On this episode of The Passive Income Attorney, Seth talks to John Blanton. John and Seth talk about passive vs. active investing as well as how John can juggle his investments while working a W2 job. Enjoy!

 

“I think it’s just, it’s peace of mind. I think that’s the biggest part of how passive income has impacted my life. It gives me a lot more peace of mind than if I didn’t have that income coming in.”

 

HIGHLIGHTS:

0:00 – Intro
1:56 – John explains when he had his “aha” moment, realising that he could make money outside of his 401k and his W2 job
4:29 – John tells us what kind of investments he got into after his “aha” moment
5:48 – John explains how he once didn’t take investing seriously and explains some things that he invested in and some lessons he learned from those experiences
10:58 – Seth asks how John found his first deal
11:20 – John advises you to look at specific markets to find a good investing deal and he explains how he did it himself
18:17 – Seth is doing all of this so he can have more time to be with his family
20:55 – John gives his opinion on active vs. passive investing
27:05 – Seth asks how John balances a W2 job and his investments
30:01 – John talks about family, and some struggles related to COVID
30:41 – It’s time for the Freedom Four – In an alternative universe, without real estate, what would you be doing?
35;05 – What’s the best thing you do to keep your body and mind healthy?
36:11 – Where were you at 5 years ago and where will you be in 5 years from now?
38:39 – How has passive income changed your life?

 

FIND | JOHN BLANTON:

Podcast: Contrarian Cashflow
Youtube: Contrarian Cashflow
Website: peakcapitalgrp.com

 

FULL TRANSCRIPTION:

Seth: What’s up law nation, beautiful day to be alive. So happy that you can join me today on another episode. Today, we have an excellent episode that will motivate you, expand your mind and show you that jumping off of the stock market roller coaster does not necessarily mean that you have to quit your practice, give up your career, or even take away from your family.

Today’s guest is a great friend of mine, John Blanton. He’s a full-time, successful sales executive, but also capitalizes on a regular basis on a multitude of alternative asset strategies. He’s done buy and hold rentals, flips, wholesales, active commercial properties, passive commercial properties, and even owns a small business with his wife. He has a passion for gaining financial independence and helping others get there through investment cashflow and has just launched The Contrarian Cashflow Podcast. Now on with the show.

Seth: What’s going on, John, how are you doing today?

John: What’s up Seth. I am doing outstanding. Hope you are?

Seth: Awesome. Yeah, absolutely. 75 and sunny out here in San Diego as usual.

John: Always jealous, always jealous.

Seth: Yeah, man. Well, let’s jump right in man. So many of our listeners still have their W2 jobs and I believe that you do as well. When did you kind of have that aha moment that like, you know, this isn’t enough? Like, let me see if there’s something else I can invest in outside of my 401k or outside of, you know, stocks and bonds. Like when did you kind of have that light bulb go on?

John: Yeah, so our scenario was a little bit interesting. So, my wife and I both work in sales. So, we’re in a commission-based industry and we work for a large organization. We worked for the same company, thankfully not in the same division, so we don’t interact on a day in and day out basis, obviously that would be a little challenging. Exactly, exactly. But so, our company actually has a non-discriminatory 401k plan. So we were initially trying to put in the maximum, maximum, maximum, and then eventually it got to the point where we could only put in based off of the income that we were earning, we could only do a small portion, 4% to 5% annually. So, we started having this buildup of capital and we were just like, well, what are we going to do with this? Like, you know, what are we going to do? So of course, we thought about a restaurant, opening a gym, you know, all these different things that were a lot more time consuming. And then we came to real estate. So, the, really the big, you know, aha moment was just, we had way too much cash sitting in the bank. And at least at that time, maybe we were getting 1% or 1.5%, not the 0% that we’re getting now in the money markets. But yeah, so it took us about 12 months, we were pursuing, you know, real estate here, educating ourselves, pursuing that 1% rule. That was, you know, that was kind of our bare bones of what we were wanting here just outside, we just live right outside of Raleigh. So, we were looking primarily in Raleigh and Wake County in North Carolina.

Seth: Awesome, man. Too much cash in the bank is not a bad problem to have though, man.

John: Well, it depends how you look at it, right. I mean, it’s good to have the money there, but I mean, when you start looking at the erosion from inflation, you know, it starts to hurt a little bit. So, it’s a lot better to have it working for. It’s not a bad problem to have, but it’s a lot more advantageous to have it working for you.

Seth: Yeah, absolutely man. And I’ll tell you firsthand that owning a gym is not passive in any way, shape or form.

John: Yeah. Well that’s why we kind of, you know, naively were like, Oh, we could open a gym or a, you know, a service industry restaurant or whatever the case is. And that’s why we said, you know, we need something, we’ve got a family, we’ve got two daughters. And so, we just needed something that was, as you alluded to a little bit more passive.

Seth: Yeah. Yeah. And I’ve actually invested in a restaurant as well, not passive.

John: All right. Well now I know what not to do. I’ll just say, Hey Seth what not to do. And then I’ll make sure not to follow that path. So, I appreciate you being so upfront about, you know, giving those opportunities a chance before I have to fail into them.

