Overcoming Stagnation: Taking Control of Your Own Destiny with Jerome Myers

CGT 6 | Overcoming Stagnation

Many apartment owners struggle with finding ways to add value to multifamily deals. In this episode, Jerome Myers, Founder of The Myers Development Group, LLC, joins Brett Swarts as they talk about overcoming stagnation and building wealth through passive real estate in the multifamily space. Get to know Jerome’s journey from being in Corporate America to first getting into multifamily and some of his experiences dealing with apartment complexes. Jerome and Brett dive into opportunity zones to defer capital gains taxes and why Jerome prefers these over the 1031. Learn how Jerome tries to bring in people to expose them more to the space he’s at and help them build their own wealth.

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Overcoming Stagnation: Taking Control of Your Own Destiny with Jerome Myers

I’m excited for another show. Our guest is Jerome Myers of North Carolina. He is a coach. He’s inspirational. He is a multifamily expert. He is an engineer. He is a West Point graduate. His father was in the military and he has an encouraging mom. He has a great story as well as some practical guidance. We’re going to talk about how to dream big, how to pay the price of admission, how to get financially fit, how to add value to properties and save, in particular, looking for ways to save in the expenses. For his scenario, it has to do with utility costs and saving utility costs and reimagining the way you look at expenses for multifamily properties. We’re going to get into all of those things as well as opportunity zones in this episode.

I’m excited about our guest. Many apartment owners struggle with finding ways to add value to multifamily deals or even if they’re new to investing. Our guest helps those who are looking to grow and overcome stagnation through one-on-one coaching, but also through showing how to buy apartment complexes and fix them up. He’s on a mission to develop people in places by holding over 1,000 doors and freeing 100 people from the work they don’t love. In other words, if you can quit your day job and/or get some passive income on the side, it is what he’s all about. He’s a coach at heart, is what I’ve gathered so far.

This is one of his quotes that resonated with me, “I clearly remember accomplishing my first goal and the rush of exhilaration that accompanied it like chasing and catching a dream. Not long afterwards, I helped someone else succeed at one of their most challenging pursuits. The rush returned and at this time, it was greater because they shared their energy of fulfillment and sense of true happiness with me. My life has changed forever. From that day forward, I have actively sought opportunities to support others in their pursuits.” Jerome Myers, welcome to the show.

Thank you so much. You set the bar so high. I’m not quite sure where you got all that stuff from, but I’m grateful for you to share that because it is an accurate depiction of how we got to where we are now and the fuel for where we’re going in the future. I appreciate that.

By the way, you can find Jerome at D3v3loping.com. Jerome, will you give our readers a little bit about your story and your focus?

I was born in Fort Bragg, North Carolina. My dad was in military intelligence. He was a jumpmaster, the hero’s hero that many kids aspire to be. As I was matriculating through high school, I had the opportunity to go to West Point and he’s like, “That would be a great idea.” I graduated in 2001, so this is right before the war started. There was one guy ahead of me who did go to West Point the year before and they’re like, “You can go be with Greg. It would be amazing.” I’m glad that I didn’t do that. Not because I’m not patriotic or have allegiance to America, but maybe I’m just a wimp. The thought of going to a foreign country to get shot at didn’t excite me and Greg, who is like my big brother, went and did that. He lost friends who he spent a tremendous amount of time with and I was like, “Our decisions make a huge impact on where we end up.”

Decisions make a huge impact on where you end up. Click To Tweet

My path was different. I went to North Carolina Agricultural and Technical State University. I got an Engineering degree. I played football for four years there. I got out of school and started as a structural engineer. I did that for a few years, got on a leadership track, identified as a high potential and continued to grow in my career. In 2009, the recession came and some of the people that were helping me navigate Corporate America and gave me opportunities to progress my career were eliminated. I got stuck in this job that I hated and I was in that job for 30 months, 29 days and 5 hours. I applied for 100 jobs over the course of the time I was in there because I was trying to get moving and get out. I was like, “I never want to be in this place again. I never want to be in a place where I hate my job.” Eventually, I got out and got into a financial analyst role.

