biden tax changes impact on real estate investors

Dandan Zhu spent her 20s in the high-stress world of headhunting, then she bought her first rental property, and within 4 years quit her job.

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Brian: Brian Davis here from Spark Rental. Super glad to be with you. And we have a special treat for you today. We have Dan Dan with us who retired at the tender age of 28 with real estate investments, where we’re doing a series of these interviews with people who either reach financial independence or retired young with real estate. Last week we interviewed Tom Brickman. This week, Dan, Dan Zhu. And Dan, welcome to the show. Thank you so much for being with us today.

Dandan: Thank you so much for having me, Brian.

Brian: Absolutely. So let’s dive right in and let’s rewind the very beginning to you. In your early to mid twenties, you’re working a full time job. So tell us about your life before you started investing in real estate.

Dandan: Yeah, so I graduated in 2009 at middle of the recession with a finance degree, and I hated finance to begin with. So it was no problem. It was kind of perfect because I was like, I think I would suck at it and fail anyways. So somehow I wanted to get rich. That was a goal I had because I don’t like being poor. I grew up poor and I don’t like it and I wanted to become very wealthy and I saw my parents put in a lot of hard work in high school. I used to help my mom with some of her dilapidated homes that we were renting room by room. So I’ve had a little taste of like the nitty gritty, dirty, grungy ness of, like, hands on real estate, like work. Yeah. So that was in the back of my mind. I was like, I want to make enough money so that I can invest in real estate. That was always the game plan because it was like, it’s not rocket science. It’s pretty straightforward and the USA is the best place to do it for economic reasons.

Dandan: So I thought when I graduated I was like, I need a high paying job, I need a really high paying job so I can make a lot of money and save it and then buy real estate. Because at that point, of course, you know, 2011 was when I became a headhunter that time, like, houses were like really starting to like come back up again. They were starting to creep up. So I started my career in recruiting. It’s a high paying sales job then, so by the time I was 25, I was making over $250,000 in that time. Yeah, my first year I was on a 35 K base in New York City in 2011 and I house hacked, right? Because I’m like, I might as well get some experience. And prior to even doing that, even in college, I was renting out rooms in my family’s house because my parents left and I had to pay the bills and that was what paid for our mortgage. And that’s also what paid for a restaurant that I had to manage at the time. So I was doing a lot of these things. My life experiences taught me this was the way to go, so I saved my money really hard. By the time I was 23, 24, 25, I was like living very frugally, even though in year two of recruiting I was already making over 130 K My first year I ended up making about 87 K, so I was saving all of my money, was going right into like stocks, equities and like really investments because I didn’t want to hold any cash and I was just constantly just waiting for the real estate opportunity to come. And in 2013, I found a place that was being fully gut renovated in Prospect Lefferts South, which is a troublesome area with a lot of like gang violence.

Dandan: So this is the only place I can buy because in New York City you’re not going to get anything. You can’t get a condo for under 400,000. So I wanted a two bedroom condo. I did not want a co-op. You have to really know your local markets. New York City has a ton of tons of co-ops. So co-ops are obviously a horrible investment. So condo was the way to go and the only place I saw, I was like, Oh, there’s this one building in middle of this random neighborhood that is totally getting renovated. That was the first step. So I bought that. It was fully renovated. By 2014, I gained ownership. At this point, I had figured out I’m going to probably like not work for the company forever. I wanted to keep buying real estate and that would be my way out. And then so I bought another house saved up to buy another condo. This time, Manhattan, Brooklyn, New York City is like no longer feasible. You’re not going to see a single condo for even close to like three or 400 again. So the first one I bought for 344, 20% down, rented it out, house packed, cut up each room cut up the living room, furnished it, rented it out individually.

Brian: So you moved into that first property.

Dandan: No.

Brian: Oh, you did not.

Dandan: No. I house hacked my whole like decade from my like 23 to 32 so I had the same apartment that I was house hacking, so I was living…

Brian: So you were renting out part of it to roommates?

