talking building a business, we got to have a product, right, we're always selling a product. And most people don't know what that is, even with raising capital. Most people struggle with raising capital because they don't know what their product is. They don't know what they're selling. So I spend another week trying to decide, okay, who resonates the most with that message. And all this time, I'm talking to peers, I'm talking to, you know, mentors, I'm constantly getting feedback as well. What do the top, you know, businesses in the world? What do they do? Right? They get feedback on their product before they launch it onto the market. Right? And it's, it's marketing one on one, right? And yeah, we don't do that in real estate. Funny, right? So I spent another week, you know, getting feedback gets great. And after a week, I made a decision that the people who resonated most with those benefits were seasoned landlords, it's called, let's call them that, right? So older landlords, that's what I'm trying to say, is 2020. You got to be worried about who you offend nowadays.
Billy 16:46
So older landlords, don't offend anybody, anytime, anyplace.
Daniel 16:49
That's right. I tell people, Look, I won't offend. But I will be honest, right? Like, I'll be me 100% of the time, I'll be honest, regardless of what anybody else thinks. So it was all their landlords, seasoned landlords. So then I started thinking to myself, Okay, how do I find these guys? So I know who my target demographic is, I know who the people that are gonna resonate the most with my messages right. Now? How do I find it? Right? And it certainly wasn't the Zelos. It wasn't you know, it wasn't all these things that people use nowadays. So I got it down to three things I spent, as funny as it sounds, I spent a bit of time talking to see some landlords. But hey, hi, how do I find you? Or like, what are ways that you're putting yourself out there? And you know, how do I get in touch with you phone them? So I came up with three ways at the end of the day. So number one was newspaper ads. So I'll look through the newspaper once a week and I would see them for rent ads that were in the newspapers because I started asking myself what was the primary ways of advertising and marketing properties 2030 years ago because that's probably when they were in the prime of you know, their professional careers. So newspaper ads and also driving around and calling for rent signs that were out. So you know, not the for sale signs, but the For Rent signs. And I will call those numbers, because that meant that this was an older landlord, who most likely still manages the building and probably didn't want to manage the building for long, right. So I found myself a motivated seller. And last but not least, this was my number one way of finding deals, finding seller financing deals, specifically, was building relationships with property managers who have been in that area for 2025 plus years, I wanted to meet the 5560-year-old landlords, and I want to get, you know, embedded with their buddies. That's what I want it. Right. So I created a little arrangement where if they have a client that wants to sell their building, well, for the property manager, that's not great, because that means they lose the management account, right? They lose the number of units they are managing. So I will tell the property manager, hey, I'll solve your problem. Have them call me first before they put on the MLS. And if I buy it, I'll keep you as a property manager. That way, you're virtually guaranteeing that you never lose your business.
Billy 18:56
I love it. So how many units were you able to pick up using those strategies?
Daniel 19:01
So using that strategy alone, I got 54 units in one year.
Billy 19:05
64 units in one year all seller finance? Yeah. So take us through the script when you're talking to an investor. I wanted I want to train the people that are listening.
Daniel 19:15
Yeah. So obviously, that's the setup, right? So I always tell people, like you got to have a setup. It's like boxing, you can't just come in with a haymaker. Right, like you got to get through a couple of jabs first, right? So that's the job. That's the setup so that now I know that these are the people who want my product. Okay, now the sales process becomes 90% easier because I don't have to convince somebody and that's what most people do in real estate is like, it just blows my mind whether you're raising capital, whether you're negotiating like 90% of people are trying to sell something to someone that they don't want. They don't want that product that you have, in this case, I know people did.
Billy 19:49
So you went out you identified your avatar, you figured out who your avatar is you cultivated the things that are going to resonate with that avatar, which is the tax deferral acting like a bank, passive income, and sure that you just went right in. It was an easier sell because these landlords are already used to receiving money on a monthly basis, right? They're not exactly a regular homeowner who's selling their house, we're like, I don't get the seller financing thing. I'm going to be on the hook for the mortgage if you do subject to an investor kind of understands tax benefits, and cash flow. I mean, those are the two biggest things.
