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ADPI_008: Living A Life of Service with Stuart Grazier

Jul 15, 2018


Episode Transcription:

Mike: Hey hey what's going on guys Mike Foster in the house?  Welcome to the active duty passive income podcast. You are in for a special treat today. We’ve got an awesome interview lined up with Stuart Greasier. He is a Navy reservist, he is an entrepreneur, and he’s a real estate investor. But he's also the co-founder of military investor network. He has an awesome story and a bunch of great nuggets of wisdom for you guys are coming right out. But first.

Hey freedom fighters welcome to the active duty passive income podcast. The only place where military members veterans and their families learn how to build wealth through real estate investing. I'm your host Mike Foster and I'm here to show you how to stop wasting your benefits. Now get off your ass, step up to the firing line and make ready for today's lesson. Shooter stand by. 

Mike: Alright alright hey guys what's going on Mike foster here. I have a very very very special guest for you guys today. His name is Stuart greasier. Alright he is a full-time support XO of a [01:23 inaudible] in Denver. But he is also a real estate investor and an entrepreneur and he has a great story for you guys today on how he got started, how he was able to turn a 600k portfolio and manages notes still today. Stuart how are you doing. 

Stuart: Hey Mike how are you doing. 

Mike: Doing awesome. Awesome super excited to have you on the show today. Thank you so much. 

Stuart: Thanks for inviting me.  This is awesome man. I love what you guys are doing. So thank you guys for starting this thing. Man it's been awesome. 

Mike: And I see you are also starting your own thing as well right. 

Stuart: Yeah so I've got to you know some other than doing real estate for like Josh going on about 10-11 years now. like you know kind of getting real serious about it recently as I'm starting to look at transitioning out of the military and about four years or so. But VSO just a little bit background about me. I graduated from the Naval Academy just like you. Class of 2002 and then I went to flight school and became a helicopter pilot and spent most of my time out in San Diego. But that was a good time.

But that actually was oddly enough kind of the catalyst that got me going with all this real estate stuff. Because I had lots of time to learn and study and read and I took the Dave Ramsey Financial Peace University class. Which really got me my mind shift changed towards you know you know being savvy with my finances and you know become debt-free and I started looking into the real estate gig and I started doing all the learning and research. So you know hindsight 20/20 that was a really good tour for me and after that I came back and finished out my tour of San Diego and then decided to go FTS full-time support for the Navy Reserves and flew C 40s. Which is like the Boeing 737 out of Fort Worth Texas. There that's where I really kind of started bumping up my real-estate game there in Texas as well. I'm originally from and at the time the opportunities in Texas were pretty good. So it's been awesome. 

Mike: That is awesome .see you have had a very very full tour and around the world. I am sure you have seen a lot. But you still managed to have time to invest in real estate. So how is that been investing in real estate while you've been in the military? 

Stuart: Yeah so not going to lie. It’s definitely there's some you know challenges involved. But really it's just about that mindset shift and just making a decision that you aren't putting the time and effort to do it. It’s a lot of early mornings like this. You know I know you're in Dubai it's afternoon. But it's 5:00 a.m. here and standard wake up time for me is 4:15-4:30 something like that and that's just kind of like the normal ritual for me. So lots of good mornings and quite often some late nights, a lot of weekends. But you know it's all been worth it. So yeah so I think if you put in a time, make a decision you know shift that mindset then you know anything's possible. 

Mike: Yeah I believe that, I definitely blew that and again thank you so much for you know waking up. Oh I think this is your normal wake-up time right. But for sacrificing little bit of your money making morning.  

Stuart: So actually my first real state deal was when I was in flight school in Pensacola Florida. A friend of mine that was going through high school at the time, he was buying land. He was basically flipping land over on the Alabama side. like right across the border and so I said that sounds fun, I'll do that and so I went over there and found like a new development like quarter acre lot and it was, and then like two months later a hurricane came through.

But I thought that was going to be like, but a terrible terrible investment. But oddly enough like the prices of real estate like blew up after kind of everything settle down and started you know rejuvenate in the area. So I've got a call like six months later from the real estate agent that I walk around and said that someone willing to buy for like $90,000 and yeah so back we fired up about real estate. So basically like almost doubled my profit in you know six-seven months. But then you know flight school happened and kind of like that. I bought a house in San Diego it was way too expensive for a young lieutenant at the time and making mistakes. But yeah that was kind of my first stint of real estate. Yeah so you know good lesson learn there.

