What’s up everyone and welcome to another episode of Become A Local Leader! In today’s episode, we have David Pere, Real Estate Investor and Educator from Military to Millionaire.
Meet David Pere – Our Featured Local Leader
David is an active duty marine and has been for 11 years. He is a transportation and logistics specialist and has spent time as a recruiter for the military as well. Throughout David’s tenure, he has gotten to travel all over the world, faced adversity and he’s learned from many different cultures in the process.
He enjoys hiking, investing, and spending time with his family. In 2015, he was pointed towards real estate investing by a friend of his. After reading books and researching online, he decided to take action and bought a duplex. David lived on one side and rented the other side out to cover the mortgage payment. That moment changed his life for the better.
He is also the co-founder of the Real Estate War Room Mastermind Group and helps manage a private network of military and veteran investors seeking to grow.
You’re currently based in San Diego but were you born and raised in San Diego? Tell us a little bit about yourself.
I was born in Northern California up in Santa Rosa and I grew up in Arkansas for the majority of my youth. I got towards 18 and didn’t know what I wanted to do with my life. For me, I didn’t know what I wanted to study at school nor did I have the money for it. My grades weren’t good enough as I wasn’t an athlete so I couldn’t get a scholarship.
So, I joined the Marine Corps because you get to see the world, I got out of Arkansas and got a paycheck. It sounded like a good thing to do. Eleven years later, I don’t regret it. I’ve travelled the world and done a whole bunch of fun stuff. So, it’s been a really exciting journey. And then, I got into real estate in 2015. Someone handed me Rich Dad, Poor Dad, and that was it. I was off to the races.
What would you say that you love about being a Marine but also what you love about being in San Diego?
Well, the Marine Corps is easy. There’s a camaraderie with everybody who serves. There’s a big sense of purpose in travelling the world. It’s a very fulfilling job for the most part. Obviously, every job has things that nobody enjoys but fulfilling and it’s been enjoyable, challenging. You get to be a part of something that’s much bigger than yourself. It’s gotten me very far in life as far as just a lot of good connections and growing up and everything.
San Diego is wonderful. It’s a beautiful place. The weather is wonderful year-round. There’s a little bit too much traffic for my taste, but there’s a lot of culture, so you can kind of go anywhere. There’s Little Italy, where there are all kinds of cool stuff to do. Old Town if you want Mexican food. They got their own little subcultures in San Diego or Oceanside. You can go to a fancy Italian place one minute and then surf in the next. No matter what you love, there’s something to do here.
In terms of your investment properties and also where you live, do you invest in the same community that you live in? Or would you say that your investments are all throughout San Diego, beyond San Diego? What does that look like for you?
I actually primarily invest out of state. I got started when I was in Missouri as a recruiter. Following this, I moved from Missouri to Hawaii. We tried to buy in Hawaii and it was a little bit out of our price range. I kept investing in Missouri because I already had a bit of a team there. In MIssouri I had a good real estate agent, a good property manager and I just kind of kept doing what I was comfortable with, what I knew.
We had a duplex. We bought another duplex, a 10 unit, a single-family, 40 unit that we’ve since gotten rid of, and a couple of other properties here and there. And then I also partnered on a flip in Hawaii when I was out there. Following this, I partnered on a second flip in Hawaii too.
Then, I moved to San Diego. I’m not going to be here super, super long amount of time. And so, I looked into buying but I didn’t know just because I didn’t know how long I was going to be here. I wasn’t sure that I wanted to go ahead and pull the trigger here. So, what I did was I’m basically doing like a rental arbitrage where I am renting a house but I got the landlord to agree to let me sublet short-term rentals.
So, I’m renting the house and short term renting out two of the bedrooms. They basically pay 80% of my cost of living. And then, I get to keep the difference, obviously. And then, I reinvest that back into Missouri. I bought a duplex a month and a half ago. We bought an apartment in South Carolina too.
What would you say to somebody who’s just starting out in investing and really wants to do what you’re doing?
I always tell people to just learn network and take action. The first thing is getting set on education so reading books, listening to podcasts, just learning from people. Figure out what your five-year vision is, what your goals are. If your goal is to just have a million dollars cash in the bank, maybe you want to flip houses, but if your goal is to have a certain amount of cash flow coming in and be somewhat passive, then maybe you want to buy rentals. Or maybe you just want to stash cash somewhere that gives you a decent return. So, you want to passively invest in syndications.
