Hi, and welcome back to another episode of the IRA Cafe podcast. My name is Jasmine Trochia. I'm the head of the marketing department at American IRA. And today, we are joined with our guest, Jeff Johnson. He is from New Path Properties and also an accomplished author. So we're gonna talk a lot about that today. Hello, Jeff. Welcome to the IRA Cafe.

We're happy to have you.

Hey, Jasmine. How are you? Nice to see you.

Nice to see you. So, I met you recently, but I'm super intrigued. Can you tell our audience a little bit about who you are and what you do?

And now we have 22 employees and we're building about a 100 homes this year. That's our plan. We've got 65 I think underway right now. So we need to get another 35 going. So yeah, there's my business partners. Zach and Stephanie Betters. And so between the 3 of us, I was a construction guy, they were the marketing people. So we, it's a match made in heaven.

Because I knew how to get the deals. I knew how to make money with the deals. So, that, that machine is is currently cranking. I don't really spend a lot of time in that business, but it, it's it's running on its own now. So we've, you know, top to bottom, we've got a CFO, CEO, COO. It's, you know, it's a true business. It's not just some guy flipping houses anymore. So, that we actually have a wholesaling component in that, business as well.

So we wholesale, couple houses a week in that, business. So it's it's been great. I mean, it's been a great journey. I'm I'm so glad that I've been able to to do this and do what I love. You know, taking old things, making them new and then build new houses too. So

Yeah. So I have several questions.

Okay.

What made you want to not be a civil engineer anymore?

Well, besides the fact that I had to get up every morning and go and sit behind the desk and do things that other people told me to do, I didn't really like the work. I didn't find it that interesting. What I figured out after I became a Real Estate investor, you know, I I've joined a bunch of Masterminds and, started doing some personality tests and figured out that I'm not actually I don't I really actually have an engineering mind. I'm good at it and I'm good at math but I don't like it. I'm more visionary. Some more of a I'm more of a big picture guy. And when you're an engineer, you're in the details, and that stuff just drives me nuts. So, it was really interesting that I figured that out, you know, a few years after I left the engineering, field.

And now that's what I do, you know, I do more visionary stuff. So I'm more big picture, growing things. I have a I also have a Christian Real Estate Mastermind called King City Mastermind that I'm the visionary of here in Charlotte. I I don't think I talked about that on the, on the call yesterday. But, but, yeah, we have, we have a group of about 20 people here locally. We get together every month and we, help each other build it you know, build our businesses together and and, build our faith together and that type of thing. So it's it's been amazing, just just doing that and building those business. So that's really one of the reasons I got out of engineering was I just I didn't like the work.

And also there's a glass ceiling there. If you wanna get over the glass ceiling, you basically have to give your life away and spend a lot of time away from your family. And I just didn't wanna do that. My, we homeschooled all 3 of our kids. So I wanted to be home a lot. And that is one thing that real estate allowed me to do was to see my kids every day, you know, several times and go and do things with them, all the time. So it was it was really awesome to be able to do that. And now they're all grown and gone, but, you know, we had that time together which was fantastic.

So, you're based out of Charlotte, North Carolina?

Right. Right.

And your invest investment properties are in that area as well?

It really is.

Yeah. Fantastic. So that brings me to my next question. Do you only deal in, like, single family homes? Do you do any commercial or multifamily?

No. We don't really do any, current I No commercial or multifamily. Right now, we are We do have some townhome developments that we're working on, but we don't do any apartments. I actually am personally getting involved in some flex space stuff, but the interest rates have made that very difficult to make the numbers work. But pretty much we stick with single family homes, but we have been doing some small developments, you know, up to 12, 20 units. We're not doing any large developments just because we don't like the turnover time. We don't we don't wanna be into a project for 2 years before we get any revenue out of it. We are still a small company, but, yeah, just haven't really forayed into that.

I think if the interest rates hadn't gone up as much as they had, we may have pushed into that area but it just it's hard to make those numbers work right now.

Gotcha. What how do you choose which properties to invest in or develop? Do people come to you and say, hey. I'd like you to develop, you know, this property or this neighborhood or is that something that your business selects?

We have a full time acquisitions guy who does nothing but look for land for us. And so that's his that's his job is to find us land to build on whether it's infill lots or small developments. We do work with some wholesalers, people who have land. We have those types of relationships, but we found our best deals come from direct to owner contact, really. Finding our own projects.