Seth: There you go, man. I mean, they’re fun though. They are fun. It’s fun to be involved. I mean, it’s a different kind of a thing where you’re just, it’s your business. So, it means a lot to you than, you know, when you’re working for somebody else.

John: Absolutely. I totally agree.

Seth: So, what types of investments did you get into once you had that aha moment?

John: I mean, we’re probably just like most people getting into real estate, right? I feel like the education wasn’t as good back then as it is today, and the options didn’t seem as numerous as they are today. So just like everybody else, we started looking at townhomes, right. That was our first rental property. We thought like, Oh, we got to get a townhome. You know, cause the single-family homes were a little bit more expensive and I mean, we were very fortunate at the time. Raleigh was not priced the way it is now. I mean, you know, prices are probably 50%, 60% of what they are today, right. So, I mean, it was a really good time to be buying in this market back in 2014, 2015. And so, we started looking at town homes and even those at that time could not attain that 1% rule. And so, we just lucked out. We ran into a broker just through a random relationship back to the networking piece. And she got us some condos right near downtown that are right near in North Carolina state university that primarily rented to students and got into those, rent by the bedroom. It’s kind of an interesting concept. So, it’s kind of like a boarding room style. It’s a shared common area and then individual bath and bed four bed, four bath, a makeup. And so, we were able to kind of attain that 1% rule from those properties. And so, we jumped into a couple headfirst.

Seth: Gotcha. Cool. And you’ve got some experience in some other types as well, not just kind of your buy and hold typical rentals, right?

John: Yeah. We lost money in a lot of things. All kidding aside. Yeah, so initially I didn’t really take the investing that seriously. It was like, okay, I’ve got my broker, Tiffany, she’s looking for deals for me. If she finds something great. If not, I guess that buildup of cash will just keep growing. And at the time we were paying down our principal like crazy, right. You know, my parents are super anti debt. And so, I was like, oh my gosh, like I’m about to own this thing free and clear. And then I paid it off and I was like, oh my gosh, it’s making me another $200 bucks a month. I was like, this is not worth how much money I just put into this thing. And so, I think that was kind of the aha moment there around, Hey, how do I increase the velocity of my capital and what do I do with this additional capital? And so finally I started getting into it, Hey, I need to be more aggressive in finding opportunities to deploy this capital and expedite these returns. And so private lending seemed like something that was fairly passive. And so, I hooked up with a local, actually from Tiffany the same broker. So, you know, she’s been very helpful to me. You know, we’ve paid it forward. She’s definitely gotten some out of us too. But yeah, so she recommended a local flipper, this guy does a bunch of deals. Of course, I was nervous, but yeah, lended him the money on a flip that he was doing, which is a little bit further out. I was nervous the whole time. I was like, man, his projection seem really aggressive, there’s no way. And you know, fortunately the LTV on my loan was like 60% or 65% of what the ARV was, right. So I was very collateralized in the asset, but still, it’s still a nerve wracking to wire out North of six figures, you know, kind of hoping like, I hope this comes back, but he did a tremendous job. The project came out outstanding and he of course beat his expectations. And so, I made a couple of thousand dollars really quickly. But I was like, why am I going to watch somebody else make all this, you know, the lion’s share. My return was capped, which it was good. I mean, I got, so obviously I don’t lend out how I expect to get paid in return, but so I got two points and 12%. So, for your listeners out there, that’s pretty solid. So, I mean, I think I deployed 135. I got back like $6,000 in like 90 days. So, I mean 24 on 135. I mean, that’s pretty solid, right. That’s like a 20% annualized return relatively. So, I mean, he paid me well, right. I got compensated well. I just, it felt like tempting fate doing that over and over again and the velocity of that. So, I tried to do a couple flips myself, you know, thankfully didn’t lose any money on the projects, but a lot more time consuming for anybody considering doing flipping out there. It’s another job. Even if you’re hiring a general contractor to do it, you know, I mean, fortunately, unfortunately, I mean, the first project I did with this GC went outstanding. What I didn’t know on the front end was it was just a lipstick job. It was super simple. I probably could have done it by myself at least, you know, I’m not a blue-collar guy. And that’s kind of what hurt me and understanding some of these processes, but, you know, it was pretty much like new floor, new paint and boom, it’s done back on the market. This next deal, the two next deals we did together were extreme soup to nuts. One of them was a meth lab you know, before we got into it. And then the other one was pretty much like fallen through the floor. It was a, you know, I think unfortunately the landlord at the time, I think he had an undocumented family living in there. And so, they weren’t reporting any issues with it. And so, the floor was, there was mold. It was just a total mess. But anyways, it was a good lesson learned. I learned a lot about construction costs, about managing contractors. I’m a sucker for sob stories. So you know, I lost a lot of money on necessarily to subs trying to, you know, Hey, I got to get this to put food on my table or close this property on myself or whatever. So, I mean, I didn’t lose any money in those deals, but passive farthest thing from it. And then most recently I’ve jumped into syndications a little bit as well. And so, I think those are really intriguing because those were more on the commercial side. So, I’m actually, I’m actually pretty blended. I’m actually in an industrial deal right now, cold storage up in the Philadelphia MSA. So, it’s a distribution facility for Chick-fil-A and McDonald’s, and then I am in a self-storage deal down in Texas, right outside of DFW. And then two multi-family deals, one here in North Carolina and then one in Huntsville, Alabama. And those are plugging along pretty well all things considered. The cold storage deal is doing great, self-storage is doing great. The multi-families, so, so, you know, I mean, it’s a tough year obviously to get into a value add deal, value add deals primarily are, you know, thinner margin on the front end anyways. So you know, hopefully next year when they get a little bit more stabilized and we start getting in, seeing some of those rent bumps, you know, my cash distributions would be a little bit more consistent and more aggressive.

