[00:02:54] Patrick Donley: I interviewed a gentleman yesterday. He’s been writing his goals down every year for the last 10 years.

[00:03:00] Patrick Donley: Every day in the morning for the past 10 years. I think he start and there, these are lifetime goals. He started off with 11 goals and he’s down, he’s a young guy, 28 or so, and he’s down. He’s accomplished six of them already. The power of just setting an attention and goals is, is super important. And he mentioned a book, Adam Grant is the guy’s name.

[00:03:19] Patrick Donley: I’m not sure if you’re familiar with him. He’s a Wharton professor that told him, set your goals, write ’em down every morning. It’ll make a massive difference in your life. So he did it and it has.

[00:03:29] Jeff Higgins: Well, it’s interesting with real estate, like I have real estate goals that I would like to continue to expand, but you’re one of your previous guests on this show I saw on Twitter, Moses Kagan wrote about how kind of the market dictates how quickly you’re going to grow.

[00:03:41] Jeff Higgins: If you force growth, you might end up in some bad deals. So as far as my growth with real estate, I kind of let that come to me. I know what I want, but I’m not pushing it. But things I can control, some of the coaching objectives, I’m very excited. This year, me and two of my partners are working on a live event that we’re starting from scratch.

[00:03:58] Jeff Higgins: We’re going to bring that live this year. So my goals revolve around that cause I can control them, making sure I get the right videographer, sell the most tickets, do the best promotion, that sort of thing.

[00:04:08] Patrick Donley: Yeah, for sure. I, I think that’s a good point about you can set a goal to whatever, have 20 doors in a year, but it may be a really bad idea.

[00:04:17] Patrick Donley: Exactly. As Moses said. How’d you get started into coaching? What was the impetus for that?

[00:04:22] Jeff Higgins: I was fortunate that I joined a group looking for some guidance, looking for just what’s missing outside in the world. A lot of men are missing brotherhood, like you grow up in your own sports teams, or a lot of guys were in the military and then you leave it and you don’t have real guys you can bounce ideas off of and hold you accountable.

[00:04:41] Jeff Higgins: So I joined the group looking for that. There’s a really phenomenal leader in the group. A guy’s named Zach Small. He started the group and it’s grown into this amazing thing where, you know, I joined the group, I put in the work, I got the feedback I needed, and now, now I’m more in the role of a mentor where I get the new guys where they need to go.

[00:04:59] Jeff Higgins: Through that process, I found a lot of satisfaction. Real estate’s been fun, but at some point I, I want to help people grow and it’s been extremely satisfying. So I spend a lot of time, probably more time in the Fraternity of Excellence than I do on my real estate at this point. And those are my major goals going forward.

[00:05:15] Patrick Donley: I want to hear more about the financial challenge that I think you led with the Fraternity of Excellence. Talk to us about that. I read that guys had amazing results from it. What did that entail?

[00:05:26] Jeff Higgins: We have a Slack that we run the group off of. So we had a dedicated Slack channel for we called it debt domination.

[00:05:32] Jeff Higgins: I was instructed to run the challenge at a 101 level for people that were struggling. Now we have some very successful people in the fraternity, and we also have some guys that need to improve their financial lives. So we have the channel every day. I, or I enlisted two people to help me with bill Connell and jp.

[00:05:49] Jeff Higgins: We would make a post with an assignment and we, we would require that you post and give some feedback on the assignment. You know, some things like laying out your, basically your personal finance, how much debt you have at interest rates, and then plans on how to eliminate your consumer debt. Then we had a Zoom once a week, which ran about an hour and a half.

[00:06:07] Jeff Higgins: 20 guys would show up. There were 65 total on the challenge. One night we had 25 guys on the Zoom and we throw it around and we talk, and I’m available for questions. I’m available for one-on. People reach out to me and I, you know, I had a zoom with a guy last night for 20 minutes one-on-one just because he dmd me.

[00:06:21] Jeff Higgins: I don’t even know this particular guy. Well, I mean, it’s 160 guys I know most of the guys. But if anyone dms me and they want my time, I’m happy to give it to ’em. Cause these are these are my guys.

[00:06:30] Patrick Donley: Are you getting into real estate coaching as well or is it mostly basic financial literacy and handling debt and leverage?

[00:06:37] Jeff Higgins: I talk about real estate. I try to let the guys know how, how much, how it’s done for my life. And I want them to see the benefits. But not too many people are too actionable about real estate.

[00:06:47] Patrick Donley: Specifically in the group, what were some of the reasons you achieved some really great outcomes from that financial challenge?

[00:06:54] Jeff Higgins: Men really need other men. We think that we don’t. But there’s a saying, iron sharpens iron. And here’s the thing, your friends, in real life, they don’t, they don’t want to give you the hard truth. My brothers in f Oe will tell me when I’m messing up, they’ll point it out to me. And we’re not trying to spare each other’s feelings.

[00:07:09] Jeff Higgins: We’ll say, you know, you, you need to lose 15 pounds, man, you just gained it. And like, let’s get on the ball. We don’t want to waste our lives here. You know, the, we have one life and we’re really aware of the unforgiving minute from the Y poem. We better make the most of this life. And we’re here to help each other, hold each other accountable, make sure we’re getting the most out of it.

[00:07:27] Patrick Donley: I wanted to walk through your early years. Did you come from a family that we’re real estate investors or did you get into it entirely on your own? Just kind of curious what your initial inspiration to get started in investing.

[00:07:39] Jeff Higgins: So I’ll give you my background. No one in my family ever owned rental property.

[00:07:43] Jeff Higgins: My mom died when I was six and had a couple of stepmothers, and my dad was a great guy, but he worked very hard. He was a corporate guy and he was away. I was always interested in finance, like I followed the stock market when I was a kid and I always had my eye. I knew I wanted to make money, but no, I had no exposure to real estate.

[00:08:02] Jeff Higgins: I was a terrible student. And I want to emphasize that because my story with real estate and the message I want to share to people is that I am the most regular guy you will meet. There is no other field where I could have been this successful. It’s like real estate is the path for the regular guy. So I failed between the time I started high school and I graduated with a bachelor’s degree from a state school in Massachusetts, it took 11 years for me to get through high school and college, and I didn’t, you know, not go to school, any of those.

[00:08:29] Jeff Higgins: I graduated college barely, and I got my first job. I was living in Staten Island, New York where I grew up, and I was working in sales for Nextel at the time, who was acquired by Sprint later selling cell phone plans. And it was a miserable existence for someone like me. You know, dealing with the commute, having to get up and shower and be somewhere when someone told me I’d be there.

[00:08:51] Jeff Higgins: It’s not a life for me. I’m an entrepreneur at heart. I’d rather do anything but work for someone else. So I quit and I played online poker. I was playing online poker on the side, and I was doing okay. I was not lighting the world on fire by any means, but this was 2004, 2005. It was the easiest time ever to play poker as Chris moneymaker and rounders, and it was the golden era for.

[00:09:13] Jeff Higgins: If you turned on the TV poker star’s, commercial party poker commercial, it was the era. So I quit my job and I’m like, I gotta play poker. And it was going okay. It wasn’t a long-term thing, but I, I was a little bit aimless and my father passed away when I was 25. And my mother had passed away when I was young.

[00:09:30] Jeff Higgins: Fortunately, he did have a little bit of life insurance. So I had a little bit of a cash infusion. Wasn’t huge, but it was enough. And even as a young man with being a little aimless, I had the wherewithal to realize like, this is my opportunity. I’d better not screw this up. I hit the books. And even though I never hit the books in school when it came to money, I was happy to hit the books, all the usual suspects.

[00:09:53] Jeff Higgins: I love Rich Dad, poor Dad. I don’t care what anyone says, but I’ve read everything. I mean, I’ve read hundreds of books. I’m looking at my shelf. I love the William Nickerson book, how I Turned 5,000 into 3 million in Real Estate. It’s outta print, but you can get a youth. I’ve read everything like that.

