Episode 128: From 0 to 75 Rental Units In Less Than A Year w/ Daniel Kwak

Since 2019, The Kwak Brothers have built successful real estate investment companies, educational courses, coaching programs, and software to help emerging real estate professionals grow their own real estate investing businesses. Today, the Kwak Brothers are a mission to help every family achieve financial peace of mind.”
Get in touch with Daniel: thekwakbrothers.com

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Hey, folks. This week, we're joined by Daniel Kwak on the Prereal podcast. This is one of those episodes you you absolutely have to listen to. Daniel shares his story, how he came to this country with literally absolutely nothing. When he had his moment, he had negative $187 in his bank account. He has now scaled nine companies. He hasn't an absolutely massive portfolio. By the age of 23, he had 83 rental properties under ownership. He is an unbelievable guy. His story is amazing. Super gracious. Please, if there's any episode you're going to catch, it's this one. Daniel Kwan. Don't miss it. Guys, are you ready to bring your real estate game to the next level? My name is James Prendamano. I'm the CEO and founder of PreReal. And over the past 25 years, I've closed over a billion dollars in transactional real estate. Each week, I'm meeting with outstanding investors, high performing individuals, and visionaries operating in the real estate space. These are the people that are actually out there in the real estate game right now getting it done. This podcast aims at bringing anyone's game to the next level. This is the prereal podcast. Welcome, everyone, to the Prereal podcast. All right, folks, listen up. We're joined today by Daniel Kwak. This is a real deal story of someone who came to the country with literally absolutely nothing, immigrated here at the age of five. He's a serial entrepreneur. He is a real estate investor. He's got an incredible following. He's built nine legitimate scaled businesses. Folks, there's a lot of takeaways here. We had the pleasure of chatting a bit in the green room, if you will, before we got started. Daniel, thank you so much for taking the time out today. I know you're a busy guy.
Hey, James, I appreciate you probably have had the best pronunciation of my last name in a long time, so I already know this episode is going to be amazing because you probably have the most accurate version. But anyways, thanks for having me on, man. Now I appreciate it. I know you have a lot going on, Daniel, so I'd like to jump right in. The reason we were so excited to have you on the show is your story. Right? It's very easy to get lost in the TikTok investors in that world today where everybody is successful and everybody has these doors under management. It's intimidating. It's not real, number one. It's intimidating, number two. And I think it's important for people to hear the story so that they can be inspired to understand you can do it. Like there is a pathway to go from absolutely nothing to where you are today, which congratulations on. The success is absolutely amazing. So if you could spend a couple of minutes on the background and give folks just a bit of context, as you did before, of really what you were facing when you came here. Yeah. Which, by the way, I love that you mentioned the TikTok finance influencers because I know a good amount of them, and you're absolutely right. Like, 90% of them aren't making not even 10% of what they say they're making online. I always tell people, look like, if you really want to learn, listen and follow the people that are actually doing it. Guys like James, we were talking beforehand about the portfolio that you've got. And then what I'm doing currently with self storage and multifamily so you'll find people that are legitimately doing it and listen to their podcast episodes, reach out to them, and kind of go, hey, can I get some insight and some questions and whatnot? But my story is one, I guess a lot of TikTok influencers speaking of which, would beg for, right? It wasn't great at the time, but we came to the United States, my family and I. It's just my brother and I, along with our parents, I came to the United States when I was five years old. And the way we grew up, if anyone listening to this, knows anything about immigrant life, is that it's tough. It's really hard. We lived in an apartment where I think rent was like 390 a month. And it was one of those places where you turn on the light switch and the cockroaches go from the middle room. They spread out to the outside through the walls. I liked going to school because it meant I got a meal. It was a good day. I remember one story where our family we were at the park, and my brother and I were just playing around in the swings on the corner of my I see my mom, she has like, this plastic container, and she's picking up these weeds, right, virtually. And I'm like, okay, cool. Maybe she's like, giving it to my dad or whatever. She's got some project going on. And then 2 hours later, I see it on our dinner plate and I'm like, oh, okay, interesting. But it taught me a lot about the value of the dollar, and it taught me a lot about hard work and grit, and it taught me number one above all things. And I think this is the number one trait. I think entrepreneurs, real estate investors alike, it's like the number one trait you can have. It's gratitude. If you could just be a posture of gratitude, like every single day and just remind yourself how awesome it is to even live in the United States, number one, it automatically puts you in a giving mindset. It's very hard to have gratitude and be selfish at the same time. It's very hard. The reason why that giving mindset is so important is because people don't want to work with takers. Everyone wants to work with a giver, especially with business partners. If you're trying to raise capital to do your deals, you don't ever want to work with somebody where they're constantly thinking about how much money that they're going to make or how much money or what control they get to have and all this stuff. We always want to work with people that has our back, that has our best interests in mind, is always going to want to take care of us. That's really important. So that's the one thing I really took away from my childhood, is gratitude. And fast forward 18 years old, because a lot of times when you grow up poor, you learn poor. And I think, James, you and I know enough about financial literacy to where when I say you learn poor, you know exactly what that means. Yeah, exactly right. You learn and you abide and you embody the principles that make you a poor individual. And we're not just talking about money here. We're talking about a lot of other things as well. The ability to dream big and have a vision of what your life could be and wanted to look like. So 18 years old, I learned poor, and that resulted as a byproduct in me having negative $187.0.65 in my bank account, and I had a couple of maxed out credit cards because I had to pay for books or college. Took out way too many loans in hindsight. But my parents were insistent that I go to an institute of higher education. So that was kind of like my breaking point. And everyone's got one, right? If they're listening to this podcast. My question to the individual listening to this is, well, why are you listening to this episode? Because you're either motivated by