I think the biggest you know is taking action. You know you got to start and to take action and learn along the way while you're doing it. So from there that's kind of I got back from that tour overseas in Iraq and I've been doing all that learning. I went to a meet up at a local meet up in Fort Worth. which is where I'm from and I was back home on leave and I started just kind of networking and meeting people and another guy who was kind of doing like a lot of flipping and he was looking for private money, private investors and I saved up some money from that long deployment over to Iraq.

And so I decided to start earning money and that's kind of where I got into the merge notes and learned that entire business of lending money and I'm just kind of invest in in paper assets and I loved about it was the passivity of it. you know as a full-time active military guy you know you had a fine investment or I thought the best thing to do is find a business where it was just incredibly passive and that was about as passive as I could get is just you know invest the money and then sit back and wait for it to get paid off and wait for those monthly payments to come in. which I absolutely loved about lending mortgage notes you know.  There’s no land lording, there's no dealing with tenants and toilets and I thought that was really really the best way to go at the time. 

Mike: That is awesome. Can we just real quick break that down? Because I'm not sure a lot of our listeners understand that concept. So can you break down what mortgage lending is exactly? 

Stuart: Yes there's a couple different styles of lending. What I first started in was short-term lending on flips. So basically there's an investor who is buying the property. You know normally their properties they need a lot of work, they want to rehab it and they're looking you know instead of going to a bank and getting a regular loan. Because most the time banks are owned on properties that need a lot of rehab work. They look to private investors for money and so you know here I come along with, I think my first investment was $25,000. So it was a super super beat up like tiny small little house in not the best area of town in Dallas. But you know they do a contract.

They call it so you know basically a promissory note and it can either be secured by a mortgage. Which actually gets recorded at the county courthouse and you know you get stamp recorded saying that you have a mortgage on the property and that secures you on that property meaning. If the borrower didn't pay back, then you could foreclose on the property and take care of the property.

So that's kind of your you know your secured asset if you will when you're lending money.  You could be in a first position or you could be in a second position. So there's a lot of different types of the mortgage notes. So I first started doing that is kind of short term gains and then kind of started learning later on once my capital built up to do you know the longer term mortgage notes where you're just basically went into an empire.

You know maybe he doesn't have the best credit. Maybe he can't go and get a regular loan at a bank and so they reach out to you know guys that who are dealing with financing and they'll hold the mortgage note and this would be the bank. So instead of you know someone paying Wells Fargo, they're paying me and it's normally at a much higher of an interest rate. When I'm looking at nine to ten percent interest on my mortgage notes. 

Mike: Wow so these people they come and find you right? You don't go and find lenders that you, I'm sorry investors that you can lend to. 

Stuart: Yeah it goes both ways. You know as your network grows you know you find flippers and you know flippers are always looking for the private lenders. because honestly it is the best way you know to not use any of your own money and you know normally when you're using private lenders there's no like extra fees.

There’s no a lot of times you know having to put extra money like with points down ahead of time. There’s no application fees. There’s you know there's lots of fees that get involved with banks and with hard money lenders. so you know as your network grows you start you know meeting people, connecting with people other than the flipping and then you're also kind of getting involved kind of in that network where you know there's guys out there that are willing to buy long-term homes that they want to live on and yeah man so it's just all done networking and getting that niche of the real estate market. 

Mike: Wow that is awesome and mortgage notes really are a truly passive way of investing. I mean other than you doing you know your own due diligence as the lender and just making sure that the deal that you're funding is correct. I mean what other real work is there involved in that process or I mean it is just making sure you have the controls in place to secure your investment right, in case anything goes south. 

A: Yeah you know there's some due diligence on the front end. You know you making sure that the buyer is going to get a payback. You know there's some due diligence and a lot of this is done by other people.

So you know there's companies that will do all this due diligence for you and you know they have what's called an RMLO, registered mortgage loan originator and they would originate a loan just like a regular bank would. So they're going to do like the background check, they're going to do like the credit check and you're going to have them go through this process.

Just like you know they don't apply for a loan through this RMLO just they look at a bank and so you didn’t know all the information and you're going to do your due diligence on these buyers and this flipper is ahead of time. But after that once you've decided that it's a good investment, you know it's turned over to a third party servicing company. Just kind of like an escrow company and you know the servicing company handles all the payments. You know the buyer sent the parents directly to a third party servicing company.

So it is truly the most passive and besides like putting in money into like a mutual fund or something like that, I would say that this is definitely like the most passive form of real estate investing. You know you put your money in there and then basically just get a monthly check into your bank account and you get a statement of where that is. So it's pretty awesome. 