Seth: Gotcha. And those are all passive deals. Right?

John: Exactly. Yep. Exactly. I’m an LP in those deals. So, introduced or was introduced to the general partnership and yeah. So, I’m just along for the ride. Nothing active on there as of yet.

Seth: Right. Hold on John, one second. Something’s going on here with my recording. Cool. So those are on the passive side. So how did you go about finding that first deal?

John: Yeah, so a kind of interesting story. So, I was trying to take down something more on the active side of 12 unit, just outside of Durham here in North Carolina. And that deal ended up falling through. It just needed a lot more work than I had expected, but I’d already sold a condo at the time. And so, I had some money tied up in a 10 31. And so, the 1031 QI qualified intermediary. So those are the folks that have to actually hold the funds kind of through the transition of purchasing the new asset. He introduced me to a broker  Delaware, statutory trust or DST, which is the mailbox money of the mailbox money, you know, so it’s kind of like if you can’t sell a property, you just roll everything into a DST. So, you don’t have to pay the capital gains tax. If I would do that again, you know, who knows, but at least it’s kind of got me down that path. So, he introduced me to this broker, he got me into this cold storage deal. And then from there I was hooked. I was like, man, this is awesome. Like I just send them my investment and then each month or every quarter, they just send me a distribution and, you know, that’s really it. So that one, I didn’t really do that great of a job due diligence, the other ones actually I had met somebody in a networking, local networking event. She had said she knew this guy doing, down at Fayetteville doing a deal. So, I got up with him, they seem pretty solid, it was close. So, I could go visit the property, which I liked. The other ones just were through networking. You know, somebody said, Hey, you should talk to this guy and talk to them. You know, just being honest, I mean, the level of vetting that I did on those projects was nowhere near what it should’ve been. You know, so what I know today and the level of education that I have, I’m fortunate that I don’t think I made any mistakes of the investments that I did get into, but going back and looking at the level of due diligence that I did on the sponsors and on the projects themselves, I definitely left something to be desired. So, like I said, I think I flirted with pain. And I think you know, for whatever reason, I think fortunately I came out on top that, you know, these deals look like there’ll be pretty solid regardless of COVID and other exterior factors.

Seth: Yeah. I mean, it’s tough. You don’t know what you don’t know. So, the first deal, I mean, you’re like, oh man, I actually have access to something like this. And you think like, you know, I better jump on this opportunity and you and I are in the business. So, like we see deals all the time, but for the average investor that just knows stocks and bonds, they’re just, you know, they never see these deals. They may know they exist, but they definitely don’t think they have access to it. So yeah.

John: Absolutely. And I mean, one thing I would say is, what was really helpful to me was look at specific markets. So, you think Huntsville, Alabama, like John, are you crazy? Why are you investing in Huntsville? Why are you investing anything in Alabama? And so, one of the key indicators that I looked at was expected rent growth for markets across the entire country. And so, for those that don’t know, Huntsville, Alabama is actually a booming metropolitan area. And it’s very insulated, it’s a very diverse employment MSA. And so that was one of the reasons that I pursued that particular market and the operator that I chose to invest in actually had three assets currently owned in that market. And they were able to scale and hire a property manager dedicated strictly to their portfolio. So, you know, so I think that was just one thing that really drew me in, obviously Dallas Fort Worth. Everybody knows the growth potential there and the influx from the Northeast and from California that are heading, you know Texas. So yeah, so that was like some of the key indicators that were in my mind as to why, Hey, these deals look good, the cold storage deal I said, Hey, you know, the recession hits whatever causes it are people going to go to Chick-fil-A and McDonald’s, they’re probably going to increase their sales because people are less apt to go to. I didn’t know how right I was. You know, people can’t even go in person to restaurants. But I think those are some of the indicators that just at a high level, what I was looking from a due diligence perspective initially. Now, I am like, you know, that was like one 10th or 100th of what I do now. But those were just some of my initial thoughts as to why I thought those investments were worth making.

Seth: Right. Just kind of putting to dot, to dot. And you’re like, yeah, let’s do it. Pull the trigger.

John: Exactly. And I’ve learned so much.