some type of pleasure or you're motivated by some type of pain that's happening in your life right now that you want to change, and you believe that investing in real estate is a vehicle to do that. So that was my breaking point. I was like, enough is enough. Let's finally do this. So I started learning about financial literacy, went to a seminar, of all places, and the individual in front finally answered the question of why did my family grow up poor? While my friends in high school, their parents had nice cars and, you know, they had different outfits to wear every single week and, you know, different things like that. So fast forward, and there's a lot of really cool stories that happened in those five years that I'll get to in this episode. But between 18 and 23, I built a real estate portfolio. At 23, I had 87 doors of rentals and had one company, started one company with my brother, and then I guess you could say the rest is history. So I'm 28 now. It's been ten years since I started my entrepreneurial journey, but that's my background. So thank you for the candor. A lot of ground covered. There are a few things I want to hit. In today's world, it is particularly difficult. And you being 28, you came up through a lot of this. I feel like it's very difficult. I have children, so I'm very conscious of the messaging and mindset out there. Why did you not buy into or adopt this mindset of, I'm owed something. Like, life's hard, shouldn't be this hard. I deserve more. I want my peace. That's a very tempting mindset. And I think it's particularly tempting if you're living in a place where you had referenced earlier you went to school because that meant you can eat that day. Now, folks, let that sink in for a minute, right? He was going to school and he was okay with it because that means he was able to eat that day. And you talked about being gracious and having a gratitude mindset, but you also have to be selfish in some of the investment strategy and perspective. How the hell did you beat back what seems like it's a growing movement and this banging drum of take. Take. Yeah, and you make a really good point because I think my generation I'm part of the millennial generation, and then now you have Gen Z. And I'm looking at these two generations, especially everyone right now, that's in their late teens and even early thirty s. And you're right, James, there is this sense of entitlement, like this sense of I deserve all these things. And I look back at my childhood and I think one of the reasons why I didn't fall into that is because since we started at such a financially disadvantaged scenario and I remember when, you know, our family first got our first house, right? I mean, I was in, I believe, like fifth or 6th grade, and I mean, we didn't even buy the house, right? It was like a parsonage from the church, right? But like, you know, the idea that we we had a house, the idea that, hey, not all four of us have to share the same bathroom, right? Like, my brother and I got our own bathroom. My parents got their own bathroom. That was insane to me, right? Like, I still remember going over to my friend's house and he had, like, Nintendo 64, he had, like, a video game set. And I was like, oh my gosh, you're so fortunate you guys are so rich because you have an Xbox and you have this Game Boy, and literally, I open up your fridge and there's all sorts of food and it's insane. Like, you guys are rich. And I still remember him giving me a weird look like, hey, buddy, that's normal. But I think the reason why I personally didn't fall into that is because we had so much financial adversity that when we did start having these things that everyone else takes for granted, again, it was gratitude. It's impossible, in my opinion, to be entitled and be grateful at the same time. Like, truly grateful. Like, gratitude, as God says, gratitude, right? Like, as gratitude as it hits your heart, right? Not just like, well, I'm thankful. Americans, we're grateful one day after the whole year, right? But I think if someone could learn that I'm not saying you can learn it, but I mean, have it be like a daily exercise. Like, man, I live in the most fortunate country of all time. Let's think about that for a second, right? If you're in the United States, you have the ability to literally drive somewhere and buy whatever you want, right? We have these things called credit cards where you don't even have to have the money. You could just say that I'll pay you back, and you can just buy it. But the income opportunities, too, are, like, phenomenal. There are so many different side hustles and businesses that you can start nowadays and make money. It's incredible. So it's rough, right? Because when you grow up and you have all your basic needs and you're told yes to so many, because I think I'm assuming a lot of parents watch this, right? But when you tell your kids yes all the time, it's going to create a mental pattern of they see somebody on TikTok making $100,000 a month doing drop shipping or whatever, and immediately, since they've never been told no, they think that they should be making that. They think that they can be doing that. And of course, it doesn't help that a lot of these influencers make it seem so easy. They make it look so easy. And I'll tell you, we got one company that does drop shipping, and Ecommerce, we did it a little differently, so we actually dropped a good chunk of change to build an AI software that does the drop shipping for us. But I have friends who make really good money, right? I have hanging out with a buddy of mine a couple of days ago who he made two and a half million dollars this year in 2022, just doing drop shipping. And he focused on a specific niche, right? Like sneakers and just really kind of like the basketball crowd. Right. And he did well, but he'll be the first guy to tell you, yeah, I'm working 60, 70 hours a week. It's definitely not easy. To answer your question, I think gratitude, that's probably the big thing. And there was no mentor or influence in your life that was a real estate investor? Or was there as you started to make this? There was there was a lot of mentors. A lot of mentors. And that's the one thing I would say I did really well at 18 is I found a lot of guys who are 20, 30, 40 years ahead. I would go to every single networking event I could find. I was a man on a mission. And I would say that's probably another thing on top of gratitude that real estate entrepreneurs, or even just any entrepreneur in general needs to start is you really have to immerse yourself. For me, one of the biggest pet peeves because I coach people on real estate. So we have a program called First Deal Mentor where we help you do your first deal. But the first one is always the hardest because you have to overcome so much mentally as opposed to just learning the thing. Because even for you, James, I'll ask you this question. If you think about how much you know now about business, and you own golf courses, right? You're telling me a little bit before the episode. I think you're the perfect guy to ask this question. But you know a lot about business. You've been in this field for a good amount of time. You're a broker, so you understand how the real estate industry works really well. When you did your first investment property, if you think about all the information that you have now, what's the percentage you think out of? Again, if your whole