Best Practices In Building And Preserving Wealth Patrick Lilly

Best Practices In Building And Preserving Wealth Patrick Lilly

I want to give them as many options as possible to create the biggest version of themselves. And when I’m able to do that within a real estate context, I find that extremely rewarding because that’s getting what my passion and my goals are for my personal life.”

Patrick Lilly is a successful New York City real estate broker, educator, transformational life coach, speaker, and world traveler. He is also the founder of Real Estate Vision (REV), an educational and networking group for top producing agents. Through REV he also hosts an annual conference and a weekly podcast for agents. Patrick is a frequent speaker at conferences and seminars throughout the world. He divides his time between New York City, his weekend house in the Hudson Valley, and pursuing his passion for traveling the world.

 

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Best Practices In Building And Preserving Wealth Patrick Lilly

 

Brett:

I am excited about our next guest. Many individuals struggle with finding a realtor with a proven long-term track record, first-class marketing, and a world-class team. Our next guest is a New York City real estate broker, educator, transformational life coach, speaker, and world traveler. I had the honor to be on his show just a few months ago called The Real Estate Success Rocks, which is a show that’s focused on real estate agents and helping them grow their business and help their clients. He has a wealth of knowledge to share as he has sold over 1200 properties worth more than 1.35 billion in his 34-year career. He’s also achieved the Keller Williams Pinnacle Award, which is presented to just the top 20 agents across all of North America. And he was also named The Wall Street Journal’s top 250 agents. So altogether, I want you to welcome Patrick Lilly. And thank you so much, Patrick, for being on the show.

Patrick:

Thanks, Brett. It’s good to be here.

Brett:

And Patrick, will give our listeners a little bit more about your story and your current focus?

Patrick:

I was born in a log cabin back in the 1800s. It’s funny, I got into real estate … I don’t think anybody grows up thinking they want to be a salesperson. I think very, very … Sometimes some successful real estate broker’s kids will grow up that way, but I think the majority of us sort of fall into it, and either you have a knack for it or you don’t have a knack for it. And I was getting my MBA from NYU eons ago. I think I graduated in ’83 and I was bartending at the time. And when I graduated, I was making like $75,000 a year in cash, which I spent. I didn’t save it. I spent it in 1983. And after I got my MBA, the highest job offer I got was for $24,000, which was I did my internship in advertising and I thought I was going to go to advertising, and that’s what an MBA in New York in 1983 made was between 20 and $23,000 when you first started out. So there was no way I was going to do that. I mean how do you reduce your income from 75 to 23? One of the job offers was 18,000, by the way. I still remember that to this day. And so I decided I’m not doing this. And I had lunch with a friend who was in real estate and he said, “Why don’t you come to sell real estate with us?” And, of course, I turned up my nose and said, “I have an MBA from NYU. I’m not going to sell apartments.” And then he told me how much money he made his first year and my nose went right back into place, and I started selling three days later for their company. And sometimes, you fall into things that you’re really good at. but it took a while. I had a lot of natural talents that made it very easy for me, but I always looked down on residential real estate. For the first 12 years, I did it, I was like this is just something I’m doing to bide my time until I get into consulting or some other form of commercial real estate. Then finally, I had an opportunity, about 12 years into my career, I had an opportunity to interview with Cushman & Wakefield, who was the consulting firm back then and the commercial firm back then. And I had two ins from two friends that were very generous with getting me the ins and Cushman didn’t want to interview. Once they saw the resume, once they saw, I’ve always been top of my class, once they saw it, they were like, “We’re not interested in you.” And that was a real wake-up call. That was like, “Hmm. What you think you want to be doing is what you’re not going to be doing, Patrick. Why don’t you have these really … You have these gifts in this other field that you’re really good at. Why don’t you take it seriously? And why don’t you really focus on doing the best job you can do on that?” And that’s really one of the best lessons I’ve learned in life is that when the opportunity is available, you have a skillset, then go ahead and work hard at it and make it happen. So that’s when I started on that road. I was probably producing 20 million in production every year. And once after that 12-year mark, that’s when eventually it would go up, it would double or half its way up. And eventually, I got to well over a hundred million for several years in a row. But the lesson, the lesson to me was I thought a little too highly of myself in a sort of very judgmental way. And once I got over myself, that’s when I really became successful. And that’s when I really started doing a good job for my clients. So before, up until that first 12 years, I was like, “What’s the least amount of work I can do to make the most amount of money and just go onto the next deal?” And then afterward, when I had that whole mind shift, it was like, “Oh, that’s not satisfying anymore. What’s satisfying is how can I do a really good job for my clients?” And obviously, with that mentality, you’re going to be more successful than… So does that long-winded answer get to the point?

