[00:03:06] Patrick Donley: Just want to hear a little bit more about the family business and what it was like for you getting started with that. 

[00:03:11] Jonathan Barr: My mom and my stepdad, they’ve been flipping home since, I don’t know, the early nineties, so they’ve been doing it for 30 plus years. And then in 2008 when the last recession happened, couldn’t find a job, was just graduating from college and decided to join up with them.

[00:03:29] Jonathan Barr: And we started going to the foreclosure auctions and buying tons of homes that way. And it’s kind of what got me into what I’m doing now.  

[00:03:40] Patrick Donley: Tell me more about that. Like you graduated right at the height of the 2008 great financial crisis. What did you study? Where’d you go to and what were your kind of career thoughts coming out of college?

[00:03:49] Jonathan Barr: Yeah, I studied finance, which actually helps a lot in what we’re doing now. I think initially it was like, I don’t want to work in a family business. I want to do my own thing. Maybe get into like a business consulting firm. But it just was really tough to find a job at that time. And it just kind of made sense to jump into the family business.

[00:04:08] Jonathan Barr: And little did I know that it was the best time to jump into flipping homes because of all the REOs and short sales and all that kind of stuff that was happening at that time. And like looking back at it, I mean, we were buying properties in LA for a hundred, $200,000 that today are worth a million dollars.

[00:04:26] Patrick Donley: And so like growing up as a kid, were you working with your mom helping out doing anything like in the summers with her? 

[00:04:32] Jonathan Barr: I would like go on the weekends to look at houses or go to open houses and always was around it. Like our dinner table, there was people talking about it. So it’s definitely in my blood.

[00:04:46] Patrick Donley: When you started with your mom and stepfather, what was that like your 22 or so, what did they have you get started doing with the company? 

[00:04:54] Jonathan Barr: So I first actually started more as like an agent, like showing buyers properties and that kind of stuff. And then we eventually got into the auctions and the trustees sales.

[00:05:03] Jonathan Barr: So I was doing acquisitions, so we had a couple people at the auction sites. I at first went to the auction sites myself, so I kind of experienced that firsthand. And then looking at the MLS and all that, but you know, later being in that business, it definitely got challenging working with your parents because you get to a certain point where like you kind of know as much as they know and then you have certain ideas of where you want to take things and it kind of, there starts to become some conflict because of that.

[00:05:34] Patrick Donley: Absolutely. I mean, any workplace is going to have some conflict, but when you involve family members, it’s like a whole nother dynamic and I can totally empathize. 

[00:05:43] Jonathan Barr: Yeah. You bring all like the history of your life with them into the business if you like it or not, you try not to, but it just kind of happens.

[00:05:51] Patrick Donley: Exactly. I worked with my dad, he had a development company and worked every summer with him and I just remember he and his brothers getting into huge arguments and as a kid I was like, I don’t know if this is for me. Because it’s tough. It’s really tough and it does stress relationships and you’ve got a brother right, that was also involved in the company.

[00:06:10] Jonathan Barr: Yeah, my, my brother who’s my partner now as well, but that worked well. We’ve always got along really well and I think we’re also, you know, it’s different dynamics because you’re essentially equals, so it’s like there’s less of a parent kid dynamic that makes it a little easier. And don’t get me wrong, I love my mother and she’s amazing and she’s done incredible things and I wouldn’t be where I am today without all the guidance and everything.

[00:06:34] Jonathan Barr: She’s resources she’s given me. But now I am happy to be off on my own, doing my own thing. 

[00:06:40] Patrick Donley: Yeah, absolutely. It’s a good transition. We’re going to get into that, the transition here in a little bit, but I wanted to hear more about the actual flipping business you guys did. How many flips? Like over 400, right?

[00:06:54] Jonathan Barr: We did 400 over a 10-year period. Yep. 

[00:06:57] Patrick Donley: That’s a ton of flips. Talk to us about like the systems you had in place, the process, what you liked about it, what you didn’t like. Talk, go into that a little bit. 

[00:07:06] Jonathan Barr: We were going to the auctions, we were buying about at 1.8 homes a month, which is pretty crazy. We had our own program and app and stuff that we had a couple people in the morning looking at properties.

[00:07:18] Jonathan Barr: We had two people at the auctions bidding on houses, and then we had three project managers that overseeing like 30 projects at any given time. So we had a whole haul operation and everything that was like a factory of like churning out these properties. And one thing that also made us really successful is in the areas that we’re working, they’re starting to get kind of gentrified.

[00:07:42] Jonathan Barr: And I noticed that people are starting to do like higher end flips, I guess you could say. Well, I noticed that like I saw one house where they did it and they did really well. And so we started doing that. And so at the auctions we were creating new comps that weren’t out there yet, that we had under contract.

[00:08:01] Jonathan Barr: So we were able to bid up higher, that no one else at the auctions knew that they could hit the values. We were bidding everyone out and buying way more homes that way because of the strategy that we had in place that was making us pretty successful and printing cash. 

[00:08:15] Patrick Donley: And so were you buying properties all on one street, one neighborhood and just focusing?

[00:08:20] Patrick Donley: Or were you all over LA? 

[00:08:22] Jonathan Barr: Yeah, it was like most, mostly Northeast LA So if you’re familiar with LA, silver Lake, echo Park, Highland Park, Pasadena, Altina, some the northeast kind of corner.

[00:08:33] Patrick Donley: Like you said, you’re 2000 8, 9, 10, you’re buying them super cheap. Tell me about a typical house Simon mean, were you taking down to the studs?

[00:08:40] Patrick Donley: What did the flip look like? Was it more cosmetic? 

[00:08:44] Jonathan Barr: I mean, it was kind of all across the board. I think at first it was a little bit more cosmetic because the deals were so good. We didn’t really have to do much to turn a profit and. As time went on and it got a little more competitive, we had to do, like, we would do gut jobs, we would do additions.

[00:09:00] Jonathan Barr: It kind of was all across the board. It just kind of depended on, and we’ve sold properties as is too. So it was all across the board we were able to do anything. And that’s also another thing that made us successful as we could take Harry deals and make something out of them. 

[00:09:14] Patrick Donley: So were you using just family money?

[00:09:17] Patrick Donley: Were you bringing in investors to do all of this? How were you funding the projects? 

[00:09:22] Jonathan Barr: Yeah. We brought investors that gave us the money and then we split the profits 50 50 and then eventually we were using hard money and just recycling through cash. And we’d buy properties at the auctions and have the hard money lenders give us some money for those purchases a couple days later and then take you back to the auctions.

[00:09:39] Jonathan Barr: So we were able to like recycle not even a huge, a ton of money. Wow. That’s impressive. Yeah, it takes a special relationship for someone, hard money lender to be willing to do that. 

[00:09:52] Patrick Donley: How long would one of the flips typically take? And you were, you’re basically doing everything in house, right? You guys are handling all of it.

[00:09:59] Patrick Donley: You’re not farming anything out? It sounded like you’ve got.

[00:10:02] Jonathan Barr: I mean, technically there was like sort of outside contractors, but they essentially any work for our us so they were, in essence, it felt like they were within our company. Yes. 

[00:10:13] Patrick Donley: And then were you guys holding onto any of the properties? I mean, you were in an area that, like you said, is gentrifying.

[00:10:18] Patrick Donley: You knew that they were going up in value, you were pushing values up. Were you guys holding onto any of the properties for the longer term? 