knowledge base that you have right now is 100%, how much of that 100% did you think you had to know just to get that first deal done? Like, technical information wise? I thought I had to know a high number, 60, 70, 80%. But reality was, I needed just a few percentage points of know how to be candid. And perspective is also important in that question, Daniel, because what I thought I knew then versus what I know now is an ocean between those two things, right. And hopefully what I'll know tomorrow. But a few percentage points. Yeah. And I would say the same thing. And then when I have asked hundreds, like, literally hundreds of different successful entrepreneurs that I had the pleasure of knowing personally everywhere, from, hey, this guy. I have ten doors. And it took me five years, but I did it right to, you know, guys like Ken McElroy and Grant Cardone. You know, I had the pleasure of spending a lot of time with, you know, these guys. They all say, like, yeah, when I think about my first deal, I probably only needed 5% of what I know now to get that deal done. And I find that when I talk to a lot of real estate entrepreneurs that are aspiring, that, hey, I'm bigger pockets. Which, honestly, Brandon is one of the guys I asked, right? The guy with a great beard. But these aspiring entrepreneurs, there are bigger pockets. I have to listen to 15,000 podcast episodes. I had to buy these programs and read all these books and all this stuff. And I'm like, look, for you to do your first deal, what you actually need is resourcefulness and grid. If you can have those two things and learn how to navigate problems that come up while you're doing that first deal, that is so much more valuable skill than needing to know all the technical information that you think you need to know. And that's challenging, right? And I'm actually talking about this in this new book that I'm writing. It's called The First Deal Playbook, right, where it's all the information you need to do your first deal. One of the things I talk about in chapter one is, look, like we've been conditioned the education system that we've been a part of for 1512 plus Sears. We get rewarded based on how much we know, not how much we apply, but how much we know. So, of course, when people are wanting to learn about real estate, the first thing they're going to do is, well, I need education, I need information. And while that's true to an extent, I would argue it's not the most important thing that people need to have when doing their first transaction. I would say immerse yourself to go back to your original question, right? Like, immerse yourself not in knowledge, but who you surround yourself with is number one. Who are you hanging out with? What conversations are you having? I learned more in my conversations with my real estate buddies, and my mentors were 20, 30, 40 years ahead than I've ever had in a book or a podcast or some type of program. So I'd say the way I met these mentors and why they were so important is because I literally got to download 30, 40 years worth of their experiences into my brain in, like, two or three years. And you get to a point where it's like, okay, once they start repeating stories, and it's like, okay, you probably got enough out of that person. But I met them because I would go to three or four different real estate networking events per week. I would read as much as I can because I think one of the things that mentors, including myself, value is, hey, do you have work ethic? Right? Because I don't want to teach you something and then you don't apply it. So having somebody who they've read the books, podcasts, if anything, it shows me that you're willing to do some work on your own before you get to me. More so than, hey, I know this much about whatever real estate. So I'd say number one advice is somebody that wants to become a real estate entrepreneur, immerse yourself immediately. Look at the amount of time you're spending per week on learning real estate and hanging out with real estate, doing anything with real estate, and just, like, multiplied as much as you can. So we have today, this is the greatest time ever to be an investor. There are so many resources. It is so much easier today than it was 30 years ago. Oh, my God. 30 years ago. Wow. I'm getting up there. When I first started to travel real estate, there is no excuse, honestly, to not immerse yourself, to not educate, to not become a lifelong learner. I think lifelong learning and growing your sphere of influence and improving your sphere of influence as you go along. I found it hard, and I mentor people over the years, and I explained to them that you're going to get to a point where the folks around you are either going to be excited and want to grow or they're not. And that's okay. Your circle is going to change. Your friends are going to change, and you should strive for that. You should want to be always in a circle two, three, four levels above where you are. Otherwise, you can't grow. Yeah, I 100% agree with that. And the big thing that I get is like, well, I don't want to cut off my relationship with my friends. I don't want to do that. Look, you're actually being more selfish by not doing that, because by you not surrounding yourself with the people that are trying to grow and trying to leave a great impact on the earth and trying to do bigger and better things by you not hanging out with them. You're preventing yourself from being better, from being a better person, from a better financier, from being a better investor, entrepreneur, father, you name it. So the people that actually really, truly matter to you, like your spouse and your kids and the future people that you're going to help, you're not doing them a service. If anything, you're doing them a disservice. Like, I heard a great quote by an athlete who says that you not becoming the best version of yourself is a robbery to the people that truly love you. And I was like, wow, that is so true. That is incredibly true. Which I think applies really well to real estate, right? Because this is a real estate podcast. I think that really applies to real estate because one of the biggest I regrets but one of the things I change about the way I began was when I first started, I was obsessed with learning about specifically real estate investing. So I would spend hours and hours learning how people found deals and how people raised capital and how people did this and how people underwrote. And for me, I always look at, how can I make something better? So I took a look at what everyone else is doing. How can I put myself in front of the line and really kind of just develop some hacks that are super easy for me to do, which translate it right to 87 doors in, like, one year that I did. And so one of the things I would change about how I started is I wish I learned more about how to actually run and start a business as opposed to specifically buying a piece of real estate, because I think a lot of people I mean, there's plenty of content on, hey, how do you raise capital? How do you find deals, how do you underwrite the property? And these are things that are very unique to the real estate world. What I wish I learned a lot more of is, hey, how do I actually set up an accounting system? How do I cast a vision? How do I create KPIs? Right? Key performance indicators for me on a daily and weekly basis to make sure that my business plan and my action items are on