ADPI_015: Determination And The Will To Win with Aaron Chapman

Aug 10, 2018

Episode Transcription:

Oh My God guys, you definitely do not want to miss this one. I have an absolute legend on this podcast today. Without further ado, let's go ahead and kick it.

Hey, 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 ass, step up to the firing line, and make ready for today's lesson.

Shooters standby.

Hey, hey, what's going on guys. Welcome to Active Duty Passive Income Podcast, I've got another awesome treat for you today. I am sitting here on the phone with Aaron Chapman, he is an amazing character. Honestly, I can't even-- I don't feel like introducing him, will do him justice but he's going to telling you all about himself, his business and how he operates in the CFO to change and guide your entire investment course and provide amazing experience to the table. Aaron, how are you doing today?

Aaron: Too really well man, how are you?

Mike: Oh men, I'm incredible and really, really excited to share this time with you. Thanks again so much for giving this a time.

Aaron: Oh, thanks for having me man. I know, with us being on up so right sides of the planet, and I'm trying to align the timing and all that. This is one of those miracles of modern technology that they consist one of the awesomest things that makes it available to us, we have to reach out to other people and communicate with each other right now real time.

Mike: Right, likewise. This is definitely interesting and I'm looking forward to joining you on the same side of the planet here soon so, we'll see.

Aaron: Pretty cool, brother. I'm looking forward to hopefully we'll get a chance to meet face to face.

Mike: Yeah. I too, likewise. So yeah, so please, tell us a little bit about yourself. A little about your background.

Aaron: So not to go too far back, but I think it's kind of nicer if we get back quite a ways. I spend my high school years on car watch and that was probably my first real offer opportunity to see a business plan and actually one of those most simple business plans ever existed is you got the kid, the calves or birds, they are fed, they are raise, they are brought to a certain point then you send them off for slaughter, you start over again. There's also doing the hay, I guess cultivating every year if you will. We have to get to point where we are plowing the field, you're planting, your watering, you're cutting, you're baling in your stalks pile. See you can then winter where you cover you kept during the weather period and it was a lot of hard work. In reality I look at it, it was definitely difficult but it was not the hardest work I've ever have done. It is now in the world tour I have to use my mind. I went from high school to the oil fields of Wyoming working for a welding company building gas plants then coating in pipelines and then from there to running heavy equipment whether be excavator or some loaders or things to that effect. Thousands of hours there and then work my way into the mines and there on the next court with my dad.

We sold the ranch home it was in nearly in 90s and then my pop was miner by since early days just after Vietnam and he had left the military and so it's kind of cold going under ground with him and I was running a what we call jack like drill, place explosives. 700 feet underground it was a great time and truly one of the best jobs I ever had but they shut down that project in 1997 and I was one of the first to let go because I was one of the younger guys and at that point, I was looking for a job I couldn't find who could save my life and I have my wife and an infant son going from place to place to place we even went to point of trying to get $10 in an hour track right in job. The whole landscape materials and then they wouldn't hire me because I was too over caught, right? I work for rolling companies, I run heavy equipment, I drive truck, I work to the mines, there's no way there's going to give me the lower level jobs in there because I've figured out I probably live this where I guess. So, I remember sitting in that parking lot, believably nearly in tears because I couldn't get a simple job.

So, because of that, I had decided to that point-- well, I just I even had a-- really was it's kind of fear what decision make at that point because I don't know what to do. But I had to get to head home and I was so broke I didn't have enough money to get gas I was literally feeling so, I'm going to my truck looking for change, and then I'm walking around the parking lot, circle kit to get enough change, to get just enough fuel to get it home and on my way home i had to stop at the grocery store to get a diapers with a coupon that my wife gave me because I have an infant son and I stumbled into a guy, that use to run in the office for the companies running heavy equipment for and he had stopped me and said hey and asked what i was doing and I explained the situation. He offer to take me and my wife to dinner.

It was a gift certificate that he had. We went Red Lobster and we sat down, he asked me if I'd interested in the mortgage industry, I knew nothing about that. The only thing I knew about mortgage was that it was a word being used when the old man, the old woman were losing the farm on TV, some TV show right? They couldn't just pay this mortgage that's quiet I knew about it. Well, he gave me the card for a friend of his. I cut a foot off my hair, shave and went in and then interviewed and they started in the office to tell him my theater. It was really tough to get going. That was late 1997?

I find and got a job driving a truck to sack. I'm only back every week that I stay on the office 3 days a week trying to build a business then that wasn't working after 3 months in the factory in the heavy equipment, get up by 3 am, be at the job, start by 4 am, work till noon or one, get to the office by 2, work till 10 pm, sleep 3 to 4 hours a night for a year and then the interest rate drop low 7% and I decided to jump for balls in to it. It was a battle at first but finally found my growth in 2003 when I started working in a real estate investors coming in to a phoenix vow and it kind of started to take off from there. I got its own bikes and had that point danger-born very well until the 2008 crash. That crippled me, well actually, in a big way. August 8, 2008.

Two days now it would be 10 yrs. I was in a motorcycle accident, 80+ miles an hour. Person making people shoot out shot me and drew now the car in the 3 way, I was put in a wheelchair, have massive memory loss and I have to start over. So, that's kind of where it all, that's kind of that quick background of where things started and until the people started to come back around that after the crash finding a investment real estate. That's how I really found my business today. In 2009 when people coming in the Arizona, looking to purchase investment real estate and I start doing those loans and I start traveling from there to Indiana to Texas to other parts of the south and then west and now I've exploited my business to be in 23 states and its been just an amazing journey that I have been able to see start, take a bidding start up again, take another BNF it's just slowly grows to appoint now, it's just a little bit overwhelming.