Brett:

That’s a great answer and I appreciate you sharing that. Kind of piggybacking on the national talent and kind of focusing on your strengths, I’m curious, before your success as a real estate broker, educator, who’s Patrick growing up? In other words, what gifts were you given and how did those gifts shape how you help others today?

Patrick:

So the gifts are, one of the gifts is unerring confidence in my own ability, which sounds horrible, which sounds terrible, at the same time, people like to buy real estate from people who are confident. And it tends to be one of their biggest purchases throughout their lifetimes, if not the biggest, and they prefer to deal with somebody who’s confident. So that has certainly helped. Plus, I’m really good at reading people. I have good people reading skills. I grew up in a family where I had a real sort of abusive father and a depressed mother. And as a young child, I learned how to read them just to protect myself. How do you live in a home that’s not safe from a lot of levels? Well, you learn to read people. And then that skill has really helped me ’cause I know when people are getting upset before they’re getting upset. I know when somebody is getting excited before they get excited, and those people’s reading skills have really paid off. ‘Cause you can imagine, if you can tell when somebody’s getting upset or somebody’s getting excited, you already know which way to take the conversation or to take the showings in that respect, too. So that makes my life easier and it makes my client’s lives easier, too. So I would say people skills were probably number one.

Brett:

So people skills, number one, and learning it through a tough environment where you learn to anticipate emotions and to stay safe to try to manage those circumstances as best you could to grow up, which is curious, Patrick. So in that type of environment, you still have the confidence and you still have that unwavering confidence. They seem like they would be opposed, but perhaps you may explore that a little bit. Is that just something you were born with? Like Patrick was always very confident, was that what your parents were saying? Or help us with that. What really inspired or instilled that confidence in you?

Patrick:

I honestly don’t know, except that I think it was probably born. My father was very confident and I have a lot of his traits, both good and bad, Brett. And I’ve learned to work through those negative traits and tame them, but yeah, I’m one of those … This is terrible. I can remember to make any … I’ve never read the Bible in my life, and yet somebody was telling me something that was in the Bible and it just didn’t make any sense to me that it was. So I said, “That’s not in the Bible.” And I sounded so confident that at least half the people that we’re listening to us believed what I was saying. And then all of a sudden, I realized and I said to the other guy, “Listen, this is ridiculous. I’m sounding so confident about this not being in the Bible, which I’ve never read and I know you’ve read it multiple times. I’m going to back off on this.” So I guess, I think it’s almost part of my DNA. I think … I don’t know. Do you think you can learn confidence? I think you can mask it. What do you think?

Brett:

I would think that confidence is based upon character, right? So the more your character grows and the more you help more people and the more, I guess, you deliver on the promises you make to yourself and others-

Patrick:

That’s true. That’s true.

Brett:

… that helps to build confidence. But yeah, I think it’s like anything, right? Confidence itself can be used in two different ways. It could go to arrogance or cockiness and it can go to humility-

Patrick:

Right.

Brett:

… and helping others and just believing in yourself, right, which is kind of the definition of humility, not thinking less of yourself, but really just thinking of yourself less and focusing on others and how you could help more people out. So shifting a little bit here-

Patrick:

Yeah. I think that’s a really good definition of the real value of confidence in how are you using it.