track. How do I do sales negotiations? How do I do all these things? I wish I spent way more time doing that, my first two, three years than learning specific real estate content. So you have achieved and I think to that point, you've achieved something that eludes most of us, me included, to be candid, scale across multiple companies. And for me, that's been an incredible challenge. And I think, to your point, investing more time in how to build the business side of it, because real estate, it's funny, it's all kind of the same, right? Medical, self storage, the asset classes and the typologies, the investment strategy, yes, it's different. Timing of the market, yes, it's different. Geographical impacts and locations, yes, it's different, but the metrics are kind of the same across the board. So once you've become a seasoned investor and you've done a number of deals in these different classes and for me, it was a real estate agent. That's how I did it. I became a real estate agent. And I just love deals. So it was what's next up on the ring here? And next thing you know, we're involved in multi story and large scale projects. And I just was learning on the job, if you will, as we went along. But I never took the time to figure the scale piece between accelerated banking and IBC jumpstart. Quok Brothers Media First deal. Mentor how scaling at this rate, at this pace of this many companies, what's the secret sauce? If there is one? Yeah, thank you for asking. That's a great question. So I have a mentor of mine who he used to be the CEO of a company. Do you know the company top golf? Yeah, sure. He was the CEO of Top Golf for five years. So when he took over, he's not the CEO there anymore. He left years ago. Right. But he took that company. I think when I first met him, he was telling me the story of how he scaled the company, because we met for the first time, I think, like eight years ago. Right. I actually met him through a former pastor of mine. But he took Topgolf from 30 million. That's when he first stepped in as CEO. And when he left, the company was valued at like, 2.4 billion or something like that. And he did it all in five years. And I remember asking him, how did you do it? That's insane to me, to grow a company from 30 million to two and a half billion. Pretty much. That's incredible. So he said something to me that I'll never forget. And he goes, what? You need to grow from zero to a million dollars a year in revenue. It's completely different than when you need to go from one to ten, from ten to 100 to 100 to a billion dollars a year in revenue. And he kind of gave me, like, if you want to go from zero to $1 million a year in revenue, and he was like, Anyone can do this, anyone can do it. But he goes, if you want to go from zero to $1 million a year in revenue, all you really need to have is a really good niche and a really good offer. That's it. Even with real estate, like, if you want to make a million dollars a year in real estate, all you really have to do is find a niche that you know really well and have a fantastic offer. Whether it's that offer to a seller, whether it's an offer to an investor. I built my entire portfolio pretty much by giving investors 100% of the depreciation, because the way I raised money was, okay, well, number one, who's my ideal client? Who do I want to raise money from? Who's going to resonate the most with my message? Because for me, my thing that I wanted to do was multifamily. I really like apartments. I like cash flow. I like underwriting. I wasn't a huge fan of Flips at the time because every single person that I met that was doing Flips, they were in their fifty s and sixty s, and they've been doing it for 2030 years. And I'm like, Well, I don't want to do something where I did the same thing 2030 years later. That's like a nightmare to me. Like, the last thing I want to do is 510 years from now. That's my biggest fear, by the way. It's if anyone wants to capture me and torture me, that's my biggest fear is 510 years from now. Even like a year from now, my schedule looking the exact same. Like, having the same type of meetings, talking with the same type of people, doing the same type of things a year, two years, three years, five years, ten years from now. That's like, my biggest fear. So even with multifamily and whatever, I asked myself, okay, multifamily, I want to do that. Generational passive income, financial freedom, right? All the great reasons why we love multifamily. And I said, okay, so that's my product. I asked myself, who are the people that resonate the most with the benefits of that product? So I literally list I put on a sheet of paper, and if anyone is wanting to raise money, I highly recommend that they do this first before they start talking to anybody and everyone. And that's what I find, is one of the biggest weaknesses for people who raise money for real estate. As soon as they find out a person has money, they get super excited, or they get super nervous and like, oh, I need to talk to that individual. I need to get their business card, I need to sell them on something. And that's actually the worst thing that you can do. So what I did is I took out a sheet of paper and I said, okay, so here are all the benefits of multifamily. So depreciation, long term wealth, principal pay down, cash flow, all these different things. And I asked myself, who are the people that's going to resonate the most with this product? And I made a list of occupations and people. So one of the people on top of the list were physicians. Were doctors. Because a lot of times doctors have tax consequences and large tax consequences. And they need real estate with depreciation, and they need losses, or they need the straight line depreciation, or they need us to do a cost sex study so they can accelerate the depreciation and get more of it this year. Right? So I started going, okay, so physicians are at top of that list, and so they really like the tax benefit. So how can I create an offer that's more irresistible than anything that they're going to hear? Because that's one of the things I was asking myself, was, well, these guys probably get pitched by hundreds of different syndications. I'm sure their email is on a bunch of different lists, and I'm sure they have people around them that are constantly asking them for investment opportunities and money. So for me, it was like, how can I stand head and shoulders above the rest? And so giving them 100% of the depreciation, on top of it being a really good deal, which that's what I got really good at finding, that was like the home run. Every single person I was talking to, they wanted to work with me because they found that I had an offer that was unique to what they were needing and what they were wanting. And so even just spending that extra time, that was key, right? But it kind of goes back to what my mentor said. If you want to go from zero to one, pick a niche and have a really good offer, that's really all you need. So even with our first deal mentor program, our offer is, hey, we help in 15 months, we help you do your first deal, right? And if we don't, we give your money back. Like, plain and simple. And so he said, if you want to go from one to ten, have a really good system, have a really, really good system that makes everything super efficient around that offer and learn how to create ancillary income. So you ask, okay, so the people that bought that