Scaling and Diversifying Your Real Estate Portfolio with Rent to Retirement CEO Zach Lemaster

Zach Lemaster: 0:00

Basically what we do is we identify some of the best investment locations throughout the United States. We build teams in those areas to either renovate, or build houses, lease and professionally manage them, and then our and then sell them to investors. So we bring turnkey investment properties in locations where we have confidence in and how teams established so people can easily scale or diversify their portfolio into some of these different markets that have attractive returns.

Announcer: 0:29

You found The Real Estate Law Podcast, because real estate is more than just pretty pictures. And law goes well beyond the paperwork and courtroom argument. If you're a real estate professional, or looking to build real estate expertise, then welcome to the conversation and Discover more at the realestatelawpodcast.com.

Jason Muth: 0:53

Welcome to The Real Estate Law Podcast. Thanks again for tuning in. And listening to our episode that we have ahead, which is a really good one. And I'm not going to be talking that much because you can hear me with my scratchy voice Rory, the benefit of our whole audience, and you and our esteemed guest, Zach, you guys are going to be carrying this conversation. And you probably have more to say, content wise than I do. Anyway. So you're welcome.

Rory Gill: 1:17

Thanks, Jason. Thanks for ducking out of it a little bit. But that leaves me with the privilege to introduce our guest today Zach Lemaster, who is the CEO and founder of Rent to Retirement, which is the world's largest turnkey provider of residential real estate investments. And what I'm excited to speak with Zach and introduce him to our audience for a number of reasons, but in large part because I think his story resonates with me a little bit. He is a professional optometrist who found his path to wealth outside of the profession itself. So before I, you know, incorrectly tell your whole story, Zach, welcome to the podcast.

Zach Lemaster: 1:56

Hey, guys, thanks so much for having me. Rory. Jason, it's a pleasure to be here. And yeah, I think we got a lot of interesting topics to talk about.

Rory Gill: 2:03

I want to start with what resonates with me pretty specifically, you know, as somebody who created a professional practice fairly young, I found, especially if you're not prepared for it, creating your own businesses can be financially draining, but also a very lonely experience. So I kind of want to ask you about your experience with that, and then how you transitioned from your earlier career into the real estate world.

Zach Lemaster: 2:29

Yeah, absolutely. And that's, that's 100% true, I think most people that are interested in investing in real estate have that kind of entrepreneurial mindset. And the fact of the matter is, when you are building a real estate portfolio, even if it's one rental, you're building a business, right? And you need to approach it like like a business. And one thing I found, though, is, before I even transitioned from optometry into being full time real estate, which was a big, big transition and hard to mentally get over after spending, you know, half a million dollars on education over eight years, and then just not not even using that anymore, was just the fact that I think the way to think about money, I think is was a hard transition so much so much in life, we have people that are willing to tell us their opinions about what to do and what not to do. And that won't work and you're kind of swimming upstream a little bit when you're looking at going outside of the normal process of you know, and we're not taught about money, right? So anyone that's a Kiyosaki fan. I mean, that's, that's one on one just how to think about think about money. But it's it was a kind of a Yeah, it was a lonely path for a while. But I think surrounding also what's helped me be successful, surrounding myself with groups of communities of other people that are on that same journey. And sometimes it's hard to find those but I mean, we we've been investing in real estate for almost 15 years now. And I say me, like my wife and I and our company, but it started out in the Air Force. I spent seven years in the Air Force as a captain, practicing optometry. And we invested that entire time. And the first house we bought was a duplex and just kept trading up every single year. And then we moved I left the Air Force, we moved out to Colorado, we own private practices and worked in optometry here. And then eventually we just got too busy with real estate and we were able to replace our active income and go into full time real estate and that's kind of been the journey, but lots of ups and downs for sure.

Rory Gill: 4:19

Just to make a point I want to ask about going to like many, many years of professional higher education when you're studying optometry did they teach you about the business of optometry in school? Or is it something you were forced to learn on your own after the fact?

Zach Lemaster: 4:34

We had we had one course that was a one elective hour is it even an elective hour, and I took it but it was it was one business course and I think we like came up with it's kind of a joke. We came up with their business name and like mission and vision statement, you know, and that was the extent of it and what I found, and probably a lot of people can relate to this, especially in the healthcare world like you're wearing multiple hats. Right, if you're in private practice, you're a business owner. And, and you're a physician, right? And you're seeing patients and it's like, not many people can be really good at both. And often we find people lacking in the business acumen. So the short answer is no, not not much education there kind of school of hard knocks.