[00:10:26] Jonathan Barr: Unfortunately, we were not, and we should have, I actually post this on Twitter all the time. If we would’ve kept like a third of the property that we flip anyone in our family probably wouldn’t have to be lifting a finger at this point.

[00:10:39] Jonathan Barr: Luckily I did buy some properties for myself, some duplexes that I bought during that time that I held which subsequently I sold to 1031 into the deals that we’re doing now. 

[00:10:51] Patrick Donley: Okay. We’re going to get into those deals and the 1031, I want to go into that and in depth and talk about that, but I still want to stay with the flips.

[00:11:00] Patrick Donley: So as the years progressed, you are what, 2019, 2020? Was it getting harder and harder to find good deals and were the numbers just not making sense? 

[00:11:14] Jonathan Barr: It was definitely very challenging. There was basically no more REOs, you know, the flip business was definitely getting saturated because you have all those people promoting flips.

[00:11:25] Jonathan Barr: You can get rich whatever. But we had our little niche there and we did high quality flips. Like I don’t even necessarily call them flips. They’re like almost restorations a lot of the work that we’re doing. And we had a lot of good contacts with different agents and had kind of a name for ourselves.

[00:11:44] Jonathan Barr: So people would bring us stuff a lot and we’d do a lot of digging. I mean, it wasn’t easy. We, I had to look at, I don’t know, probably 50 to a hundred deals before we actually bought a house, which is pretty crazy. And I was actually looking at some stats the other day. I was like, how many houses in LA County did I walk into during my career doing that?

[00:12:04] Jonathan Barr: And I estimated 10,000 homes. 

[00:12:08] Patrick Donley: Oh my God. That’s crazy. So, and were you doing the analysis on all of these? Like were you the main kind of doing the underwriting and acquisitions? 

[00:12:17] Jonathan Barr: I was the main guy, but we looked at it as a team. You know, we’d kind of have meetings and kind of talk about why we think whatever and come to conclusion.

[00:12:25] Jonathan Barr: Especially if it was starting to get kind of like tight on a deal and we were kind of unsure. We’d all definitely group up and talk about it and go through the numbers. 

[00:12:34] Patrick Donley: And then what role did your mom and stepfather play? What were they up to? 

[00:12:38] Jonathan Barr: My stepfather was on the construction side and design, and then my mom was kind of like the CFO kind of making sure everything was kind of running the way it was.

[00:12:49] Jonathan Barr: So she kind of had her hands and everything, but more on the financial side of things. Was she also a realtor? At one point? She was because we sold everything in house. So she was the broker and that’s kind of how she started in the 80s, selling houses in like the hood of LA. 

[00:13:08] Patrick Donley: I wanted to get your opinion on this.

[00:13:09] Patrick Donley: Somebody said that you should never try to sell your own properties just because you’re not going to handle the negotiation. Well, it’s an emotional deal and I just wanted to hear what you had to say. Like, I handle my own sales when I do them, I know the property really well. I enjoy the sales process, but I started to think, well, maybe I’m making a mistake and leaving money on the table by doing it myself.

[00:13:30] Jonathan Barr: I mean, I have the opposite thoughts on that. I think because you have so much skin in the game, you’re going to negotiate harder. You’re going to be that much more involved and you could use the emotion to your advantage, I would say. 

[00:13:44] Patrick Donley: Yeah, just different opinions. So I want to hear like how things started to develop that you ended up changing your personal strategy.

[00:13:53] Patrick Donley: How was that deciding to leave the family business to venture out on your own? Talk to us about what you were thinking and feeling, because that’s a tough jump to do and I just wanted to hear what it was like for you. 

[00:14:06] Jonathan Barr: Yeah, it was definitely a tough jump. 

[00:14:09] Patrick Donley: And that was when 2000, 1920? 

[00:14:12] Jonathan Barr: It was like basically end of 2019, early 2020 was sort of that transition.

[00:14:18] Jonathan Barr: But yeah, it was tough. But the catalyst that made me do that is, like I said, I bought those few duplexes, I held them for 10 years, and I saw the power of long-term holding. I mean, these properties that I bought. So what’d you buy them for? I think it was a, I mean, there were different numbers, but like, I’ll give you an example of one that I bought for 300,000.

[00:14:41] Jonathan Barr: I put about maybe $130,000 and then eventually sold it from 1.4 million 10 years later. So I made a million dollars off that deal, off one duplex.

[00:14:51] Patrick Donley: Pretty nice return. And you had 10 of them? Is that how many you had? 

[00:14:54] Jonathan Barr: Did I hear that right? No, three. Three. Okay. Okay. I wish I had 10, but I should have tried to get there.

[00:15:00] Jonathan Barr: Man, not all of them made that much. That was like the best one I would say. 

[00:15:05] Patrick Donley: That was the home run? 

[00:15:06] Jonathan Barr: That was the home run. So I saw that they appreciated by 400%. 

[00:15:11] Patrick Donley: And what were they cash flowing in la How what? What kind of cash flow were you earning? 

[00:15:16] Jonathan Barr: Like cash on? Cash on The money I put was pretty high, but when I started looking at what my cash return was on, the equity I had on the property is, it was probably like three or 4%.

[00:15:27] Jonathan Barr: So that’s what the catalyst was to sell that first property look in the Midwest. because my family, my wife has family in Kansas City. So that’s why I started looking out there, saw that I could triple, quadruple my cash flow by moving the equity from these duplexes over, over to a 14 unit that I bought in Kansas City.

[00:15:47] Jonathan Barr: So I went from making 1200 a month to 5,000 a month. And that was a tough hurdle to get over because everything I had done was in my backyard, but I found the right team. Did the first deal, and to this day, that deal’s still working out great. 

[00:16:03] Patrick Donley: In LA. Was there, is there a rent control? I mean, were you capped in terms of what, how much you could bump your rents?

[00:16:10] Jonathan Barr: Yeah, there is rent control on properties that were built. I believe it’s before 1978, which in LA is probably like 80% of the properties. Though now there’s California rent control. That kind of takes, takes that over too. But yeah, it’s 3% a year. Basically, when a tenant is in the unit they sort of own it.

[00:16:32] Jonathan Barr: And you know, we, a lot of times we would have to pay someone $50,000 to move out a unit before we sold it. But paying them that 50 made us another a hundred k on the sale, for example. 

[00:16:43] Patrick Donley: I want to hear about the sales process and then the 1031 process that you did. I presume you did a 1031 on selling the, and you sold all three basically at the same time.

[00:16:56] Jonathan Barr: Within a couple years. 

[00:16:58] Jonathan Barr: Okay. So it’s kind of staggered a little bit. 

[00:17:01] Jonathan Barr: Staggered for sure. 

[00:17:03] Patrick Donley: Tell us about the 1031 there. We’ve got a lot of beginning and intermediate investors that they’ve maybe heard 1031, the term thrown abound, but around. But what is the 1031? How does it work? What are the advantage of it? Why should you do it? 

[00:17:16] Jonathan Barr: 1031, basically, you can sell a property and move that profit slash gain into a new property and defer the tax so you don’t have to pay the tax on that gain as long as you move the money into another deal. But the caveat is this time constraints. So in 45 days, you need to select at least three properties, one of which that, or you could close all three depending on what it determined, and then close within 180 days.

[00:17:45] Jonathan Barr: And then the purchase price of the new property has to be greater or higher than the old one. And then you have to have greater or higher debt than you had previously on that property. So it’s a little 

[00:17:55] Patrick Donley: bit of time pressure, right? 