Daniel 20:20
Yeah, no, that's exactly right. And you know, these guys, you know, they've been receiving a check in the mail for 30 plus years. So, you know, for a lot of them, they were kind of hesitant to take a lump sum of cash, which I totally understand, right? Like, if you have had an income stream for 30 years, why would you want it to go away? But the virtual sell the value was, hey, how would you like to continue that income stream without having to manage the property without having to wake up at two 3 am? And, you know, fix a toilet or whatever you have to do?
Billy 20:44
I'm curious, I have a question for you. So regarding these old-timers, in your experience, you found that a lot of these guys had property managers, the single-family owners had property managers that were managing their properties, did they really manage themselves.
Daniel 20:57
They're managing it themselves? And, you know, and these weren't even single-family homes, you know, there they were, man, and let me I did, I bought a portfolio, single-family, I bought a couple of them, but for the most part, these guys, you know, they are owning eight units, 16 units, 12 units, you know, the 24 units, like these are the landlords that I was doing these type of deals with. So that was a big value, right? Because I mean, you know, you're talking about Mr. And Mrs. Jones, who's running out, you know, two or three houses, right? Because Johnny went off to college, right? That's one avatar, but the other avatars will Hey, you know, I've owned 60 units, these 60 units for 20 years, you know, 25 years? That was a completely different, you know, Avatar, so what I would do when I was sitting down with them is I wouldn't, so this is the this is my mentality going into each and every negotiation, or you're meeting with an investor or whatnot. A lot of people getting nervous, right? So I've been teaching and coaching real estate, investors, and entrepreneurs for a good amount of time. I know, I'm 27. But I've been doing it now for almost a third of my life, right? So one of the things that I hear constantly is people getting nervous, right when they talk to a seller. And I'm like, Well, why are you nervous? Right? And 90% of the time people say, Well, I don't know what to say. Right? Like if I had a script, that's why people everybody loves scripts, everybody loves outlines because, at the end of the day, they just want to know what to say that's going to get them the result. I'm not a big believer in scripts, I hate that you can talk to my clients. They'll say Daniel does not like scrip because I think it actually robs people of being their authentic selves when it comes to entrepreneurship, which I believe is their greatest weapon. But I talk to people and get nervous as well, Daniel, I don't know what to say. So well, that's your problem. That's why you're nervous. Right? Because when I walk into a negotiation with a seller, I'm not actually more concerned about what I say I'm more concerned about how well I listen. Because really, at the end of the day, if you're if you want to be a great negotiator, a good salesperson, just be a great listener, like people tell you exactly what they want. Yeah, all you have to do is just regurgitate that information back to them, or monetize the value.
Billy 22:49
Or they might not tell you exactly what they want. But you'll identify a potential problem or a major problem that you can then come in and solve.
Daniel 22:57
No, that's exactly right. You know, so for me, I care so much about the psychographics of the seller of the investor, right. Like in business, you talk about demographics and geographics. For me, I care about psychographics, I want to know at the end of the day how people think and what drives them to make a decision. So even when somebody says right, like, like, for example, if an investor tells me like, oh, Daniel, like, are you putting any of this money in your deal? Like, I didn't know, they don't really care about that. They don't really care whether or not I put money in a deal. What they're really asking is Daniel, can I trust you? Like, do you have any skin in the game? And so it's funny because like, even when I teach people like raising capital, and people throw out that objection, I tell people, like well meet it head-on be authentic, right? Just literally just say like, Hey, John, is it possible that you're asking that question? Because you're more worried about trusting this deal trusting me and me having skin in the game? Is that correct? Right. So even with sellers, you know, I try to get to the real reason. So like, everybody teaches like, oh, the first question you should be asking is, you know, why are you selling? Right? Like, do you go to any Bootcamp or seminars, Are you by any rules? Investing course, like, that's the first question a lot of people teach others and their students to ask is, why are you selling? I asked that question three times throughout our conversations because I know for a fact that 90% of landlords won't give me the real answer the first time. I know that for a fact. Yeah. As a matter of fact, I use something called social jujitsu. Right. So I also talked about this in my book and expand but I'll talk about it briefly here. So if you think about the art of what jujitsu is like, especially Brazilian Jujitsu, it was actually invented by a guy who was pretty much sick and tired of bigger stronger people beating him upright? And you know, I'm only five foot nine 155 pounds right so I practice martial arts my whole life but you know, I was like, Oh man, like I'm having a spar against these guys that are you know, like six foot one at you know.
