This week on The Mobile Alabama Business Podcast, we sit down with Justin Kihano with Justin Kihano Real Estate. Listen in as we discuss how he got started in Real Estate, what he thinks of the Cryptocurrency market, and what he is doing to increase his monthly cash flow!
Produced by Blue Fish
Transcript:
Justin Kihano:
I'm Justin Kihano with Justin Kihano Real Estate, Inc.
Marcus Neto:
Awesome, Justin. Well, I am really excited to have you on the podcast because, I think people will realize what we're getting into here in a minute, but you have your hand in so many different things. And so, I wanted to bring you on to highlight that you don't have to do just one thing.
Justin Kihano:
Yeah. It's an honor to be here.
Marcus Neto:
Appreciate that. But to get started, why don't you tell us the story of Justin? Tell us where you're from, where'd you go to high school, those kinds of things. Did you go to college? I know they answer to a lot of these, but are you married? Just give us some backstory about who you are.
Justin Kihano:
Yeah, I was born in Orange Beach, Alabama, one of the most beautiful beaches down here, cheapest beaches right now. That's soon to change though. I went to high school at Foley and I did a year at military school. Didn't actually finish high school, so proud high school dropout. Went to college for about six months. It wasn't for me. It was actually costing me money to go to college. I was in high school hustling. I've always been a hustler. I was making more money than my teacher senior year. And my credits from military school didn't roll over, so they wanted me to do an extra year of high school. So I was going to have to do five instead of four. So I was like, "Nah, nah." And me and my teachers would argue every day.
Justin Kihano:
I was a solid C student, and not just because I was dumb or anything, it was because I just didn't see the point of memorizing all this useless information. I was like, "This isn't going to get me paid. I don't need this." I was already helping my father build a company at 17 years old, doing his SEO, internet orders, stuff like that. So it was like, school was...
Marcus Neto:
What business does your dad do?
Justin Kihano:
He had a sound shop. So, we used to put radios and sound systems into cars. He's beat a couple world records. It used to be big back in the day. It's died off now. He used to be Premier Sound, way back in the day. So he got divorced, lost his business. We ended up taking it back and it was pretty much almost bankrupted. So we had to restock the place, build the clientele back up, and I was 17, pretty much working that at night. I was on my laptop building the website, doing everything during the day, while at school. So it was like, school wasn't that important to me.
Marcus Neto:
Make a choice. Are you going to go for five years or are you going to do stuff that generates revenue?
Justin Kihano:
Yeah, and I was like, I might as well just drop out and get my GED, go to college, I'll have my associate's degree. And six months into college and I was just like, I'm losing money from my other businesses. I'm working three or four different jobs at the same time. It's costing me money to drive back and forth to Bay Minette. So, six months of college, I was out. But I got into real estate shortly after that. Bought my first rental property at 18 years old. I was licensed at 19. I was the youngest agent at RE/MAX. Solo agent, wasn't on a team, anything. Pretty much in the south at the time.
Marcus Neto:
That's insane. At 19 you had your real estate license.
Justin Kihano:
Real estate license.
Marcus Neto:
And you had your first rental property at 18?
Justin Kihano:
18, mm-hmm (affirmative). So, I pretty much saved from 16 to 18 years old. I was saving everything. I was hustling it. I was working three or four different jobs. I used to do flooring inspections, moving furniture. I was busing tables at a restaurant. Every hour of the day I needed to get paid pretty much.
Marcus Neto:
You were focused.
Justin Kihano:
I was focused. I was selling stuff in high school. I remember I used to go to Walmart, I'd buy a hundred dollars' worth of candy and I'd have these three kids selling it for me at the same time. So, like I said, I was making more money than my teacher at the time. I was making anywhere between $200, $300 a day off of just, my job selling candy. I was always just kind of a hustler. Got my real estate license at 19 and I just started learning. I was like a sponge. Grant Cardone podcast, Gary V podcast. Everything that I could get my hands on to just soak up as much information about building wealth as possible.
Marcus Neto:
When did you find Gary V?
Justin Kihano:
I found Gary V when I was about 18. About the same time as...
Marcus Neto:
What year was that though?
Justin Kihano:
That was 2014, 2015, somewhere around there.
Marcus Neto:
Because I think, 2016 or so was about... He hit the internet pretty quick right around that timeframe, and I discovered him around that time as well. So, I was just curious, but go ahead.
Justin Kihano:
Yeah. I found Grant Cardone first. Well, first it was Jim Rome, a couple of those people, but my first real influencer, it was Grant Cardone. If anybody doesn't know who that is, he's a massive real estate mogul.
Marcus Neto:
Billions.
Justin Kihano:
When I found him, he was worth I think 20, $30 million. Now he's worth 2.2 billion or something. It's absolutely ridiculous. The man is the king of real estate pretty much.
Marcus Neto:
I always say, because I think when people hear that on this, they're going to go seek him out. And that's fine, go seek him out, because there's a lot to be learned there. He's got great books. I would start with Sell or Be Sold.
Justin Kihano:
10X Rule.
Marcus Neto:
10X is a great one as well, but know that this guy comes from a background of selling sales materials to car dealerships. And so, if you can't look past that, you won't learn what it is that he has to offer. And he does have a lot to offer, but that exterior that sometimes he comes across with can rub people the wrong way sometimes.
Justin Kihano:
A hundred percent.
Marcus Neto:
So I just, I always put that in there as a caveat so they don't think that we're morons, but you have to look past that rough exterior.
Justin Kihano:
Yeah. I definitely recommend people watch his videos from eight years ago. Whenever he was worth 20 to a hundred million, he was a hustler. He was grinding. He was hungry. He gave out so much good free information. That was the golden era for Grant Cardone. Now, he's pushing hundred million dollar deals. The average person can't just jump into a hundred million real estate deal. But when you found him back in the day, right when I first started really hustling it, is when he started really getting into multifamily and I was just like, perfect timing.
Justin Kihano:
He's the reason why I started buying apartments and started buying a bunch of rentals. It was just one podcast. He explained why he buys apartments, the ups, the downs. And I was just like, "It doesn't take a smart man to do this. I can do this. This is perfect for me." I like sideways money. I can't think of many other industries besides real estate that you can get paid 24 hours a day without lifting a finger. And it's going to be here in a hundred years. I don't know if crypto's going to be here in a hundred years. I don't know if Ethereum, Bitcoin's going to be here in a hundred years. I know for a fact, short of a fire, this building's going to be here. Or at least, the land's going to be here.