Dandan: Yeah, I was living in the same rental, so I never really encouraged living where you buy because I want other people to pay the mortgage, right? I want them to pay the mortgage. So I rent it out. It’s a two bedroom. I’ve made the living room into a bedroom and I rent out the living room, rented out the bedroom to the other bedroom. So I had three units pulling for me. I also had my other three bedroom, two bath that I was living in, and I was renting out the two extra bedrooms. So that’s how like I didn’t really have to pay anything. It was just like everything was being covered.

Brian: And that first deal. Did you finance that with with a conventional mortgage? Just a conventional investment property mortgage?

Dandan: Yeah. I think I put it down like I think I had to cough up like 90,000 for the down payment. I don’t I don’t I just remember it being like around 90,000, even though it should have been less. But I guess closing costs or whatever, I remember it to be around like 90,000 was what I had to put down and my monthly carrying note was like 1900.

Dandan: Okay. Yeah. So before we go any further with your your real estate investments, I want to spend a moment just talking about how frugally you were living here, because this is a huge key for a lot of new investors and even experienced investors is just where does that capital come from for down payments, for real estate investing, for closing costs? And, you know, that’s Spark Rental. We talk all the time about house hacking and living frugally and you know, how to save up that money to invest because if you don’t have any cash to invest with, you’re just not going to get anywhere. Right? I mean, it does take some money. So your house hacking as one way to save money, living in expensive New York City, what would you say your monthly budget was for living on your monthly living expenses?

Dandan: My house hacking price that I paid was about $300 a month.

Brian: So I mean, like your total living expenses.

Dandan: My total living expenses probably under like my car payment was like 170 bucks with insurance would have been like maybe no less, no more than 500 bucks. Like I lived very cheaply. So, like, everything was cheap. I don’t actually have the exact numbers because eventually I stopped budgeting because I just was not spending a lot anyways. Like when I went out partying, I wouldn’t drink liquor for instance. Like when I went out to New York City to go partying, I would not drink alcohol the whole night. I would just drink water. Like, maybe I’ll save.

Brian: A lot of money that way.

Dandan: Yeah. Like if I bought drinks, it would just be to buy drinks for other people to like politically curry favor or whatever. Like, everything I did was very strategic and like all the furniture I bought was used or borderline free. Like, I’ve never purchased a new mattress for myself. For instance, like the most expensive mattress I paid for is like the Amazon basics for one of my rental properties. Like me personally, my mattress I think was like $40. So at all these things I’m like saving a lot of money on. I only bought like a few luxury items, but because I was earning such a high amount of income, like literally I was making 250,000 a year that year before that. Just I have so much money left over, you know, I was living very carefully and the monthly rent was the biggest cost. And because my monthly rent is $300, there’s just no way you really need to budget on that because I’m making like five figures a month and I’m living off a $300 a month. I don’t dye my hair. It’s black because I’m too cheap to dyeing so I won’t even go. I go to the salon once a year, like I get a haircut once a year, like, you know, just these little decisions that you make. Like I’ll be so obsessed with saving money that sometimes I’ll be obsessing at TJ, Max walking around in circles over, like, $2. Like, it’s like kind of a compulsion, you know, like, at this point. And like, now I’m actually like a millionaire, and it’s really horrible still, because some days I literally get sucked into just like, arguing about $10, you know, it’s just like it’s a compulsion, like I said. And it never really goes away, especially if you’re in real estate because you’re always looking to decrease your costs, always looking to decrease your costs, negotiate.

Brian: You always want to do that next deal.

Dandan: Yeah, you always want to save money because you’re absolutely right. And like so many of my colleagues, made the same amount of money, but their living costs, their rent was $4,000. They would go out and drink and eat each night. Their tab would be like $200, $100. It’d be easy to achieve that in New York. That’s like seven cocktails, like over a span of 3 hours. That’s like two cocktails an hour. So, like, it’s these things like it’s like my first year in recruiting. I was eating hot dogs. I was eating Chinese buns for breakfast. That was a dollar a piece. I was eating leftover sushi from the restaurant that was closing. And they would give their sushi out for, like…

Brian: Well, less dangerous.