[00:17:57] Jonathan Barr: Yeah. You basically, like, ideally you have the property you’re going to buy before you even sell the other one.

[00:18:05] Patrick Donley: How did you end up choosing Kansas City, moving to the Midwest? How did all of that come about? 

[00:18:10] Jonathan Barr: Yeah, like I said my wife has family there, so that’s why I initially started looking there, but just started looking at the numbers and they made sense, and then just going there and feeling it out and seeing, oh, this is actually a pretty cool place.

[00:18:23] Jonathan Barr: They have cool bars, restaurants, coffee shops, this thing’s going on here. It’s not just like cows and nothing going on. You know, these are actually legitimate cities that people want to live in, that are affordable, that have room to grow still and have, and our population growth, all that good stuff that you want to see.

[00:18:43] Patrick Donley: So how did you find that first deal? You were just there visiting your mother-in-law y your ed and family and just had some free time and you were out looking around. Is that how things unfolded? 

[00:18:54] Jonathan Barr: I mean, I was just kind of bored and started talking to, or not looking at, talking to brokers right away, but kind of looking at deals that are out there and then connected with some brokers.

[00:19:03] Jonathan Barr: And the deal that we ended up, I ended up buying, I had actually walked it before they were done doing the rehab. So basically I bought a property that they flipped to me. Essentially it was everything was done to it, plumbing and electrical, all that kind of stuff. And it was still able to get double digit cash returns.

[00:19:20] Jonathan Barr: This was like towards the end of 2019. So it was like when the rates were a little bit higher and those, there just wasn’t as much competition from out-of-state people at that moment. And yeah, and that’s kind of how that happened. 

[00:19:33] Patrick Donley: So how did you end up funding that deal? I mean, you had a decent chunk of change from the 1031 to work with.

[00:19:40] Patrick Donley: What did that first deal look like? How many units were they? And then I want to get into how you managed them. Cause you’re doing that remote remotely, right?

[00:19:47] Jonathan Barr: I am moved about 500 K into that deal. 1.6 million was a purchase, 14 units, and it makes about 60,000 a year. You could do the math, it’s, I think it’s like 12% cash on cash return, which hard to do these days.

[00:20:05] Jonathan Barr: But it was just a very unique situation that I got into there and the loan and then a coup, a few years of interest only period as well on the loan, which kind of helped it get to a better place before that kind of burned off. 

[00:20:19] Patrick Donley: Would you advise investors to do interest? Only if they can?

[00:20:22] Jonathan Barr: Yeah, I mean, we did a loan, one of the last deals we did is a full term interest only.

[00:20:30] Jonathan Barr: And I think some people are like, well, you gotta start paying off your debt. It was like, well, with as prices go up and inflation’s high too, you’re eating away at that debt anyway. I always suggest going interest only if possible. 

[00:20:44] Patrick Donley: Tell me how you, did you decide you and your brother to do this at the same time together or did that kind of happen over a period of time?

[00:20:52] Jonathan Barr: So I bought that property in November, 2019 with my own, that was my own property. I bought that my own 1031 funds. And then in January of 2020, we left the business. And then September of 2020, we did kind of our first kind of larger syndication project in Oklahoma City, and that was also some 1031 money into that property.

[00:21:16] Jonathan Barr: And then we raised a little bit of money from other people, but it was tough for us to go like, Hey, you guys are like flipping in LA and now you’re buying an apart large apartment in Oklahoma. It was like pretty tough for us to raise on that first deal. And we only raise about, I think 25% of the equity from other people.

[00:21:33] Jonathan Barr: But it, it’s what kind of got us our start in that business. 

[00:21:37] Patrick Donley: Did the skillset that you developed flipping 400 homes, was there any carryover to doing the multi-family? I mean there in terms of there’s, there had to be to some degree, right? Like analyzing deals, like tell me about that. Like what skillsets are applicable in both flips and 

[00:21:53] Jonathan Barr: multi-family?

[00:21:54] Jonathan Barr: I mean, construction, it’s wood construction’s kind of the same with houses and buildings. Really good at, I think one of our strength was like due diligence in the flip business. And so due diligence in the apartment business is not that different. So like a little more complicated I would say. But also I think another of our strength is just kind of looking at it and kind of thinking outside the box.

[00:22:18] Jonathan Barr: Like we like that first deal we bought, we actually ended up putting a studio unit in an old pool room, because the property used to have a pool, but it didn’t have a pool any longer. But there was all this extra space and we’re like, we could do something with this. And we added an extra unit and that brings, you know, $600 a month times 12 and divide that by a cap rate.

[00:22:40] Jonathan Barr: You’re creating quite a bit of value by it. Not even that big of a change.  

[00:22:45] Patrick Donley: Tell me how the management remotely is going. Like that’s got its challenges I’m sure. What are the pros and cons of it? You’re living in Bend, Oregon. That’s pretty awesome. You know, you’re skiing and having a good time, but what are the challenges of managing stuff remotely?

[00:23:00] Jonathan Barr: I mean, yeah, if something serious comes up, you can’t just go down the street and take a look at it. You have to kind of rely on your manager and their expertise. And we’ve had issues with management as well. We actually just let go of our Oklahoma assets, the manager we had there and our bringing on a new one.

[00:23:19] Jonathan Barr: And I think we did a really good job bringing on this new manager. We interviewed four different managers. We talked to references, we talked to brokers and trying to get a feel of who the best person for what we’re trying to do is out there that has the best systems. And yeah, you have to have referrals.

[00:23:37] Jonathan Barr: You need to do your homework and you need to just work really hard to put together the best team you possibly can because you’re not there physically and you can’t do a lot of things that maybe you could do if you were there. 

[00:23:51] Patrick Donley: When you buy a place, are you inheriting like existing property management?

[00:23:55] Jonathan Barr: No, we’re always putting our management. Though that first KC deal, the management company was in place 

[00:24:02] Patrick Donley: and that’s who you got rid of or no?

[00:24:04] Jonathan Barr: No. That’s separate in Kansas City. Different managers and then the Oklahoma stuff. But yeah, so that manager was there and they were actually good. So I think I just got lucky, honestly, with that one because they’ve been good.

[00:24:16] Jonathan Barr: And another part of it is we’re just super involved. You know, we do weekly calls, we have like KPI reporting, like they’re telling us what our occupancy at, what our delinquency is at, how leasing is going, all that kind of stuff. I mean, we’re calling, we’re, we have emails almost daily, sometimes text messages with managers.

[00:24:35] Jonathan Barr: I mean, we’re super hands on. So that’s a big thing too, is like, you can’t just let the managers just do, you have to make sure you need to be on it too. And that’s a big part of the success. 

[00:24:47] Patrick Donley: And how often, so the different cities you’re in, tell me again. It’s Oklahoma City, Norman 

[00:24:53] Jonathan Barr: and Kansas City. In Kansas City, 

[00:24:57] Patrick Donley: how often are you headed there?

[00:24:59] Jonathan Barr: Once a quarter. The lucky thing is my brother is not married and doesn’t have kids, so he can go more often than I can. That’s 

[00:25:06] Patrick Donley: nice. So you send him pretty more often. That’s cool. 

[00:25:10] Jonathan Barr: A little more often, but I want to get out there too, you know. 

[00:25:14] Patrick Donley: So how are you guys breaking up the responsibilities between you and your brother?

[00:25:18] Jonathan Barr: He does more acquisitions. I do more like the marketing of our business for investors and some of the investor relations and some of the accounting stuff. But at the end of the day, we kind of have our hands in everything because it’s just the two of us. We have no employees, but we, they’re party managed. So that’s part of it.