So you, do real estate as a full time gig. It's not just an investment or it's not just a side gig for you. Right? And thinking about the typical American IRA client, do you use your IRA real estate as well?

Well, how could I tell other people to use their self directed IRAs if I didn't do that myself? Yes. I absolutely do. In fact, it was interesting. We're on that call yesterday and, Wendell Wong is actually one of the gentlemen that's in my mastermind. And I actually just I just gave him a loan. I think it was we closed right after Christmas. I I closed on a loan for him on one of his commercial properties. So, yeah, absolutely do that.

I I don't want my money anywhere but real estate, you know. I want my money in hard assets. I don't want it in paper or Bitcoin or anything like that. And I know there's, you know, some people like to diversify a little bit, but I know real estate will always be here. They're not making any more of it. So so yeah. Absolutely. I invest my own money with other real estate investors.

Oh, wow. So, looking ahead, thinking about the real estate market, what kind of trends or new opportunities do you see coming down the pipeline? And any new legislation that is gonna open doors? I'm sure you have your pulse on the real estate business. Do you have any nuggets to share?

Well, man, every time I think I know what is gonna happen, I'm surprised. I've, you know, I've been I've been thinking that interest rates are gonna come down for the last 8 to 12 months and it just hasn't happened. That's really the biggest thing is is affordability. So what we've noticed in the Charlotte market is, you know, originally, we started out building lower end starter homes. And we've noticed that the buyers in that price range, they're living paycheck to paycheck. So when the interest rates bumped up like they did, they're just, they're out of the buying game. They're not going to be buying a home anytime soon. So we had, you know, we had some starter homes that were sitting on the market with just not a whole lot of buyers because those people just couldn't qualify anymore.

So we've moved into a different, a little higher end product, kind of a a move up home if you will. And we started building that. And those seems seem to be doing a little bit better, but I really think that the interest rates, unfortunately, with the way Americans are with savings and debt, I I think that's gonna impact the real estate market more than anything. And that's, you know, somewhat out of our control. But I've noticed that there's a lot more people that are renting now. They're not looking to buy, they sort of tapped out of purchasing real estate. So bringing some built to rent products to the market, I think is going to be important. And, and really staying in the Southeast, staying in and around Charlotte for us is important just because we know people are moving here.

So we want to try and hedge all our bets when it comes to what we buy. And we feel like this market, with the amount of people that are moving here, the employment, the opportunities, the weather. People are moving here just for the weather. I can't tell you how many times we sell a house to someone and they're like, I just couldn't stand the you know, 8 months of winter anymore. I just couldn't stand the gloomy skies so I needed to move here or people moving up here from Florida. It was too hot. So we're just sort in that perfect, perfect area but, yes.

Not to mention the airport and the infrastructure and logistics and, you know, the the roads

and 3 hours from the mountains. You're 3 hours from the ocean. You know, I don't know. The only other place I know where you could do that is California or, you know, Oregon or Washington. I I mean, it's it's great. And actually, I do have 3, I have 3 cabins up in the mountains here, Airbnb Airbnbs that, I I just love. I fell in love with Beach Mountain when I moved here. So I ended up owning a few cabins up there, and and I go up there all the time.

So it's great. It's really great.

Oh, yeah. Beautiful. I love the mountains here. We're in Asheville, so it's it's great. Oh, yeah. So, yeah, question next. Thinking about business strictly, do you have, an investment opportunity that you'd like to sort of put out there for our listeners to know about?

Sure. Well, there's we always have several opportunities and, mainly, it's gonna be private lending for individual projects. We don't have a fund, so you don't have to be accredited. We will take small dollar IRAs and 401ks. That's no problem. So really what what our investment, opportunities are are in new construction homes. So if you have a $150,000 or more in your IRA or your combined accounts, we can generally put you in first position on a new build. If you have less than that, we can usually either combine your account with another lender of ours or we can put you in 2nd position on land purchases.

So so the land purchases, we generally will buy because we have to move quickly. We'll generally buy the land cash. And then if we can put a lender in on second position after we've started construction and we can get that money back for our land, then we can actually move forward with, purchasing more land. So we're always trying to cycle people's money through our system. When we have enough projects that we can keep we pretty much can keep the money, assigned to a project year round. So there are our clients there. Their money really doesn't sit in at American IRA for very long. You know, if we close on something, we're reinvesting it really within within a couple of weeks.