That is crazy. Guys I hope you are taking notes right now, because I totally am. I don't know if you can hear my book shifting in this at all. But this is amazing and we are definitely going to have to talk you know you and I little more about this. Because I mean honestly I think I've heard of it. You know and I know about private lenders, but I've never really dabbled into the process and so this is really kind of cool. Because as far as thinking about building multiple streams of income guys, you know passive income coming from multiple places is what you want to think of. you don't want to ever just have your sources of income coming from one place and this sounds like an awesome strategy to have you know on the side for income just coming in to support whatever it is that you guys are doing. 

Stuart: Yeah it's great. So you know you have saved up a pretty significant amount of money to do this type of investment and you know again it depends on where you're going to decide to invest and do the spending, like I said the first investment that I ever made was about $25,000 and that you know I'd saved that up on long deployment and from there it kind of just started snowballing. Do an extra jobs if you have to and just save up that money to accrue more capital to put it to work. 

Mike: That is awesome. Yeah you're absolutely right. It definitely takes a hard start. But like you said once you get going, things start snowballing that's where the happiness comes, and that’s where the fun comes. So right now in your investing career where would you say you are? You think you're at the top of your game? You are still climbing? 

Stuart: But at the same time one of the lessons learned from investing in paper and the mortgage notes is there's not a lot of tax breaks of tax write-offs. You know we talked a lot about you know the advantages of real estate and one of them is taxes. But when you're just investing in the paper, you don't have all the write offs that you would with buying a physical asset.

You can't depreciate a mortgage note, you know you're not paying property taxes, you're not paying the mortgage insurance and there's no maintenance cost. Because you will actually own the house, you just own the paper.

So when you establish a pretty significant portfolio, your text book at the end of the year starts to get quite a bit higher. Which I guess is a good problem to have right. There’s always ways to improve. So I started to focus more on and I got this great portfolio of passive income that's coming in. but I need to start balancing that with buying an actual like physical property.

So once I got back from my tour in Europe over the last about a year and a half days, [21:06 inaudible] focusing on buying you know cash only rental properties. So I started doing the turnkey, I bought some turnkey in Birmingham Alabama. but four rental properties there and then from there I kind of like learn the model of turnkey and although the properties that I bought are great, there definitely were some mistakes from the company made and some things that I thought could have been done better and so over the last like two three months I joined up with my Naval Academy roommate and we've decided to start kind of start doing that turnkey model on our own. 

Where we're going to find the properties. We put a team together and go buy the discount properties. The buy, rehab, refinance and rent and so we started doing that over the past three months and keeping some for ourselves. But we're also like you know our goal is to start selling them to our other Network. You know the other military guys. Guys that want to get started and what to buy you know cash flowing, solid mental properties and so that's kind of our new venture.  I mean goal is to start helping people get these great assets. 

Mike: Awesome. That is awesome and another awesome good note there, turn-key properties. If you didn't hear, he exactly explained what it is. So you find a property right, it's needs a lot of rehab you know or some work. But they do the rehab, they find a tenant for you, they put it in and you the investor just goes and buys it and your cash flowing day one. It is an amazing way to also to get started if you just starting out, you don't want to go through the hassle, go through the learning curve. 

Stuart: Yeah yeah turnkey is a great model and especially for you know for us.  For active duty guys that have full-time jobs and don't have the time to you know go and actively pursue and find those you know those deals and go and do the rehabs and a lot of work. So I just don't have the time to do it and so if you can buy into a turnkey model where its cash flowing from day one and it's still a great investment to start building your portfolio, I think it's a solid solid way to go. 

Mike: Yep hundred percent. So to tell me what passions has real estate investing helped you realize in your life? 

Stuart: Yeah so this is huge and this is why I've just grown to love this business. yeah for me it's all about just living a life of service and that's kind of why most of us join the military begin with this is to serve and I found on that real state [24:33 inaudible] another avenue for serving in so many different ways. You know from just you know personally just going to have to like the passive income and yeah that does is creates time enough.

If you have all these forms of passive income, streams of income you know and you build that over time, it increases your time and that allows you to serve your family, to serve their network, to serve in your group whoever that may be and then also as you  grow your wealth, it allows you to serve in other ways and give back and so that's what I've really started to see coming flourish and I was starting to not only take my time and use it to spend time with my family and my children. But spend time teaching and helping others and then giving back through you know nonprofits and charities and you know helping people attain their own goals. so we've started a non-profit of our own and our goal through this new business of doing the turnkey and model is we're taking 10 percent of our profits on every deal and we've started a crowdfund to then go buy a house for a.. 