Dandan: Yeah, you know, it was just, like, little things like that. I was like, all these costs, and, like, I was eating subway sandwiches. Like, my first year was the most difficult year because I was on the lowest base. But then once I started making like over six figures, it was a high enough money that like, I could still live comfortably again having house packed, that was really it, like just not having rental cost, essentially.

Brian: All right. Well, so tell us about how you scaled up after that first deal and how your investing strategy changed over time.

Dandan: So that first deal was just a condo. It had extremely low monthly returns. And same with the second property it bought in 2015 in Jersey City, another two bedroom condo. At that point, I started having this 10% rule that everybody follows. So my goal was if I buy something for 180, it has to rent out for 1800 and then that would be worth it. So it was a short sale. They would listed it for like 135 or something. So a bunch of people bid on it and I bid the most because I was like, I know it rents for 1800, so I’m willing to pay 180. Like that’s fair to me. So I ended up winning the deal, rented it. It was making $400 a month. Again, very chump change, not really good. And condos really don’t yield that much. Obviously, me being in the tri state, there’s only so much to do as a young investor, relatively junior and self-directed investing, where I was really waiting for the appreciation that was what I wanted. So then I quit my job in 2016 because at that point the housing market had jumped up so much that Brooklyn condo in 2016 January. I actually was dating a guy who we broke up very soon, but he was like, You should sell. His family is in real estate. He’s like, This is a peak you should sell. And so our relationship didn’t work out, but the vice was good. So I sold it and it sold for 650,000. At that point it was two years, so I could do at 1031.

Brian: Yeah. So so you made $215,000 in equity in just two years on that on that Brooklyn condo.

Dandan: More than that, $270,000 in equity.

Brian: That’s great.

Dandan: Years. Yeah. Off of a $90,000 investment. So 9000.

Brian: So your second property or that was your $90,000 cash investment?

Dandan: Yup. I got my 90,000 back and I got my 271. So now I have 300 something. So now for one Brooklyn condo and a location that’s still today, you don’t get much of a spread. Today if you were to buy that same condo, it might be 600,000. Like that area has not gone anywhere. It’s still the same as it was in 2016. So I sold that really the best time. And 2016 it was like, you’d be stupid not to get that money out, right? Because there’s like $300,000 like freaking take it out and put it somewhere else. Like New York. I’m getting like, nothing on the rental. I’m like, barely making any money on.

Brian: The yields in New York City are notoriously bad.

Dandan: Terrible. And so I knew it was the appreciation play, right? So we got that money out and then I got two homes in Baltimore because at that point it was like where where the worst press is, is where I’m going to get the best deal. And at 2016, it was Baltimore. Baltimore was having some really awful press.

Brian: Still are. I am from Baltimore,

Dandan: Still are! still one of the best places to invest, but not anymore from an Airbnb perspective, which is eventually where I kind of turned to. So at the time, though, I didn’t understand Airbnb’s, I was still like traditional long term, you know, 20% down, that kind of thing. But with that, with that first condo being sold, now I have this 300,000 and I also need to take out some debt because of the 1031 rules, I have to exceed 650,000. Right. Whatever you leave behind is whatever you have to replace, if not exceed. In one exchange you get the full exchange benefits. So I ended up getting those… One was a single family home, one was a two family home and then also another condo in Massachusetts. Because at this point, I have a formula. I just buy in these kind of like tertiary cities next to big cities. So like New York City, I’ll buy Jersey City in Journal Square. Right. It’s like a tertiary city off of a big city.