helped me get to a million in terms of offer. What else do they need? Like, what problem am I solving for next? And that's something that I believe that every single person should be asking, because we all have clients and customers, whether it's in the form of limited partners. Whether it's a seller, we all have a product that we're offering. If you're trying to sell to a seller, your product might be a cash offer. In my case, with a lot of seller financing offers, we all have a product. And so you always ask yourself if you want to go from one to ten, it's like, okay, what are the Ancillary ways of income? What are some additional ways I could serve my clients and serve my customers? And not only that, but how can I make what I'm already doing super efficient and systematize it? And then he said, if you want to go from ten to 100, get really good with leading people, like actually creating an organization. I'm sorry, creating a company. So creating a team, like team building and all this stuff. And then he says, if you want to go from 100 to a billion, he said, get really good at leading an organization. So get really good at building a culture, enforcing core values, putting people in positions where they really need to succeed. And one of the questions I asked him was, like, okay, well, you're a CEO of you've been a CEO of multiple billion dollar companies. Like, what's your secret? And he goes, like, daniel, at the end of the day, I really do three things really well. And on top of that three things was, I just get really good at making sure six to eight people are crushing it every single day. That's what I'm really good at, is having a leadership team of six to eight people, which is, like, chief marketing officer, chief tech or whatever, like chief operating or chief financial. I'm just really good at making sure that they have everything they need to succeed and lead their teams really well, and that tends to spread down the culture. I know I'm rambling a little bit, but anyways, no, these are things I thought were, like, perfect. Okay. Perfect. All right. Awesome. Yeah. I mean, so many things that you just touched on there, folks. As we're all going through this process and we're trying to build our organizations, we're trying to be better, there are so many influences and so many things that you hear and you read about and you research, and it's easy, Daniel, to get lost in the core values and all of these different things, right? And you can't be everything to everyone. You just can't. So it's amazing how the core principles remain the same. You've got to be really super intentional about whatever piece you're in. If it's the zero to one or the one to ten or the ten to 100 or the 100 plus, if it's about your offer, if it's about having the ability to have a better offer than everybody else and offer the depreciation, 100% of the depreciation back to the investors, be super focused, be super intentional. That might be, like, the word of the day for me today is intentional. We had some exercises we were doing earlier because we're trying to grow now. We have a platform on the real estate side that we feel we can scale nationally. We think that we've hit on some really important pieces in the real estate business, and I see it, but it's a challenge, man, to find those right people and put those pieces of the puzzle in play and in the right place. And being intentional, it's so critically important. Yeah. And you can do it with anything, right? It's not even just with raising capital. Right. But for me, it's like, I meet entrepreneurs all the time, but they don't even have a million dollars in revenue, and we're talking about business, right? Not necessarily like, real estate, but I meet entrepreneurs who are like, they don't even have a million dollars a year in revenue, and they're, like, reading books on culture and podcast on culture. And, like, you don't even have an organization yet right now. You're at a point where you just need to hire one or two more people and be really good at creating a system and making your offer more potent. Right. That's what you need to focus on. And it's unreal, because even with real estate entrepreneurs who are like, hey, we have 100 units, and we want to scale to 500 units, or, like, hey, we have a flipping company, and we want to scale, we did, like, $2 million in annual revenue last year. We want to grow it to 5 million. And usually when you're at that point, it's not like, crazy more. You have to do it's literally just a couple of tweaks and a couple of relationships that is required to get you there and make sure you do that really well. And so even when you're first starting out, I would say just be really intentional, but be really clear that's the one word that I tell a lot of people that are just starting out is right now, the only reason why you haven't done your first deal yet is you don't have clarity. You don't have clarity on who your ideal customer is for finding a deal. One of the questions I get all the time is, like, daniel, how do you find the best deal? And my answer is always the same you never look for properties. Always look for people. Never look for properties. Always look for people. Because it doesn't matter if you're in real estate. It doesn't matter if you're in drop shipping or e commerce, because my brother and I, we have a company that focuses on that, which we spend like, an hour a month on. It produces really good income for us, but you just have to be super duper clear, and every business, no matter what industry you're in, it's a people business. Real estate is a people business. And so, for me, my career has been built on I don't care about finding necessarily properties. I do care, I do have a criteria of what I'm looking for. But the question I always ask is, okay, how can I find sellers who own that right? What are the challenges and the nuances of that particular asset that I can use to find unique people that I want to do business with? So if you just simply sit down and kind of go, all right, multifamily is what I want, how can I use that to figure out who's the ideal investor that I want to work with? How can I use that information also to find the ideal seller that I want to work with and how can I use that to identify key relationships that I need to have to ensure that I can accomplish my deal in the next five or six months? And I think if people just took even just an hour to do that, I think people would really surprise themselves and how fast and how easily they can accomplish what they're wanting to accomplish. So a few of the companies are centered around first steps, paying off the mortgage quickly and the first deal or any of the companies centered around scaling. Like my business, right, taking a business that's been there, that's done some work, that is looking to take the next step. Is that in the family of companies for you? Is that something you focus on? We don't have a company for it, but I have friends who are like, hey, we did $6 million last year in revenue. Can we just have lunch? And can I just pick your brain on what you would do to scale it to 20 million? And yeah, sure. I love talking about this stuff. I eat brief sleep, like, scaling companies and culture and all this stuff. I'm passionate about it so much because I believe it's got the power to change the world. There are so many great companies out there that it's like, man, if everyone had access