[00:25:39] Patrick Donley: I wanted to hear if there’s anything you miss at all from the flipping days. Do you miss that at all in being in the family business or is it good to move on to the next thing? 

[00:25:49] Jonathan Barr: I mean, it’s more good to move on. But I’d say that the main thing I miss is we did some really high design projects. I mean, we did some four to 5 million projects in the Hollywood Hills, and so we did some like really fun, amazing projects that some of them got awards and got into different blogs and all that kind of stuff.

[00:26:09] Jonathan Barr: So it’s cool to be part of that. And now we’re just kind of doing workforce housing. It’s pretty vanilla kind of stuff, but my life is 

[00:26:17] Patrick Donley: better. Definitely. So the cash flow is greatly increased. You guys were, you know, as a flip, the downside is you’re, you know, a lot of people say it’s, you’re creating a job and it doesn’t end, you know, you gotta keep it pumping.

[00:26:30] Patrick Donley: I heard you say like you had to sell like three houses a month to pay for overhead at one point. 

[00:26:36] Jonathan Barr: Yeah, we had to do two, three deals a month just to pay for everything. So it’s like we had to do four deals a month just to like make some money basically. And that’s a pretty stressful and a high pressure space to be in.

[00:26:50] Jonathan Barr: And yeah, like you said, the flip business is a job. You have to go to the sites all the time. There’s things happening, you’re selling properties. It’s a full-time job when the apartment stuff is, it’s still busy, but it’s less like things have to happen today. It’s more like you do as much as you need to do.

[00:27:10] Patrick Donley: Do you think doing flips though is a good place to start for somebody just getting started? 

[00:27:15] Jonathan Barr: I think it’s a good way to create capital. You know, if I hadn’t been in that business, I wouldn’t have any cash to do what I’m doing today. So I think it’s a good way to kind of, for someone just starting out doing a flip and maybe using part of the profits to do another flip and use part of the profits to park into something long term and keep on doing that until you could focus more on long term investing, I would say.

[00:27:38] Jonathan Barr: But yeah you’re not going to just start out having all this money, so you need to create the money in some way. 

[00:27:45] Patrick Donley: Talk about the tax advantages of multi-family versus flipping business because there are some tax advantages. 

[00:27:49] Jonathan Barr: Yeah. Because most flips you’re doing in less than a year, so you’re basically getting taxes.

[00:27:55] Jonathan Barr: Ordinary income, which is depending on your tax bracket, can be, you know, 30, 40%, which is huge. And then with the apartment game, like I said we did a 10 30 once we deferred all those games. And then we’re also doing accelerated depreciation. So usually depreciation, which is a paper loss, essentially you depreciate over 27 and a half years.

[00:28:18] Jonathan Barr: But what acceleration, accelerated depreciation allows you to do is accelerate a lot of that depreciation in the first year. So I think it’s like 20 to 30% of that depreciation in the first year. So that basically what happens is someone invests like a hundred K into the ordeal. They’re getting 60 to $70,000 in losses in that first year paper losses, not actual losses, and they can carry those losses forward for 20 years.

[00:28:47] Jonathan Barr: So the idea is that all the cash flow you’re making for years to come, you’re not paying taxes on and then obviously always ref, everyone’s situation is different. So I always tell people to talk to their CPA and kind of do their own research too. Don’t take my own work for it, obviously.

[00:29:02] Jonathan Barr: Basically we, we pay little to no tax at this point. The way things are structured, they’ll accelerated depreciation. Bonus depreciation is being kind of drawn down right now, and we’ll see if they’ll keep it going in the future.

[00:29:16] Patrick Donley: I had Yonah Weiss on the show here a couple weeks ago and he does cost segregation studies.

[00:29:23] Patrick Donley: Is that what you’re talking about? Are you doing cost segregation studies to get the bonus depreciation and the accelerated depreciation? 

[00:29:32] Jonathan Barr: Correct. Yeah. So it’s totally worth doing, right? Right now It is. I mean, I think later it’s going to be more of a cost benefit analysis as that gets kind of drawn down.

[00:29:42] Patrick Donley: So explain a little bit more about how cost segregation works. You’re depreciating explain, it’s like carpet and there’s only certain things that can be accelerated on the depreciation schedule, right?

[00:29:53] Jonathan Barr: Yeah. It’s like an engineering study where they break down the electrical, the drywall, into different buckets like a five year bucket depreciation, 15 year, 27 and a half year.

[00:30:07] Jonathan Barr: And so the cost segregation study kind of allocates them appropriately so that, you know, you could offset those things earlier during the life of the investment, which you want to do because you’d rather offset costs earlier. because a dollar today is better than a dollar tomorrow. 

[00:30:26] Patrick Donley: Yona made this interesting point.

[00:30:27] Patrick Donley: He said, most people don’t even know about cost segregation studies and the advantages of doing this bonus depreciation that you’re talking about. He said it’ll ask even CPAs like they may have heard of it but don’t really understand it, and it seems like it’s a, you know, a really wise thing to do.

[00:30:43] Patrick Donley: Is there any reason not to do a cost segregation study in your mind? 

[00:30:46] Jonathan Barr: I mean, maybe for like a small property, like a house or a duplex, maybe it won’t make sense. That’s the only because of the cost of the study and all that. 

[00:30:58] Patrick Donley: And which is what about how much would you pay on a study? 

[00:31:01] Jonathan Barr: I think for our properties around four grand 

[00:31:03] Patrick Donley: And your savings are far more than that obviously?

[00:31:07] Jonathan Barr: The ROI on that is like, I don’t know, something stupid. Yeah. 

[00:31:11] Patrick Donley: So I wanted to hear a little bit about, you know, we’re in a rising interest rate environment. What’s it like right now in terms of your investors? Are they skittish to do new deals? Is it harder to find new deals? Talk to me about like just what you’re seeing in the market right now in, in the Midwest.

[00:31:28] Jonathan Barr: I mean, I think definitely investors are a little bit hesitant right now. I wouldn’t say they’re skittish, but if they are going to invest, they’re going to invest less dollars than maybe they were doing, you know, a year ago. And yeah, it’s really tough to make deals pencil right now when you have 6% plus rates and sellers still want what they wanted last year.

[00:31:47] Jonathan Barr: It doesn’t pencil, but like for example, the deal we’re closing in a week or two in Kansas City, we’re assuming the debt at 3.99%, that still has six months of interest only period. And that’s what kind of made the deal. Even though we have to put a lot more money down because of the loan amount, based on the difference between the loan amount and the purchase price, we’re ending up putting I think 40% down, which is larger than what we’ve put down on a lot of the other properties.

[00:32:13] Jonathan Barr: But with that at 3.99%, that’s spread between what we can get today. And what that is like made the deal happen. 

[00:32:21] Patrick Donley: And how are you finding these deals? Are, do you have brokers that you’ve developed relationships with that are bringing them to you? Or are you doing your own research? 

[00:32:29] Jonathan Barr: Mostly brokers that are bringing it to us.

[00:32:32] Jonathan Barr: A couple people have connected with me and we’ve done two deals now that people connected with me on Twitter and brought the deal to us. 

[00:32:39] Patrick Donley: Let’s hit Twitter. Like how has Twitter impacted your business? 

[00:32:43] Jonathan Barr: Like I said, it brought those deals. I’ve met a lot of investors. I’ve made a lot of good friends that now I’ve met in real life at Atka mean, for example.