Billy 24:39
Let me ask you a quick question. When it's really windy out you have to walk with cement in your shoes?
Daniel 24:44
You know, I live in Chicago, I suppose the Windy City. So, fortunately, I've been able to bulk up, you know, throughout the years, believe it or not, I used to be skinnier. I used to wait way less. Not when I had a stomach issue at the time, but you know, but yeah, it's I used to, I used to Hey, like had the backpack on? It just made me feel secure. You see an animal walking by the girl? Well, at least he's holding an apple, you know? But okay can negotiate it. So I got really good at listening. And the whole idea of social jujitsu is you're using as just like regular jujitsu in martial arts, right? Like you're using the other person's strength and weighing against that. Yeah. Right. So if you think about, you know, some of the most common interactions that will happen between a buyer and a seller, right? Typically, the posture of the seller 90% of the time, is, you got to buy this building this thing is a cash cow, they try to prop up the value of the asset, right? All the time, right? So it's like, oh, like, this is not, you know, the tenants. They're not drug users, they're pharmaceuticals, right? Like, they're, you know, they try to turn everything into a positive, right, like, What do you mean, that does not mold? That's, you know, historical value, right. Like, they'll try to make up anything and everything right. And brokers will do, right. And, you know, the thing that's happening right now is all like rents are about to go up. By the way, my opinion is based on what I'm seeing in terms of market data and market use. And by analysis. Yes, rent is super high. But I think in about two, or three years, it won't be as high as what people think. And I'm worried because a lot of syndicators, a lot of apartment complex to buyers are predicting, their entire business plan off rent, that's projected to be higher. I don't think the 10 pool is going to be that strong, as strong as they think. Anyway. So anyway, so social jujitsu. So one of the most common things that people would ask me was, well, you know, Daniel, this is a cash cow. Why wouldn't you want to buy this? And my social jujitsu tactic as well, you know, Billy, or what? or John or one of the sellers if you don't mind me asking you if it's such a cash cow, I know you said this earlier. But why are you really selling this case, if it's such a cash cow, my posture I tell my students all the time is when you're going into a negotiation with a seller, you have to be a frequent detective. I mean, the focus for you has to be gathering as much information as you possibly can. You don't even negotiate the first 2030 minutes, in my opinion, when you first walk in, you're just trying to gather as much information as you possibly can to then provide something of value to that other individual. So my posture, right, whatever, they tell me that this is a cash cow, or anytime they mentioned something positive about the property, right? I'm going to say about two or three times in that whole interaction, or I'm not going to do it every single time. But you know, during that 2030 minutes, I'm going to ask two or three times, Well, John, you know, if you don't mind me asking if this is such a cash cow, I know initially, you said this, but you know, why are you selling the building, right? And then you kind of get the real answers as to why they're doing it.
Billy 27:34
So let me ask you this, I want to just focus in a little bit and walk me through your at the numbers stage, this guy comes down, he has his numbers, he has a property, you get your cash flow statement, you know, what your income is, you know, what your expenses are? What's your pitch to go through? And actually, try to get them to understand seller financing? Take us through that? Yes. So in like, three minutes or less, I really want to get to the punches of what Yeah,
Daniel 27:57
for sure. So after they tell me everything that they're wanting us to devalue, right, like, what's the psychographics, I sit down at a table, and I get a blank sheet of paper out and I draw a line in the middle? And I say, Okay, I'm gonna give you two options. So number one is a cash offer. So it's a million that let's say they want a million dollars for the property. So says, this is a million dollars right here, I'm gonna give it to cash. And I asked a series of questions that make them rethink what they think they want. So number one I asked is, have you talked to your CPA about your tax implications, you know, about the sale? Because remember, number one, number one benefit? Tax?
