Let's go ahead and jump into it with today's guest. You are in for a real treat as we bring in Paul Thompson, who is the owner and CEO of Real Estate 101. And folks, if this is the first podcast that you've listened to with American IRA, or whether it is the 50th that you've joined us here in the IRA Cafe, you are in luck. You're going to learn from Paul, who I met just over a year ago at a financial growth conference called Rubecon in St. Louis. And so it is so nice to reconnect with you. Paul, how you doing man?

Fantastic. I'm really excited to have this chat.

All right, fantastic. Well, we are. We're glad that you could spend a few minutes with us today. And for, for those of you who haven't been backstage with us, we've been fighting with mics and headsets and everything else. And so as good as we are in our given professions right now, you know, technology will humble you really quick. So thanks for your patience, Paul.

And we press on. We press on. The show must go on, right?

Exactly. What's been going on with you for the past year?

Well, it's a good question. I've been adjusting to the marketplace and Right now the marketplace is a very different place than it was a year ago. So maybe we can dive into that a little bit.

Any new acquisitions you or your team have made in the past 12 months?

Yeah, I've been involved in several deals. We're under contract on a 12 unit multifamily property and I'm currently looking at a office space in Lexington, Kentucky that is very promising.

Fantastic. Now, you're, you're based in Little Rock, Arkansas, right?

Yes, I live in Little Rock. I have investments in the Little Rock for sure, but I also do commercial investments in the Southeast, the Sun Belt, so Texas, across the south and as high as Ohio.

Okay, gotcha, gotcha. You know, I introduced you here earlier as the owner and CEO of Real Estate 101. You haven't always been your own boss though, have you?

No, I haven't. So I spent 17 years in the corporate world. You know, I was raised in a pretty modest family. My dad was a Baptist preacher, my mom was an Avon lady, and I was the first person in my family to go to like a secondary or post secondary college education. And when I got out, my goal was to like not be broke. You know, I was like. And I didn't really know what to do with my life. And at the age of 22, I had gotten an engineering degree and I was starting to make, you know, money.

More money than my parents had made in their lives combined in any one year. And so I was faced with a good opportunity in that I was making good income. But I had lost my purpose because my whole purpose was to get through college and not be broken. And so I spent a long time looking for kind of like what the next mountain to climb was. And so what I did is end up going into the corporate world and kind of climbing the corporate ladder. And 15 years into the 17 year process, I realized my ladder was against the wrong wall. And I'd been hoping and wishing and dreaming to one day be my own boss, but I never did anything about it. Right.

And so about 15 years into it, I kind of had enough. And I wanted a way to control my own destiny and build wealth and control my own time, more importantly. And what we call 3x freedom time, location and financial freedom. And the challenge I faced that I didn't have a vehicle to do that with. I didn't know I didn't have an amazing business idea. And so real estate kind of landed as the thing to do, which I kind of have recently or I discovered was the kind of the final frontier for Average people to build wealth without having an amazing new business idea. This is a very simple business. All we're doing is renting rectangles, right? It's a very modest, simple business, but there's a lot of it and a lot of opportunity.

When you were in the W2 world, okay, you're, you're working for somebody else. You're having these thoughts and, and I want to hear really, exactly, you know, maybe how old you were. You don't have to tell me what the income level was, but I think you know where one of my last questions will be coming. And it's not going to be about me or you. It's going to be about the person who's going to be listening to this in a little bit. So, folks, hang on, because you're going to be able to really apply this directly to yourselves here shortly. But, you know, 17 years, corporate world. Don't know if you had the goat.

Well, you didn't have the golden handcuffs probably at that age, but handcuffed enough. You said you were making some money but lost the, lost the purpose. Were you, were you dabbling in any real estate on the side when you were at the W2?

I just didn't know the angle. Like, you know, and so seven years later, I finally got up enough chutzpah to actually start buying properties. And I started very modestly buying a $30,000 property and putting $10,000 repairs into it. And it rented for like 650 or something. It was a very modest investment, but that was my gateway drug. And then from there, I didn't really dabble. I went all in. I was doing the brrr method where I would buy a property and rehab it, rent it, and then refi it.