Brett:

Correct.

Patrick:

Ultimately, how are you using it? Are you using it for good or not for good?

Brett:

Absolutely. Absolutely. But also, too, the encouragement of focusing on your strengths because too often, I think those who are not as successful are trying to manage their weaknesses or trying to change themselves and not their natural selves and their natural fit and within their strengths or their career or whatever it might be. And that, unfortunately, oftentimes means you’re not as successful. So focusing on your strengths, using your strengths in a humble, serving way is I think the best way to grow your business and help a lot of people out. So shifting a little bit here-

Patrick:

And then to delegate those things that you don’t do well, and be clear about what you don’t do well, and then hire the right people because that’s where true service comes in is when you know what your shortcomings are, and then make sure that you have the support with on your team or within your company to be able to provide what all your clients need, not just what you need.

 

Best Practices In Building And Preserving Wealth Patrick Lilly

Best Practices In Building And Preserving Wealth: “The art is not in making money, but in keeping it.” – Proverb

 

Brett:

Yeah, absolutely. Yeah, delegating those things which are not your strengths and not the highest and best use of your time, especially as it correlates to what your clients need and value and making sure you’re hitting all of the things that they need with professionals who are strong in those areas. So shifting a little bit, when did you become fascinated, and I guess obsessed, in other words? I found that the most successful people truly do become obsessed with what they’re doing. It’s not like you had a shift within those first few years of, okay, this is really what I want to do and this is really where I want to be. But in particular, I know that’s too real estate, but I know it also shifted to creating practices that nurture both the soul and the financial wellbeing. I imagine the real estate career started out where you were helping people with their real estate investing, in buying and selling, but then it shifted a little bit more to the soul. Can you touch on that? I’ve read a few things on that from you. So I’m just curious when did that shift happen and what does that look like?

Patrick:

Well, for me, I guess I started on a spiritual journey probably in my mid-30s, and I’m 63 now so that’s been a long journey, Brett. And I got to the point where I realized I was one person in my business life and another person in my personal life, and then even in a third-person with how I dealt with family. And there was an inconsistency there and I thought this can’t be right. There’s something … It feels out of integrity when I’m doing certain behaviors in business and different ones with my friends. And I thought, okay, how do I get clear about what I really value across the board? And I want those values to be consistent in all areas of my life. So if I truly value transparency and I truly value honesty, which I do, then that needs to be in all portions that whether they’re a family member or a friend or somebody in the community or a client, past or present, that I can be totally open, transparent and honest with them about my motivations, what I’m trying to do, how I’m reacting in the world. And to me, that’s a very spiritual thing that once I’m aligning all facets of myself in all areas of my life, then that’s when I am the best version of myself. That’s when I can do the best for my clients. And that’s when I’ll track the clients who really want to work with me. We’re not going to work with everybody. It just doesn’t work. I mean that’s not effective. So you want to attract the people that are sort of attracted to who you are as an individual. And that’s the best way of attracting the best fit for me so that I can do the best job for them. So one of the things that I’ve learned is that when I’m working with the clients say in real estate I’ll ask them, we’ll go through lots of questions, and it’ll be a long interview process, and I’m just a curious person so I enjoy that anyway. But then I’ll start also asking myself interior questions. We’ve figured out everything about what’s important to them in a timeframe, type of product, that sort of thing. Then I’ll just figure out, I’ll ask myself what’s in their spiritual best interest or I’ll ask them what’s in their family’s best interest? And not that I’m asking them individually, I’m asking myself to see what sort of answers I get ’cause that can then give me direction on how best to deal with them. So if they were having trouble letting go of a property because they were fixated on a number and that market is not going to support that number, then by asking those other in-depth questions, it’s a way of getting around that number so that I can focus them on what’s really important for them to move on. Does that make sense?