to it, the world would look so different. There's a couple of medical companies and some psychologists that I've had actually breakfast with this morning and I'm just like, man, if everyone had access to your work, we wouldn't need antidepressant pills, we wouldn't need all the things that Big Pharma is pushing out or whatever. But a lot of my companies are focused on getting people to step one because a lot of times if you look at the masses, that's what's needed. For my real estate company, we help people do their first deal, but we're probably going to launch something next year where it's like, okay, like, how do you go from doing deals now? You're actually building a business and we're so we're probably going to launch something sometime in 2023 that helps people do that. But I mean, yeah, I mean, even, even for you, like if you, if you want of somebody else to kind of give their opinion on what they would do to scale something. I'm more than happy to jump on a zoom or whatever. I just love talking about this stuff. It's amazing. The podcast world and real estate world, by extension. This is all you find. It's just one person is better than the next. Everybody is so willing to help and be a part of what you're doing as long as they see you're real and you're vested. Of course, we're all busy, but it really is this amazing open arms world. You said something earlier about the power to change the world. One of my affirmations every day is that I have the power to hit certain revenue goals, and via those revenue goals, I can change the world. That's something that I affirm to myself every day. It helps me to stay centered and focused and driven and tenacious and all of those other wonderful things. Why are we here? Why are so many of us talking about financial literacy? Why are so many of us talking about those core principles? Rich dad, poor dad. And everybody talks about it, but everybody talks about it for a reason. Because the book is it's one of those books. I think it's just one of those iconic pieces that everyone must read. We know that there are things we can do, proven things. I think third grade literacy is one of them. If you improve third grade literacy, poverty chances of you being in poverty dramatically change. But we're not focused on those things. We're not teaching financial literacy. The curriculum has not changed. Why? Yeah, that's a great question. And funny enough, I'm actually doing a video on my YouTube channel, and we're filming it next week. It's titled, like, The Nasty Truth of Education. Right? So we're talking about why they don't teach taxes. We're doing a video on it. But for me, the reason why I do what I do and why am I here is, for me, I'm an Advent follower of Christ of Jesus, and there's a really interesting couple of stories in Scripture where it's like, people are asking Him, hey, why are you here? What's your purpose? And literally, his answer is like, yeah, my job is to do the will of the one who sent me, which is Father God. And so for me, that's pretty much my purpose, right? My purpose is to do the will of God, of the one who sent me. And I truly do believe that it's impossible. It's really hard. I wouldn't say it's impossible, but it's really hard to make any positive change in the world without money, right? Even if you look at someone like, because Mother Teresa is the person who's like, oh, well, she did it without money. No, that's not true. She raised a lot of money to do what she needed to do. In Calcutta, India, I actually have a couple of friends who used to work with her. One of my really good friends, literally owned the largest online platform for nonprofits raising money. He's got 105,000 nonprofit companies on his platform. Really cool guy. So this is actually something I talk about a lot, and even some of my projects that I've got going on. We're actually developing farmland in Africa and some of these countries like the Dominican Republic and Nicaragua, and we're focused on these really poor communities where I have a friend of mine shout out to my buddy Carlos Nunes. Who he goes over to the Dominican. He goes over to Haiti and all these countries, and he's like, man, dude, there's communities where they're so poor that these kids are literally just walking around the street naked. It's bad. It's really bad. So we're actually developing farmland because if you look at how economies and cities actually work, farmland oftentimes is the cornerstone of how things get built, whether it's real estate, whether it's commerce, whether it's whatever. So that's one of my side projects that I'm currently doing now. But even like a Mother Teresa, she raised money all the time. In fact, one of her favorite quotes is when somebody asked her, hey, do you know that the money that you're raising that you're using to do whatever, that actually used to be drug money from the cartels? And she said, well, I don't care if the money is originally from drug money. I don't care if it's originally from a very honest businessman. All I know that is it's all God's money, so it doesn't matter anyways. And I was like, yeah, that's pretty much it. And I truly do believe that if everyone had financial literacy, knew how to really run things right, competency, I guess in that regard, there are so many things that be different. I had a dinner with a couple of friends of mine who were recently about a couple of months ago who, I mean, they're worth a lot. I won't say how much they're worth, but they're worth in the ten figure mark. And we were talking about charities and nonprofit and giving, right? Because my brother and I, we do a good amount of giving, and they do as well. And I'm kind of just like, hey, man, why don't you give more to these type of organizations? We had a friend of mine who worked for a large nonprofit organization, and I'm like, why don't you give more to that to that organization? And his answer was like, wow, I never saw it from that perspective. He goes, yeah, I don't give because I don't trust the people that I give to, because he goes, when I look into a lot of nonprofits, like, 8% of the actual money I donate goes towards the actual cost. And he's kind of like, it makes no sense that the CEO of whatever nonprofit, they're making like, $250,000 a year. Like, it makes no sense. And by the way, they're the last person that should be the CEO of that company because they don't have any experience in running any other company. They don't have any experience in being a CEO other than that organization. They just happen to have volunteered enough hours. They stuck around. They have maybe some good leadership qualities. That doesn't mean you can run an organization or run a company. So oftentimes these nonprofits, they're extremely inefficient. Execution plans are usually terrible. A very small percentage of the money actually goes towards the cost. And that's the reason why they're still raising so much money. Like, I read a statistic saying that there's like 33 nonprofit organizations in the city of Los Angeles that try to tackle homelessness, and they raised a total of $3.4 billion last year. And yet the homelessness problem in that same time frame actually got worse. Again, to reiterate your point, it's like, man, everyone needs to learn financial literacy and whatnot. So if you had to pick one or two of the companies that you're most excited for that you're most intentional in right now, what would they be?