Marcus Neto:
For sure. And so, I was giving you some leeway because I know that you've got a number of different organizations. So why don't you tell us all the different pieces of the pie? Because you're involved in a number of different things.
Justin Kihano:
Okay. So I started out as a real estate agent. That's pretty much my starting, and my goal was to just hustle for three to five years, stack all my commission checks and then just start buying rentals. That was my goal from the start. I wanted to get as many apartments as humanly possible. I wanted to get out of the real estate game as far as being an agent. Being an agent sucks.
Marcus Neto:
It's not an easy job.
Justin Kihano:
It's not an easy job. People think that you can just work 10, 20, 30, 40 hours a week, make 100K plus a year. It's not that easy.
Marcus Neto:
No. It's nights and weekends and pulling your hair out.
Justin Kihano:
It is a business. You are not an employee, you are a business owner. I didn't know that going into it. Stacked my paychecks. At 18 years old, I took a vow of sobriety where it was like, "Hey, until I have 100K in the bank, I'm not touching a drop of alcohol. Not smoking weed, not doing anything." All my friends are out at the bars every night.
Marcus Neto:
Partying.
Justin Kihano:
Partying. I'm sitting there with a glass of water. And I was like, "I'm just going to stack it up. I don't care if it takes me three years, five years, six years, I'm going to knock this out and I'm going to dump all this money into multifamily." Took me about three and a half years to hit that goal, and I just started buying apartments. Everybody I ran across, it was, "Hey, you have any rentals you want to sell me?" "Hey, you got a house you want to sell me?" "You got any apartments? Anything you got." And I always went to older people at the Chamber of Commerce. That was my gold mine. I just went up to older people and said, "Do you have any rentals you want to sell? I'll owner finance it. I'll give you 5%, 6% interest. You're going to collect a paycheck. I'll have a life insurance policy. If I die, you're going to get paid off. I'm not going to be a problem."
Marcus Neto:
That's interesting.
Justin Kihano:
"I don't want you answering calls at two o'clock in the morning about a leaky toilet. You're going to get probably half your cash flow, but it's going to be guaranteed. You're not going to do any work. And if I die, if I miss a paycheck, you're taken care of. Everything's cool." I had everything on auto pay, so if I got into a car crash, six months' worth of paychecks was getting sent out through my bank. So I pitched. It's hard to convince somebody who's 50, 60 years old to give an 18, 19, 20-year-old, 21-year-old, a piece of real estate and finance it for them. Banks don't even want to really give you money at that age. You don't have really good credit history. You don't have multiple years of income.
Marcus Neto:
You don't have a leg to stand on when it comes to getting a couple hundred thousand dollars from my bank as an 18-year-old.
Justin Kihano:
No. So, until this year, I've actually never taken a bank loan. Everything I did was owner financing. So, I owner financed, I think it was...
Marcus Neto:
How many millions of dollars of real estate?
Justin Kihano:
I think right now I own about 10 million dollars' worth of real estate, plus or minus. That fluctuates. It's hard to gauge real estate, you know?
Marcus Neto:
Yeah. Understand that we're working with numbers in a round sense, because the market goes up and down. You sell properties. Properties are improved.
Justin Kihano:
The last time I did my math, I think I'm sitting at around 10 million. I got up to about pretty much eight or nine million worth before I ever took out a bank loan. Everything else was owner financing.
Marcus Neto:
That's incredible.
Justin Kihano:
Equity from older owners. That was my gold mine. I don't know where I got that idea from. At 18, 19 years old, 20, I couldn't find a bank to loan me money. I didn't know about private lending at the time.
Marcus Neto:
Out of necessity, I'm sure.
Justin Kihano:
I was just like, how do I buy real estate without tax returns? That was a big thing back in the day. And recently I just found how to get around that through private lenders. Now I have, at any given time I could snap my fingers and get up to 10 million dollars' worth of funding. Dangerous. Very dangerous. You got to know what you're doing. But up until then, it's been going up to older people, saying, "I want to adopt all of your problems. Whatever rentals you have, I don't care how bad a shape they're in, I'll find a way to make it work." As long as we can agree on financing terms, the price of the property really doesn't make that much of a difference to me. I can make it work.
Marcus Neto:
That is actually really interesting. So, okay. You got...
Justin Kihano:
That's the real estate.
Marcus Neto:
You got your real estate license, you bought rental properties. What else?
Justin Kihano:
Converted pretty much a lot of my equity into crypto. So I play a dangerous game. I did a bunch of cash out refinances. I take my rent checks, I pretty much dump everything I have into crypto. And then, now I'm renovating I think 16 of my properties. I'm about to renovate another three of them in the next couple of months. I'm pretty much just pulling money from crypto, fixing the property back up, trying to sell it when it's high, trying to buy it when it's low. Whether you win or you lose doing that, it's a gamble. I'm pretty much just bouncing money back and forth between crypto and real estate now. My real estate funds my crypto, my crypto funds my real estate right now. I try to find a way to work in synergy.
Marcus Neto:
So, for those people that are listening to this and don't really understand crypto or have not really looked into it, what would you say to them about crypto and the market and how that's going, and what should they pay attention to and what doesn't matter, and all that stuff?
Justin Kihano:
So, I love and hate these conversations, because if I tell somebody to go out and spend a bunch of money on Ethereum, Bitcoin, and then all of a sudden we have a correction, they're going to blame me.
Marcus Neto:
Well, which one? You're listening to this on, what is this, January 27?
Justin Kihano:
We're having the worst correction...
Marcus Neto:
It was horrible.
Justin Kihano:
We've had the worst correction since 2017.
Marcus Neto:
Yeah, it's, everybody is in crypto is [crosstalk 00:12:55].
Justin Kihano:
But I am the happiest man alive, because I actually just took out a refinance on one of my properties, and I'm about to buy anywhere between 400 to 500 more Ethereum in two to three weeks. So at these prices, I'm having a field day right now. Everybody else is panicking.
Marcus Neto:
Yeah. In a year, when it goes back up, you'll be sitting on a yacht.