[00:10:06] Jeff Higgins: Landlording by Lee Robinson, the Section 8 Bibles, and these are just all off the top of my head. And I dove in and I, I became obsessed.

[00:10:13] Patrick Donley: What was your first strategy going into it? So you had a little bit of money from the life insurance. What, how did you decide that first initial foray into real estate and what was it?

[00:10:21] Jeff Higgins: I didn’t know what to do, so I ended up buying a house that I thought was priced appropriately that I could make a little bit of money on, and I thought I’d flip it, and it probably took me about eight months. I remember I bought the house for 360,000 and I spent about 50 or 60, and I sold it for four 20.

[00:10:37] Jeff Higgins: So I made zero for my eight months work, and that was my first foray into real estate investing.

[00:10:42] Patrick Donley: So that was 2006. Right. So you broke even on the flip, basically learned a little bit, I’m sure. Then 2008 you started acquiring rentals, it sounds like.

[00:10:52] Jeff Higgins: Circumstantially. In 2006 I was living with my ex-wife and she was studying in Chicago, so I did that flip in Chicago.

[00:10:59] Jeff Higgins: Then we settled down to Massachusetts and I said, okay, I’m not moving anywhere now. I’m going to start buying rental property. I bought a for family in 2008 and I still have that place today. Now, interestingly, when I look back, I bought that one too soon. If I bought it in 2009, I definitely could have got it cheaper.

[00:11:15] Jeff Higgins: However, I don’t regret it at all. And it’s another beauty of rental property as long as the cash flowed, I held it easily through 2009, 10 and 11. And the thing is, I was able to buy more properties in nine, 10, and 11 because I was getting my feet wet with property management on my 2008 property. I’m not saying grossly overpay, but you don’t have to catch the absolute bottom to do well.

[00:11:38] Patrick Donley: And it sounds like your timing could have been way worse. You know, had you got in, started really building your portfolio in 2006, seven, early 2008, could have been bad.

[00:11:48] Jeff Higgins: I knew enough not to do that, and that’s the beauty of that ca cash flow has always been my guide. If there’s no cash flow, I’m not buying it.

[00:11:55] Jeff Higgins: As long as there is cash flow and you have a long-term time horizon you can’t get hurt that bad. I mean, certainly if rents plummeted, I would be in a lot of pain, but one of the reasons I chose Class C rentals is I find it the safest place to hide when the economy goes bad. The demand for my apartments almost goes up because you can’t find a cheaper place than my place in Sarasota.

[00:12:16] Patrick Donley: Did you get hurt at all during Covid? Did you have some fallout from that at all?

[00:12:20] Jeff Higgins: I got through really good. I mean, just maybe one or two, like delays and stuff, but no, I got through completely unscathed.

[00:12:28] Patrick Donley: Looking back on it, what were some early mistakes that you made?

[00:12:32] Jeff Higgins: It’s a great question. Nothing is coming to mind immediately, which is amazing because I have so many colorful stories of interactions and stuff maybe because I don’t regret, I learned from every mistake I made.

[00:12:41] Jeff Higgins: Maybe I didn’t screen properly here or I didn’t handle this interaction with the tenant there as good. because I’m pretty hands-on. I still am. I’m not as much hands-on as I used to be. There’s always room for improvement, but I haven’t made any real disastrous mistakes. I bought a couple properties that didn’t work out as, as well as they should have, where if I chose a different one that would’ve worked out better.

[00:13:02] Jeff Higgins: Here’s a mistake. I took a lot of 15 year loans when I was 2012 ish, 13 ish, just because I was very conservative. I’ve always been conservative and defensive and I thought, you know, this is a great way to suppress my lifestyle and force my savings even more. So I have seven or eight 15 year loans that if I never did that, that would’ve allowed me to be more aggressive and I’d have 112 properties instead of 87 today.

[00:13:26] Patrick Donley: But you were still cash flowing. You were able to make the payments, obviously and still profitable on them, right?

[00:13:32] Jeff Higgins: Oh, big time. No, I mean, I’m happy I did it. I’m just, you always look at risk, reward and the relationship to risk, and because I’m conservative, I’m not a little bit richer and I’m okay with that.

[00:13:42] Patrick Donley: Has your poker playing days, has that had an effect on how you view real estate in terms of managing your bank role and things like that?

[00:13:51] Jeff Higgins: Has an effect on how you view everything? I try to explain to people like, everything is a gamble. You can put odds on everything Crossing the street, what are the chances I get across?

[00:14:00] Jeff Higgins: Right? You know, dating a girl, there’s a lot of risk. You know, I’ve been married, there’s risk and reward. Poker teaches you a lot about that. You have to decide in real time and it’s dynamic. It’s always changing. So I did love folker, but it wasn’t the right path for me. And the lifestyle is not what I wanted.

[00:14:17] Jeff Higgins: There’d be a lot of travel. And the last point, and let me be very clear about this, I’m not one of the very best players and only the very best players really, for me would be worth it to take on that lifestyle and compete at the at the top.

[00:14:31] Patrick Donley: So you’ve got 55 rentals currently in Massachusetts. How long did it take you to build that portfolio?

[00:14:37] Patrick Donley: How were you financing the deals? How were you finding the deals? You said you were doing Class C homes and rentals. Talk to us about how you were financing the stuff.

[00:14:47] Jeff Higgins: I started doing burrs before the term burr was invented. Just intuitively it seemed like the right thing to do. So I bought that for family in Ashland, Massachusetts in 2008, and I talked a friend of a friend into doing a private loan with me, so I cashed out all the money there.

[00:15:03] Jeff Higgins: I have a private note. I still have that private note today. I’ve been sending them a check every month for 15. So I got my money out there and then I bought, I think a two-family and Holden and similar deal. I have a private note on that one as well. Then, so I’m burring, I’m burring, and I’m going onto the next one.

[00:15:19] Jeff Higgins: And eventually I ran into another investor and he was like, you gotta go to a video bank in Hudson, Massachusetts. They will treat you well. And it’s crazy. And that’s another thing I tell people, like if I walked into 20 banks, one of them would’ve given me what Avidia did. Avidia started giving me 30 year fix and 15 year fix on non-owner occupied rental property, which I had a very hard time finding before or since at reasonable rates too.

[00:15:44] Jeff Higgins: And here’s the other thing, and it never happens today. I’d buy a single family for like one 50, let’s say. And I had fixed it up a little bit and I rented out for 1800 and they would actually let me pull like one 90 or 200 out of it. Where when I go to a bank today and I buy a place for 200 and it’s worth 300, they want to loan me like one 70.

[00:16:01] Jeff Higgins: I guess I got lucky. I hustled hard. Like I would knock on every bank door and say, here’s what I do. Here’s my my net worth and here’s my liabilities and do you want to work with me? This is what I’m trying to accomplish. And I have relationships with a few banks in mass, and I have a few banks down here in Florida, and I will knock on banker’s doors and see what they can do for me.

[00:16:21] Patrick Donley: Do you still have that relationship with Avidia?

[00:16:24] Jeff Higgins: I do, yeah. I mean, I haven’t taken out a new loan from them in a while, but I still owe with ’em a bunch of money.

[00:16:28] Patrick Donley: You’ve got the 55 rentals in Massachusetts, you decided to move to Florida. I you’re in Sarasota Siesta Key area. Walk us through how you’re managing those rentals back in Massachusetts.

[00:16:41] Patrick Donley: I’m in Ohio. I, I’d fantasize about being able to take off and, you know, live in Florida half the year. Talk to us about how you’re doing that for somebody like me who would love to be able to do, be in your shoes and do what you’re doing.

[00:16:54] Jeff Higgins: So I’m so glad it worked out the way it did. I never wanted to hire a property management company.

[00:16:58] Jeff Higgins: Just the inefficiency, and I know that no one’s ever going to handle my money as well as I’m going to handle it or care as much about it. So I was always knowing that I needed to be hands on, I needed to be efficient about it. That being said, I am not handy at all. So if there is a problem that comes out, I mean, maybe I can paint an department and I used to do that and I can mow the lawn and I used to do that.