Dandan: Same with Chelsea, Massachusetts. It’s off of Boston. It’s not in Boston. It’s off of Boston. It’s close enough. Right. So that was like my strategy is like buy these buildings. These areas are up and coming because the city limits are kind of pushing people out. Right? Depreciation is moving people out. And I just thought I had this Midas touch and it was just going to keep going. So this Massachusetts condo I bought for like 189, put in 6000, got some tenants in. But then very soon I started learning how bad condos are because I lucked out on the first two. I lucked out big time like it was easy condo association. I saw them, didn’t have to go to the meetings. Then this Chelsea one, this lady owns like 30 of them. Like she owns like a big amount. So number one, it’s like not financeable, which is problematic if you want to get a high appreciation reward and you have to deal with her and she’s the one in control of everything and she has her kids in there sitting on the board. So now it becomes like, I’m a very much a David and she’s very much a Goliath. And to have your money kind of held hostage by a terrible association leader who is essentially a monopolizing the whole complex has you by the veils a lot of comfortable feeling like so that’s when I started learning like this is this is a gamble this is just not great.

Dandan: So at this point, I had already quit my job. I have these like four homes and then I have $40,000 left in the bank. And I saw this 145,000 house for family in Vermont, in southern Vermont. And that was when I was like, this is too good of a deal. One of the units was like fully renovated. So my dad and I went up. I ended up getting. My cousin in to cosign the loan because at this point I’m self employed. It’s very hard to get financing, right? So my cousin Louis and I wasted the rest of my savings. I had to take 10,000 from her to even have the down payment. And we went in on this together. And she’s a minority stakeholder. She’s a total silent partner. She doesn’t do anything. This is more of like a savings account for her kind of idea. And that was when I first started, eventually 2018, converting that into Airbnbs and after the success of seeing Airbnbs at work. Now my strategy is all Airbnbs. Now I sold out and sold like 12 properties at this point. Now I currently own things like six homes now with the plan of demolishing one, totally rebuilding it again. The strategy is full on migration into Airbnbs.

Brian: So did you sell those two properties in Baltimore and the one property in Chelsea, Massachusetts?

Dandan: Chelsea, Massachusetts. I sold that right around COVID. I sold at 222,000. She got in the way of me selling it for more and basically blocked buyers from like seeing the condo documents being very irresponsible. So I financially I got a pretty bad gain, like an average return if not like under average return.

Brian: Least, at least you came out on top though. Yeah. Sometimes you can really get in trouble. Yeah. You have a non cooperative condo association like that. That’s actually that’s why I’ve never liked investing with condo associations. It just adds that extra wrinkle, that extra dimension that is outside of your control.

Dandan: I’m currently in that problem now. I have another condo that I bought during COVID. I bought two condos during COVID one in Denver, which I’ve since offloaded. Again, very low return. I bought it for 114, sold it for 124, but I had a tenant. It’s just like, again, bad condo, like there was poop in the actual laundry rooms, homeless people. Like it was just the stuff like that. It was just like, this is ridiculous. And I was just like, I need to sell. I need to get that money out. Like, I just don’t even I see no point in sitting here and waiting and praying for the appreciation. Appreciation plays are just not not good anymore. They used to be really good. They’re not very good anymore.

Brian: So I’ve seen a cooling market as it appears we’re entering into now.

Dandan: It is. And I bought a DC condo. I’m going to lose money on that that I bought for 94 five. I’m under contract to sell for 90. At this point I just want the cash. These were all cash buys, so I just want my cash out so I could use it for other stuff. For the Baltimore place, I sold one. I kept the two family. That one’s a traditional brownstone. It’s appreciated by over six figures. So that one I’m holding on.

Brian: Out of curiosity, where in Baltimore is it?

Dandan: Right in Reservoir Hill.

Brian: Okay. So I’m guessing that you don’t use that as an Airbnb?

Dandan: No.

Brian: Yeah, that’s not really a touristy area.