[00:32:53] Jonathan Barr: And yeah, it’s helped kind of build my business. I kind of did a study of where kind of our funds come for our deals and so a third of it has come from my brother and I. A third of it has come from like friends and colleagues and a third of it has come from people I’ve met on Twitter now. 

[00:33:08] Patrick Donley: That’s wild.

[00:33:09] Jonathan Barr: Yeah, it is pretty wild. You’re meeting people on the internet and they’re giving you money, so it’s crazy. 

[00:33:15] Patrick Donley: Yeah, it’s really crazy. So, and it’s just, they’re seeing your content and seeing your tweets and they’re reaching out to you by DM and saying, Hey, I’d like to get involved in your deals? 

[00:33:26] Jonathan Barr: Yeah, and then we kind of have like a funnel on our website where they download an ebook and some emails go out.

[00:33:32] Jonathan Barr: They set up a call with me. They’ll get those interactions for like months before, so it doesn’t just happen like that. Easy, you know, and maybe they’ve been fo maybe they’ve been following me on Twitter for six months and then we interact for another few months, and then finally they invested in one of our deals.

[00:33:48] Patrick Donley: Tell me about, you mentioned a tax strategy book. Tell me about that. How did you write it yourself? 

[00:33:54] Jonathan Barr: Yeah I wrote it myself. So it’s called a tax stack strategy, and you could download it on our website as well. What’s it go into? It goes into 1031 exchanges, accelerated depreciation, which we touched on.

[00:34:08] Jonathan Barr: And then also solo 401k. So you could convert your 401K into solo 401k so you could self-direct into real estate deals or other kind of investments, which is huge. 

[00:34:21] Patrick Donley: And what’s the advantage of doing that? Changing it from a regular 401K to a solo 401k? For people that don’t really understand the difference.

[00:34:29] Jonathan Barr: You just have more control and hopefully you’re going to be able to beat whatever your 401K is doing. 

[00:34:35] Patrick Donley: It’s way more fun. Do you feel like in real estate you’ve got way more control than, do you invest in the stock market or anything like that? Or would you rather have the control that you have with real estate?

[00:34:45] Jonathan Barr: No, I don’t. I just like investing in what I know. Basically, the only other thing, and we’ve talked about it before is I invest like maybe one or 2% of my net worth into Bitcoin. That’s about it. 

[00:34:58] Patrick Donley: In case that asymmetric risk pays off, right? 

[00:35:01] Jonathan Barr: Yeah. I mean, so far it’s actually paid off pretty well, so I’m happy.

[00:35:05] Patrick Donley: Yeah. Oh, you got in early. 

[00:35:07] Jonathan Barr: March, 2020. So there go, that’s, yeah, that’s. 

[00:35:09] Patrick Donley: That’s, it’s a good time. That’s pretty good time to buy. This is like, I think 3,900, maybe 4,000 right around there. So that’s.

[00:35:14] Jonathan Barr: I think it was around six, maybe it was April. I don’t know. 

[00:35:18] Patrick Donley: That was a great time to load up if you had the foresight to do that.

[00:35:22] Patrick Donley: Hard to do though, when everything’s plummeting and it looked like 

[00:35:25] Jonathan Barr: I didn’t have the foresight. I just happened to have a few bucks at that moment, so I was like, why not? 

[00:35:30] Patrick Donley: How’d you get into it? Did you have friends that were pushing it or? 

[00:35:34] Jonathan Barr: I have a friend that’s super into it, and he is always in my ear telling me to buy it, and I was like, all right, you’re a smart guy.

[00:35:40] Jonathan Barr: I think I at least have to buy a little bit if you’re so all about it. 

[00:35:44] Patrick Donley: Yeah. Is he a real estate guy also? 

[00:35:47] Jonathan Barr: No, he actually is like an e-commerce guy. 

[00:35:51] Patrick Donley: So, we’ve got a show on Bitcoin called the Bitcoin Fundamentals that I started watching it like in 2000, I don’t know when it came out, 17 or 18. And like Uhhuh, you know, kind of got turned onto the whole Bitcoin scene.

[00:36:02] Patrick Donley: So it’s not widely it’s kind of viewed poorly, I would say, in the real estate Twitter community. Is that your experience? 

[00:36:08] Jonathan Barr: I don’t think people are fans of it that much in the real estate space. It is pretty speculative, I would say, but, so can real estate be that way? But it’s good to diversify a little bit.

[00:36:21] Patrick Donley: Yeah. So this is a real estate show now at Bitcoin. So let’s jump back to, let’s jump back to real estate. What’s your, like, longer term plan with the apartments? Is there an exit strategy? It sounds like you’re just going to hold them, right? Or what’s the plan? 

[00:36:35] Jonathan Barr: Our kind of plan is, you know, hold properties longer term, but refinance and return most of the capital within five years.

[00:36:43] Jonathan Barr: And only sell if it’s like an older asset to buy something newer, which we did our first Oklahoma deal we, that we bought in September of 2020, we just sold last October, 2022 hit like a 60% i r which is insane. And then we’re was able to 1031 that money into a property that was 30 years newer. So it was just like a win-win all around.

[00:37:05] Jonathan Barr: And I had 1031 into that property, sold that property, and then deferred the gain again. And then another 1031. So I’ve done, like, I have two instances now that I’ve done 2 10 30 ones with the same original cash. Does that make sense? 

[00:37:19] Patrick Donley: That’s wild. Yeah, it makes sense. Total sense. So is there a time period, like how does that work?

[00:37:25] Patrick Donley: Is there, do you have to hold a, an investment for a certain period of time before you do another 1031 or is there no time limit on that? 

[00:37:33] Jonathan Barr: I’ve heard some like mixed things on that and I think you do want to at least hold it at least a year. Ideally a couple years, which we did because yeah, I’ve heard some kind of mixed things on that.

[00:37:45] Patrick Donley: I’ve heard the same. I’m in the middle of a reverse 1031 and I’ve heard the same like one or two years. You probably need to hold it before you do anything. You started into the flip business in 2008. Do you see any similarities now? What’s going on now with what the real estate market was like back when you first got started?

[00:38:04] Jonathan Barr: Not really, just because. You know, then the reason why we had that recession is because people were able to get loans willy-nilly. Doesn’t matter how much money you made, and it was just a bunch of bad loans. And now we have good loans and it’s really strong. So I think the residential home space is not going to take a big hit.

[00:38:25] Jonathan Barr: But when you see the commercial side, I think there’s going to be some distress there just because there’s a lot of people that took out bridge loans. And for your listeners that don’t know what a bridge loan is, basically it’s a high loan of value loan that’s meant to like get you over, like doing work on a property and then doing a refinance into a more permanent loan.

[00:38:46] Jonathan Barr: So a lot of the times these rates are also floating, and as you know, rates have skyrocketed over the last 12 months. So a lot of those loans are probably underwater, like the loan amounts, probably even more than what it’s worth. And they went from having a 5% loan to now they probably have like an 8% loan.

[00:39:06] Jonathan Barr: And they’re going to be, and a lot of those loans are coming due. So a lot of those people are going to have to do something or recapitalize some somehow. And so I think there’s going to be some opportunity there because of that. 

[00:39:19] Patrick Donley: I think I saw Nick Huber as trying to start a bank and like providing bridge loans to this kind of situation.

[00:39:24] Patrick Donley: I don’t know if you saw that. 