[00:17:19] Jeff Higgins: But if I need anything, I’m going to hire it out. I would have trial and error with so a tenant calls me and there’s a problem. I would hire someone and some guys wouldn’t do a good job. You’d be surprised to. And I got ripped off a few times. But then one time this guy worked and I’m like, man, I think this guy’s a really honest guy.

[00:17:37] Jeff Higgins: I like him and we had a good rapport. So I give him a little bit more, I give him a little bit more. And we built up this relationship where I’m like, this guy treats me well so I’m going to treat him well. And I try to own him and just be good to him. Be nice to him. You know, long story short, we treated each other really well for a while.

[00:17:55] Jeff Higgins: 2017, 18, I’m starting to go to Florida for vacations more and more, three or four times a year. And I’m not liking when I’m having to come home. So I’m like, how am I going to do this? How am I going to do this? So I approached my handyman, who I’ve had this relationship with, and I said, Hey, you already show apartments for me sometimes when I’m outta town for a week.

[00:18:13] Jeff Higgins: What if I’m outta town for like the next 10 years? ? And he was a little worried, you know? He was definitely not like, okay. But we talked about it for a while. I told him how it would work and you know, the benefits for him. You can make some more money. And also you’re getting older. You do less things with your hands.

[00:18:28] Jeff Higgins: I know you can do this. Here’s how it can work. And moved down here in 2019. We, we have a FaceTime once a week and we text a few times a day usually. And he’s taking care of everything. He takes calls for me and he takes care of business and he’s a great guy and I honestly I love the guy. That’s awesome.

[00:18:47] Patrick Donley: So what are some of the challenges that you’re having, managing things remotely, being in Florida and having the bulk of your property. You got 50, you’ve got 87 total, 55 are in Massachusetts. What are some of the challenges doing it remotely?

[00:19:00] Jeff Higgins: Geez. Well now that I don’t live in Massachusetts, the challenge of Massachusetts is housing court, because they do not treat landlords very fairly up there compared to Florida.

[00:19:08] Jeff Higgins: And you get what you incentivize for. So I was, Florida has a lot of reputations, Florida men, all that stuff, and they’re not made up. I mean, those are true. So I thought I would have more difficult tenants down here, but it’s been quite the opposite. My tenants pay on time because they actually know that if we go into housing court, they’re going to treat the landlord fairly.

[00:19:27] Jeff Higgins: And Massachusetts is not, they’re not. They’re going to try to help the tenant in any way possible. Managing properties in Massachusetts has not been a challenge for me because I know how to do it. But now that I have properties in Florida, I wish they were all down here. And that’s what I’ve been doing.

[00:19:42] Jeff Higgins: I’ve been 10 31, exchanging my Massachusetts portfolio one by one and then buying down here.

[00:19:49] Patrick Donley: Yeah. I wanted to get into the 10 31 stuff. What’s that been like? You’re doing one for one, you’re taking a property that you own in Massachusetts, trading it out for something that you’re buying in Florida.

[00:19:58] Jeff Higgins: Pretty much my property in mass are a little bit scattered, and then I have one a bunch in this town called Marlboro, so I’m kind of selling the scattered ones and making my portfolio a little tighter so it’s easier to manage. And as I sell off a property, then, you know, I have 45 days to identify a property in six months to complete the purchase.

[00:20:15] Jeff Higgins: I’ve been able to find reasonable deals. I don’t need the best deals in the world in the 45 days. I’m not going to buy a terrible deal. I mean, I’ll pay the tax over that. But fortunately, again, you know, it’s weird how life works. I play men’s league hockey and I moved down to Florida and I decided, you know what?

[00:20:31] Jeff Higgins: I’m, I’m not going to play anymore. I’m over it. But I was down here for a year and a half and I’m like, I want to make some friends. I know how to make friends in a hockey rink. Let me go. I join a team. The first text go around and I have a guy’s number already saved in my phone. Still Jeni, multi-family broker, Sarasota.

[00:20:47] Jeff Higgins: Every time I went to visit Sarasota, I’m like, man, this guy has deal flow. They’re very attractive deals. I never bought anything, but I had called them to talk about it. Now I joined a hockey team. Not only does this guy play hockey, but he’s on my team. So I walk into the locker room, I’m like, who’s Phil?

[00:21:02] Jeff Higgins: Sit right down next to him. Six months later, he sells me 11 units. That’s crazy.

[00:21:07] Patrick Donley: And now you’ve got a relationship with the guy and are, will you continue to buy stuff from him?

[00:21:12] Jeff Higgins: As long as you keep fasting the puck. That’s fun.

[00:21:15] Patrick Donley: I wanted to talk about a little more about Florida. What’s been the toughest part?

[00:21:19] Patrick Donley: You’ve had great luck finding this guy, the, the broker that’s passing you some deals, but what have been some challenges that you’ve found moving f to an entirely new market?

[00:21:28] Jeff Higgins: It is. It, I mean, the market took off, so finding deals is very, very difficult. The thing about me is I don’t really have a great system for sourcing or off market properties.

[00:21:38] Jeff Higgins: Most of my property I’ve bought has been listed. I’ve bought some auctions over the years and stuff, but since I’ve been down here, all I’ve bought has been list. I’m pretty good at finding listed property that’s mispriced I, I’ve been able to do it over and over and over again. Now. I couldn’t tell you that I can do it at scale for a long time, but for one guy patient and can just snipe a couple properties a year, you can do that off the m l s.

[00:22:00] Jeff Higgins: And I am a broker in Massachusetts and, and Florida. I don’t represent other people, but just MLS access and so that I could see everything. I got my broker’s license and transferred it down here. Phil sold me 11 condos and obviously I’ve, condos aren’t ideal, but there’s a complex and I kind of like how they run it and the cash flow is compelling as far as deals in Sarasota.

[00:22:22] Jeff Higgins: The 11 units he sold me was far better than anything I’ve seen in Sarasota in the last couple of years from a cash flow perspective. So now that I’m in there, they’ve put me on the HOA board and now the word is out. This guy will buy your unit. So I’ve got another, another eight in that complex and now I have 19 in that complex.

[00:22:39] Jeff Higgins: There’s 80 total and I’ll get the other 61 over the next 20 years.

[00:22:44] Patrick Donley: How’s that going for you being involved in the HOA?

[00:22:47] Jeff Higgins: It’s not so bad right now because I get along with people in general. Honestly it’s not my favorite thing in the world. I actually, the only other time I bought condos is I bought a condo in Massachusetts in like 2015 in a six family building.

[00:22:59] Jeff Higgins: And long story short, I bought the other five over the next six years so that I took over the h o and then I got to close the HOA because I put together the building again as six family. I don’t like HOAs and I certainly don’t like running them, but you know, it’s, you’re weighing, everything’s a pain in the butt, so you just have to manage which one’s the least of it.

[00:23:16] Jeff Higgins: And right now this complex is 15 minutes from my house. I already met a guy who lives there who does stuff for me over there, and he’s cool. If you’re cool with people, you can make relationships and, and make your life pretty easy. Like you, you’d be surprised how little time it takes me to manage 87 units myself.

[00:23:33] Jeff Higgins: How many hours would you say per week? 10 maybe? It depends on vacancies and obviously if the vacancies are in Florida, I’m showing them they’re Massachusetts, my mandana is showing them.

[00:23:43] Patrick Donley: Tell me about Dan Moore. How did you go about training him to go from handyman to handling your portfolio in Massachusetts?

[00:23:50] Patrick Donley: I know for me, some of the handyman that I’ve had in the past, there’s no way that I’d have him talking to tenants, leasing, you know, signing leases and that kind of thing. How’d you go about training him?

[00:24:00] Jeff Higgins: Dan is a special guy. He’s just awesome, but, and he was a police officer before, so he has a good, like, he can diffuse situations with tenants, actually better than I can in many ways.