Brett:

It makes perfect sense, yeah. And that’s what I think might be the best definition of value, right? Value sometimes is not exactly seen in just numbers or a price, but it’s the overall effect and outcome for the client. And sometimes, they’re not ready to hear it from either the family perspective or a spiritual perspective, or a different perspective. And as a guide and as an advisor, as a coach, as a realtor, all of those different hats that you’re wearing, as a friend, if you can help them achieve the goal that’s best for them, and sometimes they may not know what’s best for them. So rather than asking, you’re just going to steer them to help find that and hopefully, that’s a positive outcome and it truly brings value at the end of the day.

Patrick:

Agreed, agreed.

Brett:

Excellent. We’ll shift a little bit here. What’s the most rewarding part of what you do? So when you’re able to add that value and you’re able to help that client, and/or your team when they grow in different things, what’s the most rewarding part, Patrick?

Patrick:

Different things for different scenarios. So I’ve become really clear in my life of what activities bring me the most joy and those activities that bring me the most joy focus around, well, changing people’s options of what’s available to them on things like how they think, work, live, be, do. I want to give them as many options as possible to create the biggest version of themselves. And when I’m able to do that within a real estate context, I find that extremely rewarding because that’s getting what my passion and my goals are for my personal life. So if it’s somebody that’s on my team, it’s going to shift a little, I want to give them as many options to become the greatest version of themselves, but just watching them, helping them to grow into whatever they’re meant to be doing with their lives is really, really extremely rewarding. So I’ve produced a lot of really great brokers who’ve been on my team and have left the team and gone on to create their own teams, and that’s very, very satisfying to see. So I’m not, like for instance, on that, I’m not tied into somebody if somebody leaves me that that’s a bad thing. I actually think it’s probably a healthy thing in that our relationship was meant to be together for X number of years, whatever that is, provided that it was beneficial to us both.

Brett:

Absolutely.

Patrick:

If it’s a friend … Go ahead, I’m sorry. If it’s a friend that I’m going to-

Brett:

No, I was just saying helping people become the best versions of themselves, whether that be through real estate, investing in their goals, or whether that be your team members and seeing that that is a season, seasons for everything, right, seasons for when people join and when people leave and, hopefully, it was a good connection and camaraderie there and a win-win for everybody, even though it’s not always forever, right, which is part of life.

Patrick:

Yeah. And it’s the nicest thing about that, like say, for instance, I’ve seen a lot of real estate teams when people leave, it’s like a relationship that broke up and they don’t ever speak to each other again. Everybody that’s left my teams, I’m still real friends with, I still keep in contact with, we still have meals together and ultimately, which is going to make me sleep better at night. The one where I’m continuing the relationships or the one that I’m angry because somebody left me, ultimately, it’s in my best interest to do that, too.

Brett:

Makes perfect sense. So shifting a little more to the tactical here and in particular, helping others create and preserve more wealth with their real estate and/or capital gains or taxes or just wealth in general, Patrick. So although you’re a real estate broker, I really see you as a wealth advisor, right? Your specialty happens to be real estate, but what are some of the top practices or habits after interviewing countless individuals and helping a lot of high nets worth clients and doing what you do after all of these years, what are some of the tops, maybe one or two things to creating and preserving more wealth, to capital gains tax deferral or real estate investing?

Patrick:

So for me personally, the way … Building wealth for me is great, but building wealth for building wealth purposes alone is usually not enough to motivate me. I’m just being conscious of who I am. I love it when it’s enough to motivate other people. It’s just not enough to motivate me. But if there’s a creative element to it, then all of a sudden, I’m on board. So one of the things that I personally have been taking advantage of is that you don’t have to pay capital gains on your primary residential real estate residence if you’ve lived in it for at least two years. And so, the first $250,000, if you’re single is not taxable in terms of profit. And if you’re married, it’s $500,000. And it’s one reason for me to maybe get married ’cause I’ve been doing all these as $250,000 not paying the profit. So maybe that’s the reason I should get married, Brett-

Brett:

You could build wealth faster there, Patrick.