Justin Kihano:
Everybody's panicking. I was comfortable buying Ethereum at 4100, 4000. I dumped a lot of money into it at 4000, 4100. Sold it near the top. Now that it's around 2400, 2500, I'm like, put double into it. It's down 40, 60% in two months. It's like Black Friday right now. But some people are doom and gloom. I see opportunity in everything. If it's up, short it. If it's down, buy it. Keep it simple. I think at least for the next 10, 15, 20 years, crypto's going to be a really solid investment in my eyes. Until something else replaces it, which, I'm not smart enough to know what that would be. Ethereum and Bitcoin already have such a solid foot in the door and a place, that I just, I don't really see...
Justin Kihano:
... solid foot in the door and a place that I just... I don't really see it going anywhere anytime soon.
Marcus Neto:
I'm not as knowledgeable as you, but from the research that I've done, I don't think it's going anywhere. I think we're just getting-
Justin Kihano:
We have countries now adopting Bitcoin. Grayscale is a huge investment firm, they just bought, it was 50,000 of... I can't remember the company name, it was not Riot. There's two different major crypto mining companies in America, Grayscale just pretty much acquired a small percentage of it. This is a huge investment firm. I mean Goldman Sachs is looking at Bitcoin-
Marcus Neto:
Yeah.
Justin Kihano:
And they're buying a lot of it.
Marcus Neto:
Until it becomes mainstream, it's still new, and it's not mainstream yet.
Justin Kihano:
There's a lot of-
Marcus Neto:
[crosstalk 00:14:54] I have to go to Coinbase, and all these other apps, and-
Justin Kihano:
I've got Kitcoin. Kitcoin's my main-
Marcus Neto:
Do all these other things. I'm on MetaMask, and purchasing things through PancakeSwap, or doing all these other stuff. Until all-
Justin Kihano:
You're getting deep into it, you're getting deep into it now.
Marcus Neto:
That's about as deep as we're going to go in this podcast.
Justin Kihano:
Yeah.
Marcus Neto:
Listen, if you want more information about this, send me an email, I'll get you hooked up with the right people.
Justin Kihano:
Yeah.
Marcus Neto:
Until it's as easy as opening it up an app, and pushing a button, the vast majority of the people will not-
Justin Kihano:
We're getting there.
Marcus Neto:
But we are getting there-
Justin Kihano:
We're getting there.
Marcus Neto:
And that's when those of us that are in it now are going to be rewarded, because the more that it becomes mainstream, the more people come in, that means more money, which drives the price of all these things up.
Justin Kihano:
We are so early, Bitcoin was made in 2008, 2010.
Marcus Neto:
Yeah.
Justin Kihano:
We are so early in this, and it's been one of the best performing assets of our generation. I mean, Ethereum's up 700%, 800% in the past year, a month ago, I don't know about now, I haven't checked-
Marcus Neto:
I was going to say, "Well, no."
Justin Kihano:
Yeah.
Marcus Neto:
If you look at it-
Justin Kihano:
Depends on when-
Marcus Neto:
Now, it's back down where it was.
Justin Kihano:
Yeah. But crypto has outperformed almost every other asset class. My real estate, cashflow's anywhere between six to 12%, and I think I've got a couple properties that are doing 15. Ethereum is blowing that out the water.
Marcus Neto:
Yeah.
Justin Kihano:
Bitcoin's blowing that out the water. You can yield farm now and get 100, 200% interest every year. It's absolutely insane. Your grandfather's mutual fund, that's paying 6%, you can beat that-
Marcus Neto:
[crosstalk 00:16:42] happy with that.
Justin Kihano:
Yeah.
Marcus Neto:
Because the saving account is going to be less than 1%.
Justin Kihano:
Like 0.05 or something.
Marcus Neto:
So when you say a number, like 100%, people's brains just... They can't [crosstalk 00:16:54] understand what that... I mean, "So you mean I put $10,000 into this investment-"
Justin Kihano:
Your interest alone is going to be 10,000 in a year, without any sort of speculation.
Marcus Neto:
It's unheard of.
Justin Kihano:
Yeah, and there's there's projects that are paying 500,000, 1500% APR, it's a little bit riskier, but I mean, there's... Crypto is a magical world, and then there's DeFi, where you can borrow against your own collateral. I mean, it's-
Marcus Neto:
Yeah.
Justin Kihano:
Flipping the finance world upside down, and the banks are either going to have to adopt it, or they're [crosstalk 00:17:28] going to have to change their model.
Marcus Neto:
Yeah.
Justin Kihano:
I mean, right now, I can... Don't take this as financial advice, [crosstalk 00:17:34] I can take-
Marcus Neto:
You'll hear that a lot in this.
Justin Kihano:
Let's say I take a $100,000 right now and put it into Voyager-
Marcus Neto:
Yeah.
Justin Kihano:
They're paying 9% APR right now-
Marcus Neto:
Just to have the money-
Justin Kihano:
On USDC, which is a stable coin, which never goes up or down past a dollar, you're getting 9%. So if you take a million dollars into that, that's 90 grand a year without you lifting a finger, no speculation-
Marcus Neto:
Yeah.
Justin Kihano:
It's not up, down, that's straight interest, and that's just on your cash. Ethereum can pay you anywhere between four to 6%, depending on where you stake it, but I mean-
Marcus Neto:
So pause for just a second. I feel the need to go back and explain some things, for those of you that aren't aware of how banks work, they take your money in, and then they lend that money out, and so they're only paying you a small percentage, because-
Justin Kihano:
First of all.
Marcus Neto:
They lend it out, let's say they lend it at 6% or something like that, they're keeping the difference between the 0.005, and the six or 7% that they're loaning that out at. That's how they're making their money. So when you hear about Voyager taking in U.S. dollars, which is a stable investment, when you hear about... And look, I'm just going to stop right now and say-
Justin Kihano:
Not financial advice.
Marcus Neto:
Do not take anything in this podcast as financial advice, these are ideas that you should understand, and you should go out and do your own research and figure out what you're-
Justin Kihano:
This is just our experience and history.
Marcus Neto:
Exactly. Okay, so now we've got that out of the way. So Voyager's taking that money in, and they're loaning it out at who knows-
Justin Kihano:
They're supplying liquidity to somebody else.
Marcus Neto:
Yeah, but so it's nothing for them to do a 9% interest rate, because they're probably-
Justin Kihano:
[crosstalk 00:19:13] 20, 30, 40 plus-
Marcus Neto:
Yeah, exactly.