I mean, there’s a lot of different options. Figure out what that looks like for you five years down the road, and then find somebody who’s doing that, who’s already achieved what you want to do and just learn everything from that. If they have a show, listen to it, if they have a book, read it, if they have a YouTube channel, watch it. If they have none of that and you’re in their area, you can find a way to bring some value to their life and grab coffee with them or something like that. But don’t ever just reach out and say pick your brain. Add value to their life.
The next piece is networking, getting around people who are doing what you want to do. I think that’s key because you read all the books in it in the world but getting around a group of people that’s like-minded and has similar goals will really push you the competitive nature of human beings. It will push you to succeed.
And then the last piece, take an action. I mean, all the researching and learning and education and talking to people in the world doesn’t help you if you don’t actually pull the trigger.
In terms of your investments, what’s the range in return?
Well, it’s an interesting answer because I’ve got a few properties that I no longer have a single dollar invested in. I have a 10 unit that I bought and we did 85%, bank financing, 10% seller financing, 5% out of pocket. And then 18 months later, I refinance, pulled all my cash out, paid off the seller financing. Now it’s 70% loan to value with a bank and it’s still cash flows like $1,000 – $1,200 dollars a month. In essence, the return is infinite because I don’t have any money left in it. I pulled it all out.
I’ve got some other deals. My most recent one is, I think 23% cash on cash. I put $17,000 and some change down. It makes about $300 a month. And then obviously, principal and everything else. That’s probably more standard is probably somewhere between 15% and 25% cash on cash return is generally what I say that I aim for. I majority of the time gone higher than that because I’ve had a lot of deals that are probably a hundred percent. That sounds kind of aggressive, you figure 300 bucks a month but you only put four grand down, that’s borderline hundred percent cash on cash return. I’ve got a couple of different deals like that.
I’ll say all that but I took a $30,000 hit on a flip I did in Missouri where the contractor just went out of business underneath me and took half my building with him. It’s a game. You’re going to take some punches in real estate.
Compared to where you started five years ago, has your strategy changed? Has your production changed over time? Would you say you’ve kind of consistently done things a certain way and it’s working for you and you’ll continue in that way?
I’m kind of a weirdo because as I grew my podcast and my following and everything and just started documenting what I was doing. I realized if I want to talk about Airbnb, I need to do it. So, I tried Airbnb. If I want to talk about flipping a home, I need to do it. So, I tried flipping a home. I’ve done a little bit of everything.
My personal favorite thing is just simply just to buy and hold rentals. My favorite property is my 10 unit but my duplexes are great because it gave me a good return on my investment and they never give me any headaches, knock on wood, yet. And so, as far as my investing strategy, ultimately, I kind of joke with people that my strategy is to buy a house and then my exit strategy is probate. I just hold it forever. Some people understand that and some people don’t. Some people would rather roll out of the property every five years and roll the capital into the next property and this that the other. That’s fine.
I like the idea of eventually owning them all free and clear and just relaxing on a beach somewhere. That’s my main strategy. I mean, I’ve been all over the place but that’s ultimately where all the arrows point. Whether I’m doing Airbnb, apartment syndication or buying a crappy house or buying a nice house, they all point towards holding, long term.
With everything that’s happened recently with COVID-19, has that affected your investments in any way?
Yeah, there’s been a little bit of an effect. I wrote an article for BiggerPockets actually. There was an article, a third of tenants didn’t pay rent. The data was pulled on the sixth of the month and a third of tenants barely ever pay rent. And then, it was over the weekend of Memorial Day or whatever. It was one of those whereby the end of that month, it was only a four or five percent drop in people who had paid rent. So, I’ve actually had my best month ever. It was May.
It’s funny, actually, because I had a tenant that I was trying to evict. They hadn’t paid rent in February and March. We were going into the eviction process, which is fairly quick and painless misery. But as we’re filing is when the eviction moratorium came up and we couldn’t evict them. So, we were like, “Oh, man. Okay. We’re stuck with this guy who’s not paying but it’s not because of COVID. He’s just not paying because he was just not paying beforehand.”
I thought that was stupid that I couldn’t get rid of him because it wasn’t COVID related but I get it. So, then he got so much money through unemployment that he caught all the way up and paid the next month. And so, in one month I basically got four months’ worth of rent from this guy. And every other tenant paid rent. I think in the three months, I’ve had one person not pay on time. And I think they actually caught up anyway.
So, all that to say, I bought a duplex in May. I got it significantly, probably 10% or 20% undervalue because the person was trying to sell due to COVID. So, I got a good deal out of it. All my tenants paid rent so I’m not complaining over here.