Mike: Wow! Oh my God man, that is incredible. Jeez, and a lot to unpack too but so a motorcycle accident so how? Well we'll get to that I feel like I got to touch down. So you got into a investing after having gone and tried so many these different things. Okay, you walk us through you know, what that first deal was like for you, I mean having that mortgage for free and then being able to work with investors and then what happen to that?

Aaron: Well, my first deal back when I started doing real estate investing is, it was actually pretty cool when I bought a-- where I bought my house, I still actually own the same house I bought in 2001, but a guy bought it from real estate broker got me in on a deal where there was a house on 5 acres that I was able to purchase at a certain price, split the property up in the 3 park, so sell the house on 1.6 acres at a off swing on the market for a profit and I got the other 2 acres being clear and I sat on those for a number of years and none carrying a note up on those first one note that I wrote for some they got to pay me an 8% interest on those, I'm making interest on that plus I got the 2 both for free and now years later I sold them for just under 100,000.

I'm carrying the note and eventually, when they paid it off, that was a really a big deal to me to discontinue it on go. So it was like my very first investment while I'm still in it. Well it's that 13 years later. So I've been paying payments on it. So there is so many different opportunities in real estate investing that some may not recognize and may not know what the outcome might be, just get into it. Take a step. Now, there's been other deals standing and stand that were that just grew up. I bought in stuff and anticipated equity growth and then the market crashed. Some people would say "Hey, you're in the business, why didn't you see it coming?" I've never noticed typical form I would really use my only experience was some market going up, I never seen the damn market, I was only maybe 6, 7 years in the business when their market crashed. I came out at minds for cr*p's sake so there's no way I would have seen it coming because I didn't know what to look for but now I know the history's teaching us a lot of stuff. In fact, there's a  movie "Rounders" win that game and Edward and you-- I think we talk early and you've said have not seen that yet. There were statement in there, there's a quote from a guy being named Jack King says, "Few players recall, big plots they've won, strange as it seems, but every player to remember with remarkable accuracy the outstanding tough beats of his career." So, it tells me, we have to go to those biddings that if you don't, you're not going to have salt of the memory. I think you need to get pound a little bit so he's going to remember that lesson because if he didn't, he did nothing but win all the time, you have no lessons. You have nothing-- you know, growth it might.

 Mike: Amen, that is very sure and be all need some growth and they continue achieving the goals that we set forth and that is awesome. So you said, you have taken lessons learned and now you have analyzed this market. So what lessons learned? Have you taken away from that crash?

Aaron: For the most part, really it's been a lot more conserving it was with my own personal requirements of life. At the time man, I was spending money like it would not stop. I remember when i first got in the industry so we said when you reach 5 years, it all just close up from there. Well my fifth year, I was making stupid out of my money you know, I was in mid 20s, well actually late 20s making just under 300 grand a year so I felt like it wasn't stoppable. Alright, so you get to that point when you're making that kind of an income then you think that you can do whatever and then when the music didn't stop, it really was brutal on me and then I found that I was not unstoppable and not a new to a massive biddings.

So, that was be the first and ultimate lest I learned there and it was also resought of myself and that the humility that you gain from taking up bidding like that. My link here is a Michael-- excuse me, I am trying to think if who he was who said this. Mike Tyson actually. Mike Tyson had said it that if you do not-- I can't remember exactly what he says going to paraphrase this but " The humbleness be thrust upon you" and look at his story. A guy being paid tens of millions of dollars per fight and then they take the bidding and he too financially and personally. 100% correct there's another person that can really add some great insights. You walk around, with an attitude, people can't wait to see you fall in your face and they're going to stand over you and take joy in your being. But, if you walk around with the right type of attitude, being helpful to others, they can't wait to help you when you're down. That's one of the things that would say that I have learned more than anything from that bidding where I took.

Mike: Wow, alright. I was definitely just get some words of wisdom and tell us a little more but I mean I know that's we really are off topic here but about the motorcycle accident, I mean, so you took a bidding there and quiet the recovery but I mean, from what it sounds like, you came back stronger than ever even with upbringing passion to continue and hit it hard. So to tell us about that journey and how was that?

Aaron: That was interesting. At the time I was running a branch, I was actually a branch manager for a company at that time and still doing all right, still making decent money. Then also I do fabrication work on the side description my year, my days back in the real fields then. From the mine, it had me working with him on this English double beck of glass we're turning into this almost like a bubbles drift carbon fuels, pretty while we're doing this thing and we've been going every night for over a month now, sleeping 4 hours a night working on this thing and I found out I was just tired. I need to take some time away. I jumped on the bike, I'm in a cruise for 3 days. It's August 8 this coming out of 2008, 8 is my lucky number. That's happen to be our Fridays so I take that 3 week and I'm going to go ride. Jumped on the bike in 15 minutes later, I'm just driving down and then halling down the road and a guy next to me in a 4 truck slip down his blinker and just came over right in to me. I saw him coming, I look to my right, there's nobody there so it has swaddle to get away from them and just in the car at the high knees start to pass I could tear the front bumper. So I went slipping. I don't know if you've been there at Arizona during the August month but it's quiet warm here and it's 12:24 in the afternoon, I went skipping down the freeway and I laid there on the block top in a hundred and fifteen hundred eighteen free weather. Cooked me, shatter my legs, collapse my right long. I used to raise mountain bikes like took the impact, I curled my self up took me back to my right shoulder and I just obliterate a bunch of reds and stuff, it really can't strip me out. Put me in a wheelchair, took a pretty heavy impact to the head but I saw the elbow a little bit cracked in it so I had a experience a lot of memory losses as a result and when I came out out of the hospital and was forced me in a wheelchair and you have to relearn everything and having to start over I have one good limb my left arm that I could use.