Dandan: Well, Baltimore anywhere can be Airbnb friendly. Airbnbs are amazingly versatile, but it’s really down to the city laws. Baltimore has terrible Airbnb laws. They’re not friendly towards Airbnbs, which is a humongous missed opportunity. And it’s I can talk hours about how stupid cities and states are if they dare limit Airbnb’s and how that can actually be a positive change for their cities. But that’s a different topic. So I immediately sold and that’s why when I sold, I didn’t make that much money. I bought the single family for 135, sold it for like 165. Again, not amazing returns. It’s because of third party interference, right? Like if the government wasn’t involved and allowed Airbnb, these the prices would be much higher because that place was right next to Johns Hopkins. So, you know, it’s full on. There’s some macroeconomic influences that definitely hurt returns.

Brian: Yeah. And you know, Baltimore is it’s really it’s one of the worst governed cities in the country. I can say that because I’m from there and I used to invest in real estate there, but very anti landlord with their regulations and laws. It’s one of the things that Deni and I talk about all the time is we discourage people from investing in cities with anti landlord laws. You know, they’re super, super friendly with their laws. You end up getting burned as a real estate investor there. Yeah.

Dandan: I actually didn’t mind it as much just because, like the court system, I had to do a ton of evictions in Baltimore one after the other. Right. It was kind of like, fine, because you could get someone else to go for you and do it, which was really cool. Other cities and states you’d have to personally show. So that was kind of fun where you could hire for your evictions and then the sheriff would like force the people to pay on the day and that sometimes I would get my money that way. So but I think, again, it was just like a combination of me being a junior investor as well, and Baltimore just not having a lot of people with good jobs. So you have to wait a long, long time for a good tenant. And I could not have. To wait any longer.

Brian: I know your vacancy rate impacts your returns. Yeah.

Dandan: Yeah. So it goes.

Brian: Into the calculus.

Dandan: For sure. It was. It was just me being unprepared and being a little bit of a junior investor.

Brian: So what do you look for in Airbnb properties?

Dandan: Airbnb properties have to be in a safe location, so it has to be in a well presented street and area. I think for you, you have to decide how much money do you want to spend and what kind of returns do you want? And then kind of work backwards and look at which markets yield, what, because like for instance, Long Island, you can get like five or $600 a night, but like you have to do the math, like, can I afford a 800000 to $1000000 home to get those returns? Right. So for me, I’m a cheap investor. I like investing in homes that are maybe cash buys for under 150. Right? So for a long time I was like Atlantic City. That is worth that. I still stand by that. Atlantic City is a fantastic place to invest in Airbnb’s not that I do it…

Brian: They do have good yields there.

Dandan: I have not personally, but I have looked into the market. I wanted to. I tried multiple times, but one deal fell through. Seller got greedy, another deal. I was outbid and I just haven’t. It just hasn’t worked out and I just happen to use that money instead on a lake house in Albany like west of Albany. And that was just opportunistic buy like I’m always looking at like real estate prices like which place has houses for under 200 grand that are good. And then also just check out like what are the Airbnb rates around that area? If your property is cheap, you can never lose because you already at the bottom. So that lake house I bought was $137,000. I was like, This is so cheap. It’s a lake house. I mean, most lake houses in the northeast are 250 to 350. I know because I looked at every single lake in the northeast like I literally will go sit at Trulia and look at Poconos and I literally will go on trips. I’ll go to Poconos to like talk to real estate agents. Like, I looked at that market, I made an offer, got outbid. I was like, I’m not competing.

Dandan: Like I’m not in a rush, right? Because it would be so much work that unless my rate is very low, I don’t even want to like put in the work because then right then I end up paying a lot and doing all this work. So I want to find a really, really good deal and I’m just going to patiently wait for that really good deal. But it just happened to be this Random Lake House that was a short sale owners and a senior home care center. Three years has been living there. Very dead area, nothing going on but on lake and we did a lot of projections and we’d like you never really know until you set up the property but it was a two bedroom, two bath, three bedroom, two bath. So, you know, the occupancy is going to be very high. It could be at least ten people and that’s important for Airbnb returns is the occupancy rate. There’s no math, there’s no formula. I just like to buy cheap properties and because I keep buying cheap, I always make money because your denominator is so low.