Seth: What are somethings you look for now. Yeah. Yeah. So, the biggest thing is the operator, you know, I mean, you’ve really got to be comfortable with the operator and you’ve really got to be able to ask the right questions. And that’s what, it was funny. I was speaking to an operator earlier this afternoon and I was saying, I just think there’s such a lack of quality education out there and the investment opportunities within the syndication space, I feel like it had gotten so numerous that it is almost like buying stocks and bonds. And I don’t think that LPs understand the ramifications, your investment is liquid. There’s a chance you may not ever get your money back. Same with the stock. You know, the stock, you know, the company could go bankrupt or the stock could lose its value, but you know, best case scenario you are getting your capital back in five years, you know, or sometimes even 10 years. And so, it was funny cause I was looking at myself thinking about what was I even doing five years ago? You know, I mean, five years ago I was buying my first rental property. You know, what are you going to be doing in 10 years? And so, I think that’s just one thing that that investors have to be comfortable with is understanding the timeframe. And so that’s kind of like the dynamics between the private lending. So, the private lending was nice because I got my money back in 90 days. Boom! So, Outback in, Outback in, so depending on the market that you’re in, this area is really hot for flipping right now, the Raleigh Durham area is extremely hot. The reason I got out of it is because statistically speaking, it’s one of the lowest margins as far as profitability across the entire country. So, for me, I’m not smart enough or good enough to, you know, to run on lead margins. And so, but yeah, so I think that’s the one thing that people really need to do is understand the operator, make sure that they vibe with them and make sure that they have, you know, the same morals. I really kind of dig in on the person as an individual more so than the analytics of the investment opportunity, but just does the person have a good personality. Do you think you could go grab a beer with them? Do you think that this is somebody you feel comfortable being in business with for five years? So, think through the relationships you’ve had over the last five years and how many have kind of come in and out. So that’s my biggest recommendation is get yourself comfortable with the operator, understand their track, record, understand their background. The track record is important, but I would also understand their capitalization. Where are they getting their capital from? If this deal goes belly up, are they capitalized to actually make you whole, or are they capitalize to kind of steer the deal right if it goes wrong. I’m personally not afraid of newer operators, but I’m going to be digging more. And my expectations of what I’m getting in return are going to be greater. But that’s the biggest thing is you’ve really got to dig in on the operator. People kind of say, you know, what’s more important, the operator or the market, I guess I would personally try to look at markets first and then try to find network with operators that I want to be in that market. I’m very fortunate that North Carolina is very fertile and still very affordable, relatively speaking. So, for me, it’s a little bit different than a lot of people will be it in the Northeast or in California. It’s very difficult to have local opportunities that have the return profiles that they’re looking for.

Seth: That’s interesting, man. I love that you kind of dove in and said, you know, what’s the vibe you get from this guy. I mean, is he giving you kind of that creepy like salesy vibe, if it’s that, I mean, maybe you need to have another conversation with him and really dig in and see if he knows what he’s talking about. And he’s not trying to take advantage of you or anything like that because there’s a lot of syndicators out there nowadays. So, you’ve really got to, really got to vet the sponsors, especially now.

John: Hundred percent. And I mean, for me, like I’m a family guy, right? I mean, the reason I’m doing all of this is so that I can have more time freedom and I can have more time with my family. We can do things that we want. We can go on vacation. We’re not materialistic, but we like doing fun things. You know, we like going on vacation and not really worrying about, you know, Hey, you know, dinner was $200 or, you know, this Airbnb, maybe I’m a little bit of a snob, but I like Airbnb now. So, and we usually don’t stay in like downtowns or whatever like that. You know, I get that like, because I went to Nashville with some buddies and we did a high rise in Nashville or whatever, but you know, we go to the beach or whatever, it’s nice to have the house. Yeah. Of course, I’m paying a couple hundred dollars more or whatever. But so, I guess that’s like the vibe that I get. And so that’s kind of the stuff I ask the person, you know, what do they like to do on the side? What’s their why? What’s their motivation in doing this? And it’s interesting if they don’t answer that question very directly, very clearly that’s a concern to me because obviously the motivation probably is more on the financial side versus just, Hey, I’m doing this to make my life better and to make those around me better. And it’s really great to see a lot of operators now are talking about the lives that are changing within the communities and also of the residents too. So those are the things that I look for that are important to me is what’s the mark this person looking to leave on the world and in the relationships that they’ve touched. And so that’s what I would recommend any listeners is just make sure the person aligns with your values as a person, because that’s extremely important. Again, you’re going to be with this person for a minimum of likely five years, if not longer. So, make sure that you vibe and you enjoy communicating with them.

Seth: Yeah, yeah, for sure. And I think the residents are the kind of forgotten party here. Like you don’t really think about, you know, if you’re improving these properties the correct way, and you’re improving the community and where they’re living, you’re making a huge difference in the way they live and their quality of life.

John: Well, and to that point even more, I mean, a lot of operators say, you know, a lot of times the next step for these residents, if you’ve got the property into a good position is home ownership, right? So, it’s almost like a love, hate scenario, right? You hate to see the residents leave that are good residents that, you know, that pay monthly, but at the same time, it’s really exciting to see them make that transition in their life, to home ownership, if that’s their, you know, that’s their prerogative. But it’s kind of interesting. And I like seeing that because I’m in a very fortunate position. And so, you know, I like to see the impact of others and have them attain, you know, that growth curve as well.