[00:24:10] Jeff Higgins: But honestly, it’s not that hard. It’s really not that hard. I’ll still place the advertisement, the calls or the response will come to me and I’ll say, call this person. Call this person. He calls him, I’ll show you the place. They fill out an application. The application comes to me for buildium. I use a, let’s say, called Buildium.

[00:24:27] Jeff Higgins: I look at the application, I run credit, I check ’em out. Yes or no? Yes. When can they meet with the money, meet someone, picks up the money, sign some paperwork. I mean, it’s communication. I incentivize him by, you know, my occupancy rate. The departments are full. I’m paying you this bonus. If I have a vacancy, it’s this bonus.

[00:24:44] Jeff Higgins: If it’s two vacancies, no bonus.

[00:24:46] Patrick Donley: Charlie Munger had that quote about, show me the incentive and I’ll show you the

[00:24:49] Jeff Higgins: outcome. Everything is incentives and I’m a huge Munger fan. The Charlie Munger Almanac is one of my favorite books. It’s on it’s on my coffee table in my living room. You said

[00:24:59] Patrick Donley: that a lot of your portfolio is Class C homes.

[00:25:02] Patrick Donley: Personally, I tried Section 8. This was a several years ago, but it was a nightmare for me and I vowed never to do it again. I had some pretty unsavory characters that, that moved in and they did a huge amount of damage to the, to the rental. But you seem to have a really positive Section 8 experience, which is, I think, a main part of your strategy.

[00:25:20] Patrick Donley: I read a tweet of your, and it said, in a perfect world, all of my tenants would be Section 8. Tell us why you like Section 8 so much.

[00:25:27] Jeff Higgins: I like Section 8 for a few reasons. It’s predictable in my opinion, like as long as you know that you’re going to have some difficulties. Then you’ve already accepted them, so why would I accept them back to incentives?

[00:25:39] Jeff Higgins: Okay. One of the biggest things I do is I try to limit turnover. And that is such a fine line because if your rents are too low, you’re leaving money on the table. And if they’re a dollar too high and someone moves because of that, you’ve cost yourself a bunch of money. And not only money, but work and effort.

[00:25:55] Jeff Higgins: It is the finest line in the world. I think you want to be at like 96% of market is probably the right place. Cause turnover is something I want to limit. Now back to Section 8, they are far less likely to move. It’s tougher for them to find a landlord that will accept them, even though I think it’s illegal to deny just because of Section 8.

[00:26:14] Jeff Higgins: Plenty of people do. They’re not going to move as frequently and they’re also not sensitive to annual increases. I’m trying to limit turnover. I might be very careful to do an annual increase on someone I think might jet. But on a Section 8 tenant, I have no hesitancy that I’m going to be at a hundred percent of market.

[00:26:32] Jeff Higgins: When I said 96% of market, I mean for like a cash paying tenant, I’m trying to make sure I get everything without making a move with a Section 8 tenant. I don’t have to worry about that. I want all of market. I can find out what the maximum they’re willing pay is and get it. Those are two advantages.

[00:26:46] Jeff Higgins: Recently, I just found a program in Sarasota that is paying me an incentive every time I move someone in. So it’s like I rent these condos for 1350 a month. They pay me 2000 bucks extra just to move them in. I’m like, wow, this is great. I’m like, you should pay this to someone else cause I was going to do this anyway.

[00:27:02] Jeff Higgins: How do you

[00:27:02] Patrick Donley: handle those? Increases it some, is that something that you set or is it something that Section 8 tells you what they’re going to, what the increase

[00:27:09] Jeff Higgins: is going to be? No, they don’t tell me just when the, when the year’s up or like a couple months before the end of the year. I usually send a letter saying I’m increasing it to the maximum I think is allowable.

[00:27:21] Jeff Higgins: Or sometimes there are ways to find out what the maximum allowable is. I’ve seen some sheets that tenants will show me that show their maximum. Do the Section

[00:27:30] Patrick Donley: eight tenants have any skin in the game? Are they making any of that payment?

[00:27:34] Jeff Higgins: No. They pay it. It’s based off of, I believe, their income. But I have some tenants that pay 150 bucks for a $2,800 rental, and I have others that pay a thousand bucks on a $1,700 rental.

[00:27:44] Jeff Higgins: So the amount of subsidy per unit, I’m not sure exactly how it works, but it varies wildly. Have you had any nightmare stories with section. I’ve had so many nightmares. I don’t even classify him between Section 8 and not, I’m going through an eviction right now with the Section 8 10 in Marlboro.

[00:28:00] Jeff Higgins: The guy, he can’t even be bothered to pay his 240 of $2,700 rent. But other than that, he’s fostering dogs over there and stuff, so I gotta get ’em out. But you know, people are people Section 8, maybe you have a little bit more problems per cent wise, but you have plenty of problems with Class C on cash paying tenants too.

[00:28:21] Jeff Higgins: So

[00:28:22] Patrick Donley: what would you say are some of the biggest risks with

[00:28:24] Jeff Higgins: Section 8? Like I was just saying, the same risks you have with regular people. Maybe there’s a little less skin in the game, maybe they do a little bit more damage. But the trade off for me is they also stay longer on average, they stay longer, they move less.

[00:28:37] Jeff Higgins: Limiting those turnovers saves me a lot of money, saves me time and effort. So I’m willing to exchange a little bit more damage for a little less turnover, and I think I win without exchange.

[00:28:48] Patrick Donley: I wanted to get more into talking about the Florida market right now. I know you’re close to Fort Myers, have you, there’s gotta be a decent amount of distressed sellers down there.

[00:28:55] Patrick Donley: Is that a market that you’re considering or checking out at all?

[00:28:59] Jeff Higgins: So at this point in my life, I’ve been doing it for 15 years and I’ve always optimized for lifestyle as well as profit. And I’m doing that more so than ever now for one. So I only buy within like 15, 20 minutes of where I live because if I go further than that, I either have to work harder, commute more, or hire a property manager.

[00:29:17] Jeff Higgins: None of those three things I want to do. If it’s not within 15 or 20 minutes of, mate, I’m not that interested. And then another thing is, I mean, at the moment I’m kind of outta cash. I bought a lot of properties in the last three years, so maybe I’ll sell a property in Massachusetts and then I’ll be looking for a 10 31.

[00:29:31] Jeff Higgins: And I have lines of credit that I can supplement. If I sell something to mass for 500,000, I might end up buying something down here for 1.25 and the 10 31. But I’m not really looking to deploy cash right now unless someone comes to me at the condo complex and they, they want to sell me a condo and I can add over there, I’ll add it.

[00:29:48] Jeff Higgins: But I’m not aggressively looking right now. I think, I try not to predict the market. I try not to time the market, but I can’t help with thinking they’ll be better deals a year from now.

[00:29:56] Patrick Donley: Seems like a most, your primary criteria is basically, as long as it cash flows, you’d be interested in it. That’s how I’ve always viewed things is if it cash flows, it makes sense.

[00:30:05] Patrick Donley: Cash flows

[00:30:06] Jeff Higgins: and if it’s easy to manage. And one of the many reasons I moved to Florida is I do think the next 20, 30 years down here is bright. I think the demographic show, we’re going to keep expanding. I move down here and a lot of times I’m an early adopter stuff, like I’m, I’m a good metric. Like if I move down here, more people are going to want to move down here.

[00:30:24] Jeff Higgins: It is the best quality of life move. I can’t even believe it. I thought it was going to be good. And every day I walk outside and I’m like, this, it is so good to live in Florida. Thank you, God. Yeah.

[00:30:36] Patrick Donley:I’ve had a couple of friends that from Ohio that recently moved down there and they said it’s been the best decision they’ve made.

[00:30:42] Patrick Donley: They work remotely and they’re like, why wouldn’t I want to? Ohio winners are just probably similar to Massachusetts. It’s not a place you want to be

[00:30:49] Jeff Higgins: pre Covid. I would vacation down here and I’m like, the only thing holding this property market back is we don’t really have a lot of Fortune 500 employers.