If not, rolling it over directly that day. So, there's that opportunity and then and then we also do some flips. So occasionally, we do some flips. We like to do what we call flip skis, where we'll buy a we'll buy a piece of we'll buy a property that has a house on it that's in repairable condition and we'll repair it and sell it. But then it will also have a lot attached to it that we can break off and build a new house on. So those are our, like, our favorite projects to do, you know, where you can double up.

So you'll do the renovation, the flipping, so the investor just gives you the money and you do the rest.

So all of we have all of their money invested in our company because they just can't get those kind of returns and that kind of risk profile really anywhere else. Not to mention the relationship, you know, so the trust is so important. But, those are the main opportunities. And then again, I I personally do some flips and some built to rents and also some some renovate to rents. So if somebody is a little bit skittish and they wanna work with me directly in my company, New Path Properties, I can I can, you know, basically hand hold them through some projects, my own personal company? So they have they can actually get directly to me. And then the idea is that after we do a few projects and they feel comfortable with the way I do things, then I can move them over to better path and they can start you know, that's basically be their investment vehicle. So I've done that quite a few times where people have started, you know, investing with me personally, and then I'll move them over to that other company.

What sort of due diligence question? So let's pretend that I want to invest with you. What are some really great questions that I should ask you or someone like you before I enter into an investment?

Well, just like anything, you know, when you look at somebody's resume, what do you look at first? You look at their experience. Right? What have you done? So and we can show you hundreds of projects that we've done successfully and sold and made money on. So that's number 1. Number 2, do you have references? Do you have people that you've worked with that that have lent to you before? And what do they have to say about their experience with you? Are they happy? You know, do you have lenders that have been working with you for a long period of time? Because if we have a bunch of lenders that come come in and they're 1 and done, then, you know, we may not be super attractive for somebody that wants to build a long term relationship. But everybody that's come and I would say everybody, but most everyone who's come in to land with us has stayed with us just because of the level of comfort that they feel. So, that would be the other question. It's like, do you do you have some reference to some people I can call to ask questions? And then finally, you know, what are the terms? What are the terms? What kind of, documentation do you use? And then how if you really wanna get into the weeds, show me how you figure out, your profit on the project. Because if I lend in an unprofitable project, it it it's never gonna end well.

Right? Even though we have had some projects that haven't made any profit and our lenders got paid back. But it it, you know, overall, are you conservative when you purchase your properties? Do you know what you're doing basically when it comes to numbers? And then how do you operate? You know, we have a we have a 3 person project management team that oversees all of our builders, does all the due diligence, they meet with the cities, They, meet with the engineers. They push plans through all those types of things. And I myself, I'm a licensed general contractor in North Carolina and South Carolina. So if things go south with our builders, I can always build the houses if need be.

There you go. So speaking of advice, you said you have 3 kids. What sort of investment or financial advice have you passed on to your kids that you'd like to share?

Oh, boy.

That's a good one. So I'll

put you on

the spot there. My oldest The name of the year or Jeff Johnson.

All my kids had jobs when they were young and they all had to they all had to spend their own money on things. When they were little, we gave them an allowance. And if they wanted anything outside of, the basics that we provided, they had to save for it and and spend their own money on it. So that was that worked out well. All 3 of my kids are pretty good with money. My 18 year old, he's working on it. You know, boys, they take a little longer to come along. But my so my oldest daughter is, she's 27.

She's been married since she was 18. And, her and her husband own they own their own they own their house. They have a rental property on their they have a rental house on their property, and they loan me money for my business. And they own a rental property. So I wanna teach them the, you know, the freedom of owning real estate early on. And luckily, my oldest daughter picked it up, and her husband is very savvy. He's actually they're getting ready to move back to Charlotte. I'm super excited.

They live in Atlanta right now, but they get ready to move back to Charlotte and he's gonna come work for me. So I'm excited about that. But, and my, my middle daughter, she's loves to travel, so she saves up and then she'll go. She just got back from Germany. She was in Germany for 3 months. So she loves to travel. So really just I think more than anything has given them responsibility over some portion of their finances when they're young and let them make some mistakes when it's not very expensive. And then they'll learn the value of money and then also not sharing how much money I have.