[00:39:27] Jonathan Barr: I saw him, he was like starting like six businesses or something, which seems kind of insane. Yeah, it’s throwing a lot at the wall, but it sounds like he’s having other people lead it and that he’s probably just putting his like marketing side behind it. 

[00:39:41] Patrick Donley: I think that’s exactly what he’s doing.

[00:39:42] Patrick Donley: He’s got an equity stake and he’s having other people run the thing and 

[00:39:47] Jonathan Barr: Yeah. Which can work. But you still have to do something. 

[00:39:51] Patrick Donley: He’s actually doing a cost segregation company too. Got his hands full. I would say. I was kinda just looking at your Twitter feed today and you talked about your why and there’s a book called from Simon Sinek wrote it.

[00:40:01] Patrick Donley: It’s called “Start With Why”, which is a great book. I had an Antonia Botero on the show, and it came out last week, but she talked about her why, and I just wanted to hear what your why was for what you’re up to and what you’re doing. 

[00:40:15] Jonathan Barr: Ultimately, for me is I have monthly cash flow goals that I want to hit, and those goals are in place because I’ll be able to pay for like the lifestyle I want to have and the freedom and provide for my family the way I want to provide, and then still have some money left over 10 bests in other people’s deals, or continue to do our own deals, but maybe we become more picky at that point.

[00:40:40] Jonathan Barr: I don’t only do like crazy good deals because I don’t really need to grow it much more. And luckily for me now we’ve gotten our portfolio we’re about to close this next deal. We’ll have about 420 units in the Midwest, about 35 million in assets under management, which we own more than half of because of the money that we’ve put into it.

[00:41:00] Jonathan Barr: And I don’t need to do another deal, which is a nice place to be. But we still want to grow and we want to grow to a hundred million in assets under management. Probably end up being around over a thousand units, maybe 1200 units or so. 

[00:41:14] Patrick Donley: And you’re at what, 300 and some right now with?

[00:41:17] Jonathan Barr: four 20 and 35 million.

[00:41:19] Patrick Donley: Four 20 and 35 million. And want to grow it to a hundred. A third there. Yeah. A third there. Yeah.  

[00:41:24] Jonathan Barr: And then you think he’s got in two and a half years. So not bad. 

[00:41:28] Patrick Donley: That’s a lot of growth. You’ve got the deals, you’ve got the investors, you can make it happen. 

[00:41:34] Jonathan Barr: Yeah, we’re on track to, to get there for sure.

[00:41:37] Jonathan Barr: The goal is to get there probably by the end of 2025. And that tweet that you referred to like. I think, like you said, the why is so important because like, especially in the real estate business, it’s not like rainbows and unicorns all the time. It like gets really tough and when it gets really tough, it’s like you need something that, you need something that’s higher to get you through all that.

[00:41:59] Jonathan Barr: You know, you need something like, this is my goal, this is what I’m working to get to. I know this is tough right now, but I’m going to get through it because that’s where I want to get to. 

[00:42:08] Patrick Donley: A hundred percent. I agree with that. I’m going through that right now. I’ve got tenants that left one of my rentals and it’s just like, they just trashed it.

[00:42:15] Patrick Donley: It’s really in bad shape. And you, I was the first time you walk in it’s just like, oh my God. 

[00:42:22] Jonathan Barr: Yeah. I have countless stories like that. 

[00:42:25] Patrick Donley: I’m sure. I’m sure. Yeah. It’s brutal. But yeah. To your point, having that long-term goal of the cash flow to fund your lifestyle, which, you know, kinda makes the tough days easier to get through.

[00:42:37] Jonathan Barr: Yeah, and like I just actually retired my wife too, which has been great for our family. She’s less stressed, she’s has time to like, take care of herself, like do all the things she wants to do for our family. And it is just been, and we even have more because I have flexibility with my work and she’s not working anymore.

[00:42:55] Jonathan Barr: Like we, we’ve been spending a lot more time with each other and it’s just been absolutely amazing. 

[00:43:00] Patrick Donley: That’s awesome. What was she doing? What was her career? 

[00:43:04] Jonathan Barr: She was in the healthcare industry, like healthcare tech, implementing epic systems and clinics and stuff and doing some coding and reporting and all that kinda stuff.

[00:43:15] Patrick Donley: And was that always one of your goals was to be able to allow her to retire, to focus on, and you’ve got how many kids? 

[00:43:22] Jonathan Barr: Honestly, it wasn’t. But we just got to a point where like it just didn’t make sense for her to work anymore. It was like she was just too stressed and couldn’t be a good mom and be a good like employee too.

[00:43:34] Jonathan Barr: It was just really tough and we just got to a point where it just didn’t make sense anymore. 

[00:43:39] Patrick Donley: It’s really tough to do it all. Well, something has to give, you know, when you’re being stretched thin. I wanted to know you, you mentioned the hundred million dollar number. Do you think you’ll be able to quit?

[00:43:50] Patrick Donley: Like do you have a cash flow number where it’s like that’s enough cash flow I don’t need to do anymore And like it’s not that you’re hands off, but like you’re not continuing to try to grow the portfolio? 

[00:44:01] Jonathan Barr: Yeah, that’s the plan. Just, I mean, maybe we’ll still do a dealer two here and there, but it’d be very selective and very picky or not quite sure what we’ll do at that point, or maybe become a professional p while still actively managing what we have.

[00:44:17] Jonathan Barr: I mean, if we’re, if we have that many assets under management it’ll still be like a decent amount of time that we have to put into it. 

[00:44:25] Patrick Donley: For sure. Do you think you’d miss the deal and the, like, the thrill of the deals and like that action? Is that something you like really love? 

[00:44:33] Jonathan Barr: I do like that and it definitely like, kind of gives me a rush, you know, when a good deal comes through, it’s pretty exciting, but I think I’ll find other things to kind of keep that going in some other way, other businesses, whatever, I’ll figure out something to keep, like I’m definitely never that person that’s going to be able to just sit on the couch and do nothing, that’s for sure.

[00:44:54] Patrick Donley: I wanted to get into your advocacy for Men’s Mental health. This is really an important area for me. I actually listened to a podcast that Chris Powers did last night, and he talked about just crashing and burning in his career and his personal life, just like had too much going on in just burnout.

[00:45:12] Patrick Donley: And he was like really open and raw and honest. And I think it’s easy to see guys and women on real estate Twitter and feel like they’ve got it all figured out and that’s often, you know, it’s not the case. So I want to hear how a little bit of how you got involved in interested in your advocacy for mental health.

[00:45:31] Jonathan Barr: In 2015, we were still going to the foreclosure auctions, and when you go to the foreclosure auctions, sometimes second loans go to auctions. So it’ll be the first loan and then there’ll be a second loan behind it. And we bought a second loan when I thought it was a first loan. I got bad information from the title company.

[00:45:52] Jonathan Barr: And with the trustee sales, you can’t get title insurance, so it’s not like you get covered for that in, in a normal real estate transaction. And so when we had to sell that property later, we ended up having to pay off that first loan and there was a substantial loss there was working with an investor that just like took it very badly and I was in my late twenties and basically kind of attacked me and I just had a lot of shame and guilt from that whole experience.

[00:46:19] Jonathan Barr: I went into like a depressive episode for a few years where I couldn’t even really get out of bed and not like for three years straight, but like off and on During those three years it was up and down and yeah, and I just went and that’s why, you know, I went through therapy, different kinds of medications, retreats.