I consider them like my two babies, probably accelerated banking, which we help families pay off their mortgage and then first deal mentor, which we help people get into their first deal. So a lot of what our clients do is they actually go to accelerated banking first. They pay off their debt because it's not just for your mortgage, it's for debt in general. Because the way debt works in America, most people don't know that it's a handcuff, right? Because the amortization, they're losing so much interest. But the most important thing is they relinquish the control of their capital. Because what banks do is they make money off the masses. They take the money that they make and they invest it. They invest it. And if they fail, they get billed up by the government, right? That's why they're so rich, right? So what we try to most people to do is, hey, learn how to pay off your debt. First. Let's get control of your capital back. Let's increase your cash flow by decreasing the expenses, and then afterwards, you play defense. Now let's play offense now. Let's learn how to regain control of your capital, but put it into hard assets that can survive inflation, that can survive market crashes, that if you look over a 30, 40 year span of time, the returns are ridiculously infinite. And we call real estate the infinite asset because it produces infinite returns and it brings benefit in so much more than just cash. But you're actually creating wealth because real estate over the course of 30 years is probably going to go up. And not only that, but you're getting tax benefits along the way. And you're putting yourself in a position now where, oh, wow, if you want to own that piece of real estate now you got to get an entity, get an LLC, right? Or depending on what you buy, it might be a C Corp. Might be an S Corp proprietorship. There's so many different options you could do. But regardless, you're now able to start doing things like a salary dividend split, where you divide your income through salary and also through a dividend. So that's actually what my brother and I do. So we take a salary of like 75, 80 grand, and then the rest are just dividends and distributions. And that's one of the things that we do to kind of mitigate our taxes. And so I'd say those two things are the things that I'm very passionate about because it introduces people to the world of financial literacy. And we need more of that. We absolutely need more of that in America. No doubt about it. Man you're about to take down a significant portfolio of self storage units that will put you up around 1100 units. Can you give me a few minutes on why you're so bullish there? Yeah. So I really like what real estate asset prices are doing right now. Obviously, we saw rates go up again this past Wednesday. I believe they raise the rates at that 4.25%. They raised it by 50 basis points. So I'm in a weird mode right now where I actually haven't bought a piece of real estate the last four years because of asset prices were so high. And I was like, I really don't want to do that to my limited partners because a lot of the deals that I'm seeing right now actually are assumable loan deals. Like, I've had four assumable loan deals come across my desk, and these are like 300, 400 unit buildings. And every single back story is the same. These the exact same. They took out a Bridge loan or IO loan two, three years ago, and now their financing is coming due, their debt service is going to go up and or the bank is wanting to refinance the mortgage. And now, oh, look at that, the interest rate is at 7%, right? It's literally the exact same story that I've heard. And this is like four deals the last seven days. We screamed about this. We begged people, please do not get into these indications where they're structuring debt and they're banking on a liquidity event in a few years because rates are going to go up and the banks are going to have to get rid of this debt because cash reserves are going to be going down. The big banks are going to be sucking cash into their vehicles and institutions, and they're going to have to get that debt off their desk. So I'm sorry to interrupt you, but no, you're absolutely on the money. I was saying the exact same thing three, four years ago, where it's just like, I'm telling you guys right now, that's going to happen. And the big counter argument was like, well, our equity multiple is so big, right? Our loan to value ratio is going to be exactly fine, but it's not about that. I don't care what your LTV is. If you still have to refinance after a short term bridge loan or any type of short term loan, your cost of debt is going to increase and then your returns are going to vanish. You're going to be in a lose lose situation no matter what. Again, we've said it right, but the reason why I'm so bullish on self storage right now is because, again, I'm in a weird mode. Unless we buy something that's like seller financing, 30 year amortization, and the interest rates are like, three and a half percent or 4%, which we do have a couple that we're buying right now, that one is at 3% and then the other is at 4%. Unless we do that and it's fixed debt for a long time, there's no refinance event. And if the rates are under market, we'll mess with it. Right? Absolutely. We'll do it. And if we can get it at a lower valuation than what it's worth right now, there's one deal that I'm thinking about doing right now, and the seller wants twelve. I'm like, no, you're not going to get twelve. That's way too high. It's like a four and a half percent cap rate, which I don't mean I'm trying to buy it closer to seven or eight, but if I can do something like that right now, great. Fantastic. Right. Which those two self storage units, self storage deals that we're doing are exactly that. Right. This big portfolio, it kind of checks off all the boxes that I've got, but in about six to nine months, I believe guys like you and I, who prepared for these type of moments, I think we're going to have a good time. I think we're going to have a great time. I think it's going to be the greatest buying opportunity of our generation. Yeah, I think so, too. Do you think the Fed has started to pivot with this last increase only being a half a point? I don't think so. I'm actually not as worried about that as all the other stuff that they've been doing, especially with what's on their balance sheet. Reverse repo market, then repo market three years ago, I think it was like October of 2019 that they were doing, and I think they were doing, if I remember correctly, like almost about like 10 billion a month. I might be off on that number, but it was a big operation. I'm more concerned about that than I am about necessarily the interest rate. Because the interest rate, yes, it will fluctuate asset prices, especially with cost of debt. Right. We all understand that. But if we're talking about all the stuff that they've been doing the last 510 years, this is stuff that could potentially destroy people.