And I did that. I bought one single family property every month on average for the next 24 months. So I built a portfolio of single family properties pretty quickly by a lot of people's standards. The problem I came across was I just built myself another job by doing that. And I realized later on That I could buy multifamily properties and get the same benefit in one transaction. And that's when I kind of made the switch to commercial.

Was there someone that was the spark for you that helped you get, what at least helped you have the aha moment was a certain meeting that you went to. What, what was it that, you know, you were still working at the job, but what was it that, you know, somebody said, hey, you can do this because you still got back going.

Yeah, yeah. So I'll answer that two different ways. So I didn't have, basically I had a jerk of a boss. And that was my, my kick in the pants. And so I had a very specific moment that I call the, my, my personal wake up call. I think all of us will have some version of this in our lives. It's. For me, it was.

I was on a beach vacation. I had a chance to extend that beach vacation work from the beach house. My kids were free, my wife's a stay at home mom. And I had the money to extend the stay. We had a chance to stay at where we were staying for another week for half price. And so I called my boss up and said, hey, they've offered me to stay another week. You know, I work for my laptop every day anyway, I'm just going to work from the beach house. We have employees all over the country.

We're an Internet service provider. Like, you know, we are technology people. We make this technology work. I'll just work from, from home. I was very polite about it. And he says, oh no, we don't do that here. I expect your tail back at the office Monday morning, 8am and he hung up on me. And I needed that job like I did as the only income I had.

And so I had to tuck my tail between my legs. And I remember on the Saturday morning, it was a very specific moment. I was packing my, the van up. I still had like sand between my toes. And we were still kind of enjoying the sea breeze as we were driving away. And I saw my kids at the time, I think four and seven in their car seats kind of slumped over, resigned their fate. They were very upset about not being able to extend because they thought we were going to be able to. My wife's an adult.

She understood. My kids didn't understand yet. And I felt like an inch tall. I just felt like a failure as a father. I knew that these moments with these young children like that wanting to spend time with me was fleeting and I wanted to savor every moment of it. And I had the capacity to do so. It just. This jerk of a boss says, no, you can't work from your laptop from the beach.

You must work from your laptop in this office where I don't even live. Like, my. My. My boss didn't even live in the same town as me. I'm like, why am I going to get on conference calls over zoom in this office where I don't have employees or very many employees, instead of at the beach house? Because I could. I mean, I was still doing. I've done my job well. And they lost me that day, like a good employee, just basically internally shut down.

We would call that quiet quitting. Now. I came back, and I was a. I was a terrible employee for a while because they made it very clear how unimportant that was. That was my wake up or aha moment. And so then I found a mentor, and he gave me a very specific assignment. He said, I want you to write a three page handwritten essay after reading the book the Richest man in Babylon. And it's a very simple, basic book about money concepts.

And. And I went on to write, like, nine or 10 handwritten essays that I would then mail to him. I mean, that was his test to see if it was like this Mr. Miyagi moment. And what he did is he said, based on your situation, you need to be going to conferences three to six every single year for the next five years to get your real estate education, you have to go build your own MBA for real estate. And that's what I did. I went to these, like, grand old men of real estate, like Peter Fodinato and John Schaub, and these, like, guys have been doing it for, like, 30, 40 years. Some of them have since passed away.

And I got a master's class because I would get out of class, out of work on Friday night. I would fly to Orlando or Tampa or Dallas or wherever they were. And I would have this weekend seminar and then fly home Monday night and then do my normal work. And I would get this. These education that I know you provide for your clients as well. And those. I would just stack those nuggets and those insights and then go back into the marketplace where I lived in Little Rock and actually put practice.

Man, that is. Thank you for letting all of us in on that one. I have a feeling that there's going to be a lot of folks that have had those phone calls and who been wondering what's next, and they're going to be listening to this. And folks, as we Always say here, you know, sometime the education isn't always me talking to you about a self directed ira. You're going to find out how to use your self directed IRA to do the investing that Paul's going to talk to you about. But you know, that story right there might just be some of the best education that someone has gotten. So thanks for taking us down that, that road there, Paul. Well, one of the new platforms in his company, Real Estate 101.