Seth: Yeah, yeah, absolutely. So, you’ve kind of done the full gamut of real estate investing. What’s your take on active versus passive because you’ve done the past syndications. I know you’re getting into the active side now; you’ve done a ton of active real estate in the past. What’s kind of your just overall opinion on that?

John: Yeah. So, the two things are time and risk. So, do you have the time that you can invest in this, that it’s not going to impact your life negatively? What I mean by that is when I was doing the flips. So, on the two that I had the GC, the projects were about an hour and a half away from me. So, I wasn’t checking on those that frequently. And I kind of just delegated to her, which, you know, obviously came back to bite me. You know, I mean, I eventually went down there on one of the projects and was walking the project and, you know, she hadn’t done the punch list that we had talked through to get the property listed. And that was a lot of stress. And so, I probably wasn’t speaking the way that I should have properly to my wife, to my kids as I normally do, because I was just under a tremendous amount of stress, right. Because I had actually taken on investor capital to do that deal. And so I felt obligated that, you know, I got to make this person whole, if this deal goes bunk, on the deal that I did on my own, the flip I was there almost every day. I mean, I was fanatical. I did it entirely wrong, but again, it was my baby. I’d never done it before I wanted to be there every part. I wasn’t doing, you know, I ended up having to swing some hammers and, you know, do some finish and trim final aspects of it. But I was there way too often. And that was taking away my family on Saturday, on Sunday. I either had to go there on the weekend for a couple of hours in the morning. So that’s the question I ask more than anything of people is how much time can you really invest into this and depending operators and actually seeing properties and then the risk side of it. And I haven’t talked about my wife that much in this, you know, in this interview, but I think that’s the biggest thing is you’ve got to have this conversation with your significant other or those people around you that it’s going to have an impact on their life. And I’m very fortunate. I mean, like I said, we’re both in sales, right? So, we both already have probably a higher risk tolerance than most people, because I mean, I’ll tell you, I’m making a lot less money this year than I made last year. You know, COVID impacted our paychecks. And so, but that’s the risk we take, right? That’s the roller coaster that we ride. And so, she trusts me, it’s taken time. I mean, we started small, we were doing smaller rentals here and there. Now it’s getting more iterative. We’re doing these larger deals, but she trusts me, but she has that risk tolerance that if we were to lose that capital from that said investment, we’re going to make it back. We’re going to be okay. And I think that’s the conversation that people need to have with their significant others, with their spouses and with themselves. I mean, I think that’s where I see people struggle the most trying to go active is, they don’t understand the negative aspects that actually happen in their life. Now, that’s kind of like the, not sugarcoating anything, but the returns on the active side are just exponentially better than the passive side. So that’s when I say, okay, well, what are you willing to sacrifice? Are you willing to sacrifice time? Are you willing to sacrifice? You know, do you have that risk tolerance on a scale of 1 to 10 in the 8 to 10 range, well, if you’ve got that and you can knock out that 25% to 40% IRR, annualized return, that velocity of money is going to get you there that much faster. So, the thing is, it’s all about mindset. And if you need to think about it and really understand who you are and what you’re wanting as an end result. And that’s why I never really liked, you know, giving people advice, because it’s like at the end of the day, it’s all about you. You need to understand time and risk and you know, the communication with your spouse. Those are the three things. If they can answer all those questions from me, then I feel comfortable. Hey, okay, let’s talk through what makes the most sense for you, but those would be the things. So, I mean, if you’re in a career that, I’m in outside sales, right. So, I mean, unfortunately, I don’t travel at all or anything. So, you know, I’ve got my job, I’m working 40, 45 hours a week, whatever the case is. But a lot of people in, you know, careers and executive leadership or attorneys, what have you, if they’re working 70 and 80 hours a week, they’re probably not going to have that time or, you know, dealing with family stuff and whatever. And so, I’m fortunate that I’ve got the time to do things in the evenings. Of course, I’m around with my kids as much as I possibly can be. You know, they’re probably sick of me now because of COVID. But yeah, so those are the things that I really would say somebody needs to look at, but if you know, an apples to apples comparison, of course the returns inactive are way better, but it’s not an apples to apples comparison. So that I don’t think people should be looking at an active versus passive. They should look at those parameters, time, risk communication, once they’ve vetted those out. And they realized that they could make it work. Then yeah, I think active would be a route for somebody to go, but it’s a grind, man. I mean, you and I have had multiple conversations about assets that we’ve been pursuing and it’s really stressful. And, I mean, I guess to that point, I’ve lost $15,000. I’ve spent $15,000 on pursuing deals in the last 12 months. And I don’t have anything to show for it. Thankfully, I’ve got something that, you know, should close next week. That should make up for that. But you know, you don’t think my wife’s telling me, Hey, why are you spending all this money on these deals that aren’t going anywhere? So, you know, I think that’s the thing, but she trusts me. And I mean, thankfully, that trust is about to be paid off, you know, very handsomely. But that’s where I think people struggle is, you need to understand those parameters first, in my opinion. And once you understand those, then you can decide which path makes the most sense for you. But it’s not an apple to apples question. And so, I think that’s what people need to understand.