Billy 28:33
Tax. Right, right. So the thing with the tax implication we're gonna have to pay?
Daniel 28:35
That's exactly right. You know, so, have you talked to your CPA, but you haven't. Okay, great. So based on my experiences, with talking to individuals, have you been in your situation? My estimation is you're gonna pay X amount of taxes. Right? Okay. Do you currently have the property paid off? Do you currently have a loan? You don't? Okay, great. Fantastic, right. Cool. Right, and click that off, and the closing costs are, etc. And then there's a number, right, there's a number at the bottom that's a little bit lower than what they expected. Right? So in my experience, and you'll, you'll hear in the book, my experience is most landlords, if they start at a million, they'll end up at 500 to 600,000. Right after taxes, after closing costs etc, etc., etc. Right. And then I draw, you know, obviously, the other half of the line right on the other side of blindness, okay, based on what I'm hearing, I'm only mentioning this offer, because I've because of what I've heard you say, all right, and of course, I know like I That's why I picked the person, right? Yeah. So on the other hand, I'll still give you a million dollars, right? And by the way, with the first one with a cash offer, I'm not guaranteeing you, that I'll give you a million dollars. Right. But based on what I'm seeing right now, with this second option, I will give you a million dollars that I can tell you, right and I break down okay? So you know this option, right? And by the way, like a word-wise, I never say the words owner financing. I never say the word seller financing, right? And I tell them well in this situation, you can actually be my bank. So from what I know banks are the richest entities in the world and With a second offer, you would have the opportunity to be my bank. And I would give you these terms that would give you 10%, down 4% interest 25-year amortization is what I would do. And you would actually make 4% on your money every single year. And so I will run through the amortization table with them and whatnot. And if you go to a mortgage calculator, so I use this app called Carl's mortgage calculator, I wrote a document everyone downloaded. By the way, I don't have an affiliate agreement with them or anything like that, like it's such a great app. It's so simple. They use it all the time. Right? So I literally have it open on my phone right now. So I'm gonna put in $1 million in value.
Billy 30:33
So what was the address? Again? It's Carl's
Daniel 30:35
Yeah, Carl's mortgage calculator, K, RL apostrophe s mortgage calculator. Alright, so I put in the terms, a million dollars purchase price, 10%, down payment, 4%, interest, and a 25-year amortization, which is actually strange, because I literally have a student doing a 16-unit deal right now with those terms. And then you go to some, which is at the end, and it tells you how much total you're paying throughout the course of those 30 years. And it's actually 1.4 to $5 million. So I write 1.4 to $5 million at the bottom of the sheet. And I say, Okay, so without any further due diligence without any diving into the details, and by the way, I'm telling you, even with the second option, you will have to pay taxes, but not as much as this like very minimal compared to what you're paying the first option because you still do right. But long story short, let's say that it's 1.2 million, right? Because of everything that we're not talking about here, I'll give you the benefit of doubt, let's move from 1.4 to 5 million to 1.2 billion. So in this case scenario, your best case is this and to the left is 600,000. Right over here on the right is 1.2 million. In your opinion, which option is for me, I don't ever ask them what they want. Because I'm making too big of a jump. Whatever. I asked them to sit, I want to have a small jump. It's like boiling the frog, right? Like, I want to have the small stair stairs, cases that eventually get them to the yes, that I eventually want at the end. So I tell them based on what you're seeing right now, which option would you like to explore further? That's the exact question I asked them. I'm not asking what do you want to do? I'm not asking that question. Which option? Would you like to explore further? In that case scenario, the easy option is Option B. Right? So after that, you know, typically I tell him, Okay, here's what I want you to do, I want you to verify with your tax professional, on the taxes you're going to pay, which by the way, nine times out of 10, it's a lot, especially if they're an older landlord, they owned the property for more than 27 and a half years, right, there's all that depreciation recapture that they're gonna have to face in closing, not to mention that a lot of times those guys are treated at ordinary income at the highest tax rate. Because you're talking about even if you sell property cash, you're you're paying two different taxes, you're paying ordinary income, and you're also paying capital gains. Yeah, so a lot of times those guys, their tax bill is pretty significant. Like it's way more than what they're actually wanting, you know. So, at that point, I tell, hey, verify the taxes you have to pay with your CPA, which most of the time, right most of the time, it actually enhances my argument enhances my offer. Yeah, they come back and like, wow, this kid wasn't kidding. Right? Like he wasn't lying. You know, he was actually telling the truth. So and by the way, I tell them never to mention seller financing to their CPA, because most attorneys and CPAs and my experience will shoot, you actually shoot down the idea. And then you have to do damage control afterward.