Well you relearn a lot about yourself and your abilities when you don't allow that to debilitate you. Before that, I was learning marathons, I was climbing mountains others doing all kinds of stuff then you just from mark to the stop. It was a tough thing from me. I was forcing myself to push hard and get through that faster and since then, after that I get my legs back, I was able to walk again. I took my journey of climbing and hiking and all those outdoor activities and I joined the local sheriff's departments rescue unit so now was it now 10 coming upon 10 years later I guess it's 9 years later when I joined that. I'm in charge with the Techno west, you even have to sell high angle rope related stuff, air rescue unit to go where myself and a team of 4, we can be flowing in propeller of the helicopter it struck on me out of a really bad scenario the most inchargeable off rages, where we'll jump in jeeps, we'll crawl in there deep through into the mountains or some may have road their vehicle. We've been trained to cut people out of low vehicle Swiss which is high with jacks and chains and get them out of one of the worst experience in life and be able to give back, allow me to be able to give back because of me being given back my mobility and so I felt it's only fitting. Being able to use that mobility for the benefits of somebody else.

Mike: Wow! That is absolutely incredible Aaron. You are an amazing being. I'm telling you, that is so motivating man. Wow!

Aaron: Thank you, I appreciate that. It seems somebody else benefit, it is probably the greatest motivation I've experience and now, being in my business, what it is now working with the real estate investor. I get to witness suddenly on greater scale if you will. So, how I approach it, now you're working with real estate investors, now with this podcast has really centered towards is helping those individuals. Were looking to make something more of their life. Feel more comfortable going into it and how I've seen is many people coming in to this. It is very unknown territory and it could be fairly fearful stepping in to it because you're in the mind set that we have, we live in a very consumer-based economy right? Would you disagree with me that send me 72% of the US economy has made of our consumption?

Mike: Yeah, makes sense.

Aaron: Well, an alarming statement I heard last January, from some of his work with the central bank is that 19.6 or 19.7% the global economy is the US consumer. That's pretty alarming statement when you consider that much of the whole world's depend upon the US to consumed tax and quite that's important right now it's because that's how people are programmed. They're programmed by whatever meet yet I would has hitting them at the time whether be an app on their phone, whether be an email or pops in something on the television if they have been watching that, ads on their computer.

Your aim is to get them the consumed something. So when you think about real estate, that's the same thing all for banking information out there to get you to go for a whether is that the cheapest and the fastest right? And they're thinking about real estate as you're coming in to this than spending money and going into debt right? Does that make sense? Well my job is to help them in that first meeting to get the structure in their mind accurate in  a sense that during their loan of the consumer coming in to a position consuming of something.

They are now the CEO of their start up real estate investment firm. They are taking liquid capital they have then moving it from a liquid account to a non-liquid asset that will grow by virtual effect then just owning the real estate. Many people think that "Hey, I just buy a cash I'll make more money". That makes sense for a consumer perspective but if you think about leverage accurately you're actually losing money right now leveraging. If you mind a little bit of Math, just to--

Mike: Oh yeah, please, go for it. Absolutely.

Aaron: Oh. A lot of times I start asking these questions for some people which is simple but simplicity is that necessary because one of the things we know is Math is, it's either right or it's wrong. There's no close when it comes Math. Close is still wrong so we're going to talk about a transaction on a $100 000 or the $100 000 or transaction of 20% down right? and we're going to say it's making a 1% of rent evaluation. So I'm going to ask you what those numbers are and what it has mean to you and I are in the same page. so, $100,000 acquisition, 20% down, how much is that 20%?

Mike: 20K

Aaron: 20K, right? and then if you're doing 20% down that means that there is a leverage coming in there in the form of the loan at 80%, how much is that?

Mike: That's 80 thousand. Right?

Aaron: 80 thousand, correct. and then we're talking about  a 1% rent about a ratio, how much is that?

Mike: It's 1% that's... a thousands. Yeah.

Aaron: A thousand bucks, correct. So, we're also going to say that your closing cost between the lender, the title, the appraiser, the inspector, the taxes, the entrance, everything has fifty five hundred. That sound fair. So if your running 20% down and then all your settlement charge going to be fifteen hundred bucks, how much is that in total?

Mike: So, 20%, 55,000 so it's about 25,500 bucks.

Aaron: 25,500 bucks, correct. That's state on and so you would just and then we're talking about 1% rent about a ratio of $1,000 does it seem reasonable that you would retain at least $250 of that thousand AccuPay that painted on the loan, the taxes, the insurance and the property management not including maintenance to vacancy. Just a hard costs. Does it seem reasonable to--

Mike: Just hard cost, yeah that's-- yeah. Yeah that's right.

Aaron: That's probably even very, very conservative right?

Mike: Exactly, yeah.