Paul, you talk about the bankless deal architecture and it's, and it's really a methodology that you use and that you have advised that all of this come from really all those conferences and all the old school guys out there and you built this. Tell us a little bit about it and also how it plays in with the Silver Tsunami opportunity.

So you're looking for opportunity. We all are. And right now the marketplace is a little bit uncertain. Like we're not really sure where things are going. It's, I'll just be it, I'll put it politically very correct is that we would just say the, the market is very uncertain right now. Like no one really knows what's going to happen next. So when that happens, I want to go and go back to what are the fundamental, like, kind of like first principles, thinking what are the fundamentals? Our population in the US is still growing. There is a huge population of baby boomers who are now retiring, who have a total of $78 trillion in assets they've accumulated over their lifetime.

They're the wealthiest generation of people ever and they're aging out of the workforce and they're starting to pass on their assets to the younger generations. A lot of those are small real estate businesses for which their children or families do not want any part of. And so I like to go to Silver Tsunami owner property owners and say, would you be open to selling your property? And so what you're doing is you're making installments over time, making payments. It's called an installment sale. And what it does is it saves you a ton of taxes. So I go to these owners and say, I'll give you your price or really close to it, provided you're flexible on the payment terms and you become the bank. I'll pay you interest and you won't have to pay as much in taxes to Uncle Sam. Is that something I have a conversation about? And not everybody says yes, but a lot of them do.

They're like, now wait a second, they kind of lean in, like what? Tell me more about that. And that is my negotiation opening. And so what I do is I put together three different options for them. So option number one is I offer them a lump sum where I cash them out, where they get their entire purchase price up front, but at a significant discount from what they want. Option two and three are some sort of owner financing scenario where I'm able to pay them a much higher price but, but in payments over time. And when you give them three options like that and they see how low that lump sum offer is, sometimes it's a little bit insultingly low. They're like, well, I want more than that. It's like, well, I understand, how about I give you more than that.

But you take the payments over time and you save yourself some taxes. And what that does is it softens the blow of that investor grade cash offer that's really below what they want. And I find that is a negotiating strategy which is technically referred to as multiple equivalent simultaneous offers. Mezzo. We never say that to them. We say, hey, here are three options. Which of these are most you're liking?

You know what this really goes in and if anyone has looked up your information before or met you, what I find that's pretty profound in this, and you tell me if this is really where this is heading, but is where a lot of folks seem, especially when they get in to the business. They're always looking for the deal. They're always wondering where that next deal can be found. You know, and then, and, and they show up to real estate investor meetings and they're saying, you know, I'm looking, I'm hustling, I'm trying to, but, but I, I don't, I don't know where the people are. And, and, but you say it's not so much where the deal is found, it's where it's created. You're actually creating the deal from scratch. And do you want to build on that?

Yeah, deals usually are not dropped in your lap, packaged up and ready to go. And so in real estate, there's always three hats that are being worn. There's the deal finder, there's the deal funder, and there's the deal operator. In the context of single family, that's oftentimes the same person that is wearing all three hats because it's a little smaller size project and you can kind of handle it all yourself with your own credit. Whereas when you get in these bigger projects, they tend to be team sports and you may just become the deal finder. And then you go and find a partner who wants to help fund it, which is where self directed IRA and solo 401ks will come in perfectly right. And then you also need the deal operator, which is what you don't want to be as an IRA holder. So as an IRA holder you could be a part investor in a project for which you are not have any material, you know, responsibilities other than being the funder.