[00:30:56] Jeff Higgins: But then once work from home happened, it exploded. And I, I wasn’t surprised. I

[00:31:01] Patrick Donley: wanted to get into a little bit about property management further. It sounds like you’re kind of anti property management companies. I’ve experimented both with self-management and using a property manager, and I currently self-manage my, my rentals.

[00:31:14] Patrick Donley: Tell us how your philosophy on property management developed.

[00:31:18] Jeff Higgins: So, you talked to a lot of people and they’re like, I want to get started. I’m like, are you going to manage it? No, I’m going to get a property manager. It tells me like, you, you don’t really want it. You don’t, you’re not willing to pay the price. No one wants to do the nitty gritty of the property management, but if you’re like, I’m going to get in there and I’m going to get my hands dirty, I’m like, yeah, my man, you, you want this?

[00:31:35] Jeff Higgins: And I, I’m going to bet on you. You know, property management is not glamorous. I enjoy it. I love the grittiness. I understand low income. I really do. I would’ve made a good, poor person because I know how to find value and I don’t enjoy spending. Like I have a couple of mindsets, I don’t know if this applies, but I was getting divorced in 2009 and I moved into a five family.

[00:32:00] Jeff Higgins: I had, I moved into a one bedroom and I was so focused on financial independence at this point. There was a basement apartment and it was vacant, and I showed the basement apartment, nice couple, and they didn’t like the basement apartment. And I’m like, wait, wait, wait, wait. Come and see my apartment. And I showed ’em my one bedroom apartment.

[00:32:15] Jeff Higgins: They liked my apartment. I moved out and I moved into the basement and this is the worst apartment I own and I still have it. It rents for $880 a month now. And I lived there for like a year. Have you always been a pretty frugal. Yeah, my grandma was a great depression person. It very, very much affected her and she taught me, she, she would give me $5 for my birthday and ask me if I could stretch it , and I would just look at it that way.

[00:32:42] Jeff Higgins: And I’ve never enjoyed spending on consumerist things. I always thought that money was for freedom, money was for buying time, and that’s what I use it for.

[00:32:52] Patrick Donley: I wanted to talk a little further. We talked about goals earlier and being the new year, but what are your long range goals for the portfolio? Will you stay in class C rentals or do you have visions of doing something bigger and or are you pretty happy with how things are right now?

[00:33:08] Jeff Higgins: Sometimes I look at people doing bigger than me and I’m like, man, why am I still buying one off condos? I don’t know why. But then at the same time, I’ve done really, really well. I’ve exceeded all of my financial goals. I don’t need anything. It’s a weird spot. In some ways, I would fantasize about buying that a hundred unit, but at the same time, like owning all my own equity, not having any property, or not having any partners, never having to ask anyone any questions.

[00:33:34] Jeff Higgins: I’m hyper independent person. I think I’m in the right place. I understand Class C. It makes sense to me. It feels safe. I feel safe about the demand. I think it’s very likely that you will see me in 20 years showing low end departments because I also like the people. I mean, there’s people that need a chance.

[00:33:53] Jeff Higgins: I move people out of homeless shelters and, and sometimes that is risky and sometimes, sometimes they credit once in a while. But when it works out, it makes you feel really good. And I, I understand what they need. I understand what I’m providing for them. It’s an exchange that makes sense to me, so maybe I’m in the right place.

[00:34:13] Patrick Donley: It sounds like it, I mean, it sounds like it’s a good strategy. It’s working for you. I, I’m in the same boat. I, it’s class C stuff that I rent out, and same thing, I’ve got a relationship with a, a church that they put women who are coming outta prison through a two year program. Once they’ve gone through the program, I’m buddies with the pastor and the pastor recommends the women that he thinks would be great tenants, and then I rent to them.

[00:34:33] Patrick Donley: So it’s like a win-win for everybody, and they’ve been great tenants. I think given people a second chance like that, it’s, you know, it’s worked out well for me in, in most cases. I read on, on Twitter that you practice what, when you show a property, you call it antis selling. Talk to us about what you mean by antis selling and, and how it works in

[00:34:53] Jeff Higgins: practice.

[00:34:54] Jeff Higgins: Again, optimizing for lifestyle. I do not want someone to be a pain after they move in. I’m never going to try to make the apartment seem better than it is. I’m going to say, here it is, and actually this isn’t that great and this isn’t that great. You still want it because if you go in expecting things better than they are, then you’re going to complain.

[00:35:11] Jeff Higgins: But if I’ve told you like, this is bad, this is bad. What I’m offering you is this apartment exactly as it is for this very reasonable rate, do you want this? And then if they can say yes, then what is their complaint about afterwards? I would rather someone say no. And then we part ways than be married to someone at a lease that is unhappy because I don’t want my phone ringing.

[00:35:34] Patrick Donley: Does your, Dan, your property manager, does he also do the, the same strategy of antis selling? Have you trained him on that?

[00:35:40] Jeff Higgins: Dan’s a much nicer guy than I am, but yeah, he does it to an extent. I’ve explained the value of that. And he doesn’t want his phone ringing as well, so he might be a little bit nicer about, maybe a little bit more skill, but he doesn’t as well.

[00:35:52] Patrick Donley: No, it’s a great idea just to kind of set expectations and like this is what it is, and kind of go under people and say, eh, you know, I may try that here. I’ve got a rental that just freed up and maybe my next tenant I’ll, I’ll do that strategy on it.

[00:36:06] Jeff Higgins: No, I was going to say, try it out, see how it goes.

[00:36:08] Patrick Donley: You wrote also on Twitter that you think that seller financing I is the opportunity right now.

[00:36:14] Patrick Donley: Tell us why you think that. I’ve never done seller financing. I don’t know that you have either, but it seems like something that I’d like to potentially pursue it. Why do you think it’s a great opportunity at the moment?

[00:36:25] Jeff Higgins: The high interest rates create such potential. There’s people that want to sell their property and they’ll take notes back at 5% and you go to the bank and they’ll give ’em to you at seven.

[00:36:33] Jeff Higgins: So it’s a great opportunity win-win for a seller to get maybe a higher price. Private notes are beautiful. I mean, I have a couple private notes they just learned from sellers. I fantasize about being able to do more deals to seller financing and my, my friend Phil, the broker my, that I play hockey with, he tells me about a lot of deals that are going down the seller financing right now.

[00:36:50] Jeff Higgins: So maybe I get one in the future. But having a note that a seller writes just gives you so many opportunities. There’s less, less fees to close the deal. Everything’s negotiable. The interest rate’s negotiable, the length is negotiable, the balloon, and then, you know, it creates opportunities in the future.

[00:37:06] Jeff Higgins: Six years from now, you owe the person 400,000. They might need money real bad. They say, cash me out for three. Things like that happen. I mean, they don’t happen every day, but it opens up a world of opportunity where a bank, it is what it is. There’s also, you develop a relationship with a seller, you get a seller financing note and you treat them well.

[00:37:23] Jeff Higgins: Maybe they tell someone else that wants to really fund your next deal. I mean, there’s a world of possibilities with seller financing, especially with interest rates high right now. I feel like if I was 25 and starting, I would be absolutely immersing myself just making sellers financing offered deals all day.

[00:37:38] Jeff Higgins: I mean, in many cases the paper can be worth more than the building if you can get someone to finance it at 4%. I mean, think about that. How much is the note worth right now?

[00:37:46] Patrick Donley: So you said you do own some notes.

[00:37:49] Jeff Higgins: I have a handful and I’m actually a maker on a note too.

[00:37:52] Patrick Donley: Tell us about that. How does that work?

[00:37:55] Jeff Higgins: So I sold the house. I actually sold it to Dan when I was leaving Massachusetts because I wanted him to own a home. And I said, you don’t have to bring any money to closing. I’ll give you the mortgage. I hold the mortgage. We filed it. It’s a real mortgage. And he pays me.