I know that there’s definitely potential for things to go south in the long run as people don’t pay back forbearance and whatever. But I think as long as have healthy reserves and as long as you budget higher vacancy rates right now, you’d be alright. I mean, I’m holding cash. So eventually, if something does go south, I know I can pay all my mortgages if nobody pays for six months to a year. I’m not super worried about it.
What would you say to any investors who are maybe having some issues with tenants just not paying?
The first thing is the screening. The best way to stop a bad tenant from living in your property is to screen and not let them move into your property. I think communication. It’s very easy for someone to say I’m not paying and for a landlord to get super mad and slam their fist down and say, “You owe me money.” That doesn’t solve anything. That doesn’t help anything. So immediately, when all this popped up, we sent out a letter.
I don’t do any of this myself. I have property managers so that I don’t have to deal with it but I called my property manager and together we drafted it. We sent out a letter to every tenant. “Look we know what’s going on. We really hope that you don’t need to but we’re willing to work with you. If something comes up, let us know.” And we also gave them instructions on how to file for the FPUC, the Federal Pandemic Unemployment Compensation so that they knew, “Hey, if this happens, here’s how you apply for unemployment. Here’s how you apply for the Federal Unemployment Benefit.” So now they know that we’re there trying to help them and also, we know that they can’t say they didn’t know how to do unemployment.
Ironically, in Missouri, if you were unemployed, you could make $11,000 a year more than the median income in my town. It’s kind of like one of those like, “Hey, you just got a pay raise, you better pay me rent because I helped you.”
The one or two people who had some issues were more than willing to reach out and say, “Hey, this is what’s going on.” and communicate with us and they paid a little bit and then we pay back some on the back end. And so, I think opening that line of communication, which I say all this but I’ll tell you, I am definitely the landlord who wants to slam my fist and say, “Stop being terrible with your finances.” Give me money because I would never put myself in a situation where I couldn’t budget for rent, but that doesn’t help anything.
How would you say you build relationships right now?
Well, the first thing I do is talk to everyone. I mean, it’s very easy, especially as you grow a platform, I’ve gotten very busy. It’s very easy to say, “I don’t know what value this person brings to me like, yeah, you know, I’ll put it off.” So rather than do that, I always open up a 10 or 15-minute phone call slot for people throughout my day. They can schedule it on my link. It might be two or three weeks down the road but it’s there. And it makes them call me so that there’s some effort, right? If they don’t call, I’m not going to go out of my way to reach out. But if you reach out, you want to talk to me, and then I schedule with you and you follow through.
And so, I think that’s key because it’s very easy not to when you get super busy. But you never know what kind of connections you’re going to miss out on.
Here’s a prime example. I had lunch with a gentleman earlier this week. Lunch is just not convenient for me when I’m working. I don’t get a whole lot of time to just break away for lunch in a while where I currently work. So, it was not convenient but I was like, “Yeah, this guy. He seems cool. No big red flags. Yeah, sure. We’ll do lunch.” I made it work. He happens to be friends with a guy who I’ve been trying to get on my podcast for a while. He’s big enough that he doesn’t really check social media and it’s hard to get a hold of him. So, I think perhaps down the road that’ll be fruitful, that I can finally get an introduction to get him on the podcast. But I had no idea. There was just chance connection.
And so, I think it’s key for you to just stay open and talk to people. You should always be networking and building relationships. And if you just focus on helping people out, answering questions, and not thinking of things like what’s in it for you with money and just focus on building relationships, you’ll get a lot out of it.
Who would you say has referred your business in the past?
A lot of people. I think networking is kind of my superpower. That’s a hard question to answer just because it’s a lot. A lot of people have referred me business. Part of what I do is refer clients over to other agents because as my community grows, I have a lot of military investors looking to be connected with local agents or real estate agents who understand how to utilize VA loan and make it competitive for offers, good VA lenders. And so, as I get these requests in, I’m referring out a lot of business and so just a lot of connections in general. But the more you grow, the more you realize that they say three degrees of separation. Everybody knows everybody, right? There’s a way to find some way to contact somebody if you want to.
What percent of your new business is relationships versus referrals versus advertising?
I don’t advertise it all. It’s probably all referrals or my platform coming through whether people come in through podcasts and whatnot. I mean, I still find deals organic ways and whatnot. But my investors in those last syndication were people that I met through my platform. One of them was from a referral. Most of them were from people who’ve just been following me for a little while. Most of my leads are either through the platform or introduced to me by, for example, I had one two days ago that was introduced to me by a lender. I think it’s all networking and referrals or content marketing, I guess. But I consider that networking.
Would you say there’s anything that you’ve done in terms of marketing, referrals, relationship building, any of these things that you’ve realized doesn’t really work for you that you could share with us?