Brian: So we’ve got a question from the audience here. Rebecca Taylor asks, How do you see the recession impacting the short term rental market for vacationers? If if we’re even in a recession, that’s a whole nother conversation. But assuming that, yeah, a cooling economy, whatever you want to call it, how do you see that impacting the short term rental market for vacation homes?

Dandan:: It’s really bad if you have $1,000,000 house in Long Island. It’s just really bad if you have a high value property going into a recession. This is why real estate you always have to buy low. Like because you never know. You just never know what’s going to happen. At least that’s my view. My my risk tolerance is very low, even though I’m actually very risk taking my I’m very conservative. So I’m like. This house is a $127,000 we put in 35. It didn’t cost us over 170. Even in the worst case scenario, the carrying cost is like 8 to 1200 a month. I can afford that. So that to me is a safe investment because I can afford. If you add up all of my carrying costs, it’s not more than like seven or 8000 off of like six homes of 15 apartments. It’s because I buy cheap, so it’s really cheap. The caring cost is very cheap. And when you have a cheap, caring cost, you never have to worry about the economy because you can literally have a sit vacant. So you have to be in a very financially positive situation where you have a good income coming in.

Dandan: That’s your real safety net is still having some other hustle. That’s what I learned from real estate. You cannot survive off of real estate alone. You just never can’t because a roof will cost you 15,000. Like this will cost you that. That will cost you that. It comes at you from nowhere. If you don’t have like a good day job, like a good full time hustle. Real estate becomes a pain. That’s what I personally experienced when I was 28, when I had four properties and evictions. It was like I was living in debt. It’s not enough. So anyways, back to your question about short term rental. If your rate is really low, you’re caring costs is really low, you can drop your price, you drop your nightly rates, you can do long term rentals. So that’s been good. I’ve had long term people come in and that was the four family. So one unit is like 2000. The other one’s also like 2100. So right there the mortgage is 1300. So already you’re again, you buy properties that are so good that no matter what happens, you’re insulated.

Brian: Right? You have enough meat on the bone that you can drop the rental rates and still come out cashflow positive. And to your point about lower cost properties, when you enter a recession, some people are no longer going to be able to afford the high end properties. Right. So where do they go? They don’t move out to the street. They move into more affordable housing. And in the case of rental or vacation rentals, maybe they stay in more affordable places to rent, maybe Airbnbs instead of hotels. Right. Or maybe more affordable Airbnbs, more affordable lake houses rather than the riskier stuff.

Dandan: I will say it is scary because I am seeing an uptick in applicants on Airbnb guests. You have to be very careful as an Airbnb operator today because there are a lot of scammers who want to like potentially squat. So this is definitely happening right now where people are like, Hey, this happened to me. I would love to stay. Like, I got hurt many times as a junior investor, being a bleeding heart, you cannot be a bleeding heart in the landlord business like this. The weirder the sob story, the more it’s believable and the tenants know it. So they’ll just tell you the most heart wrenching, saddest stories. One lady told me that she lived in a satanic building that was haunted and the baby was murdered there. And she’s having nightmares. And please, please, please, can I help her? And I fell for it. And she squatted and lived in my house for a couple of months until I got her out and she threatened to kill me with a gun. Like, it’s just stuff like this that, like you, Airbnb’s, you have to be very careful to charge them a high deposit. That’s how you prevent that. Because if they’re like a zero review, it doesn’t mean that they’re a bad tenant. It just means you need to ask them for a high deposit, even if they have reviews for long term stays. I ask for $1,000 deposit really just to test if they have the money. And if they do, then it’s usually like, okay. But again, it’s like you’re spinning the wheel every time because you never know. Come there, check out date. Are they really going to be gone? Like you’re a little bit nervous. So I think it’s a very dangerous time for Airbnb operators to be wowed by short term, long term stays where it’s like one month long term stay, it’s like X dollars. Be careful to like really look into the guests a little bit more because they’re having an uptick in this behavior.