It’s actually  set up like a house full of wounded or ill veterans that are going through treatment of VA center and used it almost like a Ronald McDonald House and so that's our goal. so I go over the next step to three years is to buy a house and it'll probably be either in Milwaukee Wisconsin, which is where we're doing most of our investing right now and set up a kind of a veteran Ronald McDonald House for wounded and ill families and go from there. We’ll see if we can branch out and buy some more over time. But yeah that's what it's all about man. It’s all about you know serving and giving back and that's what we'll still have done for me at least. 

Mike: Amen that is so awesome. Oh my god that's powerful. Stuart you are amazing man. So that literally embodies everything that you know I personally feel too about real estate. I think a lot of times we focus so much on you know the money that it brings in and not enough is it emphasized the good that can come out of it you know. Because real estate is so much more than just you know passive income coming in month after month.

It's you know you being able to take that income and do something awesome in your community or in your family or you know in the world. But that is incredible, absolutely incredible Stuart and I wish you guys the best of luck with that. That’s awesome. So you've already been alluding to a lot of little bits what you've been doing with military investment Network. But please tell us a little background on it. So you guys are a lot like us right, education platform where you teach you know military how to invest. But tell us how you guys get started. 

Stuart: Yeah man. so military investor network started with me and another they were kind of glad that we were serving together out in Italy and it started with he and I just one day started talking about real estate and found out that he's been doing real estate for a long time and I've been doing it for a long time and we got grab a cup of coffee on a Saturday morning on base and just goes talking about real estate and said hey this is fun, let's invite others.

We just started doing like a little Meet up and we would just pick a topic and we would do you know if we didn't know it personally, we do research on it through the month and we would create you know like a PowerPoint presentation on the topic and then one of us would present it  and talk about it and then we just you know ask questions and learn from each other.

So it is really an awesome way to just connect, you know we make a website and my wife knew how to do it and there's some you know that idea kind of came to fruition that, hey let's go around the world with this and let's see who are the others doing you know local meet up groups and let's do a discussion board and you know so we didn't per se be like an education platform like you guys are, which is awesome you know your course.

But just almost kind of like bigger pocket style you know doing discussion forums and the idea was hey let's make a platform where military guys and veteran guys can get on, ask questions. If they have an investment opportunity post it you know.

So it kind of came the idea of just feeling like a big military alike investment club you know a club where guys could ask questions, talk about stuff, post deals, do deals with each other and my vision is you know how cool to be if you have you know three investors, all military guys, one guy finds a deal, the other guys military that who wants to lend money on deal and then there's another guy at the very end of the table who wants to buy the deal to hold it for a long time. You have three military guys, all part of the military investor network doing deals together. So that's kind of a thought and the brains behind all. 

Mike: That is awesome, oh man. So really really cool how you guys had those meet ups. You know I mean that is awesome. Because that's another way to really find people who are interested in you know in real estate in that particular area. One friend invites another friend and another friend invites another friend and you guys kind of grow. How many did you guys usually see in Italy too of all places? It’s not a place that you would think to start, that's great. 

Stuart: Right yeah you know I would say our standard was anywhere from five to ten people. So you know it wasn’t a ton. But it was enough to have like a great conversation and to learn from each other. so you know I would highly recommend that for anyone, even if you're starting out, even if you're a beginner what it did for me was helped me learn. Because we would pick a topic and maybe I had never done that type of investment before.

But what it forced me to do was to learn and to research. especially if I was the one that was going to be giving a presentation that month and it forced me to go out and learn and do all the research and then come with a presentation about that topic and then you know there will be questions that came from it and then that would force me to go back and do more research and do more learning. So it was just a really great way to get involved and learn. 

Mike: That is awesome man that is incredible. Wow all right. So what other big things that we have coming up for a military investor Network. I know you were talking about the turnkeys, are you cooperating that as well? 

Stuart: Yes military investor network you know it will continue to be you know free for all military, all veterans. you know continue to try to just grow that organically and just you know and other people hear about it, just love to have them pass it along and first you know that the turnkey business is a separate business. My roommates, his wife is from there and we've created an amazing team on the ground and that's what it's all about is putting that team in place and so we started there and then we'll see how it goes. If maybe in a couple years we branched out to some other markets. But yeah it's going good so far. 