Forget buying a piece of stock or a piece of real estate for cheaper or more expensive. The stuff that they've got going on on the outsides of just interest rate. Those are things that might ruin people's lives. And that's worrisome. That's extremely worrisome. I'm following a lot of things happening right now, and I'm still a little shy, but I guess I'm bullish more on the deals that I'm doing than on the overall market. Man, this has been an absolutely amazing hour. I cannot thank you enough for the candor, the insight where's the best way for folks to find you. Daniel yeah, and by the way, I feel bad. I'm glad you thought this was a good episode, because I feel like there's so much more techniques I could have shared on how to find deals and raise capital. I feel like I could have spent, like, another hour on how to do that. But if people do want access to that, because I'm sure there's a lot of people that are like, wait, I wanted to hear about that. I do have a free course that I give out. So if you literally just go to the clockbrothers.com and there's a tab that says free stuff, if you just go there, you'll find I do a free three hour class on seller financing. We have, I think, like a 40 or 50 hours free course on real estate. And in there is how you raise capital. There's deal finding stuff in there as well. There's all sorts of things that I think people could really enjoy. So literally, just go to the cooperative.com/freestuff. I've got a book titled Zero to 75 Units in One Year that's also free as well. The only thing you have to do is pay for shipping. So if people want access to that, I mean, again, we give out so much free stuff, and we do a free meetup every other week. So every other Tuesday, I do a free hour and a half virtual meetup where I share a lot of really cool stuff. So January 3, we're actually having an event. It's titled how to make 2023 your breakout year. So 2017 was my breakout year. I we did 83 83 doors that year. We just call it 75 because it's more catchy. Like, my brother is more of the marketer than I am. But in January 3, I've got multiple people speaking. So I have one friend of mine who's a clinical psychologist, and I've asked him, hey, can you share what are the proven from a clinical psychologist? What are the proven things that you could share that help people actually accomplish their goals? And then I've also asked a friend of mine, Matt Sorensen, he's an attorney, to come speak on how to raise capital from self directed from retirement accounts. So how to do that, because obviously retirement accounts liquidity is, like, ridiculous right now. So I've asked him to come share on how to do that, how to do that effectively. And also the new laws around raising capital and doing real. Estate, and then I'm going to talk about how to establish a business strategy, how to establish a plan. So it's a little bit of both. Right. But it's real estate, but it's also hey, like, this is actually how you, like, do something, right? Like, here's how you actually succeed, whatever you do. I'm going to talk about that as well. So it's a three hour event, six to 09:00 P.m. On January 3. I strongly encourage people to attend that because it's probably going to be one of the best trainings that we put on in a while. So, again, free event. Everything I've mentioned is completely complimentary. Feel free to just go to the thekwakbrothers.com. You should be able to find all that information there. And this event will be hosted virtually? Yes. It's virtual, so anybody can attend. No need to buy a plane ticket or get a hotel room or anything like that. All right, so we'll be sure to promote that. Daniel, this again, I can't thank you enough for the time. This really has been one of the absolute best episodes I've been a part of. Thank you. I really appreciate you. What you've done here is nothing short of remarkable. Your perspective, your energy, your humbleness. Really just an absolute blessing to talk to you today. Thank you so much, James, best of luck, Daniel and everyone out there, as always, please stay safe. This was great, man. I really appreciate you. Thank you, man. That was fun. That was probably the most fun I've had in a podcast in a long time. Good. I'm glad to hear it. I know an hour kind of came off the clock so quick. It's just we kind of got going. And I'm sorry if we didn't hit some of the specific that you wanted, but this was enjoyable. Thanks for being willing to promote the January 3 event. What I'll do is I'll have Katie, who's my marketing director, I'll hover, send you some information. Yeah. On it. And by the way, I'm serious. Like, if you ever want me to hop on a zoom and take a look at a couple of things, I'm more than happy to do that. I really appreciate you, and I may take you up on that. If you ever need a real estate brain that is an area perhaps you don't have a level of proficiency in that. You think maybe I can help? The same offer, of course, is extended. I'm going to promote that event. You may see me at the event. And this was great, man. Really appreciate you. Where are you residing in? We're in New York. Right on. Okay. Good stuff. Anywhere in specific? Queens. Yeah. So the headquarters is in Staten Island. We have an office in New Jersey and in Pennsylvania, and then we've got out in New Mexico. A pretty significant portfolio. Wow. Okay. And you're in New York? Yeah. Okay. Yeah. Next time in New York, I have to please do my phone with me. But yeah, let's stay in touch. Maybe through text or anything like that. That'd be awesome. Yeah. So I'll shoot you a note with my cellphone number. Okay. Was her name Stephanie? Yeah, that's my assistant, Stephanie. Okay. So have Stephanie send me the information on January 3. I'll send back my cell, we'll promote it, and then we'll connect from there. Okay. Thank you. I'll have Katy send it over because she's a marketing director. But I appreciate you doing that. That means a lot. No, anything that provides value to the audience, we're happy to promote. And I love everything you got going on, man. Really. Congratulations. This is inspiring stuff. Thank you. I appreciate that. My pleasure. Have a blessed day, man. See you, James. Take care.