Brian: And depending on your state and local laws, someone, they qualify as a tenant at a certain point instead of a guest and have to be evicted instead of removed as a trespasser. So you have to be careful about that with long term stays.

Dandan: If it happens, I’m going to buy a gun and I will. I’m sorry. I’m going to do and I’ve heard a lot of my Airbnb friends say this. They’re like, if it happens to me, we’re going to buy guns. We’re going to show up a whole crew like we don’t give a crap. Yeah, the government’s not going to help you with this. Like, I don’t know what’s going to happen. I hope to God it never happens to me. But if it does, I don’t know what I’m going to do. Brian, you might see me in the front page news.

Brian: Yeah. No, I’ve been burned a bunch of times as well by sob stories. And, at a certain point, you just realize as a real estate investor and as a landlord that you need to operate completely as a business. Zero emotion. I mean, you need to operate like at the bank basically. You know, if someone’s late, they get the notice, they’re out, you know, with due process, of course. But that due process takes a long time. As you know, from filing evictions, I mean, in some areas like Baltimore, it can take many months to get rid of bad tenants. And anyway, that’s a whole nother, you know, tangent.

Dandan: Stories of real estate investing that they don’t tell you.

Dandan: Exactly. So Rebecca has a follow up question. Do you still have a day job other than real estate? Because we talked about how you retired from your your your day job years ago. But my understanding is that you have launched a new business for yourself.

Dandan: Yeah. So in 2018, I had already retired for two years. At this point, I didn’t want to sell anymore of my properties and I had like a million plus if you add up everything, I could have done that. But I don’t want to sell and I need real estate. It’s all like stuck, right? All your money.

Brian: Stuck on liquid.

Dandan: Yeah, It’s not liquid at all. And you don’t want to borrow against yourself to, like, live. So I have very high financial goals, like a lot of people. I think when they do the fire thing, I heard about fire, financial independence, retire early, I heard about it and I’m like a lot of people doing that game. They’re happy with like less than $1,000,000, like net worth. And they don’t want 10 million. They don’t want 20 million. But I personally…

Brian: Like mean fire.

Dandan: Yeah, I want big fire! I want like…

Dandan: Bad Fire…

Dandan: I want bad fire. Right.

Brian: Me too!

Dandan: Yeah. I was like, hey, I was like, let me see what retirement looks like. And to be honest, I missed recruiting. I love recruiting. I’m very good at it. It’s a passion and it prints money. Like, if you’re a good headhunter and you want to do it, it prints five figures a deal, right? So I was like randomly prospected by one of my old colleagues who is like, you know, we need recruiters. Like actually recruitment agencies. They need headhunters because there’s nobody that understands the business enough to recruit qualified headhunters to move agencies. So I started my recruiting business in 2018. Really fun journey; ups and downs. Covid really kind of shook things up, but I had that recruiting income, which was critical because that for family, my tenant, my elderly tenant upstairs who’s since gone on to go to a nursing home, she at the time clogged up the toilet. We. Destroy the whole bottom unit that was like $60,000 to rebuild because I have a…

Brian: Wow, For a clogged toilet.