Because I mean, you know, look, dad, like, dad, you can afford it.

Yeah. No. I think it was I get that.

Yeah. I think it was Shaq. I think it was, Shaquille O'Neal that said is one of his kids said, but dad were rich. And he said, no. I'm rich. You're not rich. Yeah.

I totally get that. Yeah.

Yeah. So so I want I want them to be responsible with their money.

Oh, that's awesome. That sounds great. Sounds like it's working. So it worked when they were little. So

So far so good. Yep.

Wonderful. I I wanted to ask you one more thing. This is a question we get all the time. Do you have any advice about networking? How to find other people to bounce ideas off of? You mentioned that you have a class that you hold, like a master class that you've organized. But, when you were going about, you said you've you've met other partners or other people that wanted to come into business with you. Do you have any advice about networking with like minded professionals?

Yeah. The biggest thing I can say is just give things away. Give your time, give your knowledge. I I ran a, I ran an advanced Real Estate Investors Group for about 6 years here in Charlotte, every month. And just, you know, I had people come to my meeting and I would just give away knowledge and I would help people and I would be available for people, if they had questions. The other thing that I've done is, I open up 3 to 4 hours on Thursdays for folks to just come to my house, sit down with me and chat about real estate, life, faith, family, it doesn't matter. So that's my time tie that I give back, to our community here. So that's really been the biggest thing is is I found the the more I give away, the more I build like a I almost say less like a cheerleader squad.

Right? Every when you give away your time and you give away your your knowledge, people wanna see you succeed. And so you end up I can't tell you. I if I look at my deal sheet right now, most of my best deals I have on my deal sheet right now, I wasn't even looking for. It was something somebody called me, said, hey, I got this deal. Do you wanna do it with me or do you wanna buy this deal for me? And that's I think that's just all of that coming back. So I think a lot of people get into real estate and they go in, like, what can you do for me? What can you do for me? You know, how can I how can I suck your, you know, your knowledge out of your brain as quickly as I can instead? Have the attitude of, you know, what can I do for you? How can I help you? Even if you're getting just getting started in real estate, there's something you can you know or can do. You can go take photos for somebody. You know, there's a million things.

And then and then value other people's time is is important too. You know, if you're if you're with people, make sure that you, are respectful of their time and give as much of yourself away as you can.

I love how you called it your time and tie that to the community. I I think that's a really great way to look at it, and to think of it that way. Almost like a freak consultant a little bit, that you're opening your your time, your schedule for that. That's really cool. That's great advice. I don't think I've heard that one yet. So awesome.

It was, so there was a book I read. It was called The Seven Levels of Communication, I think. I'm trying to see if it's over here on my it's called the seven levels of communication. It was actually written by a real estate, agent. And that was what he did is he would go sit at a restaurant and just schedule people to come through and talk to him. And that's how he built his business. And I was like, wow, how can I do that with Real Estate Investing? And I had, you know, probably at that point, I probably had 7 years of experience under my belt and, you know, a 150 flips or something like that. So I knew what I was doing.

And there's a lot of people just really struggling. Yeah. That's it. Seven Loves of Communication.

There you go.

Mhmm. Very good. Very, very good book. So so that's what I did. And I I inspired, another a couple of people to do the same thing and watch their businesses grow too. So it's really cool.

Speaking of books, I cannot end this interview without inquiring and asking about your book that you've published, Retirement Returns with Real Estate, and it has a much longer subtitle, Building Tax Advantage Retirement Wealth with Residential Real Estate Investing. So give us a little synopsis about your book.

Well, it's it's actually really easy. So, when I first realized that I could use other people's money to do my real estate business and I could borrow from private individuals and I have to go to banks or hard money lenders. And I found out about self directed IRAs, I just went all in on it just because there's a couple of reasons why. Number 1, I like building people's wealth. I don't wanna build the bank's wealth. That that that that brings me no satisfaction whatsoever. If I have a friend and he has a $100,000, I would love to make it $200,000 for him as quickly as I possible as as I possibly can. So so I have that passion and, what ended up happening is is as my business grew, I needed more and more lenders to help me, finance the properties that I was buying.