Rory Gill: 5:17

All right. And then for somebody who has had so much education, where did you get your business education and training on, you know, growing your entrepreneurial endeavors?

Zach Lemaster: 5:27

That is real world experience one on one. And, you know, I continue that that's a lifelong journey. You know, and I think that real estate is a really cool way to learn about business. Because in real estate, just like many businesses is such a relationship type of business. You really learn negotiations, and how to, you know, whether you're doing self self management with your properties. We've just learned the hard way. But also the fun way. And now I've have mentors in my sphere that I learned a lot from that are far ahead of where, where I am in where I want to be.

Rory Gill: 6:04

Tell us a little bit about your first investments and what how you started to kind of pivot your, your mindset into real estate as opposed to everything else.

Zach Lemaster: 6:15

Well, first, so back in the day, I think even in optometry school, I've always been interested in building businesses and doing something just like getting ahead and working hard to do that, and grinding. I mean, there was a point in time when I was in the Air Force. I had I actually had private practice clinics in town where I was, you know, Tuesday, Thursday evenings, I was there seeing patients Saturday, Sunday, I was seven days a week, running that business as well as full time with the Air Force. And I was always just trying to hustle. And and you know, that's really served me well to get ahead. But in real estate is same same exact thing. I got the bug, I think reading Rich Dad Poor Dad called the purple Bible. And then, you know, bought our first I used a VA loans with no money down on a duplex in North Dakota, and ended up paying for the mortgage, just having a tenant in there moved out of that one did it again, rinse and repeated. And just continued to scale that way and learn more and more. And then we got to the point where we started investing very strategically in other markets where we saw better opportunity, not just where we live. And that's what allowed us to exponentially increase our portfolio and start making this a real business.

Jason Muth: 7:23

When did you consider yourself a real estate professional in relation to being an optometrist? Like was there a time that you were both in your head or early on in your career, were you and optometrists that did some real estate on the side, and then that kind of transitioned?

Zach Lemaster: 7:42

Yeah, it's probably a few. If you looked at the graph, it'd be something something like this, you know what I mean, where there is a breaking point, and I left because I started, eventually, I stopped, like, cut my work hours down to four days a week, three days, two days, one day is doing the optometry and I always, always hustled with real estate you started out with as a side hustle, which I think is such a cool thing, right? Like you can do, you can be a part time professional investor, and work in your W-2 position or have multiple businesses and real estate, if you get it once it's set up. It can be somewhat passive, and you continue to grow it. But I remember I mean, same sort of thing. I mean, I was I always had rentals, I actually bought my first rental property before I even started practicing as an optometrist. And I was always doing that. And we eventually, I mean, I one thing I tell people, too, is, Jason is that we bought more and more real estate and going back about 15 years now, every single year, we bought more than the previous year, we've continued to scale, sometimes it's hard, we have to raise private capital, we've gone through 1031 exchanges. You know, we're buying millions of dollars of real estate every single year to our to just hold in our own portfolio. But I mean, there's times where I was, you know, in lunch in between patients, you know, making offers on properties and coordinating that stuff. You know, early morning, I would drive where I lived in North Dakota the base was about 45 minutes away. And of course, you know, winter storms, it could be an hour and a half sometimes commute. I was on the phone making offers, you know, and stuff during that time. And I was utilizing that. But eventually it got to the point where it's like, Hey, you got to choose a path and fully commit. And we chose real estate. And of course, that's way more lucrative anyway, so.

Rory Gill: 9:19

And that's an interesting question, Jason, because I've worked with a number of professionals who have had successful small practices or law practices or other endeavors. And they end up turning to real estate investments as their retirement in many cases, because either the education and getting the business started meant that they're later in life getting started with retirement planning. So they want to make up the difference. Or they just look around and see that some of the traditional retirement accounts that are out there aren't necessarily the best opportunity if it's if you're the employer and the employee themselves.