[00:38:08] Patrick Donley: Nice. It works out for him. You get a payment all as well.

[00:38:12] Jeff Higgins: It’s worked out very, very well. because I mean, since I’ve moved, property is appreciated very much so. I feel good that I’ve been able to make an impact that way too and it’s a win-win situation. I don’t need to have it all. It’s a fair deal.

[00:38:25] Patrick Donley: Jeff, I wanted to do a deep dive into the poem. “If” by Rudyard Kipling you wrote a fantastic thread explaining why the poem’s not only a great guide to life, but a fantastic way to learn mental toughness in general.

[00:38:38] Patrick Donley: I had a therapist in my mid twenties that upon completion of our work together, he read me that poem and it’s always meant a lot to me. So would you be willing to read if to us and then we will unpack it a little further once you’re finished?

[00:38:54] Jeff Higgins: Absolutely. I would love. If you can keep your head when all about you are losing theirs and blaming it on you, if you can trust yourself when all men doubt you, but make allowance for their doubting to.

[00:39:05] Jeff Higgins: If you can wait and not be tired by waiting or being lied about, don’t deal in lies or being hated. Don’t give way to hating and yet don’t look too good nor talk too wise if you can dream and not make dreams. Your master if you can think and not make thoughts. Your aim. If you can meet with triumph and disaster and treat those two imposters just the same.

[00:39:26] Jeff Higgins: If you can bear to hear the truth, you’ve spoken, twisted by naves to make a trap for fools or watch the things you gave your life to broken and soup and build them up with worn out tools. If you can make one heap of all your winnings and risk it on one turn of pitch and to. And lose and start again at your beginnings and never breathe a word about your loss.

[00:39:49] Jeff Higgins: If you can force your heart and nerve and sin you to serve your turn long after they are gone. And so hold on. When there is nothing in you, accept the will, which says to them, hold on. If you can talk with crowds and keep your virtue or walk with kings, nor lose the common touch. If neither foes nor loving friends can hurt you, if all men count with you, but none too much, if you can fill the unforgiving minute with 60 seconds worth of distance run, yours is the earth and everything that’s in it and which is more, you’ll be a man, my son.

[00:40:23] Jeff Higgins: I get chills reading it, honestly. I can tell it’s great stuff.

[00:40:28] Patrick Donley: So let’s go into it. You had a whole thread on it. What are some of the key points?

[00:40:32] Jeff Higgins: Holy cow, Twitter in general. So I decided to, to try to grow following and kind of get out there on Twitter. I’ve been a very private person for a long time, but working with the Fraternity of Excellence and becoming a mentor and, and sharing my message and seeing that people want to hear my message, I’ve finally been convinced, okay, I’m going to go out and I’m going to talk on Twitter.

[00:40:51] Jeff Higgins: I made a thread about the poem and really emphasize the mental toughness. You know, there’s so many great lessons, emotional control, you can keep your head about you. When all are losing it, blaming you, you can’t let that affect you. I mean, you need to be the oak tree. That is a, a great analogy for what you want to be as a man.

[00:41:09] Jeff Higgins: You want to be steady, you know, you feel the wind, but you don’t get knocked off balance. You know the truth, you know when people are doubting you. You must stay strong. If you can wait and not be tired of waiting, you know, you need patience in this life. You can’t be running and reacting to every little thing being lied about.

[00:41:25] Jeff Higgins: People are going to gossip and that doesn’t matter. You have to ignore the opinions of others and don’t look too good and talk too wise. Stay humble dreams. If you cannot make dreams, you’re master. You want to think big, but you also don’t just want a naval gaze. You want to get to action, Isabel, what you do.

[00:41:41] Jeff Higgins: And then you know, if you can meet with triumphant disaster and treat those two imposters just the same. There’s a lot of highs and lows in life, and if you want to be emotional and, and chase ’em all, that’s not, that’s not what you want to be. That’s not a man. A man is emotionally steady and reliable and he’s.

[00:41:57] Jeff Higgins: One of my favorites is if you can make a heap of all your winnings and risk it on a turn of pitch and toss. When I was a kid, I didn’t get this part, because I used to read this poem and I was a kid and I was like, man, that, that’s not really respecting risk. But that’s not the point. The point is you go for it.

[00:42:12] Jeff Higgins: It doesn’t mean be reckless, it just means you go for it. And when you go for it, you accept the outcome. You don’t cry about it. No one wants to hear it. Like, if you lose, it’s okay. I mean, tell your brothers, tell your brothers in the Fraternity of Excellence. Don’t cry about it to your wife, . And, and don’t, don’t cry about it to a stranger.

[00:42:28] Jeff Higgins: Cause it’s just an admirable trait. You can let it out there, you can go for it and you can lose and you dust yourself off again and you get back at it, suck it up, no complaining. I love it. And then, you know, I’ll cut to the end, the unforgiving minute. I mean, that’s what it’s all about. That’s this life.

[00:42:45] Jeff Higgins: And unfortunately I see a lot of people that don’t care about the unforgiving minute and I’m very aware of it. You know, my mom died when I was six and my dad when I was 25. And every day I’m blessed with, I want to make something of it.

[00:42:56] Patrick Donley: I think when you’re touched by mortality at such a young age, I mean you lost your parents at a really young age.

[00:43:02] Patrick Donley: You know your mom for sure, and then your dad like to lose your dad at 25. That’s so young. I can’t imagine what that’s like. We’re blessed with this life and it’s so easy to caught on autopilot or get stuck on autopilot and just sleepwalk through life and I mean, death is like the big awaken, you know?

[00:43:19] Patrick Donley: It’s something to keep in mind. There’s a saying about, I think it’s a stoic practice called Memento Mori. Remember Your Death? I don’t know if you’ve ever heard of that, but it’s such a good practice, like to remember your, your death every day. Make something of your life. Do something. Thanks for reading that for us.

[00:43:34] Patrick Donley: I really appreciate that. You also did a thread on alcohol that, that I came across, I think it was pretty recent, like within the last week or so. That’s been one of my New Year’s goals is to drastically limit the amount of alcohol I take in. I don’t know if I’ll do it a hundred percent, but maybe that’s the way to do it.

[00:43:50] Patrick Donley: Can you talk to us about your experience with stopping alcohol and the benefits that it’s, it’s had for you?

[00:43:56] Jeff Higgins: So the thread, I had a blast. It was satire. If you see me on Twitter, it’s it was pretty funny and it got, got a lot of views. It’s actually the most popular thing I’ve ever written. Here’s the thing about alcohol.

[00:44:06] Jeff Higgins: It’s all about truth. I know and self be true. You gotta know yourself. For me, I drank too much. So I had my last drink in 2014 and it was a great decision and I’m glad I did it. If you don’t drink too much, enjoy. And I have friends and I will absolutely hang out with them and they will drink. And I will not, after every hockey game in the locker room, I’m the only guy not drinking, and I have no problem with that.

[00:44:25] Jeff Higgins: Enjoy it. But make sure you’re not lying to yourself. Even people without a drinking problem, they will rationalize things. You know, if you’re hungover the next day when you should be coaching your daughter’s soccer game, you might want to look at that. And what I mean by you might want to look at it is get honest with yourself.

[00:44:41] Jeff Higgins: What is it bringing to your life? Every decision should be deliberate, especially as your grown, grown person and you’re a mature person. If it’s not an issue for you, you have one drink, you enjoy it, you have my blessing. But just be honest with yourself.

[00:44:54] Patrick Donley: I wanted to talk about limiting beliefs. There are a lot of people that are hand handicapped by limiting beliefs or mental barriers that that hold them back from the kind of life that they want to lead or the kind of things that they want to do, the goals that they pursue.

[00:45:06] Patrick Donley: You’ve done obviously a lot of work on yourself as a man and as an investor. What were some of the limiting beliefs through mental barriers that you had to smash through to get to where you are today?