It’s a personality thing. The thing that didn’t work for me the longest was Pinterest. Now, I have recently got a little bit more success on Pinterest and I figured the secret out. So, if you’re a guy and you’re listening to this, the secret is that Pinterest is almost all females. If you’re a dude, no matter what you do, it’s not going to appeal. So, my virtual assistant is not a guy and she is awesome. Ever since she started doing my infographics, Pinterest is gone up like 100 and something percent for traffic. I think that was key for me was realizing I can’t relate to this demographic. I’m through and through not relatable to this demographic, which is fine! I need to embrace that. And as soon as I realized I’m the wrong person to be creating this content and made a change, it started working.
I think that’s the key to content marketing, in general, is just figuring out your personality. I’m great on Instagram and I have a great Facebook group. But nobody likes me at all on Tik Tok. My LinkedIn could care less about me buy my podcast is okay. My YouTube, if I’m being honest would be a lot better if I had a personality that everybody was like, “Oh, that’s awesome”. But I’m kind of an either love me or you hate me type.
I think just kind of realizing your own personal strengths. It’s a personality thing. Figure out which personality you have that goes with which platform and then knuckle down on that one and you’ll be successful.
In terms of just determining a budget for marketing, what would you recommend? How do you determine what you’re going to spend for marketing?
Honestly, most of my stuff is organic. It’s a lot of sharing, building a community, getting other people to share. I think there’s a large amount of value in not paying for marketing but getting others to work with you. If I have someone on my podcast, I make them out to be an absolute Rockstar and then send them an email. “Hey, if you click this, it will tweet. If you click this, it will Facebook. If you click this, it will whatever. Can you share this? Cool, awesome. Hey, I made you look awesome. Here’s a quote.” And people will share that, and then that’s free marketing.
As far as the marketing budget, I say that but then I’ll go and spend a thousand dollars on a camera. I think figuring out a budget is less about saying I can afford to spend this much and more about saying like, “Where do my dollars work the best for me?” and “where can I make that money back?”
So, if I spend 10 bucks on a Facebook ad and it does nothing, then I’m not going to spend another 10 bucks on a Facebook ad just because my budget was $20. But if I spent 10 bucks on a Facebook ad and it gets me a thousand people to my website, and of those thousand two of them buy my course or whatever, then I’m going to go spend half of whatever I got off that course on that marketing. And if I put another hundred bucks into it, and it happens again, well, then I’m going to put half back in.
So, I don’t necessarily set a budget. I test the waters and if it takes off, I dumped a bunch of money into it. But realistically, most of my stuff has been organic growth at this point. There’s a lot of just sharing amongst my community and getting people excited to share stuff.
In terms of your podcast and even your investments and all the people you interact with, what would you say that you hear repeatedly about yourself? What do people rave about when it comes to you?
I’m authentic. I have no problem talking about failures. I have no problem being my brash self, take it or leave it. Self-degrading or whatever. I got no problem talking smack and being a jerk and telling people what I think or how it is whether they like to hear it or not. And so, I guess authenticity is one. That’s probably the most important one out of them actually. I mean there’s a couple of different things but that transparency or authenticity, I think that’s probably the main one and that’s what I go for. I just want to be me and I want to be able to go to sleep at night feeling good about my day. If I earn $100 and I sleep well, I’m happier than if I have $200 and I don’t.
In terms of then differentiating yourself from your competitors, what would you say sets you apart?
For one, there’s a lot of people out there who are just money, money, money, money, and they’re scammy, salesy, slimy, almost predatory. It’s not fun. So, I think being authentic and transparent is one that sets me apart. I think the other is just the grind.
I posted on my Instagram last night, it was like, “All right, so tomorrow 4:30 in the morning, I am recording a podcast, 5:30 recording podcast, 7:00 investor call, 8:00 recording a podcast, 10:00 recording a podcast, 12:00 investor call, 6:30 dinner. In the middle of that, I’m going to film five or six videos and run four miles. Out hustle me, I dare you. That’s one day of not being in the office. I’m still working 40, 50, 60 hours a week with the Marine Corps. I don’t even have my cell phone allowed in the building because I work in a secret vault or whatever. Actually, I have to leave the phone outside.
I think that’s probably the thing that sets me apart. I got no problem waking up at 3:55 to record a podcast even if I went to bed at midnight the night before because I was recording the podcast. If that’s the time that I can make it happen, I’m not going to miss it.
When it comes to just being a part of the community, how would you say you give back to the people in your community and provide value for them? Do you do anything outside of business? Or is it mainly through business that you do it?