Jason Muth: 9:58

Can I comment about that also? You know, talk about identity and work. I mean, like, your work is so ingrained in all of our identities, you know, usually when you're meeting someone for the first time you ask them, you know, so what do you do? Right? And, and, you know, Zach you went to school for optometry, and then you served the country. And you practiced that. You know, I had a career before I called myself a real estate investor full time. But I'm still trying to get over that, like, you know, I remember, you know, the pre-world, which was not that long ago, but I had that same transition where, you know, 2016 is when we start started investing on the side. And I'm, I'm still coming to terms with calling myself a real estate investor when people ask what I do, because I remember what I did. When people ask you that question, Zach, and I know that, you know, with Rent to Retirement, you have a whole built out business. Do you start by saying that I'm a retired optometrist or still practicing optometrist, or how does that factor into your identity when you're meeting people at a cocktail party?

Zach Lemaster: 11:04

We have two young kids. So we don't we don't get out too many cocktail parties. So. But I mean, in that introduction, I totally relate to the real estate aspect now, that wasn't always the case. And to your point, Jason, I mean, I was very proud to be an optometrist. And you know, it took a lot of time and work and education to get there. And I really enjoyed what we did, like I legitimately enjoy helping people see, because I've, I have terrible vision, and my optometrist was influential in my life. But now we practice on a volunteer basis, and we have humanitarian missions, and like, we can still do that passion. But it's not our sole focus. But there were so many people, my mother in law included when we when I was like, Okay, I'm going to leave optometry. And they're like, don't don't do that, you know, that's not the safe route. And so it was, it was kind of a tough transition. And people ask you what you do when you're areal estate investor like, like, what does that even mean, right? Because there's so much to do in real estate, it's like, I have a hard time explaining that just briefly, so I'll just probably leave it at that, that I'm a real estate investor now but.

Jason Muth: 12:05

Could you talk a little bit about what you do at Rent to Retirement because, you know, when you go through the website, there's just so much information here, I was struck by the size of the team that you have, whether they're full time or advisors, you know, you've really built out a lot of different nooks and crannies of a full planning team. And I have heard some of your previous podcasts where you talk a lot about the value of long term rentals and buy and hold strategy. So you know, talk a little bit about what what the business is all about.

Zach Lemaster: 12:36

Absolutely. So our company Rent to Retirement, We're a turnkey provider. That's one of those buzzwords out there that is kind of ill defined. So basically, what we do is we identify some of the best investment locations throughout the United States, we build teams in those areas to either renovate, or build houses, lease and professionally manage them, and then our and sell them to investors. So we bring turnkey investment properties in locations where we have confidence in and have teams established so people can easily scale or diversify their portfolio into some of these different markets that have attractive returns. And we try to take a comprehensive approach into helping people build a business because as we talked about, in the beginning, this is a business when you're investing in real estate, especially diversified across the country. And so there's all sorts of ancillary things that come alongside that as far as like, the tax, the legal, the accounting, the financing side, like you. There's all those things that you need to have in place to really make this a sustainable business model long term. And so we, we go through and offer the coaching and mentorship with our clients to build sustainable portfolios. We mainly do single family, I would say that's about the bulk 70% of what we do, but we also have small and large multifamily, we do a lot of new build and development projects, in areas that are that are in the path of progress. Hopefully that makes sense. That's my elevator pitch, so.

Rory Gill: 13:55

No, that makes that makes perfect sense. And I kind of just want to parse through that some of that, you know, a little bit because you are in many ways you're taking a lot of you are curating a lot of the decisions that the potential investors have down to which markets that you've vetted, which properties that you've vetted, and you know, what repairs and work that you've prioritized in a property. When you're looking around the country what markets speak to you as strong markets, and do they shift over time?

Zach Lemaster: 14:25

They're always dynamic, they're always changing. And we have some like Midwestern markets, which are just like slow and steady bread and butter investment markets, right? I mean, those aren't going to have crazy appreciation, they're not going to be influenced by a housing correction too much. They're always going to have housing demand and rental. So those are your your bread and butter $150,000 cash flowing properties that we own a ton of and always like but we also like to look for markets that are in the path of progress where you get appreciation potential as well. We want to be in areas that have landlord friendly legislation. You guys probably knew all about this, you know in the challenges with that So we want to have favorable tax structures, we want to be in areas that have a diversity of industries, not just reliant on oil or gas, we want to be in areas that have population growth, economic growth have high rental ranges relative to home prices, so you can actually be positive cash flow, etc, etc. So with the markets we really like that I'm super excited about probably Florida is our is our top market right now. In Florida over this past year, just looking at 2022 statistics had the highest percentage growth out of any state. Texas beat Florida in terms of population numbers, but percentage growth, Florida was number one. And we just like being in areas where there's just an under supply of housing, and a huge demand because we know that this is a safe place to be. So we've had exceptional returns, like sometimes over 50% over the past couple of years in some of our Florida markets. So we like to Sunbelt in the path progress, Texas, Carolinas, Alabama as well. And then the Midwest is just a nice place to have a consistent rental as well.