Aaron: So 250 a month. Most people going to take and they're going to work at a cash-on-cash return model 250 a month and factor the inch of the 25,500 to get their cash-on-cash return, correct?

Is this as square in my opinion, this is just opinion of Aaron Chapman, that that cash-on-cash return model has been created for consumers because in reality, cash-on-cash as I understand, I could be a 100% off base here, but as I understand that that was created for some who use taking their 25,500 and putting into something that basically vaporizes that money. It's gone. So I could buy here, you're starting up the business so investing in a new start of business that the money is being use for start up cost that if it fails, it's gone, there's nothing coming back here. I've been there I've invested money and start for just vaporized before.

We got cash-on-cash return as you're recovering that money over time within a little income its you have 250 bucks at a time you'll going to be recover that money over certain length of time, then make money out of it, right? You're return, you're increase return doesn't come into you, you get your money back. Well, in the example of real estate, my argument is 20,000 and your down payment is not done. Now the fifty five hundred, it is gone. That's gone just services. You're not going to getting back that went to pay people to do the job. But, the 20 grand will come liquid account to that non-liquid asset, it's still yours. It's just locked up some place where it's protected from 3 different things.

The 3 things is protected from these: 1. Inflation, inflation are now has eroding our dollar by faster than 2% of the government's plan. We know it's a lot more than that. I'm just going to say it's 5% just to be generous. (Oh wow) and let's say it's also being protected by you know, there is new laws out there and it's been talked about of the I don't know if it's caused laws or whatever the regulation has worked. Over that my beam they have to bail out at one point. Now there's such thing they are people are talking about this bail in, right? Where the bank get some trouble they can take the depositor's money and issue the depositor's stock. If that is truly the case, that's a big risk. (What!?) Right? You heard that?

Aaron: Now, do a Google search on that, that I have had hit my desk  a hundred times, people talking about what they call bail in bank where they're not going to go to the government and go get their money anymore. They really on that position they take to the depositor's money they hold on to that, they issue stock to that depositor. If they're at that point, their stock is probably not going to be worth the whole help a lot. (Absolutely) Why have a lot of faith in that process either? Then there's one other thing would really protecting itself from the... I'd say the biggest risk who are assets, there's one thing you'd be protecting it from by putting it in the real estate, what you think that is?

Mike: I would mention tags but I mean, I don't know. You tell me.

Aaron: The biggest risk is ourselves. We are creatures that impulse, right?

Mike: That make someone sense, yeah.

Aaron: Because if that money is in your account and it excess fault you, you could regularly turn that in to a boat pretty easily right?

Mike: Yeah, absolutely. That is so true.

Aaron: But if you push your real estate, it's locked up! (It's locked up) and get your 10 on it. (Right) So let's do a quick question. So you got a 20% done, we establish this 20 grand, you've got a loan of 80 thousand, right? Well divide that 80 by 30 years because this is 30 year that we're talking about, what is that come to it?

Mike: Eighty thousand divided by thirty, then the old calculator here, it gives this two thousand six hundred and sixty six, so wow.

Aaron: $2,666.66 right? Then 666666... so keep going. Right? So that's how much you're giving every year on the apps, so somebody else, your tenant, your renters paying that off, right? They're paying down the eighty thousand. So over that 30 year window they're paying off $2,666 per year. You take that figure, divide that into your 20% of just 2,000, that is equal to 13.33% of that 20,000 every year being added on top of the 20,000 over that 30 year window.

So, you if think about it, your 20 grand is growing by 13.33% if you raise of 20 grand it tell you to reach a hundred thousand correct? (Right) So just by verge to the fact you leveraged it. You're making that money regards to give me cash flow, right? (Right, absolutely) So you put that on the shelf, that's only shelf now we know the 20 becomes a hundred over 30 years, now let's train our attention back to that 5,500 bucks. That's spent, it's gone, right? But you're also given $250 a month. How long is it going to take 3 to get $5,500 back in 250 a month?

Mike: Not long at all. Honestly. We do the Math, it should take about... 22 months?

Aaron: 22 months. 22 months and you are now actually a square one. You made all your money back, your 20 grand is still yours. You got your $5,500 back in your pocket, now you're making money. So, we know in this example we're talking about 30 year jams, that's 360 months right? Subtract it to 22 months to that, how many months do you have left?

Mike: 360 minus 22 I should be able to do Math by my head but I can't, so 338.

Aaron: 338 months left to cash flow. So you multiply that... times 250, what do you have?

Mike: That gives you 84,500.

Aaron: $84,500. Your 20,000 makes you how much?

Mike: Your 20,000 makes you 84,500. Oh, I guess my money is that so.

Aaron: No, your 20,000 made you 80,000 because that's over that shelf making that no paid offs, you made 80,000 because you have 20,000 involved in there (Okay) but your $5,500 got paid back and then your cash flow made you in 4,500 so you add the two together, your making a hundred and sixty four five hundred dollars.

Mike: Oh my gosh. Wow! That's incredible. I guess your really that--- (Is that we get cost) all that but that is amazing. Yeah.

Aaron: And that's a $164,500 after you paid yourself back 5,500 bucks, put that back in your pocket and you sought your 20 grand sitting there. So it's really... you know, the 164,500 right? Plus the other 20 share that a 184,500 and you had a 5,500 bucks on top of that, we're 189, well a 190,000 as what is generated by selling $20,000 aside in that attachment.

Mike: Wow, that is absolutely incredible.