Dandan: For clogged toilet, destroy the whole bottom unit, like, all the way to the basement. Like the whole bottom unit needed renovation anyways. And Airbnb people have a very high standard. If it’s not renovated, well, they will leave terrible reviews. You will not get high nightly rates. So with the recruiting job, with the recruiting business that I had at this point is mine, my own it. So every deal that comes through other than the cost of running the business, which is very low flows to me and my partners and I put it into fixing that unit. So having a day job I think is really important and it’s an elective choice because I want more. I need more to get more with this business I have, I can get more loans in the future and I’ll have 200 plus figure incomes coming in because I own my own practice as a headhunter. I work to my own hours, my clients, and my candidates, I handle them myself. So there’s no real, like, job feeling. It’s very entrepreneurial. I have a whole course on recruiting recruiter prop dot com. We’ve at least that as well. So I have multiple business. I’m going to set up trainings, I’m going to set training revenue streams, you know, so I’m just getting started recruiting and real estate is the foundation both of these disparate business entities. And then I’m going to add on training and coaching. On top of that, my goal is to get very, very rich.

Brian: Well, you are clearly on your way. And, you know, I just wanted to highlight a couple of things you just said there. You know, one that it really helps to have many sources of cash flow and revenue here, both real estate wise, but also outside of real estate as well. And not only does it help you keep your personal lights on, but it also makes it easier to get financing to do those those next real estate deals. So, yeah, I’m a huge believer in that. And, a day job is even the wrong way of putting it because it’s not, you know, like a ball and chain, y9 to 5 thing. It’s like you said, it’s something that you control. It’s your baby. You can work as many hours as you want. You know, it’s a model that Deni and I follow as well. We have a business, but we get to also invest in real estate and we get to work as few or as many hours as we want on Spark Rental. And, you know, it doesn’t feel like we are tied down. It’s fun!

Dandan: Yeah… the image I have is like one hand washes the other. Right. You have real estate, you have something else. It could be computer programmer like I know other real estate investors who are like literally like Java developers or like compute technologists and they invest in real estate. Like, it’s just you need something if you want to play and keep playing, you need more money. And unless you’re going to go and syndicate and ask other people for money, you have to make yourself. So there has to be some other thing you do to keep that tap going so you can build that snowball effect. A lot of recruiters are in real estate because it’s the same skill set. It’s people, it’s challenging business conversations. So there’s actually quite a few other headhunters who hit me up, but they’re like, Oh, I’m also in real estate. They mostly do long term rentals, but I also have a client of mine, she does Airbnbs, so she has a recruitment practice, a legal recruitment business, she’s self-employed, she has some people working for her and she has very nice, really nice Airbnbs like luxury lake houses and cabins. And so there’s a lot of people out there doing this.

Brian: Yeah, no, they are totally complementary skill sets and complementary as far as bringing in revenue, like you said. I mean actually as a little side gig for fun on the side, I do freelance writing and stuff. Yeah. So but all reinforces each other and at the risk of using like corporate speak, I mean there’s synergy there in all of these different sources of funds and revenue all reinforcing each other. Well, I want to be respectful of your time. We’ve taken up a lot of your time today, but where can people connect with you if they want to learn more about you, what you’re doing real estate wise, what you’re doing, recruiting and headhunting wise? Where can people connect with you?

Dandan: The best is just to follow my website: dandanzhu.com – There you’ll have all the access to the different social media links. I haven’t put out a real estate course yet, but it’s on The To-Do, but on LinkedIn and also on my website. I do post a lot about real estate and recruiting and other stuff, like personal stuff, and there’s just a lot of information that I pump out daily. I write daily. Writing, to your point, is such a great skill as a business person, so I like to just put out as much content as I can. I also have a podcast, recruit podcast and I also have another podcast daily done podcast. I don’t really do that one anymore, but there’s enough on there with real estate, with like life, success, money, you know, whatever have you. Basically covering everything we talked about today.

Brian: Oh, that’s great. And we’ll link to Dan Dan Zhu dot com in the comments as well. Well, Dan, Dan, thank you so much for your time today. We really appreciate it. And stay in touch. Keep us posted on your next project and I’ll have to bring you back on the podcast some time soon to hear about what happens next.

Dandan: Thank you so much for having me, Brian.

Brian: All right, guys. We will see you next Tuesday at 2:00 Eastern. In the meantime, stay in touch. Let us know you want to hear about and we will catch you on the flip side.

 

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