Seth: Yeah. I mean, you can get better returns, but it’s going to take time and it’s going to take effort and it’s going to take money to get those returns. And if you don’t have those things, one, two or three or whatever it might be, you know, you don’t have them. And then passively makes a lot more sense.

John: Well, so what I didn’t say was, man, there’s nothing cooler than just checking your bank statement and just have your bank online. And all of a sudden it just like boop! Distribution. I mean, so there is something to be said for, I know that there’s like that in rentals and stuff too, but it’s kind of cool. You’re just like, Oh, there’s the wire transfer from the distribution this month. So that is something about the passive side that is pretty awesome. It’s just like, it just hits your account and it’s almost like another paycheck. You’re just like, Oh, I just got paid again. So, there is, you know, there is something there on that passive side that is really exhilarating to when you just see that check coming in.

Seth: Yeah, for sure. I mean, and you do some workup. I mean, you’ve got to vet the sponsor. You’ve got to look at all the paperwork and do all that kind of stuff. But then once all that’s taken care of all the onus shifts to the operator shifts to the sponsors and you don’t have to worry about it, and you get that mailbox money.

John: Mailbox money, baby just hit my account.

Seth: Yeah, man. So how do you balance having that W2 and doing all this man?

John: Yeah. I mean, it’s definitely tough, right? I mean, I’ve got the family, I’ve got the job, I’m trying to do some of this real estate stuff. So, I mean it’s all about being conscious of your time, right? I mean, that’s something that’s extremely important to me and my wife and I, before any of this journey we talked about, that’s the most important thing to us is spending quality time together and then spending quality time around our kids. So, my dad growing up very successful corporate career, CFO for a publicly traded company. But he was traveling a lot, right. I mean, there was a time actually that he lived in Southern California in an apartment during the week. And so, I didn’t see him. He missed a lot of time in my life and that had a tremendous impact on me saying that’s not what, that was the best thing for, he felt that for our family, I don’t resent him for it by any means. I’m just saying, you know, looking back, if he could have that time back, I would be curious what his decision would be. And so, I don’t want to be in position and that’s been something that’s been extremely important to me throughout my life is being there as much as I can. And he’s there for me. I mean, you know, I love him to death. There’s nothing wrong with him. He did a great job. He provided me a tremendous childhood, but that just impacted me. And I said, that’s never going to be something that’s going to be, that’s why I don’t take a job there. I travel, or a job where I’m having to, you know, be out every night or whatever the case is. We do kind of answer, we did client events who knows what the future of client events is going to look like. But I wake up at 4.50 every morning and that gives me a solid two hours to really kind of, you know, get the meat and potatoes into it of either underwriting deals, looking at deals you know, networking, sending emails, whatever the case is. And the biggest thing is just the networking piece, right? You need to find people that you can trust and that can really expedite that learning curve. And within that, you know, I’m going to events, I’m doing things in the evening. So, you know but again, that goes back to communication in a conversation with my wife, right. I had told her, Hey, if we’re going to go down this path and we’re going to try to get to this level of financial comfort at an early age, there’s going to have to be something that’s sacrificed. And so, you know, I’m not doing it every night, but you know, once a month, twice a month, am I doing things on my own calls. I’m like, Hey, I got to go take this call real quick. Cause I got to talk to so-and-so about this or whatever the case is. So yeah, it’s just level-setting with your partner and with your family and you know, it’s pretty fun. I mean, I want the girls to understand that work is meant to be fun and how do we integrate it in our lives. So that it’s a healthy balance, right? Hey, I got to take this call right now. Not just, Hey, I’m on calls, you know, Hey, sorry, you know, honey I’m on calls between 5.00 and 8.00 when you’re home before bed. So, I think that’s the big thing is like, how do you integrate it in your life? And back to the time and risk tolerance and balanced aspect of it. How can you do that and be the person you want to be. And I’m thankful and fortunate than I am, you know, I’m able to make that balance work, to be who I need to be for my wife and for my kid.

Seth: Yeah. Yeah. So, the keys, I mean an open line of communication with your loved ones and keeping a balance and another one is just being present. So, whenever you are with your family or your friends or your loved ones, just make sure that you are present. So, you time block those things off.

John: And that’s something I’m struggling with right now, man. Like I was, I used to be so good about that. Not when I had my flips going on, but prior to that, I was so good about just putting the phone down and not worrying about it. And during COVID, I’m just like, I don’t know what it is, man. So that’s one thing that I’m still working towards is I’m checking my phone way more than I need to. There’s nothing that’s that important it’s going to be happening. So, you’re totally right. Being present in the moment and enjoying and taking advantage of that time with loved ones and the folks that are closest to you is so important. So yeah, again, it’s still a struggle that I’m working through. So, I’m not saying I’m a pro at it by any means.