Rory Gill: 16:00

I mean, the past few years have brought us kind of one major change after another. And it's had some kind of interesting economic effects on a lot of the markets that are out there. You know, right now, as we sit in 2023, we're coming off of kind of a rapid rate in mortgage rates that has shaped everything that we do. It has kind of a lot of ripple effects across different markets. How is it changing your buy and hold strategy on behalf of your clients, the environment that we're in right now?

Zach Lemaster: 16:32

Specifically around the interest rates?

Rory Gill: 16:34

Yeah, I mean, the higher rates and the low inventory have made it, you know, relatively difficult, particularly in our market to find properties that are cash flowing with a, you know, with a mortgage on top of it. Has it impacted your business at all? Has it changed, you know, your processes at all, or your markets?

Zach Lemaster: 16:54

Yeah, to some degree, of course, I mean, some people expected there to be this this housing correction and drop, which we really haven't seen in most markets, at least not the markets we participate in, because again, it's supply and demand. It's just, those are consistently strong markets, obviously, higher interest rates, which, in my opinion, this is necessary, right, like this is everyone was living in this fantasy land over the past few years with historically low interest rates that we may never see, again, you know, they're artificially kept low. And, you know, at some point, people use that as the norm. And it's not, it's I think this is necessary to make this more of an even playing field for for the market. But yeah, it's still challenging, there's still an under supply. And in a lot of the areas and and cash flow is less when you have a mortgage that was could have been four or 5%. Now it's six or 7%, like, the cash flow is less. So does that mean you need to change your underwriting criteria? Potentially? Do you need to put more money down? You know, potentially, yes. And so we've sharpened the pencil a little bit in terms of our, our offers and how we're underwriting properties. But the fundamentals of real estate really haven't changed. And, you know, especially with the tax benefits that are still very attractive, and this year, like they were last year, you know, we're still seeing people be very active if they're, if not, I mean, over the past six months, I would say on the tail end of 2022 people had this a little bit of this fear factor of, we don't know what's happening. And now they've maybe come to terms like, oh, the now this is normal. And this is what we expect. And you know, as long as you as long as you have a strategy in place, and you're working with the right people in the right market, you can be successful in any cycle, right, and the people that are really successful in real estate, and people that I get mentored by, they're always buying, they're not talking about, oh, interest rates are higher. Now they're talking about, this is how I'm being successful right now. Right. So we try to emulate that.

Rory Gill: 18:47

That's great. So, you know, I kind of also want to let you give a little bit of pitch for kind of your segment of the business and that being turnkey. You know, why should a prospective investor look to a turnkey provider instead of kind of going and doing everything on their own?

Zach Lemaster: 19:03

I think there's a lot of benefits to turnkey in terms of and obviously, I'm biased, this is our business, but most of our investors do not only buy properties with us. They see this fills a need and a demand to the level that they want to invest. And they're also going out and doing some of their own things. However, there are some people that are busy professionals that they love, like real estate, and they have no interest in self managing or, you know, going through that and so that's that serves a perfect niche for that. But turnkey is a great option for people to say get started if they've never bought a property and they need some hand holding they want to avoid the common pitfalls and they want you know, the education process throughout that at that's what we strive to offer is the education for someone to be successful long term, or if it's their first time investing out of state, if they simply just want to diversify across some of these areas turnkey is an easy way to do that versus having to build your own team from the ground up in an area which is a huge lift and can have, you know, a lot of challenges. To do so, and also just people that want to scale quicker, they want to acquire more properties, they are full time investors, and they just, you know, they're doing what they're doing, and then that they want to still put their money into real estate assets in these markets and just buy more property. So those are kind of I think the demographics of people that we often see, come through the turnkey space.

Rory Gill: 20:22

And, you know, I'd be remiss if I didn't ask a little bit more in depth about why we, why we real estate investors do all this in the first place. And, you know, the words that come to mind are, you know, financial independence and retirement. But those terms mean a lot of different things to a lot of different people. And since you work with people to bring them toward financial independence into retirement, would you mind taking a crack at defining those for us?