Justin Kihano:
Just off their USDC.
Marcus Neto:
Yeah, and also, they're probably investing that in other coins that are also growing and so on. And so when we talk about disrupting, or the DeFi world where I, Marcus Neto, if I have $10,000 in Bitcoin, which isn't even one coin, but... And so if I take $10,000 in Bitcoin, and I manage to invest that, stake it, whatever, then I can get some level of return back.
Justin Kihano:
That a bank's not going to be able to match.
Marcus Neto:
That a bank's not going to be able to match, and guess what? I still own the Bitcoin, so if it goes up, I still have an asset that's gone up in value, and it's generating revenue. So it's almost like the rental properties that you're buying in a way.
Justin Kihano:
It's digital real estate.
Marcus Neto:
Yeah, I felt the need to kind of explain that, because a lot of people, those of us... And no way shape or form do I know as much as you about crypto, but for those of us that started talking about this stuff, it is a foreign language to other people-
Justin Kihano:
Yes.
Marcus Neto:
Outside of the industry. We have a friend, David Owen, and I know that you're involved in the whole DeFi efforts, the consulting group that you and Kevin and David have, and the one thing that I told him, and I'll say it to you here on the podcast is, if you can break this down and make it simple, you guys will make a ton of money, and you'll bring a lot more money into crypto, which makes you more money-
Justin Kihano:
Right.
Marcus Neto:
And it's the whole [inaudible 00:20:48] thing.
Justin Kihano:
[inaudible 00:20:48] is a king among kings.
Marcus Neto:
He is a king among kings, and he's made more millionaires than you and I will ever make.
Justin Kihano:
I can agree with that.
Marcus Neto:
So [inaudible 00:20:58] is a guy who went to University of South Alabama, and got involved in crypto back when Bitcoin was $400 [crosstalk 00:21:06] or something like that, he was early.
Justin Kihano:
He was probably eight, nine years deep into it now, he was pretty deep-
Marcus Neto:
He was early into Bitcoin. And he has a Facebook group that I'm a member of, you don't pay to become a member of this, you just-
Justin Kihano:
You have to get invited. You have to be invited now.
Marcus Neto:
Yeah, you have to be invited. He just gives away all this information and breaks it down, and there are other people in the group that literally will go step-by-step and provide tutorials on how to buy certain coins and stuff. Because it is quite confusing, but what they're doing is, not only are they educating, but they're bringing people in, [crosstalk 00:21:39] they have an audience now, so they have authority, and then they-
Justin Kihano:
[crosstalk 00:21:43] 12, 13,000 members now?
Marcus Neto:
Yeah, I mean it's-
Justin Kihano:
I got into the group when there was two or 3000.
Marcus Neto:
Yeah.
Justin Kihano:
It was way back in the day.
Marcus Neto:
It's interesting to watch, because cryptocurrency isn't going anywhere, not for a long time at least, we agree on that. And it's just interesting for me, because I have a technology background, so it's a little bit easier for me to understand some of this stuff, but when I talk to people outside of the group, or whatever, it's like reading a foreign language to them.
Justin Kihano:
It pretty much is, it pretty much is at this point. I mean, we're in the new gold rush, pretty much.
Marcus Neto:
Yeah.
Justin Kihano:
We're in a brand new financial revolution. They keep printing more and more money, I mean, it's become... It was an issue years ago, [crosstalk 00:22:35] now it's almost a crisis.
Marcus Neto:
It is definitely a crisis.
Justin Kihano:
When you buy a bag of groceries now it costs you a hell of a lot more than a year ago, two years ago.
Marcus Neto:
Hell yeah.
Justin Kihano:
And it could get a lot worse quickly.
Marcus Neto:
I'll use this as an example, and I don't know if this holds true, but I like pints of ice cream, whether it's Ben & Jerry's, Haagen Dazs, whatever. I'm not going to eat the jugs of ice cream, I'm going to eat the good stuff. Life's too short to eat crappy ice cream. And so Haagen Dazs' ice cream, for the longest time, was $4.30 for a pint. A couple months ago, I went into Publix, and it had jumped. And within a week or two, it had jumped a dollar. Supply chain issues may have caused that, but also there's some level of inflation that was built into that as well.
Justin Kihano:
These prices might be locked in, though.
Marcus Neto:
They are definitely locked in, it's not going-
Justin Kihano:
They're not going to go back down, the manufacturers know they can get this money now.
Marcus Neto:
Exactly, so they are locked in. So for those of us that are trying to make a better future for ourselves, you need to listen to what he's saying, because the assets that he purchased... He was inspired by Grant Cardone, and now he's got assets that are now spitting out cash, and guess what? They're also increasing in value, like the real estate market-
Justin Kihano:
My real estate has been treating me really nice the past couple years.
Marcus Neto:
Yeah.
Justin Kihano:
Multifamily is now a very sought after investment. People are bidding for them. It's so hard to find cashflow now. Companies are just throwing money into apartments, just to be able to just hedge against inflation right now.
Marcus Neto:
Yeah.
Justin Kihano:
I mean, you used to be able to get apartments at six to 8% cap rates all over the place, now three to 4% is lucky.
Marcus Neto:
Yeah.
Justin Kihano:
That's less than what the mortgage usually is-
Marcus Neto:
Yeah.
Justin Kihano:
It's less than the interest rate.
Marcus Neto:
Yeah.
Justin Kihano:
I don't see how a lot of people are doing it now. You can't find cashflow in California, New York. I mean, Miami, it's getting harder and harder to find cashflow.
Marcus Neto:
It's a loaded question, why can't you find cashflow? It's not just because everybody-
Justin Kihano:
Real estate prices are going up. People are bidding for it. People are dumping more and more money into it. We're arguably at the top of the cycle.
Marcus Neto:
Yeah.
Justin Kihano:
I don't like to play the crystal ball game, things have been going up for so long, what goes up has to-
Marcus Neto:
Has to come down.
Justin Kihano:
Correct, it has to come down. When? I think whenever inflation gets addressed a little bit heavier, and it's making a lot of people mad right now, that they just keep printing money, but when that money machine slows down-
Marcus Neto:
It'll be painful.