And what I'm doing as a investor was when I have my investor hat on and I'm going on the marketplace, I'm becoming a deal finder. And I often just find somebody who has a little bit of motivation and then I have to create a structure such that it's a win win for both parties. If I come in with just a lump sum cash offer and are just kind of blind to the fact of what they need, then we won't get a deal done. Like they don't, they're unwilling to take that much of a discount now on their side. Most sellers are blind to the fact that most the cost that they're asking for the price does not bank out. Like I cannot go and get a bank loan and make that property cash flow. Like it doesn't, it doesn't, it's not bankable at all. They're blind to that.

They don't think that way. And you have to kind of present that idea to them and say hey, did you realize this? If for this 2 million dollar purchase price, if I were to go get a bank loan, it doesn't even pass the DSCR level. It's like no bank would lend on this. You know, there's just no room for this. And so, but how about I give you that $2 million but then I get, but I give you a 10, 15% down payment, pay you a little bit of interest and make you payments over time and it will balloon out in seven or 10 years and then we negotiate the terms of that. But I give them their price, which is a premium, but I'm paying down that principal super quickly with the way I've structured the terms. And my cash out of pocket is way less than if I went to go to a bank loan.

Now if you will, I know that you understand the premise behind self directed IRAs. If you for someone who's listening and is thinking about setting up their self directed Iraq wants to be the next Paul Thompson. If you can take that and now apply it to what that looks like using the self directed IRA.

Right? So let's say the same $2 million deal I have to come up with, let's see $300,000 as a 15% down payment and I don't have the 300k. Maybe I have 50, maybe I have 100, but I don't have $300,000 of liquid cash coming out of my pocket. What I'll do is I'll go to some of these investment clubs, some of these real estate meetups and I'll say, hey, when I come across a property in Lexington, Kentucky and Little Rock, Arkansas and you know, Columbus, Ohio, and it's forecast to get about a 12, 15% cash on cash return for the project, is that something you'd want to hear more about or is that something that's not interesting to you? And. Well, yeah, I, I mean. What do you mean? It's like, well, if you're looking to perhaps be a capital investor in the deal, then I would be able to share some of the, the pro. The pro. The profit of the deal with you. As of, we could do it as a syndication.

You could be the sole investor. It kind of depends on how much you might have to work with. If I've come up with if $200,000. Is that something that is within your capacity? Well, we need to bring in some other people. So it's very soft ask, you know, I'm not saying, do you have $200,000? Can you give it to me? No, no, no. It's like, it's a real casual conversation. Now. Let's flip the script and let's be the person with the IRA holding and you have 50 to 100,000, $500,000 in your IRA or solo 401k that you want to deploy.

You could deploy that as a passive investment to a syndication like what I just described a 24 unit apartment complex in Columbus, Ohio that is forecasted to get a 12, 15% return and you can get a return on the investment that the sponsor is setting up. Obviously you want to make sure the deal makes sense. You'll make sure that the sponsor is reputable. But that's places where you could deploy your capital, get a consistent return and have a good, pretty good consistent payout on your IRA without having to do a lot of lifting yourself. You want to do the due diligence. Beyond that, you're just collecting checks,

you know. And what this is doing is what Paul just said is that it's, it's leaving the money, say in the bank account, pulling it from other areas that a lot of folks don't even realize that they've got. And all this together really becomes your Flexibility and freedom. Like, he talks about the 3x freedom framework. You had alluded to it at the beginning. Can you expand on that a little bit? What, what you came up with and, and maybe what it means to you, and then how. And somebody else is going to be able to see how this relates to them.

Yeah, what I'll do is, the way I'll answer that is just kind of ask your audience a question. Like, you're here learning about IRAs right now. Like, why, why are you here learning about this? Like, you want to make some money, right? Well, why do you want to make some money? Well, you want to provide for your family. Well, why do you want to provide for your family? Because you want to make sure they're taken care of. You want to make sure that you can retire. You want to leave a lasting legacy for your family. What you ultimately want, when you ask that question enough times, is that you want the freedom to do what you want, when you want, with whom you want, and not stress the money. I refer to that as 3x freedom.