Zach Lemaster: 20:50

investing, at least in my opinion, is a lifelong journey. And ideally, something that if we leave as a legacy, right, not not only we're talking about generational wealth with legacy financially, but legacy in terms of education, and tools and resources for, you know, the people behind us that we want to leave in a better place. And that's why I think that's why we're passionate about real estate. And that's why we're in this business. I don't need to be working in this business today. But I enjoy helping people accomplish their goals, and see the light and be successful in real estate. But most of the time, there's different levels of like retirement, per se, and a lot of us this is a foreign subject, initially, it's just like, oh, I want to pay my pay my expenses, right. So that's whatever that is three to $5,000 a month, like, that's the first goal I want to get to. And sometimes your mind doesn't allow you to think past that until you reach that goal. And then from there, it's the next step of retirement, which is financial independence, which is replacing your active income, through rental real estate. And this could be being an active investor or path through passive real estate, we try to look at building a passive portfolio, otherwise, you're just trading one job for the other. And so that's, you know, whether, I mean, the most common number we hear is $10,000 a month. That's my goal. And then once people achieve that, it's like, oh, I can actually increase my level of, you know, expenses, and, and lifestyle, and also look at, yes, how do I create that legacy. And so those are kind of the three stages that we walk people through.

Rory Gill: 22:28

And I mean, a lot of that feels, you're dealing with numbers, and you're dealing with the calculations and the real estate investments, but you're actually holding people's hands, they kind of transform their lives kind of take on different mindsets. I know, when we first started doing real estate investing, the concept of financial independence and certainly retirement felt strange. Retirement is you know, sitting on the beach, when you're an elderly person, enjoying your last few years. And now I've certainly had my mind open in the real estate space to seeing it as the opportunity to dictate what you do with your own time. And the lot of people who are, quote unquote, retired are still working very actively. When you are working with your your clients through that process, you know, what does that look like to them and how does their their mindset shift when they move into the latter stages of financial independence and

Zach Lemaster: 23:21

And we're kind of coming full full circle with retirement? where we opened up on with these the entrepreneurial mindset and journey being somewhat of a lonely, lonely journey. And like you it is a my mind shift, change, right? Because I think that it really comes down to time, right? All of us think about time, what do we want? That's the financial independence is being able to choose what you who you spend your time with and what you're doing. But it's not it's we found being involved in your passion and spending time with that. And so it's it is an evolution mentally, but most people are in that set first stage, how do I cover my expenses or possibly to replace their active income. There's a lot of different things you got to start thinking about. And sometimes it is a struggle, because if you're a W-2 employee, you don't have to think about stuff that sometimes on the entrepreneur path, there's no off. There's no off switch, right? It's like sometimes you're constantly thinking about this stuff. I know that I am guilty at some point of we all are of that. So a lot of it is setting up the systems in place to be able to have a scalable and sustainable business model. For example, if you are self managing your properties, at some point that will drive you mad. If you if you own enough properties, you know what I mean? And to really scale you need to hire and get staffing. Hiring talent, and hiring people within our own active business in our portfolio. That is such a key component. And so you just you're constantly learning stuff as you're going through the entrepreneurial journey. But I think our focus is looking at how to build a sustainable portfolio from the fact that you know, if you read The E Myth by Michael Gerber, I think that's one of my favorite books where it talks about like working on your business, not in your business being, you know, an engineer or technician. I mean, but that's the journey we take people through and and try to educate them on is, you know, how do you build this, so you can focus on the overall business, and then you can truly enjoy retirement, not just be buying yourself another 80 Hour Work Week.

Rory Gill: 25:22

And you know, if somebody is listening to us for the first, and they're having this talk for the first time, which I doubt, but if they wanted to start taking the first steps into moving away from kind of the traditional W-2 job with, you know, 401k investments, if somebody wants to take that first step, what are some good resources, and how can they connect with you to start moving that ball forward?

Zach Lemaster: 26:23

Yeah, and if they haven't bought their first property, I would say that's step one. You know, sometimes we all get in the analysis paralysis, and that's fine. Like, you know, there's always something, politics, COVID interest rates, recession, war, or whatever the, there's always going to be noise and excuses. Like there's, there's always opportunity too, and so I would encourage someone to if they're interested in real estate, like buy your first property, if that so happens to be a turnkey route, fantastic, if not fantastic, just to do it. But if they want to learn about my company, or connect with our team, you know, we're happy, we don't charge anything for education, we make our money through the renovation and sale of the properties, you know, but we're happy to spend time to go through and map out your goals and strategy plan and talk about some of the best investment markets, they can go to renttoretirement.com. That's renttoretirement.com. And, you know, learn more about us look at inventory schedule, a time to meet with my team.