Justin Kihano:
There's going to be a lot less money being dumped into these stocks, real estate, crypto, even too. I think that's when the correction's going to start happening, is when they really address the magical money printer-
Marcus Neto:
Yeah.
Justin Kihano:
And when that slows down, people might start getting hurt.
Marcus Neto:
Yeah.
Justin Kihano:
Because right now, we're just pretty much feeding the fire with... Right now, the tender is your money. They're not throwing wood in the fire, they're just throwing paper into the fire-
Marcus Neto:
Yeah.
Justin Kihano:
Right now.
Marcus Neto:
And I'll illustrate it in this manner, currently, we're building a house, and so we're living in Highland at Springhill, which is, I'd say one of the nicest, if not the nicest apartment complex in Mobile. And so they have a waiting list of people that would love to-
Justin Kihano:
About two or three years?
Marcus Neto:
No, [crosstalk 00:25:53] I don't even know if it's that, but I mean, they have a waiting list of people-
Justin Kihano:
Yeah.
Marcus Neto:
That would love to live there that can't get in, because they're absolutely full. And the prices at Highlands at Springhill, for a studio efficiency type apartment, are probably in the neighborhood of 1,400, $1,500.
Justin Kihano:
Absolutely crazy, isn't it?
Marcus Neto:
And if you want to-
Justin Kihano:
It's good for them-
Marcus Neto:
If you want-
Justin Kihano:
Bad for you, if you're trying to buy.
Marcus Neto:
Yeah, if you want a three bedroom apartment, because they have one, two, and three bedroom apartments, if you're looking in at a three bedroom apartment, you're looking at $2,200 a month.
Justin Kihano:
That's-
Marcus Neto:
They are absolutely full.
Justin Kihano:
That's a mortgage. [crosstalk 00:26:28]
Marcus Neto:
And they have 250 units. So do the math, I did it one point in time, if you take an average-
Justin Kihano:
You're making $2 million a month.
Marcus Neto:
Well, it's not two million, [crosstalk 00:26:39] their rent that they're bringing in is half a million dollars a month, at least, at a low end, 450, $500,000 a month. Their mortgage is not $400,000 a month-
Justin Kihano:
It's probably about three fourths of that or half that.
Marcus Neto:
Yeah, exactly. And they're absolutely booked, and they could sell them all over again tomorrow if they needed to, because there are that many people that want that. And so as a businessperson, I'm like, "Man, what would it take to build two more of those?"
Justin Kihano:
First off, labor is through the roof.
Marcus Neto:
Yeah.
Justin Kihano:
Material is through the roof.
Marcus Neto:
It was a rhetorical question-
Justin Kihano:
Yeah.
Marcus Neto:
But you get what I'm saying.
Justin Kihano:
I definitely get it, it's hard.
Marcus Neto:
Even if it was more expensive than what they paid by a factor of 25, 30%, you're still going to end up in the positive, because the math-
Justin Kihano:
Yeah.
Marcus Neto:
Just works out. So-
Justin Kihano:
I got lucky, I got into the multifamily industry-
Marcus Neto:
Early.
Justin Kihano:
In around 2015, 2016, 2017. I got in at a really good time. There was a lot of product, cashflow was available, we didn't have this massive craze of a lot of people and not a lot of inventory. Right now, there's a lot of buyers and there's not a lot of inventory, [crosstalk 00:28:02] horrible for the buyers, wonderful for the sellers...
Justin Kihano:
Inventory. Horrible for the buyers. Wonderful for the sellers.
Marcus Neto:
You know what's funny though? In 10 years, there'll be people sitting in your seat saying the same thing that you're saying now.
Justin Kihano:
Probably. It's probably going to get worse. I tell a lot of my friends-
Marcus Neto:
You know I meant they're going to be saying the same thing in the sense that it's not as bad as what we think it is, because it will... Now granted, we'll have corrections, but everything is usually up and to the right. So in 10 years I'm convinced somebody will be sitting, maybe this is-
Justin Kihano:
Prices are ridiculous right now. Can't' find a house.
Marcus Neto:
They'll be saying the same thing, but they'll be doing quite well at it. So, it's interesting to me. But real quick, just in a list format, so you had your real estate license, you went into rental properties. You are heavily invested in crypto. Is there anything else that you do?
Justin Kihano:
That pretty much keeps me busy. That's about it, besides social media, YouTube.
Marcus Neto:
By all means, that's plenty.
Justin Kihano:
But yeah, real estate's such a vast field. Crypto's such a vast field. You could devote all of your time to either one of those and be massively successful.
Marcus Neto:
And so one of the things that you have done is you've started with a couple of other guys. You've started a consulting firm, as best as I can describe it, for crypto. Do you want to talk about that any?
Justin Kihano:
Yeah. I mean, mostly it's just we're trying to make it easier to adapt crypto and that's a hard thing to do. Trying to make everything simple in the crypto world is a very hard thing to do. It's so vast. There's so much to learn-
Marcus Neto:
And it's changing-
Justin Kihano:
We're trying to create a course to help people understand, but by the time we get halfway through the course, we got to make a whole new section. It changes so fast that it's almost hard to even make a course on it right now. So we're pretty much, we're swapping over to mostly fundamentals, like what projects to look for, how to set up a coin base.
Marcus Neto:
How to assess or-
Justin Kihano:
Yeah, like tokenomics, what is a market cap? Just simple stuff like that, but we can't tell somebody, "Hey, buy this coin." Because by the time somebody views it six months later, that coin could either boom, bust. You could be buying it too late.
Marcus Neto:
Could be six minutes later.
Justin Kihano:
Yeah. We went through the time where somebody's entire financial future could change at one tweet from Elon Musk. He could wreck or make an economy in one tweet. You tell somebody to buy something and all of a sudden, three days later it's worth 300% more. Or you're the guy that tells them to buy it, they wait three days, they buy it at the top. And then all of a sudden they're calling you a scam artist. I quit. I quit giving that advice a long time ago. Because whether I'm right or wrong-
Marcus Neto:
You can accept the consequences [inaudible 00:31:12]-
Justin Kihano:
Yes. But somebody else-
Marcus Neto:
For somebody else's consequences.
Justin Kihano:
Yeah. I don't like giving that advice anymore. Teach a man how to fish, but if he doesn't catch something, then he is going to blame you.
Marcus Neto:
I don't think that's the exact quote, but we'll go with it.