Aaron: And a lot of people on think about it, well a lot of people trying to catch me in some, but wait a minute, you may remember we/you said the not the economy, it's vacancy. We always talk back about that. You think if you are a good CEO of your business, meaning your making the right choices. Most choices being finding the right property that going to rent and make you a revenue and if you're choosing that property that's going to stay occupied.

You and that's right being picking one with the right what I could roove with the mechanicals, does it seem probable that you can maintain that property for that 30 year window for 40% of the original acquisition price. (Absolutely. Yeah) Yeah so why not? If you did the right job over that 30 year you should be able to recover that for 40 grand, right? That's really generous. That's a lot of the turnkey people I work with across the country said "Don't say that Chapman is way too expensive". I can, going to say it. I get to the CEO of this business or the CFO of this business, I'm going to step on the number. So, 40,000. You back with 40,000 off for the 164,500, what do you have?

Mike: 40,000 now we get 120... 20 or something.

Aaron: $124,500 (Right), after paying yourself at 5,500. You have still the 20,000 you put aside to begin with and you set aside 40,000 for contingencies. Tell me, what's the real return here?

Mike: A lot. It's still a lot.

Aaron: When I calculate it, my calculator says we done decades.

Mike: Exactly, right. That's amazing.

Aaron: One of the reasons I go over that is one is we need to be on the same page. We need to be thinking correctly, you need to be kind of forming that neurological connection towards looking at the Math in a more simple manner. people always looking for the complicated Math, the really complicated question, that doesn't have to be complicated, to be very, very simple and it needs to be really simply.

If complication only makes thing more difficult. Makes it a greater chance of breaking it and you simplify it and you understand those simple terms it becomes more exciting. How I put myself into this whole process here is each investor is really like I said before, the CEO, the real estate investment business. What's really cool about that is you're buying a cash flowing business for the market varied with sole asset. Think about that, let that sink in from them because most time you're going to buy a business that's operational and that is working and making the cash flow, not you have to pay assets the sticks, the bricks, the computers, the decks, the intellectual property and the fine cabinets which you also have to pay for the earnings, right? You prepay like be 5 or 10 times earnings.

When you're done evaluating the business you give them appraisal on it. So 10 times earning is not an uncommon request for some of you that sell a business to you. Well in this example that would be your $12,000 a year, you know thousand dollars a month so that's 1 times earnings, 10 times earnings would be a hundred and twenty thousand. That mean if you are truly buying this is the business that is you'll be paying the hundred thousand for the property plus a hundred twenty thousand for the earning potential, repaying $220,000 for this business. You do actually get to buy it for less than a half of that for you know, basically just a market value of the sole asset and then you get an operations division from most part because you get people that are going to rehab it, they going to manage it, maintain it, that's full for operations division that comes with it for free.

I'm applying for the CFO job a every time I talk to a new person. You know, and one of the things I talk about in greater detail become this so called CFO position I put myself up as. You know, not necessarily on their payrolls, the CFO  is just more of a mindset thing but somebody they can turn to and ask questions when it comes time to making a decision. My business you know, loan regeneration. Helping people get financing in your regular conventional finely made friendly max style, 20% down, single family stuff, 25% down, multi-unit deals up to 4 units 30 year fix that's the most common thing we do. The reason I am actually one who puts myself in that position as often as I can because I won't want a person risking their business by going to just anybody, right? The average person in my industry statistically speaking as I understand, This is what I gathered from the information handed to me. Closely in between 304 transactions per month.

That is an annual experience of 36 to 48 transactions per year. That's their experience of doing this transactions to people. Last year I closed 676. This year I've closed over 400, so far I'm aiming for 700 and I've been doing this since 1997. So when a person has to make a decision for they put in that position to talk to about those next steps so they going to making decisions, they have to make to the CEO their business. As who do you want to talk to? Somebody who has the experience of 36 to 40 transactions per year or somebody who has done over 600 a year and what that is my one year is equal to other person's 15 to 18 years.

So, when you have a question for the new investor buying a piece of real estate has a question about that specific scenario, because that pretty darn of the chances seem like never come up before. I've seen someone somebody make a decision about that before and I've seen the outcome and I can offer practical information to help them make it to the correct decision. I won't make it forum, they are the CEO, they have back stops there, we'll give them all the data I can. Have you ever heard the term "Good judgment comes from experience, experience comes from bad judgment"? (Yes, yes I have. Yeah, a lot) That's a pretty telling statement isn't it?

Mike: That certainly is. That's a no brainer, that's far as you know, who you would choose to be on your team. You know, someone with a crap ton of experience or someone with a perceived amount of experience, I mean, the numbers like you said, right? They don't lie and to the fact that you are now on track of doing 700 transactions in this year. That's incredible, that's absolutely incredible. So...

Aaron: Well, thank you. That's mostly real estate investors and the reason I say that is not to pat myself on the back is that if wasn't for my team, kicking ass and the people who put the trust in us, we wouldn't have those numbers to offer. Well there's more to illustrate like I was just saying that we have good experience to offer. Don't put yourself at risk by having the exercise bad judgment to get the experience so eventually you get to use good judgment because what ends up happen is that cost you all your livelihood just to get the experience. Experience is a very thorough instructor. It will teach you very, very thoroughly over a lifetime but  you don't have the lifetime to put into it.