I think that’s a large piece of it. I mean, almost all my content is completely free. So, I would consider that giving back. I mean, it takes a while to write a blog. It takes a while to do a video. It takes a while to shoot content. Sometimes I’m paying people to edit that stuff. So, I’m paying for giving out free content. I think that’s definitely part of it. But yeah, I do some giving back through some various charities or donating time at places. I try to meet people for food or lunch or whatever whenever possible. It depends. I just try to be a good person. Life usually seems to work out all right for you.
Would you say you’re involved in any community marketing initiatives?
I do Toastmasters if that counts. That’s maybe not rotary but similar, I guess. It’s a club where you get you to go around and speak and stuff. I’ve been to a couple of local meetups.
Would you say you’ve learned some of those communication skills that you’re talking about earlier from Toastmasters or was that separate?
I was decent at a lot of that before just from recruiting duty. But Toastmasters has definitely refined a lot of those abilities, especially the ability to speak somewhat intelligently without having to prepare. Like being able to just on the spot answer questions well.
What would you say are some of your goals moving forward?
Well, for one, I want to be a paid speaker. I’ve been working towards that. I’ve been doing some speaking gig. I want to up that. Well, we hosted our first. It was going to be live this year’s event but obviously, COVID happened. So next year will hopefully be our first veteran’s live real estate event. Those are probably the two biggest. The next one in line would be I plan on exiting the military next year and going into the reserves and so I’ll no longer be on active duty. I plan on purchasing a studio and doing that to be able to go back to Missouri and work full time on the business.
What would you say are some challenges or roadblocks that you’re facing when it comes to achieving these goals?
Time, being on active duty and still having to do a whole bunch of things with a whole bunch of people rather than having time to work on my priorities. That’s my biggest balance. I’m fairly good with time management but definitely still a struggle.
That’s ultimately one of the big reasons I’m planning on going into the reserves next year so that I have control of my schedule, control of my time, and I’m able to work on everything.
Lightning Round Questions
Do you buy leads from Facebook ads?
How about Google ads?
I have not used LinkedIn.
What about Instagram ads?
I have used Instagram ads.
How about Zillow?
What about realtor.com and homes.com?
How about retargeting?
No, not really.
Do you have anybody who helps you with digital marketing?
I have periodically. Not currently.
What about advertising on things like bus benches, grocery carts, or just any other types of display advertising?
My car and t-shirts and merchandise. I’ve done some of that stuff but not so much local. More of the traditional, like, if I buy a house, put something in the yard or stuff like that.
What about things like direct mailers?
How about writing blogs?
Definitely, every week at least.
Where can we find that blog?
What about creating video content?
Yes, I have a fairly large YouTube channel now. It’s growing. Just hit 5000.
What about email newsletter?
In terms of following up with people in your database, do you ever pop by?
Well, if possible but a large majority of my network is across the world. So, when I can. If I’m in town and I know someone lives in town, I’m going to come to see them.
What about writing personal notes?
Yeah. Unfortunately, I’m a little too holiday-ish with that. I need to be more sporadic. But yes, I do handwritten notes at least once or twice a year.
What about sending gifts?
Yeah, if it’s someone I want to stay in touch with, for sure. I just ordered custom printed branded golf balls for somebody that came and spoke in one of my events that I want to get up close to.
What about putting on client appreciation parties or tenant appreciation parties?
Something I will consider once I live in my market locally. Yeah.
How often would you say you text call or DM?
I DM all the time. Calling is my least preferred of the three. I’ll text or DM a lot. Calling just too easy to let people take too much time without meaning to.
Would you say you cold call or not really?
I’m not a huge fan. I would rather text blast but I do cold call sometimes.
What about door knocking?
Not in a while. I did a lot of that as a recruiter but not right now because I don’t live in my market.
What would you say to any real estate professional in terms of investing? If they’re an agent, broker, podcast who wants to become known as the local market expert or the go-to person in their community? What advice would you give them?
Network and content marketing. Grant Cardone has this quote. He says, “Best known always beats best.” I think that’s a great summary of content marketing. There are better real estate agents out there than the people I use but I know the ones I use. I might not know the guy who’s best. I don’t care if you’re the best real estate agent in the world. If I don’t know you and I know this guy and he’s done me right, I’ll go with the guy I know.
So yeah, get out in front of people. Whether that’s networking at events, at conferences, at whatever. Or if that’s just putting out content and making sure you use location tags and hashtags and whatever. Collaborate with other people in your space, other experts, and just get out in the open. If I know you, then I’m much more likely to do business with you.
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