Billy 33:19
So how do you get them to address their CPA? You just tell them to ask them what their tax is if it'd be just on selling the property for cash.
Daniel 33:26
That's it. So I tell them to do me a favor, right? Like John, do me a favor, don't buy it and nine times out of 10. I tell them the email that right? Because a lot of times when you get an email, right, you're not going to give a long, illustrious answer. You're not gonna ask to follow-up questions. You're just going to answer the question that the person emailed you, right, it's a lot of them could be yes or no, because you're trying to answer 1000 other emails or texts, you know, so I ask them like, Hey, do me a favor, email your CPA or your tax professional, and ask them how much you owe in taxes. If you were to sell 1475 Greenstreet.
Billy 33:57
Right, and just look at tips here, bro, you honestly have a couple of good tips here towards the end. I like it.
Daniel 34:01
Yeah, awesome stuff. Yeah. And so I thought we just get that number. Right. And let's, let's get back on the phone. And I always do a cold band fan, right, you book a meeting from a meeting? Is what you do. Right? So I booked a meeting from that meeting. Uh, hey, let's meet up in three days. Let's see what number you got from your CPA. And let's continue to see if this is a more this is a viable option at the end of the day like I don't want to do seller financing unless it does genuinely help the person. Right? Like I do genuinely want to create Win-Win scenarios. You know, for the other individuals.
Billy 34:30
You wrote. This was solid information, by the way. Thank you. Daniel, you wrote in your the letter when we had you come on, you said many lack capital as adversity, I can share I raised millions of dollars at 21. Is this your strategy for raising money or is it a different strategy?
Daniel 34:46
No, it's a different strategy.
Billy 34:48
So I slept shift gears. I want to go ahead. Let's go. Let's go. I don't want to spend any more than like 10 more minutes and I want to wrap up. So let's talk about how you raise money specifically because you're very good at raising money. As a young man, I would assume that you had, you know, the potential of you're a young guy. So the credibility probably was not there. So let's talk about how to overcome that. And then how do you go about raising the money that you raise?