Rory Gill: 27:18

Actually, I want to float kind of one avatar of buyer that we see in our market here. So you know, we're in Boston, which is, you know, it's doesn't come up in a lot of people's hot investment lists. But it's a it's a market where the supply definitely can't meet the demand for housing. But a very, you know, landlord friendly or very tenant friendly state in the first place. We see a lot of people who are looking for the first time their their primary residence and the first time home, and they are priced out of the market. And I think interest rates do matter for this particular person. But a lot of those people now are actually getting an investment property as the first property that they've ever owned. When it comes to investing in investment properties versus you know, having a primary residence, do you think people need to wait to invest in an investment property until they own their primary residence, or can they jump right in?

Zach Lemaster: 28:12

Huge topic here, they I think you absolutely can own an investment property. You do not have to go down the primary residence route. I mean, the big question with that, too, is like, is that even an asset? If it's not producing income? It sure is, if it's appreciating, but I mean, I mean, otherwise, it's just on the liability sheet and expense. But yeah, I think investing you don't have to, you don't have to wait until you own your primary residence. I mean, walking through and evaluating the property, it's really the same process with the additional layer of okay, let's let's look at the business side of this and analyze the numbers, a lot of people will buy a primary residence and then move out of it and then use that as a rental, right? Or maybe you combined it where you have a like a duplex or you do some house hacking where you rent out half and you live in the other house. So you can combine it like like we did for our first one so but we have a lot of people that live in expensive markets and it frankly just makes more sense for them to rent and then it does to buy a house there and they have large rental portfolios, right? And their cash flow on the rentals are more than covering their their rent numbers. So to each their own but do not have you haven't bought a property yet, don't do not think that you have to buy your primary first, before we buy an investment property.

Jason Muth: 29:24

That's actually fascinating to hear. You know, we've always been in the mindset of buy, buy, buy, you know, just us personally. In fact, the office that Rory a city, and we own that also, because we didn't want to pay rent to somebody else for office space, right? So we looked around a little bit and we're like, Screw this, you know, just let's go find somewhere that we could actually buy and own. And that worked out really well for us. But yeah, you know, markets Boston, what we did personally, you know, we traded it up a couple times in the city. And we did use the equity as a bit of a piggy bank, you know, whereas a lot of people just want to pay their mortgage down and then say that they don't owe anything on the primary home and they could just be fat and happy. We put that money to work, you know, so we took out home equity lines of credit multiple times we put that equity into investment properties that are cash flowing properties. We were able to trade up and then we moved out of Boston, traded down mortgage size wise and doubled the size of where we're living and, you know, on the portfolio goes so you know, everyone has their own pathway as to how they do it. But you know, I'm glad that you mentioned you know, the debate of is your primary home an asset or a liability, it could be either it's just how you hold it. You know, I've always been under the mindset of my primary home or our primary home is an asset. Because we're not going to wrap up all our money in it, you know, if it appreciates in value, which every one of them has, we're going to use that to our advantage, which we have.

Zach Lemaster: 30:55

I love that there is such a thing as return on equity, right, and yeah so and capital to invest his most limiting factor for everybody. And so being creative with using things like HELOCs to expand your portfolio, just another resource.

Jason Muth: 31:10

It's been a combination of, you know, smarts and some dumb luck. I mean, we ended up in a really good neighborhood in Boston, that got really hot. So you know, I can't say that in 2003, I had the foresight to be where we are today. But hey, part of real estate is just persistence and waiting. And it's being smart, right?

Zach Lemaster: 31:28

And taking consistent action. People ask about what's the number one thing that separates people from being successful from those who are not? And my answer is consistency. Because just like, do your point, Jason. I mean, sometimes, if you own enough progress, some of them won't work out, right. And some of them won't be great investments, but then some of them will surprise you 10 years later, and just be like, and those are game changers, you know, just by just by investing, and you didn't have that foresight. But you did take action, and you just kept taking action, right?