Justin Kihano:
Something like that. There's a quote, there's a quote. I'm probably butchering it-
Marcus Neto:
Teach a man to fish, he'll eat forever. But if you give him man a fish he eats for the day. And we flipped it. So it's really, if you give a man fish, he eats for the day, if you teach a man fish he eats forever, is the saying. I mean it still applies. And I guess one of the things that I wanted to have you on for is to illustrate that you can be in a number of different things and yes, do you mind sharing how old you are?
Justin Kihano:
26.
Marcus Neto:
This man's 26 years old, 10 million dollars worth of rental real estate that's kicking out cash-
Justin Kihano:
About a hundred thousand plus square feet worth of real estate.
Marcus Neto:
Yeah, it's just insane. So I mean like you make... I'm not twice your age. God, I can't believe I just said that.
Justin Kihano:
Don't say that, don't say that again-
Marcus Neto:
But it pains me to hear this because you're so far even further along than I am right now. I have no idea where you're going to be in 10 years.
Justin Kihano:
Scary.
Marcus Neto:
It's just been really interesting for me to follow you and to know David a little bit more, and of course I've known Kevin Mueller for years and he's doing a lot of stuff with you guys.
Justin Kihano:
I started at 18 though. Most people get that red pill awakening moment when they're in their thirties or forties.
Marcus Neto:
Yeah, that's me. I was in my late thirties when [inaudible 00:32:54]-
Justin Kihano:
A lot of the times it's either you start a family, you got to knuckle up and provide for your kids. You go through a divorce; something happens in a man's life where they step out of the matrix and they basically say, "I have got to stop living like the 99%. I want financial freedom. I want physical freedom, mental freedom." It's really hard to do that. It's hard to get out of the rat race.
Justin Kihano:
Building enough cash flow or liquidity to live a comfortable life without having to clock into a nine to five is everybody's dream, but it's a hard thing to accomplish. And I knew at 18 years old, I was like, "If I just put in... If I can crunch in 40 years worth of work into five years, by the time I'm 23, I can kick my feet up and do whatever I want."
Marcus Neto:
Which you are, now.
Justin Kihano:
Which at 23, I did. I actually, I hate saying this, but I kind of retired at 23. I started making more money off my rentals than I was at my job, multiple times over. I got comfortable, but I was living a lifestyle of comfort. I wasn't saving a lot of money from it. I kind of had to budget my money. At 23, I took like a year off from working. I didn't do anything pretty much. I just traveled and snowboarded and just kind of kicked back. I was like, "I've been grinding for five years. I need to take a year off."
Justin Kihano:
And then this past year I matched five years worth of work in one year, because I just was a little bit sharper. I had a little bit better direction. I could put that a hundred percent energy into direction rather than just like a machine gun shooting all over the place. When I was 18, I was just grabbing whatever I could, trying to be successful however means possible.
Justin Kihano:
This year I'm more of a... I guess I'm more directional with it. I can focus that energy into a certain direction a little bit more efficiently. I think I bought like four or 5 million dollars worth of real estate this year, plus or minus. So I've matched my five years worth of work in one year to double my quality of life. Now it's like, if I go out to eat, I don't have to worry about the bill. If I want to go snowboarding or go on a vacation or go on a two or three week trip, I don't have to exactly look at my finances. I don't have to save up six, seven months to take a vacation if I don't want to.
Justin Kihano:
And that's something I hope everyone can experience in life, and it's possible. That's why I give out so much free game on my Facebook. I show people how to buy rentals. I tell people, "Buy rentals, give it to your kids. Every year, try to buy one property. It's doable." It's doable. It might take you 20, 30, 40 hours in a year or of your time to buy one rental property. But it'll pay you for 10, 20, 30 years. So I mean, you're going to put 40 hours worth of work in your job for somebody else to go buy a rental property. Your boss is going to take the money that you're making them. Put that towards yourself. Put it for your kids. And that's pretty much what I've been preaching the past year. One rental property a year. My formula for success, just buy one rental property a year.
Marcus Neto:
It doable, everywhere. I think it's the how to eat an elephant one bite at a time, kind of thing. So I mean, most people don't get to where you're at in the manner that you do.it takes them a lifetime of getting there. But, I think what I want this podcast to be is a marker in the sand for somebody that's listening to this that, "Oh, okay. So, that's where I need to get. Okay. Well now I know what I need"-
Justin Kihano:
How do I get to there?
Marcus Neto:
I can figure out how to get there by working backwards. I'll give this illustration. A couple years of ago as emerging leaders and we had to do a five year plan and I've done videos and blog posts and stuff like that on this. But we had to do a five year plan, which was ultimately confusing to me because it's like, "How do I plan for what my business is going to do in five years?" And they were like, "No, you need to imagine what you want your life to be like in five years. And then you work back from what your life is going to be like to tell, how many employees do I have to have? How big of a building do I have to have for all of those people? What's the revenue going to be like? What do you spend your day doing?" And all those things.
Marcus Neto:
And so that's what I want this podcast to be. If you want to be somewhere in four or five years, well knowing where you want to be is key because then you work backwards to figure out, "Okay, well, in order to be in a position where I'm no longer having to work and I can take vacations and stuff, what do I need my income to be? Okay, well then how many properties do I need in order to have that? Okay, well how many properties do I have to buy per year? Okay. Well how much income do I have to have in order to have the down payment for one of those properties to even get started? Can I leverage that property to buy other properties?" You know what I mean?
Marcus Neto:
So knowing where you want to be and having that goal set for yourself is key because that's the only way you get there.
Justin Kihano:
It's a hundred million dollar mindset right there.
Marcus Neto:
Absolutely.
Justin Kihano:
A lot of people don't even know where they want to be. you said five years from now. It's going to come quicker than you think. Just having that little bit of direction. I mean, a lot of people are lost. They're depressed. They're drowning in life, mostly because they don't even know where they want to be. I a hundred percent agree. I mean, if you're working nine to five for somebody else, not dissing it, not hating on it, but you're building somebody else's dream. If you're putting 40 hours a week in at your job, what are you doing with the rest of your time? Take 10 hours a week, hit the gym, read a book, take 10 hours on just personal development. Then take another 10 hours and apply that towards a side business. You got nothing but time in this world.