Daniel 35:13
Yeah, no, fantastic. So I was struggling to raise capital for about three years, right. But when I was 21, everything changed. So I don't mean to get too biblical on you, right? It's okay, if I share the story course, sure. Right. So it happens to be in the Bible. There's no altar call or anything like that, right? I'm not going to ask people to buy my prayer stone or, you know, so I remember I was 21. I was extremely frustrated because, by that point, I was studying finance and real estate for a good amount of years. But yeah, I was continuing to make no money. It was this story in the Bible, where Jesus and his disciples are walking into the Passover feast. And all of sudden, Jesus has this realization, that he's the most powerful being in the universe, right? As a matter in Scripture, the word for word scripture says that Jesus knew at that time that, you know, the father had put everything under his authority, and that he was from the Father and then returning to the Father. What was really interesting is what he does after that, right, I consider Jesus to be the greatest leader to ever walk the Earth. But what Jesus does after that is he chooses to do the thing that was actually reserved for the lowest ranking servant, which is the wash of feet. So he begins to wash the feet of his disciples and their feet right away. It's not like it was now where we have socks and shoes. It was stinky, very nasty, right? Like they're stepping in all kinds of stuff throughout the day. So at the height of his power, he chose to do the most humbling thing. And at that point, God used that story when I was 21. To demonstrate to me like Daniel, you're a smart kid, you have a lot of great ways of finding out, you know, methods to generate whatever. But the problem is, in every single room you walk out of the people's feet are still dirty. And so that's shifted the philosophy of my business, right? And that's why even with seller financing, I won't do it unless it does genuinely serve them.
Billy 36:50
Right. So you're walking around with like, a wash bucket now and a couple of washcloths.
Daniel 36:53
So metaphorically, yes. Yeah, absolutely. Metaphorically. I'm, I'm the janitor van. Well, yeah, that's right. So. So how are we Yes, the connection was okay, I got to focus on helping other people, and I got to bring value like a servant. So what I did, in lieu of that story, the action stuff that follow that story was, so I belong to a couple of different real estate investing networking events at the time, they were meeting weekly. And I probably saw between 500 to 600 people on a weekly basis that was all real estate investors interested in real estate. So what I did is I grabbed a notepad, and I walked around, and I asked almost every single one of those people, what are your biggest obstacles that you currently have in your business? Right? What's your greatest problem you have in real estate, I found that a lot of people lack capital, like 60% of people are like, oh, I need capital deals. However, 5% of those people, five to 10% of those people said something along the lines of You know what, Daniel, I'm an orthopedic surgeon, I make $750,000 a year, my CPAs telling me, I desperately need to get involved with some real estate for tax benefits, and long term gain. But I don't have the time, I don't have the money. I have the money. But I don't have the time, I don't have the expertise, or the team to actually implement all these things and buy real estate like I don't I just don't have that bandwidth. So for me, that was just an easy problem to solve. Right? I was like, Oh, hey, you know, I've got people that who have a little bit more track record than I do, would it be a valley, but I am really smart with analyzing deals like I'm book smart, I just don't have to happen to have the experience. So would it be of any value to you, if I rounded up all these people that I talked to that I got through email, just the people that want capital? And then I vetted those deals? And I sent them over to you? Would that be any value? And they're like, Well, yeah, so I started connecting people, without expecting anything in return. And one day a guy called me was like, hey, I really appreciate you setting me up with John who put $300,000 towards my deal. Do you want 20% of it? And as Yeah, sure, absolutely. And so now I started learning as an actual partner. And that's how I built my track record. And then I started going off and doing my own deals. And so I had something to show. But even if you don't have a track record, I tell even my students, like when you're building relationships with investors, because at the end of the day, you're not raising capital, you're building relationships with people who have capital, which, right, the same thing with real estate, the sellers, I get told me all the time, never look for properties, look for people, if you do that, your entire business will change. So even my clients that try to raise capital with no track record, I tell them like Look, don't just don't bring it up. Like, don't bring up the fact that you don't have a track record. Like what but however, like have a really kick-ass product. And by when I say product, I see the breakdown of what product means is you your part of the product as an operator of the real estate business, you are part of the product, you're the most important part of the product, actually. Number two, there's a blueprint and a strategy. That's part of the product. At the end of the day, when people put money into something, they're putting money in you, but they're also putting money into a strategy and a blueprint. And last but not least, they're putting money into an asset, right? So the unique deal that you're bringing them, which by the way, that's the least important part. Even if you don't have a deal, you can still raise capital, you can still build relationships with individuals, because you're selling them on you and a strategy and a hypothetical asset Write like an acid that, like I told investors throughout the years all the time, like, look, I don't have a deal right now. But here's what we're looking for. Here's, here's an example deal of what we're looking at. Right? So if I bring you a deal, it's gonna look a lot like this, right, so that people actually own it, it's tangible. There's tangibility there, there's something that I know is associated with what I'm investing into. So with everybody raising capital, if you find out what your product is those three things, and at the same time you identify who your ideal client is like, you know, your avatar, you know, who you're targeting, you're gonna have a much easier time raising capital than you are now. Most people struggle because they don't know what those two things are. They don't know what their product is. And they don't know who their ideal clients are. So even like what I did with a seller, I did the same thing with investors and found out that doctors and physicians were the ideal people to invest with me, because their values aligned with mine, my business strategy, and who I was, all the things that I valued in real estate, the value in real estate as well. And then I had in this my last thing, I had something that was unstoppable like I made it. I use the word unstoppable for real.