Allow us to put a lot of that in there that you don't have to go to the get and so that's why I feel that it's very, very necessary how a person to understand that we can offer a lot more than just use your rate energy cost. Kind like going to ascend that Jack King situation. People remember the act of how was remarkable accuracy outstanding tough beats of his career that takes me back to elementary school. I went to a Pentecostal school in first grade. I skip kindergarten because they don't have a kindergarten at that time so I was six years old in this school and they're teaching us the alphabet and in that with each letter of the alphabet they are teachers teaching us with nursery rhymes or some sort of limerick.

We got the letter the M. And you'll going to need-- I could look it up online that this thing is actually still exists, people are still teaching with this method and it's about the letter M, they used a story about this mule named Milton and then the limerick it went Milton mule made a mistake as he read a map he walked in the lake. The picture of this cartoon picture is a mule standing in the lake looking at the map. See, he completely walk off the road, he wasn't paying attention. Well, being a person that I am even this 6 years old, I change the limerick and instead of Milton walking in the lake I had an pissing in a bucket.

Didn't have making my Pentecostal teacher very happy. So he took me right there by the era and the little girl that laughed about it and drag us in the principal's office who was the Pastor and he very ceremoniously got his briefcase out, it was one of those scare craft deliver them once, opened it up and in there was his Styrofoam cutting in there that had a cut-out for his cattle, he got that out and walked our asses. What came of that, the reason I tell the story is because there's how many letters in the English alphabet? (20-- Oh my God! 24 right?) That's actually 26. (26?!)

I had to look that up myself because I didn't really thought about that a long time. (Oh gosh, yeah) There's 26 letters in the alphabet, but yeah, I only remember the nursery rhyme for one. The only reason I remember nursery rhyme for almost just got my ass beat for it. So the reason I point that out is because we're all like that in some form of another and I do not want the investor we work with to risk their livelihood and their children's.

Well, for in their family's future, to learn something the hard way. When we've already learned it, I've been doing this for so long and work with so many people and I have such a great team with me. I basically introduce them as the wizards behind the curtain and I'm just smoke mirrors to be as. But we have learned together how to make others success one, that is our goal, that is our business. We close the loan just we can generate the revenue staying in existence.

Mike: Wow. Amen. Oh my goodness! Guys, I really hope that you are taking awesome notes here because this is amazing and if you're driving or not in position to be writing stuff down, definitely, go back and relisten to this episode because oh this is intense! I want to highlight something you said earlier which is very, very profound. You know, about experience a how it will take you a lifetime to gain a lot but we don't have a lifetime afforded to us to really spend on gaining this experience. So having that experience with the tune that already has been in place is beneficial.

I mean, it can literally help you achieve so much more in a faster time and that resonates well with me and I know and with my team as well. One of the books that we all love is the Four Hour Work Week by Tim Ferriss and that's just something he hard ton a lot you know is automation or being able to put professionals in place that are experienced and that can take the time or that time away from you because they already learned the process and how it goes and make it whole lot faster. So that is awesome. Wow. Amazing Aaron.

Aaron: Thank you man, I appreciate it you saying so. It just rolls off my tongue and it doesn't seem so extraordinary because I've been living it for so long and then I've been given the opportunity to talk something new and they absorb this data and it just seems like its-- like you said, this is profound or just seems become a place of myself. It really give me that charge of energy to stay in what I do to keep at this state. That's what keeps me in this business. It's not because of loan. Loans are completely unsexy, it's about the people for seeing the light turned on and the impact that information has and that's why I enjoyed just digging in and to continue and try to keep doing what I do.

Mike: Absolutely man, I've  agree with a 100% and thank you for doing what you're doing and I really hope that you guys out there listening, take advantage of Aaron's company because this is definitely awesome. Wow man! You've given us a lot, a lot of nuggets of wisdom and this has been amazing. I'm going to take you through the same bonus round that I take all the way of my other interviews here because I think it's also great. It give our listeners a little insight to you more personally. So, if you don't  mind I've got 3 questions for you. Alright? (Sure, alright.)

So, your favorite book, what is your number 1 read as you recommend, and why?

Aaron: Number 1 read, I've got a lot of here of books and I've only start reading the last like 2 or 3 years and that truly change my life. But the one that stands up today, I'm in break in to say scripture and I'm going to go with different route in scripture because that would truly be my first route I'm going to take some now so it's a book called "The Master Thesis" by Charles F. Hummel and it goes through a process.

It was published that I think 1910. Getting your mind trying to think properly and the reason that that is so dang important to me is that the more I think accurately about things, the more I think in a positive direction and point myself where I need to go. The more I can't see the negative thoughts anymore of negative aspect of anything. I've got other experience to be able to share about really focusing in my goals and then not only achieving the goal but other unslurry things that I wrote that didn't even really think were part of it but they came about. So I want to sure at that some point I know were stress at time there but that right now I say is something that each person is to put on their daily routine is going through that book. It rates it down hundred twenty seven blessings. Every week with the same thing over and over and over again do the example go to the next lesson, that's amazing.

Mike: Wow, okay. Definitely. That will be in the show notes guys so definitely look for it, a link to this book, it's going to be great. Wow, alright. So, question number 2. Who is your biggest hero and why?

Aaron: It have to be my parents and I know it sounds kind of cliche but in reality I'm here because of them and the lessons that I learned from them, they both were just take a bidding and get back up. Take a bidding and get back up. I remember that I've never seen two people hassles so much in our life just to make ends meet and not really realize they have to go to those extents to keep things moving forward and that was for my foundation came from. My work ethic.