Marcus Neto:
Yeah. Instead of watching TV or any of the other things that we do with our time, whether... I mean take time to have fun, but at the same time it's amazing to me how many people will waste 20 hours on a weekend just watching football.
Justin Kihano:
I guess a little shift to that would be, if you are out with your friends drinking every night, maybe pick better friends. I think the one thing I've learned this year is keep better company. I've strived to surround myself with better people. They don't have to be better than me financially, just better people that are moving forward in life. I think most of my mistakes in life have come from surrounding myself with the wrong people that just derailed me from my path.
Marcus Neto:
The old saying is, you're a sum of the-
Justin Kihano:
Five friends that you, yeah.
Marcus Neto:
[inaudible 00:39:31].
Justin Kihano:
You are not stronger than peer pressure. I promise you. It's stronger than you. I tried to fight that for years, just hanging around complacent people, hanging around people that are doing bad things. If you're out at a bar every night, I'd be willing to bet there might be one quality person and they're out of 20. Most of them are just in there getting drunk, not living productive lives. They're probably in there drowning their sorrows. You might have one positive conversation in that bar. That's not good odds. It' definitely not good odds. If you're drinking on your couch with your college buddies every Sunday watching football and their lives are going downhill, I'd be willing to bet yours is about to start.
Justin Kihano:
Surrounding yourself with better friends. Pick 2 or 3, 4, 5. If you have five good friends, I applaud you. You are a rich man if you have five good friends. Pick two or three friends and tell them what you want to do. This year I've started a networking group with me and one of my best friends. We meet every Tuesday now and it's called a goal getters group. We write down our yearly goals and we keep track of each other.
Justin Kihano:
So every week we meet and say, "How's your work going?" Three business goals, three personal goals. We keep each other accountable. And now we've got our group, we started out with just me and my friend Lindsay. Now we're up to almost 10 people that we meet every Tuesday. It's just nothing but positive conversations like, "Hey, what did you do to win this week? What did you do to lose? Tell us what you did to lose and we're going to compare notes and see how somebody else might learn from that."
Marcus Neto:
Well, it's like having 10 other people that are-
Justin Kihano:
10-
Marcus Neto:
Willing to share their experiences and shortcut things for you as well. So if somebody else has something that was a difficulty, or what other people would term a failure, "Well, okay. I'm not going to do that."
Justin Kihano:
No, that's more valuable than... I can tell you what to do all day long. That's cool. Anybody can tell you what to do. Eat an apple a day, go to the gym, do something cool. There's some advice I could give you on what not to do that'd be even more important. Ask an older man who's in his 60's, 70's what his biggest regret is in life. I guarantee you that is a conversation you need to listen to. Meeting with my friends every Tuesday for an hour, just to discuss our goals and create a positive environment, is probably 50% of the reason why I was able to match five years worth of work this year.
Marcus Neto:
That's incredible.
Justin Kihano:
I would probably... I could confidently say, meeting with my friends once a week, just-
Justin Kihano:
I could confidently say meeting with my friends once a week just to discuss our goals kept me in line, kept me focused, kept my head out of the gutter. That's probably the number one reason for my success this past year, along with good market and everything else. But I mean, it's keeping good company is super important. And if you don't have that, find it, just try to find.
Justin Kihano:
I guarantee you everybody has those one or two people on their Facebook that's killing it. Message them and say, "Hey, I want to meet once a week for coffee. Let's get a group of three or four people, let's all discuss our goals. We'll talk crypto, stocks, contracting, real estate" whatever it is, there's an industry that you probably don't know that much of that you can learn. That's financial advice, I'd put that there. I'll give that my seal.
Marcus Neto:
You don't know how difficult it was for him to say that folks.
Justin Kihano:
Yeah, I'll give you my seal for that. If you meet with your positive friends once a week-
Marcus Neto:
That's financial advice, because you will be wealthier for having done that.
Justin Kihano:
I guarantee you if you meet with your friends once a week and you discuss your financial goals, tell them you want to make $100K in a year, tell them you want to buy one rental property a year. If they're good friends, they'll keep you accountable.
Marcus Neto:
And it will happen in a [crosstalk 00:43:19].
Justin Kihano:
I will stamp that one, and you know.
Marcus Neto:
So I'm a going to pause you for just a second, because those of you that listen to this on a regular basis, know that I usually have a bunch of questions that I ask, and they're all meant to prompt conversations that we're currently having. How did you start your business? Do you remember the first rental property that made you think that, hey, there might be something to this.
Marcus Neto:
If you were talking to someone and wanted to get started running their own business, what's the one bit of wisdom that you would impart to them. Hey, surround yourself with good people.
Justin Kihano:
That's number one.
Marcus Neto:
What is the one person that motivates you? Well, I guess we did cover that Grant Cardone.
Justin Kihano:
Grant Cardone.
Marcus Neto:
I mean, are there any books, podcast, people or organizations that have been helpful in moving you forward? Well, guess what?
Justin Kihano:
Grant Cardone.
Marcus Neto:
10X, Sell or Be Sold. I'm sure there are probably some other organizations that have been helpful to you, including the organization that you started-
Justin Kihano:
You can find it.
Marcus Neto:
... which is your positive friends group. What's the most important thing that you've learned about running a business? Actually, what is the most important thing that you've learned about running a business?
Justin Kihano:
You are the business personally. So personal development is super important. If you're the manager of a business, you are leading it. If you own the business, you are the business. Being able to influence people in a positive direction is super important.
Justin Kihano:
If I gave somebody random a million dollars, they'd probably lose it in less than a year. It's so important to become a millionaire in the head first, and acquire those skills before you actually get your hands on a million dollars, you'll blow a million dollars so quick.
Justin Kihano:
Most important thing in business is you need to continuously be educating yourself. Doesn't necessarily mean college, doesn't mean go take four different degrees now, keep learning. I watch a minimum worth an hour's worth of YouTube a day. Most days it's two to three and it's either on crypto, real estate, health, something that's going to elevate me to the next level. You need to do that if you're running a business.
Justin Kihano:
I mean, you know this all too well. I mean you've probably spent hundreds and hundreds and or thousands of hours reading, going to seminars, invest in yourself, definitely invest in yourself mentally, build the skills to live a successful life. I mean, go to a 10X con like a conference, go to any crypto seminars that you can learn something new, just get out there and network, keep building your skills mentally.