Billy 41:04
Yeah, you have me, brother. That's right. That's right.
Daniel 41:06
I have Billy in my corner, right. So I had something that was unstoppable, which was what I call the irresistible offer. So this is the one thing that gets people to want to work with you more than anybody else. And my irresistible offer to my doctors was, well, first and foremost, what are they valuing? So I actually did the same thing I did with sellers, I did a survey, I asked three to four doctors at a time, like, hey, what do you really value in real estate? Why are you getting into real estate? What's most important to you? And this answer kept coming up over and over and over again, which was tax benefits, right? They're like, well, like Daniel, I don't necessarily need the cash flow, like, don't get me wrong, I want the deal to have cash flow. But you know, I make $750,000 Here, I make half a million dollars a year, I don't necessarily need the cash flow, but I do want the depreciation and I do want equity growth, right, like the long-term equity growth. So my irresistible offer was I would give my investors 100% Of all the depreciation that was my irresistible offer. So even as like taking on equity, like LPs, right, limited partners, they would have 50% 60%, right? I would actually give a time 40% To my LPs, and the GP would take 60%. And I was beating outright like I was beating out other guys who are giving their LPs 60% Because of my irresistible offer, which was That's exactly right, I will give him 100% depreciation because I got I listened to what they want it I just gave it to All right. So I think you if you want to be a master of raising capital, have a really clear understanding of what your product is, have a really clear understanding of who your ideal client is. And then use that information to formulate your irresistible offer the diagnosing things
Billy 42:44
Danielewski, finding out who your avatar is, is key, because the message that everybody most people go out with is cash flow, passive income, cash flow, and that's going to serve a certain amount of people. What if you're having that message to a high net worth individual or high-income individual, they don't give a shit about cash flow, they care about the appreciation and saving as much money as possible if the tax returns, and of course, the equity build up over time,
Daniel 43:10
Which by the way, even if you talk to the investors that have $10 million-plus like the big whales, right, and I'm not talking about family offices, I'm not talking about institutions with 10 million-plus, I'm talking about with an individual with 10 million-plus, their main priority isn’t to return its risk, right? Like, if you really want to know like that. That's what they really want to hear about. Like they could care less about returns, they can go to their stockbroker or their or whatever, and they'll get a 9% return 12% return, but what they really care about his risk,
Billy 43:36
And to say it differently is a risk. It's really capital preservation. That's the number one thing that the high net worth individuals in these family offices care about. And they'll take a 4% 5% return, as long as their initial capital in is safe and secure capital preservation with that type of Avatar is key.
Daniel 43:56
That's exactly right. And that's what kind of leads into like really understand the psychographics of your ideal client. Like what do they care about? What do they think? How do they think what drives them to make decisions? Like, for me, that's like, that's what I want to know. That's what I'm obsessed with.
Billy 44:08
I gotta tell you, man, it took you three years to get yourself going. But just listening and I got to know you over this 45 minutes, you really take your time in understanding like you ask a shit ton of questions, taking you time to get yourself going. But once you get on that path, because of the information, the data that you collected, and how you went about you were very you had a lot of intent with the way you put yourself together everything across the board from childhood to what you do. And today there's a lot of intent with what you're doing. And I have a lot of respect for you, bro. You're doing really, really well Daniel congratulate Thank you.