Mike: All right Stuart, this has been an awesome interview. I really really hope that you know you listeners out there have been taking notes. Because he has dropped so many nuggets of wisdom already. But we're going to do a bonus around. I've got three questions for you and it's going to help us get to know a little bit more about you. So please number one, what is your number one read? What’s your number one book that you recommend to our listener? 

Stuart: There are so many good books out there.  So I would say the number one book that my favorite is, it's called the legacy journey and it's by Dave Ramsey. He’s written quite a few books. But the legacy journey is probably one of my favorites. It do about how to grow your wealth biblically and through generosity and forgiving and through creating a legacy. Creating a legacy for either your family or creating a legacy for your network or for whoever you choose. Which is kind of one of my biggest goals is creating that legacy for my family and for all of us. For our group of military veterans. 

Mike: That is awesome, that is amazing. I definitely that hits home with me as well. You know being able to grow wealth and faith and that just kind of goes into that whole giving back you know that we were all talking about earlier. So I can definitely see how that connects. Alright so who is your biggest hero and why? 

Mike: It's completely up to you. 

Stuart: Yeah I don’t know if maybe heroes where I live for this guy. I have a problem for years and years, it was kind of a catalyst if it got me going taking his Financial Peace University course that got me into that mindset shift about changing and look at my finances differently.  He’s all about like paying cash and never being in debt. but I think like starting out you know for people that are learning about finances and you know trying to stay debt-free, you know bad debt if you will. I think his mission is awesome and trying to teach, like trying to teach kids about it and high scholars.

You know he's got a whole education platform for teaching kids. Because they don't teach it in schools and I just love his mission and I love passion. So I'm going to go Dace Ramsey. 

Mike: All right, we’ll all right Dave Ramsey that what I'm talking about. Okay so last question and I know you've already given us plenty of nuggets. But if you were to give three right now or less right, what would those be for those who are just getting started? 

Stuart: Yeah so I think first and foremost kind of back to the Dave Ramsey thing is get your finances in order. You know start doing a budget. Know and learn where your money is going and then take control a good money.

So I think that's first and foremost. Second is find a mentor. find someone who is doing what you want to do and you know reach out to that individual, try to offer value to them in some way and try to help them and always be learning and finding that mentor and take that on board and then the last thing I would say is you have to take action. Like you have to pull the trigger and take action. It’ll be scary the first time you do it.

But if anything you're going to learn from it and the best way to learn is just to do. You know to take that action and do it and you know you can continue to learn, you can always be like reading books and in the podcasts and blogs and there are so many different avenues and niches in real estate. But choose which route you want to go and then take that action. 

Mike: That is awesome. Oh man Stuart this has been amazing. Thank you so much for all the wisdom that you've provided on this wonderful podcast. I've learned so much right now just even talking to you. So this has been really really good. So how can our listeners connect with you? 

Stuart: Yes you know the best way is to go to military investor network. Www.militaryinvestornetwork.com. you know for anyone who’s military or veteran or a spouse of a military veteran, family members, go to www.militaryinvestornetwork.com, become a member, it's free to join. We have a Facebook page, we have a YouTube channel where we do videos, educational videos. We have an Instagram. Instagram is military investor and then they could always email me as well [email protected] 

Mike: Awesome. Alright guys make sure you reach out. Stuart's got a wealth of knowledge for you guys, more than just what you heard here on the podcast. He’s got a lot of experience and he also has a team, the folks behind him that are willing to help you guys out as well. So against Stuart thank you so much for being here on the podcast with me. Really appreciate having you and thank you for what you do and what you're about to do. 

Stuart: Absolutely Mike, it's been a pleasure man. I wish you guys the best of luck and I will definitely help you guys out in any way possible. So reach out. 

Mike: All right likewise. 

All right all right guys that'll do it here. Again thank you so much for listening. This was an amazing interview and we have so many awesome interviews like it coming up. Some from first-time investors that are just getting started and also more from people who've been doing it for years. Right veterans that have been out there whether doing it passively, actively. Right so you get the full scope of everything that involves with real estate investing. We want to make sure that you guys have a clear picture so you see all what it's all about and if you have any questions make sure you reach out to us okay.

Hit us up on our community on our Facebook right. Hit us up on our web page www.activedutypassiveincome.com. All right we've got a whole bunch of awesome stuff and I've also linked up all the resources for this last interview in the show notes page. So make sure you go ahead and take a look at the notes and figure out how you can get in contact with the military investor network. All right guys I'm out of here. 

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