Time, location, and financial freedom. I want to be able to do what I want when I want and not stress about the money. And I want to spend time with the people that I love and cherish the most. I mean, that's what life is ultimately about, is being able to enjoy it with the people you love. And money gives you options, gives you choices, gives you flexibility, and it buys yourself your. Your freedom. And the way you do that is not by working harder, but by owning assets. You may have to work hard to attract those assets.

The analogy I like to use is we've all played Monopoly. We understand how Monopoly works. You go around the board, you collect 200 bucks. If you played Monopoly with somebody else, and all they ever did is tried to pass, go and collect $200 and never bought anything they landed on, you would think they were crazy. Like, how are you going to win this game if you're going to. Like, why are you playing the game Monopoly and not buying any properties? Yet in the real world, if you're collecting a salary and never buying any assets, that's exactly what you're doing. And you will never win the game of financial. Of the financial game of life.

Right?

You may still enjoy your life and be happy, but you're not going to be able to get ahead. And so you'll ultimately have to work until you die is what Warren Buffett says. Right? So if you don't learn how to make money while you sleep by owning assets, you will work until you die. And I don't think anybody is intentionally trying to do that.

I can already see the, the next book that, that Paul writes, it's going to be titled something like Smiles in the Rear View. Now.

I like it.

I get, I, I guess you, I, I get a cut of, of that, by the way. But, but you, you started seeing smiles in the review now, right?

Yeah. Exactly.

How old are the kids now, though? Depending on.

My son graduated high school, just cried. What's been 10 years. It's been 11 years, I guess since I bought my first property. It's been 11 years and I was able to send my son through private school. I was able to not have a day job for the last 11, I guess at this point, nine years, and bought myself a lot of time. And let me be clear, I'm not a jet setter. I'm not like running around in my private jet and I'm not even sure I could even pull it off. I'm not, I don't have to drive for it.

If I could pull it off, I'm not sure I'd want to because the cost of that would be the time with my family. And so I want to make enough to be able to spend time with my family. Right.

We've just got a couple minutes left here and in time is my, my son and I were talking about, as a matter of fact, first thing this morning that he and I were having talks over the weekend about, you know, he wants to have a job with money and be comfortable and go. I mean, really, I'm going to make him listen to this podcast. He's 14. And when it comes out, I want him to hear it because this goes along with exactly what we were discussing over the weekend. And then things that we were talking about this morning when I said, you know, of all the things, they make more money, there's other jobs out there. One thing that they don't make more of is time. And you know, you got one set of parents and, and you got, you got friends, you've got yourself. And really what it comes down to is, is maybe not all about the money, but it's the time that you can use the money.

Who cares if you got all the money in the world? You don't have any time to enjoy it. Right. And so that really does ring true. If, and so for the folks who've been hanging in and listening to us, I told you that you're going to see the backside of, of, of

some

of the things that we've been Talking about it's in this question. There's somebody out there that's going to be listening to this and they're going to be driving home. And I think about some of my commutes that I used to have a long time ago where it'd be an hour commute home and somebody's going to be. They're going to have worked a long day for a boss that probably didn't even, you know, understand their worth at the company. They do work very hard. They understand the nature of the work. They've. They may be thinking that they don't have the money or the wherewithal to make the jump.

They may think, what happens if I fail? You know, this, I have to have this job. A lot of the things that you really talked about and folks, I didn't know he was going to talk about this story, you know, but it really resonated with this last illustration that I wanted him to talk about. What do you say to Paul from 20 years ago? Paul, what do you say to that person who's driving home listening to this? Are tired. They don't want to read a book when they get home. They don't want to. They've been on their computer all day. They don't want to get on to try to find the next best thing. But they might be asking a question.

I know that time is against me, but also is the money, how much money should somebody be thinking about to have to get started like you did?

Can you do it with no money? Sure. But you don't have to do hustle harder. For sure. Having a little bit of cash in an IRA or in a taxable account is helpful when you're owning property. It costs money to own property. So you, you want to be in a position of financial stability, if not strength when you invest in real estate. So what we do for a lot of our clients is a lot of our clients come to us and like I just don't have 50 grand liquid capital, like totally get it. If you don't have any idea, then go become that deal finder we talk about and partner with somebody who does.