Daniel 44:41
I appreciate that. Yeah, that's one of the things I tell people all the time. It's like everyone's looking for a shortcut. I guarantee you some people are listening to this podcast right now hoping to get that one thing that's gonna like oh my god is gonna change and maybe you didn't maybe you did it right. But there's anything that you could take away was it was intentionality for me. Yeah, like That's key is nothing can be an accident when it comes to your business. You know, like I was watching this last dance right with Michael, Michael Jordan documentary, right? With the bulls. And you know, Man, that guy, you know, everything was the intention, like everything was on purpose everything was intentional from his workout to you know, the people who he chose to be around him, you know. And I mean, like every step and every dribble was was had a purpose. No. And that's the same thing we should do with our business because at the end of the day, you know, business sports are all the same. There are levels to this stuff, right? Like there are levels to this thing in real estate, investing in wealth creation and being unstoppable. There are levels to it. All right. And for me, like ever since I was young, you know, ever since I started my business, like I had no interest in doing things at the lowest level, or even a mid-level, even though the fundamental things that I was learning, like the equivalent of learning how to dribble and basketball, dribble a basketball, I wanted to do it at the highest level. And I think that's for me, it was probably it's probably my, my, the last nugget I'll share, but it's like, I remember, I had the pleasure of speaking with a pro athlete. And I won't mention who this person is, because I don't want to come across as the guy whose name drops. But this ended I asked him like, hey, what separates you, you know, from the guys who played in college who are the same size, as fast, as smart as you are? What separates you from them? And he told me, You're the reason why I reached the highest level of my sport, was because even the little things like the fundamentals, I did it, I tried to do it at the highest level. You know, as I asked myself, man, how does the how would the goat right the greatest? Like, how would a goat do this? Like, even if it was washing my hands or you know, brushing my teeth or putting my shoes on or tying my shoes, you know, or even just, you know, stretching or running a simple 100 100 yard? What would the highest level what does look like? Right? What does that highest level look like for me? And so you know, that that really struck home with me because even for you guys that are just starting out in real estate, even if you're learning what a cap rate is, right? Like do it at the highest level, you know, try to do it as okay, what would somebody what would a veteran How would a veteran approach this? You know, if you can do that, man, you'd be surprised at what that the only doing that for three years would bring you.
Billy 47:12
Daniel, this was very informative. Very good. You're a good speaker, you have a lot of knowledge, a lot of drive, and you are living with intent brother, and really appreciate you, dude, congratulations, everything if people want to get in touch with you, how do they get in touch with you?
Daniel 47:25
Yeah, so I love people, man. So you know, this is a little weird, but I'll actually give out my personal email address. So you know, people will even just want even if they want to, they want to say hi, they don't have a question or they don't have anything they want. You know, my email is Daniel at the clock. brothers.com. So it's just D A N I E L and then the Kwak brothers. And like I said if people just want to say hi, they have a question I'd be more than happy to talk.
Billy 47:49
Awesome, bro. Thank you so much for coming on. Stay on. I'm gonna end this we'll talk right after.
Daniel 47:54
Okay, sounds good. Thanks.
Billy 47:57
Thank you so much for listening to today's episode of unstoppable real estate investing wealth. My mission is to give you my listeners the blueprint for success, the insider secrets for starting, growing, and scaling your real estate investing business so you could experience and live the unstoppable lifestyle. I've made it simple for you to catapult yourself to success. Go to billy'ssecrets.com at B I L L Ysecrets.com. There you will find every single tool, tip, trick strategy system, and secretly used to make millions of dollars as a real estate person. Everything my team uses and my guest uses all in one place for you to tap into the toolkit to start, grow and scale your real estate investment business. I really hope you implement what you're learning. I hope you utilize these tools, tips, tricks, strategies, and secrets. And I hope to see you in the next episode. God bless bye.