Jason Muth: 31:58

Yeah, we had a previous guest many episodes ago, Pam Hill, she mentioned the lottery ticket value of your property, which I love that term. You know, if you buy enough of them, eventually one of them might become that lottery ticket that you know, is the property that opens up right next to, you know, a major employer that comes to town or a new sports stadium or a hot neighborhood. And there's you lottery ticket right there.

Zach Lemaster: 32:21

I love that.

Jason Muth: 32:22

So before we get to the final couple questions, I do have one last question. And you got to tell us about those North Dakota winters, man they look brutal on the news.

Zach Lemaster: 32:31

I tell people I was deployed in in North Dakota instead of being stationed there because it was the great white north in the tundra. Yeah, when it snows there, it doesn't melt, man. It doesn't melt til June. That's just keeps compounding. So that's real estate is a is a different ballgame there for sure.

Jason Muth: 32:49

And some of those wind chill maps. My God, when the jetstream just drops down to Texas. I'm just looking there saying how do they do it? I have no idea. Those are negative numbers we don't even see in New England, but..

Zach Lemaster: 33:01

Yeah, you get thick blood real quick. Yeah.

Jason Muth: 33:05

Let's get to the final couple questions. We ask these of all of our guests in the podcast just as a way to wrap things up and learn a little bit more about you. The first one we have for you Zach is if you could get on stage and talk with zero preparation for about a half an hour about any topic of the world. What would that be?

Zach Lemaster: 33:24

I mean, it's probably all the stuff we've just already talked about, right? I think obviously, I'm very passionate about real estate. My favorite. My favorite topic in real estate, though, is actually tax. Talk about taxes, we our goal is to buy because we are real estate professionals buy enough real estate every year to reduce our taxable income to zero via cost segs, mainly. But this is I mean that when you when we learned about the tax benefits of real estate and how to strategically use that, that changed our trajectory of our investing, and really allowed us to expedite things. So while that is a pretty dry topic for most, I really like talking about the entrepreneurial journey and to Rory's initial points, I mean, that's, that's tough stuff. And when I when I hear people that are kind of going through or have gone through positions where I am currently, and that's super motivating, and those are the most influential things for me.

Jason Muth: 34:19

Yeah, that is not a dry topic to Rory and me. We just did our first two cost seg studies and it's eye opening.

Zach Lemaster: 34:27

I love it. Awesome.

Jason Muth: 34:28

What do they say it's not the money that you make, it's the money that you keep.

Zach Lemaster: 34:32

The money that you keep, and then that money reinvested is just like when you actually run an ROI on that. I mean, yes, it's deferred depreciation, but you can 1031 that, but I mean, just a simple fact of like, being in high tax brackets, and then not paying that money in Uncle Sam then reinvesting it. That's how you get that snowball man that just exponentially grows.

Jason Muth: 34:53

Yeah, they don't teach that to you and optometry school. Second question we have tell us something that happened early in your life or career that impacts the way that you're working today.

Zach Lemaster: 35:04

Let me think on this one, because there's a lot I could jump or I could jump quickly to a lot of issues that we've had. Let me talk about an unfavorable topic of losing a lot of money into seven figures. But this is solely from forming a bad partnership, and not going through the legal due diligence that I needed to in terms of you know, funding. So that I had a partner early on in our career path. He almost buried our company. And actually this was a separate company. This was not, but the money I made from Rent to Retirement was funded this project. And basically, this was a rehab project, basically a syndication we were co-GP'ing on where we had a partner that we had done some smaller scale rehab with and ended up funding a lot of stuff that the money we we funded into the seven figures was not actually used for rehab, and was this person in a filing bankruptcy, chapter seven, and 11. And we ended up you know, just basically getting pennies out of it. We haven't even received that back yet, years, years later, it's just chaos. But what I've learned is, we jumped into a partnership that was not necessary, too early on, and did not do our due diligence on the partnership. And one, partnerships can be extremely valuable. But it's just important not to get into them too early to have set expectations, and especially as you grow, and just do your due diligence on people, you know, going into it. So that is maybe not a super fun topic to talk about. But because of that, in that learning lesson through that we've been able to form new partnerships that have just been great. One of my mentors always told me in real estate that you always you either make money or you learn. And that was his way of saying, you know, you lose money. But all those things, the school of hard knocks, I mean, if you apply it and, you know, just allows you to be that much more successful moving forward.

Jason Muth: 37:05

That is one of the best answers we've had for that question. Rory, we need to get into the habit of not asking the final three questions in advance because we didn't prep you, Zach with those questions. Yeah. So thank you for sharing that.