Justin Kihano:
Always be learning. I think that's the number one thing. I mean, you will never be a master. I mean, you're never going to 100% master anything, it's called practicing real estate for a reason practicing wall-
Marcus Neto:
Right.
Justin Kihano:
... you're always leveling up.
Marcus Neto:
And I mean, I think the same holds true for any industry. But I was picking up my phone just a minute ago, I wasn't trying to be rude because it's a personal thing, but I just don't like to be on it while I'm in these.
Justin Kihano:
Yeah, I get.
Marcus Neto:
But there was a book that I read, I can't find it. I think it was servant leadership and it was written by, I don't think it was Jocko Willink, it was a military.
Justin Kihano:
Jackal is an animal.
Marcus Neto:
Yeah, but I mean, the basic premise of it is if you own a company, then you are responsible for everything. And so whether the employee that's doing great or the employee that's doing bad, whether it's the income that's doing great or the income that's doing bad-
Justin Kihano:
It's your fault.
Marcus Neto:
... it's all your fault. And it just goes to show like you need to constantly looking for ways to improve, constantly looking for ways to streamline processes, and so on and so forth. But those are all things that we've talked about quite a bit on this podcast. But so tell me like, how do you like to unwind?
Justin Kihano:
That has been a thing that I've really been working on the past three or four months. I get into this, like it's like a toxic grind mode where it 16, 18 hours a day. I am just going a hundred miles an hour and it becomes exhausting after four or five or six months, we'll start burning out.
Justin Kihano:
Recently, it's just been snowboarding, traveling, I'm in the gym at least an hour a day. If it wasn't for that, I would be probably alcoholic drug addict. That's where all my energy goes is at the gym. That keeps me grounded. Being able to go in there, put all my energy into the weights, definitely helps me unwind.
Marcus Neto:
Well, there's definitely something very cathartic about-
Justin Kihano:
It's meditation almost.
Marcus Neto:
... expending that energy, because that energy would manifest itself in negative ways-
Justin Kihano:
Could-
Marcus Neto:
... if you get it out.
Justin Kihano:
... very much could.
Marcus Neto:
Yeah. And so, I highly suggest that if any of you are going well, actually no, all of you-
Justin Kihano:
Everybody go to the gym.
Marcus Neto:
... need to be lifting weights, need to be exercising. Cardio's okay, but weights is where it's at, it's something that you can do for a long time. It's helps you build muscle mass, which increases your resting metabolism. There's so many different benefits, and it's easy. I mean, you can get memberships at places for $10 a month. I mean, you really don't have any excuse.
Justin Kihano:
There's no excuse. I mean go outside and do some pushups. If you were a man, there's no excuse short of like medical or something out of the blue, why you should not be able to do at least 10 pushups, some pull-ups, run at least half a mile a mile. You need to be able bodied if circumstances allow, of course.
Justin Kihano:
If you have some sort of weird illness, obviously, but spend an hour a day, 30 minutes a day, just walking, running, lifting some weights. It's hard to perform financially if you're out of shape physically.
Marcus Neto:
For sure.
Justin Kihano:
If you're huffing and puffing, walking up a staircase, I would be willing to bet that's going to roll over into your financial life.
Marcus Neto:
Yeah. There are a number of people that we probably follow that are successful business people that are worth hundreds of millions of dollars and every single one of them, I bet you have some has some sort of workout regimen and they all have a practice of self care. Because if you are empty, and you have no ability to give, then you're dead in the water. Like there's nowhere for you to go at that point. So you have to take care of yourself.
Justin Kihano:
What are you working for though. I mean, if you're going to be dead at 60 from a heart attack, because you've been eating McDonald's every day for your entire life, I mean, what's the point of that too.
Marcus Neto:
Exactly. Yeah.
Justin Kihano:
Just pay attention to your body. You wake up, if you're overweight, lose it, if you're underweight, eat and lift some weights.
Marcus Neto:
Right.
Justin Kihano:
Just be well rounded physically.
Marcus Neto:
Yeah.
Justin Kihano:
You don't have to be a bodybuilder, you don't have to be a supermodel, just get in the gym and-
Marcus Neto:
Consistency is key.
Justin Kihano:
... and just move, get up and move. If you're not moving, you're dying.
Marcus Neto:
Right. For sure. It's just like businesses, if they're not growing, they're dying so. Well, I want to thank you again for coming on the podcast. Actually, before I say that, where can people find out more information about you or-
Justin Kihano:
Type in my name? Every handle I have Instagram, Justin Kihano.
Marcus Neto:
I was going to say, because your name is like-
Justin Kihano:
K-I-H-A-N-O.
Marcus Neto:
... so almost guaranteed that I can get it.
Justin Kihano:
You're not going to find another-
Marcus Neto:
Yeah.
Justin Kihano:
... I think if you type in Kihano just my last name alone, you're going to find me, there's not many of us.
Marcus Neto:
Okay. Very good. Well, I want to thank you again for coming on the podcast to wrap up any final thoughts or comments you'd like to share.
Justin Kihano:
I think we covered just about everything.
Marcus Neto:
I want to go on record. This is probably the longest podcast that we've ever had, but I want to say thank you because I think there's a lot of information in here. And if you are listening to this and wondering why you listen to it, then go back and listen to it again. Because there was so much in this that you have no idea.
Justin Kihano:
There's one rental property year, meet with your friends once a week for an hour, get in the gym. Just keep just wrap it up, just keep it simple.
Marcus Neto:
[crosstalk 00:51:37] Those are the three thing.
Justin Kihano:
Three formula for success. Let me wrap, it has taken-
Marcus Neto:
You started a business on that.
Justin Kihano:
... me eight years to figure out those three things. I'm going to give it to you, and once its been like 30, 40 minutes, get in the gym, meet with your friends, buy one rental property.
Marcus Neto:
There you go.
Justin Kihano:
And just keep it simple.
Marcus Neto:
Yeah.
Justin Kihano:
Positive friends.
Marcus Neto:
And he gave that to you for free. How many people would charge thousands of dollars to find that out.
Justin Kihano:
It's cost me several millions of dollars to find that out years of research. Here you go, it's for free.
Marcus Neto:
There you go. Well, Justin, I appreciate your willingness to sit with me and share your journey as a business owner and entrepreneur. It's been great talking with you, man.
Justin Kihano:
Appreciate you having man.