And so I was meeting with people constantly and I'd have to go, you know, from beginning to end on how the process works. And I try and educate them on how, you know, if you're not even if you're not gonna lend with me, I wanna give you the information so you know when you go out what questions to ask when you, are interviewing a real estate investor. So I had that conversation over and over and over and over again. And I just and I decided, instead of doing that, why don't I just put all that information into a book? And then when somebody's interested in investing with me, I can just shoot them a copy of the book, tell them to read it, and then we'll sit down for coffee. And so those conversations are a lot more, a lot more high level once they've read the book so that they understand what's going on, how it works, you know, the different vehicles that we use, what to expect. Then they just wanna know about the opportunities. So we end up just talking about opportunities once they've read the book, which is really nice. So it gets them from, you know, a to s, and then we can start on t instead of starting on b when we get together.

Right? So so it really has has accelerated that that relationship and that opportunity. Because I used to have to meet with people 2 or 3 times to get them to the point to where they say, yes, I'm gonna go ahead and invest with you. Now it's, you know, it's one time. And they'll know after they read the book whether or not they wanna be involved in that. So it saved a lot of time. Not to mention the other good thing that sorta was a, a side benefit is a lot of the investors in my market and even other markets that I've been, involved in, they will actually use the book to raise private money. So they'll send a copy of book of the book to one of their prospective lenders, and it accelerates their process. So it's really helped a lot of people, build their private lending, portfolio much more quickly just because it's, you know, it's just it's just great information in there.

And, you know, American IRA has been a big help. And I had some friends and some other, businesses, IRA businesses that helped me with it. And it's it's just one of those things that's just it's been great to have. So and I don't I don't make any money on it. That's the other thing. I don't I don't charge like $20 for the book. I charge what it costs to print it. So I don't really make it.

I think I make like, $30 a month or something on the book. But it's

And the book's available on Amazon. Right? We can You can look it up on Amazon.

No. Yeah. Not even local. We were we were we're Yeah. Kind of international. So, yeah, I'm not surprised. Yeah.

Yeah. So so it's a good it's a great connection, you know? It and it's what was really nice about it too is it it's it's another way to make a kind of a warm, you know, start a warm conversation rather than, okay, let me start at point 1 and and run through everything. So it's yeah. It's it's worked out really well.

Fantastic. Well, that's very cool. Well, I will definitely be getting that book. Just I'm very interested to know what your basics are in there. So, add that to my repertoire as well. But is there anything else I haven't covered that you you desperately want people to know about you or your business? What is Jeff and who is Jeff and and any parting words?

Well, I think more than anything else, I wanna build long lasting relationships that benefit both my companies and the people that lend to us. So, that's really what we're about is building relationships. Long lasting solid businesses are built on people, not on making money. So that's that's kinda really where we're at right now. So if there's anyone out there that's looking for a company to invest in, and a really good operator who knows what they're doing, check us out, give us a look, give me a call. I'm happy to have a conversation with you as many as it takes to make you feel comfortable. But yeah, I just, I I love to help people build their wealth using Real Estate. The other nice thing is is that a lot of these homes we build, we're adding to the to the inventory.

There's a there's a huge shortage in inventory in America. And so we feel like we're doing our part to to help, bridge that gap and give people some affordable options for new homes. And that's, you know, I think about my first new home or my first home when I would just got out of college. If I hadn't bought that home, I wouldn't have been able to build wealth. That was a huge wealth building vehicle. So we want people to be able to do that, to be able to build wealth through homeownership. And and that's important to us too. It's not just about, you know, we're a business that makes money.

We wanna help people build their wealth.

Fantastic. I think that's the overarching theme of our whole conversation. So I'm glad you brought it back around like that. Well, thank you so much for joining us, Jeff Johnson. We really appreciate you being here. Thank you for telling your story. I like to get to know people a little bit better, and business people who and approachable business people, super fun to talk to. But thank you so much for joining us in the IRA Cafe.

Thank you.

So we're coming to a new segment of the podcast that I like to call the IRA Cafe q and a. We're going to answer a mailbag question or an emailed question from a listener. And today's question comes from Carlos. Thank you, Carlos, for submitting this question. What is an FMV and do I have to submit 1? Very good question. Thank you so much. FMV stands for a fair market valuation. Fair market valuations have to be submitted to American IRA or to your IRA custodian for each asset that you hold in your IRA account every year.

31st at the absolute latest. So for