Rory Gill: 37:17

And that's I mean, there's we could talk for another hour about, I think, the dangers of not entering into partnerships and the dangers of entering into partnerships, because there are a lot of problems both ways. But I thank you for that answer. Because I'm sure that was not, it was a learning experience, but I'm sure it was not one that that you remember fondly.

Zach Lemaster: 37:39

I will say this though, because of because of that bad experience. We actually got introduced to other people. It's so such a people business, right. I mean, business in general, but especially real estate is all networking, we were actually able to meet people because of that, that changed our business, that we actually made way more money back then than we lost. So it just took time. So we didn't see the light at the end of the tunnel then. But I mean, it's just it's interesting how it comes full circle.

Jason Muth: 38:05

Yeah, it's wild. That is wild. Final question we have tell us something that you're listening to, or watching or reading these days, it could be anything in the world.

Zach Lemaster: 38:14

All right, I'll throw out a YouTube star who's kind of intrigued me recently, Alex Hormozi. I don't know if anyone watches him. But he's just this young entrepreneur that is just really kind of blown my mind. I love watching his stuff. And I've transitioned like, really early on in our career. It was all real estate, education, real estate, real estate, real estate. And then it became more business business business and focusing on scaling the business. I really enjoy his stuff. His book, $100M Offers is great. Yeah, and we follow Bigger Pockets a lot on the real estate and business side. So you know, hopefully, that's a value.

Jason Muth: 38:54

I just found your BP profile page. Actually, I saw a video that you shot at BPCon this year. I was also there. As were, you know, thousands of people. So I'm not surprised that we didn't cross paths.

Zach Lemaster: 39:05

Well, we do a lot of advertising with them, too. So you'll, you know.

Jason Muth: 39:08

I was wondering why you were in their podcast studio. Did you get access to that b ecause you're an advertiser?

Zach Lemaster: 39:15

No, they didn't. Because they were very particular about the guests. Like you can't buy podcasts with them. You can't if they wanted to be very just organically education based. What we did there. And that's just I began to know some of the hosts there and collaborate on different stuff. And I was able to sit in on a Rookie podcast, we did a live Rookie podcast recording there. So that's what we use the studio for. And actually, we were able to use it for some of our own recording as well.

Jason Muth: 39:41

Yeah, yeah. I love that podcast. I saw one of the hosts. What's the woman's name with the host? Do you remember?

Zach Lemaster: 39:46

Ashley.

Jason Muth: 39:47

Ashley she was also in charge of one of the panels there that I sat through, so.

Zach Lemaster: 39:51

Awesome. Yeah.

Jason Muth: 39:53

Rory, why don't you bring it home? I shouldn't be talking right now with this voice that I have.

Rory Gill: 39:57

Yeah, so just want to you know, before we depart, if you know we mentioned earlier, but remind our listeners where they can find you and reach out to you.

Zach Lemaster: 40:05

Absolutely. Best places is to visit our website renttoretirement.com That's renttoretirement.com that has links to all our social media. 800 numbers is 800-311-6781. But yeah, I mean, we got a ton of resources out there. Our goal is to add value to anyone that comes in our community. We're all active investors here on the same journey. We do a lot of short term rentals and commercial and multifamily and single family. So please reach out and we'd be happy to schedule a time with with anyone.

Rory Gill: 40:36

Well, thanks for joining us. Zach and if you're looking for Jason, you can reach Jason at jason@nexthometitletown.com His voice we'll be back by the time you hear this anyway, but you can send him an email directly there. If you're looking for me Rory Gill, I'm available through my law practice UrbanVillage Legal. That's urbanvillagelegal.com. And NextHome Titletown my brokerage. That's nexthometitletown.com. Thank you, Zach, for joining us on the podcast and thank you all for listening. Thank you.

Announcer: 41:05

This has been The Real Estate Law Podcast. Because real estate is more than just pretty pictures. And law goes well beyond the paperwork and courtroom arguments. were powered by NextHome Titletown Real Estate are Boston's progressive real estate brokerage. More at nexthometitletown.com and UrbanVillage. Legal, Massachusetts real estate Council serving savvy property owners, lenders and investors. More at urbanvillagelegal.com. Today's conversation was not legal advice, but we hope you found it entertaining and informative. Discover more at realestatelawpodcast.com Thank you for listening