[00:46:39] Jonathan Barr: I went inside and figured out a lot of things and that’s why my why and my goals are so, such the way that they are. because I realize like, I don’t want to build this like crazy portfolio. I just want to create even, it’s still a large portfolio, don’t get me wrong. It’s still like, we’re still reaching high, you know, we’re still going somewhere.

[00:46:58] Jonathan Barr: But like for me it’s more of about a lifestyle and creating the li it’s more about creating the life that I want than like some ego trip of building this huge portfolio. And I think that as men in the business world we’re not connected. We’re just like gung ho, we gotta do all these things. And we don’t, we’re not in introspective enough when we’re not building.

[00:47:21] Jonathan Barr: We’re not like methodically building a way that’s like best for ourselves. We’re doing it a lot of times for what we think the world will see as best for us or something. 

[00:47:32] Patrick Donley: Yeah, that’s exactly what Chris was saying. Like he was so concerned about what everyone else thought about him, and it was just like completely somewhat image oriented in a way, rather than just being like, what do I feel about myself?

[00:47:43] Patrick Donley: What do I think? 

[00:47:44] Jonathan Barr: Yeah, exactly. Like you need to build the life that you want to build, and maybe it is that billion dollar portfolio and maybe you’re that special person that’s going to get it there. But for me, it’s just like living lifestyle. I want to live in the place I want to live, to be able to do the things that I want to do, but still challenge myself and grow and build something.

[00:48:06] Patrick Donley: It takes a lot of courage to talk about this. Well, were there anybody, like did you have any influences who that encouraged you to talk about the experience of depression? 

[00:48:15] Jonathan Barr: Yeah, Sean Sweeney is one person that’s active on Twitter that’s kind of had some mental health stuff and he and I have talked a little bit and there’s a couple of other people on Twitter that kind of you know, motivated me to talk about it more because the reason why I talk about it is hopefully my experience can relate to some other people that are struggling too, so that they can know that there’s hope and that they’ll get better and they’ll be better off in the long term because of it.

[00:48:43] Jonathan Barr: And I don’t think the depression stuff is a weakness. I think it’s actually a strength because naturally I’m a person that will just go and keep on going. And like the depression thing actually like, kind of forces me to like slow down and kind of reflect and kind of realize that maybe I’m like going too hard.

[00:49:02] Jonathan Barr: And so it kind of ends up being a good thing in a weird way, even though it sucks. 

[00:49:07] Patrick Donley: It absolutely sucks. I’ve been through a couple of episodes myself and it’s brutal to go through. It’s brutal for the people around you. If a family has never experienced it, it can be like really hard to see this guy who’s like ambitious and hard charging and you know, on the go all the time.

[00:49:22] Patrick Donley: All of a sudden just being able to be like, not do anything that’s like hard to, if you haven’t been educated in mental health issues, it’s, it can be tough. I do think it’s great that like guys like you and Sean are open about it and talking about it to get more awareness out there because it’s, it happens, it’s an, like you said, it sucks to go through, but there are gifts to it as well.

[00:49:44] Jonathan Barr: And that’s actually one thing, like once I get to that goal, I want to hit doing something in the mental health world with men in the business world. Not sure quite what that means yet, but to be involved in that in some way would be, I would get a lot of, a lot out of that. 

[00:50:00] Patrick Donley: Yeah, that’d be awesome.

[00:50:01] Patrick Donley: That would be a good why too to, you know, your, like your next y. Do you have any practices that, that you implement? You mentioned a little a few things pretty quickly, but I wanted to really kind of touch on this, but do you have any practices that you do or things that you implement in your own life to not prevent another depression, but I guess in a sense to make sure that you are functioning on all cylinders and, you know, maximizing what you’re able to do?

[00:50:27] Jonathan Barr: Yeah, I think it’s, I’m not drinking. I am, you know, I’m keep active ski, rock, climb, do things, walks, I’m huge on walks because it makes me think through things really well. It helps me clear the mind, but it’s not so taxing that it, it’s like exhausting either. 

[00:50:48] Patrick Donley: Do you take your, like are you listening to anything when you’re going for a walk or is it just you and your thoughts?

[00:50:54] Jonathan Barr: I’d say it’s like 50/ 50. Sometimes I’ll listen to a podcast, sometimes I just won’t, and I’ll just like let my mind do whatever it’s going to ruminate in. And a lot of times I figure out solve problems that way, but also, like intense workouts help kind of solve problems because after you have those endorphins going and you could kind of really think through some things or like things pop into your head that wouldn’t have otherwise popped into your head.

[00:51:18] Jonathan Barr: And so just making sure that, you know, self-care is very important. Eating healthy, taking care of yourself, and just building and creating good relationships and people around me that could support me when, cause I mean, we all go through tough times and it’s not always good. And you just need the right people around you to support you through those tough times.

[00:51:40] Patrick Donley: And so you said that was 2016 when you first? 

[00:51:44] Jonathan Barr: 2015. Yeah. And I’ve kind of gone through little things since then, but I’ve been going to therapy regularly and just talking about things and another thing that it’s really helped me with is just like, it’s made me a lot more empathetic towards other people.

[00:51:59] Jonathan Barr: I was like, oh, why is this guy like, maybe he didn’t sleep well, maybe he’s going through something. 

[00:52:04] Patrick Donley: Yeah, I totally agree. I think it does develop a compassion that you may have not had otherwise. I know for me, in my case I didn’t have the compassion that before a depression as I did after going through a brutal one.

[00:52:17] Patrick Donley: It softens you or I don’t know what it, whatever, but it, do you think somebody asked this Chris, like, because he is kind of softened up a little bit, he is more compassionate. Has it affected your business life at all? Like, is it, you know, in a sense like made it a liability that you’ve got compassion and empathy, or is it completely the opposite?

[00:52:36] Jonathan Barr: I think it’s the opposite. I think people can feel it in you and they like, oh, this guy like, kind of, sort of cares about me and he’s not just like trying to get everything he can out of me. And I think it just makes for better conversations, deeper conversations, and everyone goes, it just gets more value.

[00:52:52] Patrick Donley: Yeah, it’s definitely a multi-pronged approach. I think like you were sharing all the different things you do to manage it and it definitely has its gifts. Like you said, 

[00:53:00] Jonathan Barr: it’s hard work to keep it going, you know, it’s like you gotta work at it every day. You gotta keep going. Keep those routines, keep doing it.

[00:53:09] Patrick Donley: Hundred percent. A hundred percent. Yeah. I just want to thank you for sharing because it I just think the more people share about it the better and it takes courage to talk about it and hopefully it, if it helps one person today, like, you know, we’ve made a dent. 

[00:53:21] Jonathan Barr: Yeah. I mean when I posted that Twitter thread about my whole experience, I was over the moon, how people were supportive and.

[00:53:30] Jonathan Barr: Oh, I got so many DMs people sharing about their experiences and it’s just, I think a lot more people deal with it than they, they admit because it’s kind of has a stigma for sure. 

[00:53:43] Patrick Donley: I completely agree. I completely agree. 

[00:53:47] Jonathan Barr: Even though it’s becoming less so, as you know, it’s becoming more open out there.

[00:53:52] Patrick Donley: But the stigma is still there and it’s still very difficult to talk about.

[00:53:56] Patrick Donley: I mean, this is kind of challenging for me, honestly, knowing that this is going out to however many people watch it, but like, you know, it’s difficult to talk about, but good stuff. I wanted to jump into the fire round here that I’ve got for you. Sounds like you are into podcasts and learning, and I want to hear about like a most impactful book or podcast that has made a big impression on you.