My desire to not give up and I've come to the conclusion that bruise, bleeding, missing limbs, I'm going to get to the goal that I've set. I don't care what it takes to get there and that come from them and there drive to continue to  accomplish what they set for to do and not lay down. My mom sleeps that's hanging upside down and then she goes then goes and goes. She's 62 years old and were 64 now. My dad's 71 or 72 I kind of lose a hair and never, they don't stop! I don't know how that people that age can go with the energy levels that they do but they just keep going.

Mike: Amen, amen. That is definitely my life goal. That's a big older and very, very active. There is a guy that lives on my block, I don't even know his age and to be honest, he looks like he's probably in his 80s. Maybe his in his late 70s but always see him running out, running around outside every single day without fail. He's just going on his jog and looking good and great, in great shape. I mean, I haven't had the chance that actually have a conversation with him but one of this days I'm going to, I'm going to take his brain and just kind ask him how he has maintain his health because he looked really good.

Aaron: There probably some awesome information inside the head more than the hell and I think that we worthwhile stop and then I'm like you. I come to the great and I'm coming it high. There's not reason I'm going to be fat. I'm going to move on. When I'm done doing what I do here is to hand it off to somebody else and I will never stop doing what I do. I'm going to be the face of this business for a long time. The brand, well I'm building a brand that will endure but it's also a brand that's never going to die and that's my intent and when I move on to the next statue of life, it's not to relax. Let's go kick asses of something else.

Mike: Amen, that's exactly what I'm talking about man. Oh! So motivating Aaron. This is amazing. So alright, let's give number 3 here. So again, you have given us amazing nuggets and this will definitely just going to cap it off here but if you had to keep it to 3, what nuggets would you have for those who were just getting started in real estate investing.

Aaron: Rather than keeping it to 3, I'm going to keep it to 1 and the one is really probably the most important lesson I've ever learned in my life up to this point and what it is is I think people have not quite fully understood the practical application of gratitude. Gratitude I know a lot of people talk about how it makes you feel differently if you start off your day with gratitude and how you approach the world, right? But I've learned a little different is, a true practical application to the concept.  So, kind of a background a few years ago, I have a newer employee and she come from a different industry— they kind of similar but not quiet the same and I told her that when she reach the certain length of the time with me, we reevaluate her pay and reevaluate the core role what she's contributed, and that time came around, so I was looking at it, now I was thinking a little kind of increase we give to her and her hourly salary and her bonus and I have a number in mind but I want to have to start asking question of my boss I now own on this company, I work for a firm and then of others that I knew will in different industries, what was the comment increase in the salary for somebody in that position and they said 2 to 3 percent of it and they will go get a job.

That seem really, really low to me and when I figured out the number I was thinking, I was thinking 10%. So I presented that to my hire ups and they said there's no way now. They said maybe 3% if I can justify. I still want to fight back, I want 10 and I want a 3rd percent upper of bonus to a certain matrix. So they made me go backwards and prove what she had made that kind of a difference to our business that would worn that kind of an increase. So I dug through emails and through production reports and all this information they all piece together her contribution. When I was done, they approved it.

So I was ecstatic! I mean 2 weeks of hell buy if me to approves this and I got then to buy off and that was big deal to me. Remember braying rents sitting her down going through her contribution and how much I appreciate her and now, excited to rework her for what she did. That is like having that your kid and buying in that bike for Christmas. He can't wait to show him a bike that they've been dreaming for all your long and now, you save and didn't eat lunch for several months just to save it up to buy this bike right?

Because I would do in mind which is hellish to do. I don't like that kind of thing. I want to present it to her with this anticipation. I saw this little candor in her face changed or got kind of twisted when she looks sensuous that's it. Because I would have thought you could do better than this. So I went from excitement to just pure anger almost instantaneously and my instinct at that point and of those are who put themselves in this position right now could really get in touch of the feelings. My instinct to that point was to now he gave her take that race back. I want that back to take the job to local.

I want turn country thus complete. I was just angry but I allowed myself to go in that coachy mom and talk to her about you know, that's not the best reaction. If it was me, I would look a business even if you thought disappointed and expect the more to be thankful for what you got and ask. I'm really looking and trying to achieve more what do I need to do to do better and achieve the higher position. Right? Hiking it behind and get behind somebody taking that approach that they pushed to anger be. But later on that week I'm asking the freeway coming to my office and there was a homeless man at the 3 way exits standing there with a cardboard sign and there's something about him that really just kind of dug it me and as I saw him there and I knew he needed a help.

So I rolled down my window, as I'm rolling up to where he was and when I stopped I was still probably about 3 car lines away from him and I reached to a spot right a cash hidden in my truck and it was hidden there because of the experience 20 years ago when I ran out of money I need to go climb through my truck and and walk around the parking lot to be getting enough cash to get home and when I pulled that bill out and I held my hand out, he approached. He accepted that full of bill thanked me and turn to walk away and as he's walking away unfolds it, he turns back and looks at me holds it up. He says "Are you serious man?" and I said "Why? It was just a 20 bucks man." and just kind of fold my hand up to him almost in a way to the position and say "Cheers!".