Patrick:

We can…  that up. But it’s been nice that for each property that I’ve done, I’ve made a little bit over 250,000 on each one that I’ve done. And now this next one, I feel like I can make a full 500,000 on the profit on it. And maybe it’s time to get married. So that’s-

Brett:

And just for our listeners, absolutely, it’s a great time to get married. Just before that happens, the best tax-free money, that’s meaning you’d probably have to earn, let’s say 750,000 as a married couple and after you pay tax, in New York, maybe it’s 800,000, and to net the 500 or if you’re single, let’s just say 350,000 to net the 250. So this is tax-free money on any of the growth from where you bought the house as long as you lived there two to the last five years and any of the appreciated gain. And so that is called the 121 exclusion for the listeners out there. So yeah, it is one of the best ways to create and preserve more wealth and for your capital gains taxes. So Patrick, what should every wealth advisor out there, besides being realtors, but maybe financial advisors, commercial real estate brokers, business brokers, what should they know about what you do, and maybe how to best leverage your service and expertise to collaborate or partner with you?

I want to give them as many options as possible to create the biggest version of themselves. And when I'm able to do that within a real estate context, I find that extremely rewarding because that's getting what my passion and my goals… Click To Tweet

 

Patrick:

It’s interesting because I’m on the East Coast or specifically New York, though I do sell some properties upstate New York, our properties do not have cash flow well at all. And in fact, if you’re buying an investment property here and you’re barely breaking even, you’re doing really good in New York. You’re buying in New York investment-wise for appreciation or for development, one of the two reasons. And when a client wants a cash-on-cash return, I always say, “Listen, here are some great brokers in the Midwest. I can recommend it to you. They have a track record. They can manage the properties for you. I think you should reach out to them because I can’t provide that.” But if you’re looking, if you’re in a market where you think prices are going to be increasing, there are some really great opportunities. And even in a down market, when a market … ‘Cause that happens, too, sometimes great value can come in where you can latch onto a property at a very discounted rate. And then in a couple of years, turn it over for that increase in value. So what we do for our clients is figure out those that are willing to invest in the Northeast. Then we figure out a plan, do we need to bring in other people to do it as a REIT? Do we need to bring in … are they willing to … can they handle the whole thing on their own? How much cash are they willing to put into it? Do we want to sell this to a developer? Do we want to bring a developer in and work on the property? There are quite a few different options provided that you’re either looking to develop the property or you’re looking to sell in whatever time span that works for you ’cause it’s not a cash-on-cash business.

Brett:

Yeah. That makes sense. So finding the right partners either in the Midwest for high cash flow or if they’re looking for development kind of asset appreciation, maybe you’re sticking in the East, but finding the right fit for the right investor for their goals, which makes a whole lot of sense. Excellent. So shifting a little bit more, Patrick, how do you kind of stay centered in your values? And how do you stay encouraged to really keep reaching for new goals and charging ahead? What are maybe some practices or habits that you practice or leadership inspiration that you’d like to share with our listeners?

Patrick:

Well, the first question, the question is how do you stay centered in my values is the easier of the two questions and I’ve been doing it for so long now, I’m really consistent with that. So just like if you want to become a better tennis player, you just keep on playing tennis or you practice it and you’re potentially going to get better at it. The same thing is being clear about what your values are, being clear about what your ethics are, and then constantly being vigilant about it and saying, “Does this align with who I am?” Each time you push yourself to be more in alignment, one, it becomes easier and easier. And two, you don’t even have to start thinking about it anymore. In the beginning, you might have to put a lot of mental energy into it, but I’ve been doing it for so long now. I don’t even … It’s rare that I even have to think about it. Every once in a while, to be totally honest, Brett, there’ll be a time when I want to say something that’s not truthful. So like I land a listing that’s not a hundred percent truthful, it’s a bit of a stretch and I have to catch myself still on that and say, “No, let’s just be totally transparent here. Let’s give a hundred percent truth.” I may not get the listing because I’m doing that and I’m okay with that. Maybe I wasn’t the right person to be getting that listing in the first place. But that doesn’t happen too often anymore. It used to happen a lot more when I was being much more aggressive about just looking at the end results as opposed to who I was in the process. The second question, staying motivated and finding new challenges, that’s fascinating. And it’s fascinating ’cause I’m 63 years old now and I’ve achieved a lot in life. And the question is how do I stay motivated and how do I still want to get up and work in the morning and how do I create new things to get me excited about? So the second portion of that question is easier because if I’m not excited, I’m just not going to do it. So I have to make sure that whatever I’m doing is bringing me creative excitement. That’s easier. The question is when you’re making a good income, let’s say from real estate, and the motivation to continue to produce at the same level diminishes because you’ve already established for so long. I found the ways that if I can look okay, how can I increase my profitability? In other words, is it possible that I can actually work less, but increase my profitability so that I can still net the same amount of money? So there’s that creative process of trying to figure that out that still says, “Oh, well, that’s fun. Let’s do that.” So I have to say, is it fun for me, then I will do it. And if it’s not, I’m probably going to be saying no to the stakes.

Brett:

Wow, what a great answer. And I want to just kind of circle back with what you said there. So to stay centered in your values, you’re making sure you’re very clear about what they are and then you’re constantly aligning yourself with those values and asking yourself the tough questions of should I take this business deal on? Is this decision I’m about to make align with the person I want to be to fit my integrity, my honesty, my track record? And then also being totally transparent with times when you’re not sure if you should say something or not, or hold back, you say, “No, let’s just be completely transparent. And if we lose the business, that’s okay. Maybe it wasn’t a good fit, but I’d rather be true and keep the wholeness of my integrity intact rather than the opposite.” And the second part you said was staying encouraged or staying motivated. If there’s some form of creativity or some kind of fun or something that’s exciting, then great, let’s move forward. But if it’s not, then you’re probably looking for something else because yeah, you’ve been very successful and it’s going to take something that’s truly enjoyable. So that makes great, a whole lot of sense, Patrick. So thank you for sharing that. So Patrick, where can everyone find you and connect with you and learn more?

Patrick:

So my umbrella website is patricklilly.com, L-I-L-L-Y.com. And within that umbrella site, you can find all my real estate websites and my coaching site, and my podcast. So you’d find all that within the umbrella, so that’s probably the easiest way. And then I guess if somebody wants my cell, it’s online, so it’s (917)863-7873.

Brett:

That’s excellent, Patrick. I want to thank you for being a guest on the show and sharing your wisdom about real estate. And I want to thank our listeners again for listening to another episode of the Capital Gains Tax Solutions Podcast. As always, we believe most high net worth individuals and those who help them struggle with clarifying their capital gains tax deferral options. I hoped you learned a little bit more about the 121 exclusion in particular and how you can create and preserve more wealth if you’ve lived there two of the last five years that Patrick shared with us today. As always, not having a clear plan is the enemy, but using a proven tax deferral strategy, we believe is the best way for you to grow your wealth.

 

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About Patrick Lilly

Best Practices In Building And Preserving Wealth Patrick LillyPatrick is the founder of Real Estate Vision (REV), an educational and networking group for top producing agents.  Through REV he also hosts an annual conference and a weekly podcast for agents. Patrick is a frequent speaker at conferences and seminars throughout the world. A consistent theme in his talks is the creation of practices that nurture both your soul and financial well-being.

After completing his BS in Psychology and Mathematics from Missouri State University, Patrick earned an MBA in Marketing and International Business from New York University. In 2007, he earned his life coaching credentials, which allows him to conduct transformational seminars throughout the world on discovering one’s essence and purpose in life.

Patrick divides his time between New York City, his weekend house in the Hudson Valley, and pursuing his passion for traveling the world.

 

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