At that point, I had my MBA and they told me, “If you don’t get a promotion in the next few months, the bonus that you had in your old job is going to get cut back.” I was like, “What do you mean? You just hired me. You knew what my comp was when it came in.” I left. I went out and started doing consulting for a small consulting firm. It’s a series of these stumbles. I get to this new job and things are going well. My boss says, “You charged the admin budget last week.” I said, “My project was over. There’s about a week lag in between, that one ending and this new one starting.” He said, “You will either take a vacation next time or figure out how to make sure that your project is aligned.” I was like, “I’m done. I’m not going to charge the client for work that I’m not doing for them.” He’s like, “You should figure something out.” I said, “I don’t own the company, so I am going to go on the admin budget if I don’t have somebody to bill.” He said, “That is the last time that you will bill the admin budget. You probably need to go back and fix your timesheet for what you did.” I was like, “I’ve been 100% billable since I got here. This doesn’t make sense.”

I gave him back a $10,000 sign-up bonus, I left and went to another company. There, we had great success and got to travel internationally. I was on a plane every week. I didn’t like that part of it. I enjoyed traveling but I didn’t like being gone all the time. In order to take that role, I had to give up coaching football. I was a guy who did engineering work or management work during the day and then at 4:00 PM during football season, I was going to high school and I was coaching football. That was where I felt like I had my greatest impact. When I was traveling, I didn’t have the ability to do that anymore. I gave up coaching for $600 a month and after-tax dollars. I felt like I sold my true gift and my passion cheaply but I needed to provide for myself and my family and grow. It set me up for the next job and that last job was building a $20 million division for a construction company. We had real estate, engineering design and the construction piece. I was employee number two. It moved from 2 employees to 175 over the course of eight months.

At the end of the year, we built that client for about $20 million. My pat on the back was a $30,000 bonus and we made $6 million in profit that year. I was like, “There is something completely wrong with this.” I asked, “Are you going to give me a promotion or a raise? We built something out of nothing.” “You’re overpaid already.” I thought to myself, “I don’t have to make $20 million a year. I don’t have to make all the money that I’m making because I didn’t grow my lifestyle as I was increasing my income.”

After two rounds of layoffs, I decided that I was walking out of Corporate America. I got tired of dreading the holidays because I knew I had to lay people off.” We did that two years in a row and I was like, “Enough is enough. There’s nothing fun about spending Christmas Day through New Year deciding who’s going to have a job in the new year.” I went back to something that we were doing or thinking about when I was in college. My friend, Ron, and I were sitting on the stoop, and for those who don’t know, that’s the stairs that go up and down between floors. We were talking about what we wanted to do. We knew we didn’t want to have jobs. We knew we wanted our time decoupled from our income.

We realized that we were paying rent to somebody and the whole complex was paying much the same rent. He was making about $700,000 a year and we’d never talked to him. We never saw him and we didn’t know what he looked like. The issue was my dad was a soldier so we didn’t have business owners and wealthy people coming over for dinner to eat with us. Access to that network wasn’t something that I had. It took me going through Corporate America, and even after I left Corporate America, going to banks and getting turned down. I was sitting on the porch of one of the flip houses I was working on since I couldn’t get into a multifamily because I couldn’t get financing. The guy pulled up and said, “Let me see your house. Let’s see what type of finishes you guys are doing. We’re doing something on the street.” In that exchange, he mentioned that he was going to buy a property, a 23-unit building.

CGT 6 | Overcoming Stagnation

Overcoming Stagnation: The government is going to incentivize you to do what they want.

 

I begged and pleaded, “Please, let me get in with you. I want to do apartments. They said I can’t do it because I don’t have experience,” and he left me out. Fortunately, the guy did not take his offer. I got into the deal backdoor. He needed to put a team together. I had an extensive project management background and this was an extremely heavy value add. On our first deal, we did a new roof, new parking lot, landscaping, added a half bath, added a laundry room on the first floor, granite, removed walls, and painted. We did the whole gamut and they needed somebody that could help make sure that that process went smoothly. That’s how I got into the apartment space.