Seth: Yeah. Same here, man. I think we all struggle with it, but we’ve got to just keep that kind of in the back of your mind to real us back in.

John: Absolutely. Absolutely.

Seth: All right, man, let’s jump into the freedom four.  So, in an alternative universe where you weren’t involved in real estate, what else would you be doing?

John: I don’t know, man. It’s got to be something chasing deals. I just can’t, that’s just me man. Like I can’t, yeah, if it wasn’t real estate, it would be something else. It’d be buying businesses. It would be buying and flipping cars. I don’t know, man, I’m just a junkie. So, I just, you know, being in sales, I mean, that’s just my personality. I’m extremely competitive. But also, I kind of want to find something that does offer me fulfillment and purpose. And so, for me, it’s not necessarily about the money as much as what can I do with that money to help others and stuff. So, I think it’s just, I’m not trying to build my empire to see how big I can make it from an individual perspective. I’m trying to build my empire so that I think I can do more for others around me. And you know, I just feel so fortunate from what I’ve been given in my life. And I want to make sure that I’m able to touch and help others as well. So, it would just definitely be something in regard to trying to buying and selling and closing deals, because that’s just what drives me and what I’m really passionate about.

Seth: Yeah. That’s cool man. I used to flip sports memorabilia on eBay and in college.

John: Oh my gosh, I was a baseball card junkie. I think I was probably like 10 years old and I pulled like a Chipper Jones, it was a Chipper Jones, like a serial number, like out of four or something like that. And I sold it on eBay for like $200. So yeah, I think maybe that’s what hooked me right there. I was just like, oh my gosh, like mom, dad, I just bought this pack for $3 and I just made $200. This is awesome. So, you know, I’ve lost a lot of money on baseball cards since then. So, I’m not as big into them anymore, but yeah, no, that’s awesome. I love, yeah. I love memorabilia and stuff like that. That’s a cool story.

Seth: Nice, nice. Gary V is into that stuff man, heavy.

John: I think that’s an interesting point that you bring up because I just think that shows the lunacy of how that over, not overvalued, but how high the market is right now on every type of asset. I’ve heard that wine is at a high level. I’ve heard art is at a high level. You just talked about memorabilia. So, I just, it’s an interesting time. So that would be the only thing. Like I’m never a proponent of sitting on the sidelines by any means, but I would just caution your audience out there, make sure they’re taking the steps through the due diligence to really understand what the risk profile is of that said investment because I think there’s more risk today in the market based off of the assumptions you need to make and purchasing a particular deal than there have been in anything in the near future.

And that goes back to the vetting the operators and understanding the last couple of years. Well for the audience, that’s not as astute or are kind of in that, learning on that educational ramp up for operators, anybody that bought something in 2015, 2018, realistically, regardless of how well or poorly they operated, they made a boatload of money. And so I always love operators that have taken assets full life cycle, but the reality is anybody that bought something in that timeframe between 2012 and 2018 and even, I mean, I’ve seen people buy assets in 2019 looking to flip it in 2020, and they’re making 20% to 30% on the purchase that they made on the asset. So I just, I know I’m sorry to go on a tangent there, but I just think, you know, back to the way the market is right now and conscious people need to be of what they’re paying for an asset. You also have to think what the future value of that asset is going to be. You spend your money how you want, you know, if you really want that basketball card or you really want that Van Gogh, go for it. I’m just telling you; you’re probably paying the top dollar that it’s ever had right now. And if you could wait, you know, 24 months or 36, depending on what it is, right. If it’s the van Gogh, you know, you’ve got some time, if it’s the baseball card, just go out and buy it. But just an interesting concept right now across the board, because, you know that would be an interesting person to bring on. I know people have talked about buying wine as an investment, and then, you know, I know it doesn’t kick off cash flow, but you can kind of flip it down the road, different vintages and stuff. So anyways, sorry, a total tangent, but just kind of an interesting concept, just how expensive all assets are at this point in time.

Seth: Yeah. And it just goes to show, I mean, there’s so many different things that you can invest in. I mean, you think about wine and sports memorabilia and this and that, and it’s crazy, man. I mean, you’ve got to educate yourself and make strong decisions.

John: Education above all else could not agree more.

Seth: Yeah man. So, you talked about, you almost bought a gym at one point or you’re thinking about it. So, what, you know, what’s the best thing you do to keep your mind and body healthy?

John: Yeah. So, I mean, that’s something that I’ve struggled with during COVID, so I’ve always been really good at working out. But I’m a little bit of a foodie myself and I like eating and drinking a little bit. So, you know, I try to stay active. I do a really good job working out. We’re very fortunate. I’ve got an Olympic bar here; we’ve got some CrossFit stuff. So, I’ve got some bumper plates in the gym downstairs. We’ve got some cardio equipment. So, I do have a gym membership, which I haven’t been there in a long time, because we’ve got the gear here. Thankfully it’s not too much, but yeah, so I love being active. I love taking the girls out. That’s one of my favorite activities is we go on, walks outside, we go to the park, we do different things. We actually took our daughters camping at a Lake this last weekend for the first time. So yeah, just being active, getting out with the family and yeah, just getting to escape all of this, right. The electronics, the deals, everything. Just spending time having fun and investing in the relationships that mean the most to us.