[00:45:17] Jeff Higgins: So many, and you know, it’s still a battle. It’s an ongoing battle. I’m doing this conference this year, a live conference, and I have to get on stage with people I admire and deliver a speech, and I have limiting beliefs that I’m not going to be any good at it, but I am, I’m going to be good at it.

[00:45:31] Jeff Higgins: But these are battles in my head that I’ve had. I had limiting beliefs some, every step of the way. It’s hard to even quantify where like exactly identify what they were. I’m sure I had them in real estate that held me up, but I had pushed through them. You got me comfortable. You know, my shirt I’m wearing right now says Comfort kills on it.

[00:45:49] Jeff Higgins: Anytime I feel uncomfortable, that’s a, that’s a sign for me that this is where you push, this is where you gotta push through. It’s become an indicator for me that says it’s time for some action.

[00:45:58] Patrick Donley: There was a photo of you that, I don’t know, it was a before and after kind of photo one from your early days probably when you were drinking and then one now, did you hit a point at one point in your life where you were just like, God, I’m fat outta shape you.

[00:46:14] Patrick Donley: I’m disgusting my own self. Did you hit a point like that where you’re just sort of like, I gotta do something to change?

[00:46:20] Jeff Higgins: The drinking is a long story. I knew I should have stopped drinking when I was 21, 22, and I didn’t stop until I was 34. So there were a lot of years in. When I stopped drinking, I got very into cardio and I started running and then I even did an Ironman.

[00:46:33] Jeff Higgins: I got very skinny at that point. So then I, I shifted and I said, you know what? I, I actually want to put on some muscle. So I pivoted and now I still do some cardio, but I focus more on strength training the fraternity, we have a competition called Physique Freak. The photo you’re talking about is I won the last physique freak.

[00:46:49] Jeff Higgins: I got very lean, kept most of my muscle. So I post that picture, my before picture. I don’t look that good. And the after picture for a 43 year old guy, I’m pretty ripped. So here’s the thing about taking care of your body. And as a man with muscle being lean, it changes your mentality more than anything. I swear the world is a completely different place.

[00:47:07] Jeff Higgins: I used to be invisible and now I walk around and people want to have conversations. I’m a happily married guy, but man, I can’t help but notice a lot more women want to start conversations with me out there and like, it’s just everyone. It’s a happier world. People want to be around you, you know, I coach you to sports and I really enjoy that.

[00:47:23] Jeff Higgins: And like the kids look at me and, and I want to set a good example for ’em and show ’em like, you don’t have to be the dad who isn’t out here and you know my drink and it doesn’t want to run around and I’ll race ’em and, and show ’em. I can beat ’em. And it, it’s just a better way to live. I mean, fitness is it’s worth it.

[00:47:40] Jeff Higgins: That’s the one thing I want to tell a lot of my friends that, that don’t pay any attention to their bodies. The unforgiving minute, 10 years from now, you’re going to be 10 years older and it’s going to be harder and you’re going to have wasted the time. But if you knew how good it was, walking around living this life as someone very fit, it’s so worth it.

[00:47:57] Patrick Donley: They want to be around you because you look like the liver king.

[00:48:01] Jeff Higgins: I get that a little bit. I get that man. Oh my God. The 15 year old kids especially, I dressed up like liver king for Halloween. It was a hit. They loved it. I’ll send you a picture. That’s hilarious.

[00:48:11] Patrick Donley: One of my favorite books I want to talk a little bit about books is one called Richer, Wiser, Happier by William Green.

[00:48:17] Patrick Donley: He does a podcast for the Investor’s podcast called Richer, wiser, happier, any. In the book, he talks about the world’s top investors and how they win both in the stock market and in life. I know you’re really into the stock market, and we’re going to get to that, but he’s got an entire chapter devoted to discussing what he calls high performance habits.

[00:48:34] Patrick Donley: What would you say are the most important high performance habits to develop as a real estate investor, as a man? And how would you recommend someone who’s maybe, you know, at the beginning of the year realizing they want to change, go about developing better habits?

[00:48:48] Jeff Higgins: I gotta be honest with you, this is a weakness of mine and it’s something I’m looking to improve over the next years because it’s a major change for me.

[00:48:55] Jeff Higgins: I get by on a lot of motivation and I throw myself forward and I throw myself into things, but motivation isn’t as reliable as discipline. I know a lot of discipline men in the fraternity, and I want to be more like them because it’s automatic. They get up and they’re jumping rope and they’re get up and they’re doing their lift.

[00:49:11] Jeff Higgins: I know when I get up and I’m like, oh, I should write something, and then like, I know I gotta go to the gym and like I’m just throwing myself forward. So habits are my life is very open-ended as far as I haven’t had a job in forever, and I don’t answer to anyone and I just respond to what’s necessary.

[00:49:26] Jeff Higgins: If I have a vacancy, I’ll take care of that. If I have a project that needs to be managed, I, I manage that. I’m not the best guy to ask about habits because I’m still trying to develop. Yeah, it’s good stuff.

[00:49:35] Patrick Donley: I see guys on like Jocko Willink, he’s the Navy Seal that he wakes up at four 30 or whatever. I see other guys, there’s a guy from Columbus, Ohio, ma, Maurice Claret that I’m going to be interviewing.

[00:49:45] Patrick Donley: He was a football player for Ohio State. Same thing. He wakes up at five 30 and he is looking out and he posts his, you know, he is got his little photo of his watch and he’s doing it every day. You know, that accountability that he’s showing, Hey, I’m up, I’m at it. And you, you should get your ass outta bed too.

[00:50:02] Patrick Donley: You and I are really similar in that we both have a shared love for both real estate and the stock market. Stock market was my first love. I got into it as a young kid reading books and having my dad, you know, make small little investments for me and a custodial account. And I understand that you spent a fair amount of your time on this, on your stock portfolio, and I think you had a 33% return this year.

[00:50:21] Patrick Donley: In a year where most asset classes were down. What are some of the strategies that you’re using to outperform the market? And I think this was like the fourth year in a row that you’ve beaten the S&P.

[00:50:32] Jeff Higgins: I went deep into trading a number of years ago. I just wanted to figure it out. I used to believe here’s a limiting belief for you.

[00:50:38] Jeff Higgins: I thought the market cannot be time. Everyone says it, and it’s probably good advice for most, but it’s simply untrue. I mean, there’s plenty of people who you can point to who obviously can beat the market and beat it badly and consistently over the course of decades and decades. So it can be done.

[00:50:56] Jeff Higgins: How do they do it again? Yeah, I hit the books. I hit the books hard, and it still wasn’t clicking. But, you know, the, the best books are how To Make Money in Stocks by Bill O’Neill. That one is cited by so many traders as the rich dad, poor Dad of short term trading. He is the investor’s Business Daily founder.

[00:51:12] Jeff Higgins: But that book was, was good. It didn’t, it wasn’t like the Bible to me, but I read Mark Mink’s books who’s a, a trader and I joined his service, which was very expensive. I went to see his live seminar, which was also pretty expensive. I went to the last one he held live. Now we hold it online and the interesting thing is I can’t trade like him.

[00:51:31] Jeff Higgins: He lays it out there and it doesn’t suit my personality, so I have to keep looking. I joined the service by a guy named Brian Shannon, alpha Trends, and he’s really, really good. He is been at the game over 30 years and I learned a lot from him. And I joined a message board called Ticker Monkey. He’s a guy named JT on there that runs it.

[00:51:49] Jeff Higgins: And he is unbelievable. I mean, the guy is amazing every day, real time, showing how he’s looking at it, explaining what he’s doing, and I just watch him. And there’s also a lot of other savages on that board that are talking. I don’t do it like them, but I did learn like stop losses are a must. So I will take stops all the time and that’s okay.

[00:52:11] Jeff Higgins: But I trade very short term. I sell ’em to strength all the time. I’m willing to take my stops and yeah, I’ve done, done really well, 33% in 2022, I was very satisfied with the S&P off 19%. That was a good trouncing for me.