Right.

So go pick up the skill of what it takes to identify a property, analyze it quickly to figure out what it's worth and make an offer that makes sense where it has a lump sum offer or you have a deal where you structure some terms where it makes sense for the seller to give a little bit higher price and you get these creative terms. Developing that skill of being able to go out in the Marketplace and find a deal. You'll never regret being able to develop that skill. And so you take that with you for the rest of your life. And now you have something of value to the marketplace and you can still continue to work your job. You can, you don't have to have a ton of money to do that. And you develop the skill of being able to go out in the marketplace and provide value and then partner with other people who do have capital or do have the operational experience that you need. The operational experience or the operational cost is really not that much.

Right. Like you just learn how to, you know, you get a little bit of coaching or you just, you know, YouTube it until you figure out how to run the business. And now you have something of value, the marketplace, that you can do and take with you for the rest of your life.

Well, and I think one of the other ways too, I would ask you, so where's the best place for them to start? Whether that's going to be the meetings, getting in with the right network work, but also with you too. You know, when you talk about your clients, I almost want to call them students. But is there a way that folks can really, you know, tap into you have some type of consultation where you can, you know, have this talk on a grander scale, maybe more specific to their scenarios and their needs and their direction?

Yeah. So I run a free community that specializes in how to become a commercial deal finder. We run it on the school platform and we'll provide a link for the users to the listeners to go and find me and figure out what I'm doing, see if that's interesting to you, whether it's me or with somebody else, you want to get in the community around a niche that you feel attuned to. So pick one and become really good at one concept. Mobile homes, commercial single family tax deeds. I don't care. Pick one. There's.

There's money to be made in every single discipline of real estate and you want to find one that you could be gain some expertise in and take that specific knowledge on that topic so that you can leverage that to then find deals and make money.

Well, Paul, you know, I really think that we just touched a bit of, of things that you can share for folks. I think we have definitely reached folks today, this evening, whenever they are listening. There's a lot of people that, that see themselves in, in this podcast and they should. I think that there's a lot of them out there. I talk to them weekly. So I know that as we're wrapping up here. I just want to thank you again. I know that we're going to see you on a webinar.

So folks, when you're listening to this, if you haven't had a chance to see Paul's webinar with us, try to catch that live if it hasn't happened yet. And then you can also catch this in any of the productions on our YouTube channel. So make sure that you're looking us up there at American IRA llc. Well listen Paul, thank you again for your time. It's great to reconnect man.

Thanks for having me.

I think it's going to behoove not only American ira, but definitely our listeners. We're going to look at getting you scheduled in again. So if there's another topic out there that you'd like to bring, we will definitely make sure that your time is going to be well used here. So again, for Paul and for everyone here at American ira, this is Kyle Moody, part of the IRA Cafe. I'm in the Business Development Office and all of this is made possible by our wonderful team that I'm backed by@American IRA for this, this and other episodes. Whether it's a podcast, whether it's a webinar, always make sure to find us on your favorite social media platforms. Whether that's going to be Facebook, whether you're looking at cruising YouTube, find us there. And then as always, we're@homericain ira.com we are here and waiting for your call, waiting for your chat to see how we can get you on your path to your successful investment objectives.

Thanks again. We'll see you next episode.

American IRA llc, a North Carolina LLC acts as a third party administrator for New Vision Trust Company, a state chartered South Dakota trust company. As a neutral, self directed IRA administrator, American IRA does not recommend or endorse any investments, individuals or entities including financial representatives, promoters or companies. American IRA and the IRA Cafe are not responsible for other statements, representations or agreements nor do we evaluate the quality or profitability of any investment. American IRA does not endorse guests on the IRA Cafe Podcast. Guest opinions are their own and do not necessarily reflect the views of American ira, its subsidiaries, associates or custodian. Participation in the podcast is voluntary and no compensation compensation is provided. American IRA is not a fiduciary and cannot offer financial advice. Please consult your CPA or another professional before making financial decisions.