Seth: Yeah. For sure. Got to unplug a little bit and keep yourself healthy.

John: Absolutely. Absolutely.

Seth: Yeah. So where were you at five years ago and where will you be or where do you want to be five years from now?

John: Well, it’s a very you know, pertinent topic, right? Because most people that would be looking at investing in a syndication deal, that’s the timeline that they would be looking at more than likely. So, I think it’s a really interesting question. So, five years ago, yeah. I mean, jeez, hard to believe, but yeah, we were looking at those rentals the first time. And so, I think that was, you know, we were in a good spot, but I think I look at how I make income today differently, much differently than I did before. And I think that would be one thing that I would look at into the future is, you know, having a high income is great, but if you’re a W2 employee there’s really little to do to hide any of that income. And I almost look at it, you know, you’re kind of naked, I guess, you know, to the IRS. That’s kind of how I equate it sometimes because they can see everything right. Unless you want to go to jail. And I don’t want to go to jail. And so that, so I think that’s the biggest thing is, you know, so we were starting on this investing journey. Our daughters were a lot younger. And the area here has just grown around us, you know, the Raleigh Durham triangle area has just grown exponentially, which is outstanding, very fortunate to be here, very fertile employment market. But you know, the downside of that is it’s getting a lot more traffic, either cutting down a lot more trees. So, it’s just interesting. So, five years from now, where am I going to be? Yeah, man. I hope that the trajectory and where things are going right now continue to move in that direction. I mean, I think entrepreneurship is great. I really want to be able to help others. Like I said, I feel very fortunate, the success that I’ve gleaned so far, and I want to make sure that I can help others really get to where their goals are as well. The biggest thing for me is mindset. I’ve just really invested a lot in consuming content, be it podcasts, reading books, and doing different things. And so I just really hope I continue to push myself from an education perspective and a mindset perspective, because I know, and I can understand that some of the audience now is probably a little bit hesitant to say, Oh my gosh, $50,000, a $100,000, that’s a lot of money. You know, like that’s all I have in my account or that’s more than I have in my account. And I think that’s the important part is this is an iterative long-term process. You know, look at the long game. In five years, I hope I’m only halfway to where I’m going to be in 10 years. You know, so as long as I can kind of stay on that curve and continue to grow myself mentally and obviously financially, then I’ll be there. So, I mean, I just hope I’ve got a lot more time to spend with my family and do the things that I want to do and a lot more capital do it with. So yeah, I’m kind of excited to think about where I want to be in five years.

Seth: Yeah. Awesome. Man. How has passive income made your life better?

John: It’s just nice to know that it’s there. It’s nice to know that income’s coming in car breaks down, something happens. It’s just nice to be like oh, that stinks. That was a $1,000 or $2,000 expense I didn’t see coming in this month. Oh, well, you know, I’ve got that, you know, thankfully I’ve got those rentals or I’ve got that, you know, syndication deal or whatever the case is, that’s coming in on the side. And so, I think it’s just, it’s peace of mind. I mean, I guess that’s, for me, just in general, finances and money is peace of mind. The more you have, I feel like the more peace of mind it gives you. And so I think, you know, more than anything, you know, when we get some of those expenses that come in randomly, you know, whatever kid runs their bike into the car, you know, wife backs into something or, you know, I accidentally, you know, break something on the house it’s covered by the passive income we have coming in. So, I think that’s the biggest thing that how passive income has impacted my life. It gives me a lot more peace of mind than if I didn’t have that income coming in.

Seth: Boom. There it is man. This has been awesome, dude. You always bring the energy, the contrary and cashflow guy, John Blanton, where can our listeners find out more about you or contact you? What do you got for us?

John: Yeah, man. No, I really appreciate you being willing to share my story and I’m super excited. I just launched my podcast. Contrarian Cashflow. And so, the synopsis real quick is think different, earn different live fulfilled. And so I think that’s really the big thing that I would have your audience think about first is how are they going to be able to understand this and get their mind rationalized around making these investments and deploying this capital. The second thing is they are all more than capable of making any of this happen. And I think that’s the biggest thing about mindset is just, you know, I don’t know why, but until the last 12 to 18 months, I didn’t understand the capabilities that I had. And when I’ve kind of let go of a lot of those limiting beliefs, it’s just really expedited my potential and my growth.

John: And I just, I feel so fortunate to feel that way. And I want everybody else to feel that way too. So, yeah, obviously on all major streaming platforms, Contrarian Cashflow, we’ve got a YouTube channel Contrarian Cashflow on YouTube and you can find me on LinkedIn, John Blanton, or at my website, www.peakcapitalgrp.com. But man, this has been tremendous and yeah, hopefully the audience got some and out of it.

Seth: Oh, I know they did. All right, John, appreciate it.

John: Sounds good, man. I’m sure we’ll be in touch.

Seth: Absolutely.