[00:52:26] Patrick Donley: Your timeframe is about a day or less, I mean even less than a day, hours from an hour to two weeks maybe.

[00:52:34] Patrick Donley: So how would you explain the strategy? Is it like a momentum strategy trend following what, how would you explain it?

[00:52:39] Jeff Higgins: Man, I am I couldn’t even really explain what I do. I, I look at it with a lot of feel, which is, it’s crazy. I would never advise someone to trade the way I trade, and I probably wouldn’t even believe someone if they were saying the words that come outta my mouth.

[00:52:53] Jeff Higgins: But as I do it year after year, I must be doing something right. I’ve been watching the market since I’ve been like seven or eight years old, and I didn’t have the knowledge of what people like Menini were doing, people like JT were doing. And once I saw what they were doing, taking the stops is the most important.

[00:53:10] Jeff Higgins: Look, there’s four outcomes. When you take a trait, a big win, a small win, a small loss, and a big loss. I’m taking the big loss off the table, right? I’ll take a small loss, I’ll take a small win, or I’ll take a big win. That puts you ahead of a lot of investors, certainly in 2022, because big losses became on the table that year and I wasn’t taking any.

[00:53:28] Jeff Higgins: And then when, when the market is really, really heavy, I’m not taking longs, and most other times I’m looking, looking for longs. It’s easier to make money longs than shorts. I did do some shorting last year. It’s fun. It’s an obsession. You know, similar to poker or gambling. When I’m winning, I lean in really hard, but I hate losing.

[00:53:47] Jeff Higgins: Losing is painful to me. So whenever I’m losing at anything, I run away. Instead of trying to double down and get my loss back, I just run. When things are going good, I hit it. When things are going bad, I run, and that’s how I do it with everything.

[00:54:00] Patrick Donley: How much time are you spending on the stock market each week?

[00:54:03] Jeff Higgins: It varies, but when things are going good, it could be, you know, 15th, 20.

[00:54:08] Patrick Donley: So if you had to choose just one investment vehicle for the rest of your years, which would it be? Stock market or real estate?

[00:54:14] Jeff Higgins: No question. No question. Real estate, I mean, I don’t know that I could trade all of my net worth in, in reality, I only trade probably under 5%.

[00:54:24] Jeff Higgins: You know, I think in 2020 when things looked really attractive, I, I put a lot of money in it and I was probably trading 15% of my net worth, but there’s no way I could, oh, I don’t have the stomachs for trading all of it. It’s a beau, another beautiful thing about real estate, I mean, it takes out the human element of mistakes.

[00:54:41] Jeff Higgins: Illiquidity is a blessing. It’s like the greatest blessing to most people. I stick with my real estate long-term, my liquid securities. I do short-term. I’m able to make some money doing it. I’m able to enjoy it. It’s a, it’s an incredible game. It is like cold, except you don’t have to travel.

[00:54:56] Patrick Donley: There are no minute by minute daily quotes for real estate.

[00:54:59] Jeff Higgins: Exactly. Exactly. Yeah. No real estate, no doubt. It just, it takes care of you. So well every month, pay every month. What’s your favorite stock market book? Ryan Shannon at Alpha Trends. He is legit, been doing it for a long time, gives presentations all over the place. I subscribe to his service For a couple years.

[00:55:19] Patrick Donley: You’ve spent a lot of time, money, and energy on books, on courses, on coaches. What’s been the highest return on investment for you and when you are speaking and working with your clients, what do you recommend for them in terms of essentials for a high return on investment in terms of what they should read or study?

[00:55:37] Jeff Higgins: I think it depends exactly what you’re trying to accomplish. As far as real estate, I got value from almost everything. I’m very skeptical, so I don’t sign up for coaches that aren’t legit. I’m able to filter them out. I probably filter out people that are legit because I’m just extremely skeptical. Like if you show me anything that makes me not trust you, we’re done.

[00:55:56] Jeff Higgins: At the same time, I got tremendous value in probably 20 2005 or six. I went to a real estate seminar led by a guy, and I’m not even going to mention his name, but he had gone to jail for mortgage fraud. And I still knew he knew what he was talking about, and I don’t have to step over the line, but I would like to know exactly what he was thinking and my, my goodness that he teach me so much about real estate.

[00:56:19] Jeff Higgins: I think back on that week a lot, and I, I paid a lot of money for that. I paid a lot of money for fortune Builders. The, the company started by Merrill and Paul Sian. They flipped his house guys back in the day and I was probably one of the first people there. Like, we would be in a conference room, there’d be 15 people and they’d be on stage.

[00:56:36] Jeff Higgins: Now you go and there’s 500 people and they’re nowhere to be found.

[00:56:40] Patrick Donley: Anything. Like for somebody listening right now that wants to take the first step into real estate, what would you read?

[00:56:44] Jeff Higgins: The books? Yeah, just read, I mean, reading the books, absolutely. I mean, the best material is in the books now. If you hire a coach, they’re going to hold your hand and help you through it, but if you want it bad enough, you can get everything outta the book.

[00:56:54] Jeff Higgins: Hiring the coach is kind of just like a cheat code to make your life easier.

[00:56:57] Patrick Donley: As you mentioned, I’m super skeptical of and suspicious of real estate gurus and coaches. Just seems like a ton of them are just scammy and kind of prey on people’s, whatever the weakness for greed or instant riches, how do you tell if someone’s like a, a fake guru or the real deal?

[00:57:12] Patrick Donley: Or is it just a gut instinct with your trading, you’re going by intuition? Is it something along those lines?

[00:57:18] Jeff Higgins: I trust my personal intuition, but if I was advising someone how to look at it, I mean, how much property do they own? How much money have they made for real estate? That’s a pretty, pretty good equalizer.

[00:57:27] Jeff Higgins: It’s theory. Unless you’re rich, like I don’t understand. There’s a lot of people on Twitter with huge followings and I’m like, this guy owns three houses and we have no idea if he’s going to make it or not. But they’re speaking with such authority, it, it kind of is a head shaker for me, but how much property do they own?

[00:57:41] Jeff Higgins: It’s a good metric.

[00:57:43] Patrick Donley: Jeff, as we wrap up today, I wanted to ask you, without naming names, who’s the dumbest, richest guy that you know and what does he do?

[00:57:50] Jeff Higgins: That’s one of my favorite quotes because that is my message, man. That is my message to the public, like, you can do this. I don’t want to talk to the super technical guy who knows how to syndicate and who’s going to raise a bunch of.

[00:58:01] Jeff Higgins: God bless him. But I want to talk to the tradesmen that wants, is thinking about, can I get that one rental house? Yes you can. Like, it is what it looks like. I needed to dip my toe in and before I bought that Ford family, I didn’t know if people were going to pay me rent. I didn’t know if it was real, but then once I dip my toe in, I hit the gas because it was working.

[00:58:19] Jeff Higgins: So my message is it works. It really, like, if you can find a property that cash flows, you’re going to do all right. Just, you know, move forward and do it. You don’t need to be a super genius. You don’t need to have all this technical knowledge. It’s one of the last opportunities for the regular guy I think in America.

[00:58:34] Patrick Donley: Jeff, I I really want to thank you for your time today. This has been a lot of fun. I appreciate you sharing your knowledge, sharing the poems, sharing some about your threads, a lot of wisdom to share. For those of the people who want to get in touch with you or maybe learn more about you, learn about Fraternity of Excellence, how, what’s the best way for them to do.

[00:58:52] Jeff Higgins: Best way would be to find me on Twitter. I’m @JeffreyHiggins. You could go to the fraternityofexcellence.com. You’re in good hands there. These are the best people in the world over there running, running it, and they want you to win. That’s just for men though. If you’re a woman, you can find me on Twitter.

[00:59:07] Patrick Donley: Jeff, thanks so much for your time. I appreciate it.

[00:59:09] Jeff Higgins: Thank you so much, Patrick. This is a blast.

[00:59:12] 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.

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