[00:54:18] Jonathan Barr: I really like The Psychology of Money because we just talking about that, you know, like why do you actually want to make this money and what is it going to do for you and why? I think it also goes on into like why certain people are good investors, et cetera, et cetera. Which is cool. And I think you have, you said you’ve read it before too, right?

[00:54:37] Patrick Donley: Yeah. It’s a fantastic book. It’s I listened to it on Audible. It’s there’s not a lot of books I will listen to twice. There’s a handful though. And that is one of them. Morgan Housel is the author and I think I’ve mentioned we’ve got a, he’s a great writer. He, we’ve got a newsletter called We Study Markets.

[00:54:54] Patrick Donley: It’s free. And we’ve covered a lot of his stuff, chapter by chapter. In that book I did one, his last chapter is called Confessions. How he Manages his own money. And it’s a great chapter. It’s just how he thinks about his own money and, you know, manages his financial life. 

[00:55:09] Jonathan Barr: Another book I like is Shoe Dog, the Nike story.

[00:55:13] Jonathan Barr: By Phil Knight amazing. Has nothing to do with the real estate, but it has a lot to do with business and just kind of being, being in the trenches and getting things done. Isn’t there a movie coming out Scrappy? He was super scrappy, you know, super scrappy, right? 

[00:55:26] Patrick Donley: Isn’t there a movie coming out about called Error or something like that with Matt Damon 

[00:55:30] Jonathan Barr: and Oh yeah.

[00:55:31] Jonathan Barr: About the Michael Jordan shoes, I think. 

[00:55:34] Patrick Donley: Yeah. Yeah, I think so. Yeah. The Nikes, yeah, he’s, I think, saw that he’s gotta, there’s gotta be a Phil Knight in the movie. 

[00:55:41] Jonathan Barr: So there’s I would assume so. Yeah. And I think that’s another thing that’s made us successful in our business is we’re pretty scrappy.

[00:55:48] Jonathan Barr: We’re, we get in there we, before we fired our old manager, my brother was working and leasing units on site, on one of our properties. And that was very enlightening and we learned a lot. And you know, you gotta get your hands dirty sometimes and get in there, you know, you’re not too good for any role that is being done in your business.

[00:56:07] Patrick Donley: What about your best investment? You’ve had s several it sounds like here lately, but I don’t think you’ve mentioned your best investment. 

[00:56:14] Jonathan Barr: Honestly, my best investment was the house that I just sold in California that I bought in 2013. We put a lot of money into it, but that property, I was able to sell and move that money into the property I bought in Oregon and still have money on the side to continue to invest in what we’re doing.

[00:56:30] Jonathan Barr: And the only reason why I bring that up is because a lot of times people say that your house is not an investment, but it totally is. Anything you hold long enough is going to be a good investment, basically in the US. 

[00:56:42] Patrick Donley: It’s like the Robert Kiyosaki thing, the Rich Dad Poor Dad. Like he says that your house is a liability, you know, it’s not an asset.

[00:56:49] Patrick Donley: That was my next question. What controversial opinion do you hold that, that the real estate world may not share? Do you have any other ones like that? That is maybe one, but I agree with you. Like I, I’ve done well on my own home, so 

[00:57:02] Jonathan Barr: yeah. And then. What’s actually controversial, not, maybe not on Twitter, but just like holding, not, maybe not forever, but like 10 plus years.

[00:57:11] Jonathan Barr: That’s like very unusual because most people, like, especially in the syndication world, they’re holding for five to seven years because a lot of times on the back end, that’s where they’re making their money. But in, in our particular deals we’re invested so much money into the deals that we’re in it with our investors to go into the long term, 

[00:57:30] Patrick Donley: Kinda Warren Buffett principle is long term holding, like never sell 

[00:57:34] Jonathan Barr: Strategically, sell to 1031 into something better.

[00:57:37] Jonathan Barr: There you go. 

[00:57:38] Patrick Donley: Exactly right. 

[00:57:40] Jonathan Barr: Yeah. Keep it rolling. 

[00:57:41] Patrick Donley: Keep that rolling. I love it. 

[00:57:43] Jonathan Barr: Keep pushing the can down the road. Basically. 

[00:57:46] Patrick Donley: Last one here, what does success mean to you? 

[00:57:49] Jonathan Barr: That one is one I’m always still figuring out, but like I said, is to get to my goals and the why and all that kind of stuff that, that we talked about.

[00:58:00] Jonathan Barr: So that I could have the freedom and lifestyle that I want to have and have the people I love and people I want to be around close and have that time to actually spend with them, that’s success for me. 

[00:58:14] Patrick Donley: That’s great. I want to kind of wrap it up here. So I really want to thank you for your time and reconnecting today.

[00:58:19] Patrick Donley: This has been a lot of fun talking with you, and thanks for connecting me with your mother, Marissa Solis, that I’m going to talk to her in a week or two. Yeah, it’s just been fun. 

[00:58:28] Jonathan Barr: Cool. Yeah. I feel like we’ve gone into, and, you know each other pretty well actually. Yeah. 

[00:58:33] Patrick Donley: It’s really cool. So, for the, anybody that would like to reach out to you, maybe they’re struggling with a tough time, what’s the best way for them to get in touch?

[00:58:42] Jonathan Barr: You could go on my website, JB2 investments.com or on Twitter @Jb2Investments, or you could look up my name and then I have the ebook on there. And then I also have a blog with, you know, I’ve downloaded my brain into the, these blog posts so you could kind of learn a lot about what we’re doing and if you’re trying to get started in the business is a good way to get, I kind of make it pretty simple too and digestible.

[00:59:07] Patrick Donley: How do you find the blog? Is that on your company website? 

[00:59:10] Jonathan Barr: Yeah, I just go to my website and there’s a tab for blog. 

[00:59:14] Patrick Donley: Oh, I’ll have to, I’ll definitely have to check that out. Moses Kagan has got one and it’s great. It’s like amazing education and real estate. 

[00:59:21] Jonathan Barr: I honestly used his sort of as a guide with my own twist.

[00:59:26] Patrick Donley: Yeah, I’ll put links in the show notes. He’s a better writer than me, but I tried. 

[00:59:30] Patrick Donley: No, he’s great and it’s awesome that people are sharing their, I guess their playbook, but just what they know. It’s such, such a great thing that people are willing to share like they do on whether it’s a blog or real estate Twitter.

[00:59:39] Patrick Donley: It’s super helpful. 

[00:59:41] Jonathan Barr: Yeah I think it’s because like a lot of people are like scared to share a lot of those things because they think they might be helping their competition. Right. But I think what you get in return is much more than what you might be hurting yourself. 

[00:59:54] Patrick Donley: Yeah. Just kind of have that giving abundance mentality.

[00:59:58] Jonathan Barr: If you actually are, you probably are actually hurting yourself. 

[01:00:02] Patrick Donley: Yeah. So I will put links in the show notes to your blog, to Moses’ blog to the company website so that people can reach out and keep their learning going on. Or even, like I said, if they’re having a tough time, reach out to me, reach out to you.

[01:00:14] Patrick Donley: Happy to talk to anyone. 

[01:00:16] Jonathan Barr: Yeah, I’m always happy to chat. That kind of stuff. 

[01:00:20] Patrick Donley: Jonathan, thanks so much for your time, man. 

[01:00:21] Jonathan Barr: Thank you. 

[01:00:23] Patrick Donley: Okay folks, that’s all I had for today’s episode. I hope you enjoyed the show, and I’ll see you back here real soon. 

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