He turned, he reached for my hand, he took it, hold it to his chest, bowed his head and said he clearly thanks to God and ask the blessings upon me. And then with tears streaming down his cheeks, he looks back up to me with some of the lifted vehicle and he's thanked me profusely. Now this time, sensitive killed just overflow me that I didn't have more cash on me to give and I was thinking `Man, you have a square because swipe my credit card`. I want to give him more than what I had. Well if you know Arizona drivers by this times of light was green and people honk in the horn behind me so in change with that I last use my start to leave and then they hit me. That's the practical application of gratitude.

On one side, I gave a person $10,000 a year and I felt was so he spat my face and I was angry and I only don't want to that back, I want everything back everyday. She deserved nothing in my opinion at that time. There's another guy gave him 20 bucks and because of him response I want to give him everything I could that felt guilty I didn't have more. That's how it is between us as humans. If you express real true gratitude to another, they are will really going to do more for us. If we express this stain for the other, they will take everything they can and that's just human nature.

So if we understand that and we employ a property, it will only benefits us to walk around with that sense of gratitude. I remember sitting in a vent where a guy was speaking and he says, `You won't get out of bed in the morning without 3 things to be grateful for. Well  trying to do that exercise I found that after 3 weeks we kind of out of stuff, right? So I took the lesson that I learned fro this homeless man that I get I new things everyday. Right now I've got a general by a name of Mike Foster I'm on phone with.

It was introduce to me by somebody else in this individual that introduce us is another person that his name Eric. Those are two names that are going to end up on this list of people buy or write down every single day and when I go to refer Duty, I thank God for those people that are brought in my life and I asked if it wasn't upon them the exact same way I was taught and that has changed my life.

That has changed how I looked at everything that has been able to approach things with gratitude and also, they're willing to bless other people's lives not only approaching the foot of beauty in their behalf but also with purpose to change their life. Not just to benefit me but to benefit them and that exercise in a its self probably been in the greatest called might get in handy anybody in life. This would be approached with gratitude to the right way. What you really doing this brings back to you.

Mike: Amen! Aaron, you literally just became one of my favorite people on this area. That is absolutely amazing! That story is so uplifting. I can't' even-- Wow!

Aaron: There's one thing I ask of the people everybody just listened and they will please help me out here, I've one thing I'm trying to do. I'm trying to make it to a TED stage with that talk. With that particular lesson because I think the world could stand a benefit from it, not benefit me but to benefit everybody around just imagine the world we live in the people operate with that level of gratitude, and I would love to be able to take with this 2 people talk me and I appreciate also them. I still seeing contact to that woman that  work for me, she is awesome. She taught me an awesome lesson.

I'm so grateful she put herself in that position be invulnerable and put me there to teach me that and that man, I never see him in another side of the 3-way again. He was there for me and so that lesson I want to get to the world. If you heard about the TED talks website there is nomination page there where you can nominate some to be on that stage. I want to take that to the planet and I'm trying to one podcast at the time that you can only so many people. I want to get this out even more.

Mike: Oh my goodness! Yes, well that link will certainly be at the top of the show notes page. So guys please go out there if you're listening to this right now, I want you guys to go in that link and go ahead and nominate Aaron because yes, I completely agree. The world needs to look at to things to the lens of gratitude. I mean, it just making that affirmation each morning to just completely change your life. It is definitely done wonders for me too man so I feel exact same way. Wow! Oh my goodness. That's powerful. Such an awesome story. Oh my goodness, alright. (Thank you I appreciate that) Wow! Oh no, thank you. Thank you for imparting that on me and as well as our audience and you've given us so many great nuggets. Man, I am super excited to continue this relationship and man, we got to bring you back on this podcast because this is in a way we can just do this one.

Aaron: And that's my things that I'd love to be able to share with folks.

Mike: So we will certainly bring you back on for something else again. Trust me on that. That's definitely coming. So guys look forward to that. So alright man, we run out of time. How can listeners get on contact with you?

Aaron: The best is my website A-A-R-O-N-B as in boy, that's not my middle name, Chapman,

Mike: Okay, awesome. That will be on the show notes pages so guys go ahead and take a look at that and get in touch with Aaron.

Aaron: Most definitely they can also look me up on the NMLS website. My NMLS ID is 267844. That shows on my license and legal to do lending and re-lending industry.

Mike: Awesome! All right. Definitely check that out. Alright man. Thank you so much again. Is there anything else you want to say the listeners before you roll out.

Aaron: No, I just appreciate you taking the time to allow me in the show and those to the listeners who were taking the time away from their life to listen to me and hopefully we've said something to you that would definitely benefit your life.

Mike: Certainly have. Now guys, I need you guys to go ahead and rewind this episode and go listen to him again. Alright? Because this has been awesome. Alright Aaron, thanks again so much man. Appreciate it.

Aaron: Thank you brother.  

Wow guys! Talk about powerful. Oh my gosh! That was amazing! Listen, this is what I need you guys to do right now, I need you guys to go to the show notes page. I need you to go ahead and click on that link. Go vote for him on that TED talking because we need to promote him. That's absolutely amazing. Alright. And also I need you to go ahead and subscribe to this channel because we have awesome people on this podcast! I'm totally convinced that we are going to do something crazy here alright so you don't want to miss it and make sure you subscribe.

Make sure you hit us up on Facebook, hit us up on Instagram and reach out to us  because we want to know what is going on with you. Alright? Anyway, thank you so much for listening, I really appreciate all your kind reviews, the good feedback that we're getting. Thank you so much for all the input that you're providing because you are making this community great. I'm Mike Foster, signing out!


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