You said engineering into investment real estate from this idea, “Take control of your own destiny and not be depending on corporate jobs, and whether it be layoffs, bonuses or getting paid for the value that you have. In this arbitrary, you’re already getting overpaid based upon the standard of what we could hire someone else out to do. Instead, you said, “I’m going to figure out something else where I take control of my own destiny,” and multifamily investment real estate became the vehicle. Before we dive into some of the nuts and bolts of that exact transition and some of the things you’re doing, I’m curious, who was Jerome growing up? Not just the athlete and the hard worker, but give me something where you were given a certain gift, Jerome, and connect the dots with where you are as an entrepreneur, coach and educator. What strength or gift were you given? How does that impact how you help others?

The immediate thought that comes to mind is when I was about five, and my mom was my best friend as a kid. I’m an only child. We were playing on a blanket in the front yard and Lonnie, the trash man on the back of the truck, would grab the trash, throw it in the back, and then pull the lever. My favorite part is when he pulls the lever, I get to hear the noise and I was like, “This is awesome. Mommy, I want to be a trash man when I grow up.” Lonnie gets home at 2:00 and my dad didn’t get home until after 6:00. He had the lifestyle and he got to play with big machines. My mom looked at me the way the only mom could and said, “You like Nike’s. You like nice things. That isn’t going to support the lifestyle that you want to live if you want to maintain the standard. You’ve got to dream bigger.” I was like, “He’s got a great life. He gets to do all the cool stuff.” I didn’t get it at that point. The point that she made was like, “Dream big and your dreams should be real whatever they are.”

That was the gift that she gave me. It made me realize that you can be an encourager or you can have anything you want. The thing that we miss in society because it’s so microwave is that you’ve got to make some sacrifice. There is a price of admission for the things that you want to have. I’ve been driven to that. I’m willing to pay whatever price for whatever I say I want and nothing can get in the way. There is nothing that makes me believe that I can’t have that. I give that all back to my mom. Seeing discipline and work ethic from my dad’s side, it made the whole picture come together. He worked Carolina half days from 6:00 to 6:00. He worked hard.

The mom who is encouraging you, teaching you to dream big and thinking to think outside the box. Your dad who was working hard, providing and in figuring out a way that would move you towards your dreams. I heard a good quote and it goes like this, “Consider it a privilege, not a sacrifice, to pay the price for my dreams.” It’s one of the quotes that I try to read on all my goal sheets every time I look at it. It’s a privilege and an opportunity to go out, sacrifice, work hard and figure it out. That’s a privilege to pay the price for the big dreams you have in your heart, for your family, community and for helping others. That is the price of admission. Shifting a bit here. Before your success as an educator and as a coach, let’s walk through that transition from a corporate job, first multifamily property, and 23 units value add and you’re like, “We have something going here.” Walk us through that transition of burn the ships and now, you’re all in.

I burned the ships before I even got into the game. I was naive and uneducated when I walked out the door because I had a 100 credit score, some cash in the bank and all these certifications, an MBA, Six Sigma Master Black Belt and an engineering license. I thought those things were going to matter when I went to the bank, and they told me that it didn’t because I hadn’t signed a loan on an apartment deal. It was frustrating and it was humbling. It was a lot of things. I had to shift and the pivot was to go into a single-family fix and flip. I did a few of those and that experience was beneficial when I started estimating costs on apartment rehabs and understanding how things go together and working through the process of scheduling these things and getting in the right contractors in the right sequence. All the actual nuts and bolts of making the sausage that is of a value-add property. It’s easy for people to say, “We’re going to go in. We’re going to do a rehab. We’re going to bump the rent to $150.”

There is a price of admission for the things that you want to have. Click To Tweet

What happens when the flooring guy doesn’t show up? What do you do? Did you think about that plumbing and how you’re going to have to adjust that in order to get the flow that you want? What does that take? I learned that stuff and it’s aggressive. In every rehab we did, it was close to $100,000. Getting that deep knowledge on how to execute the value-add thing allows us to do a better job as asset managers. When we go in and model something, we’re doing it from experience. Not from the experience of doing 100 and 200 apartments, but knowing the process that you go through to execute it. What that costs and what can go wrong so you can have your contingency plans and get through the process. At the end of the day, once you’re in, you have to finish. There isn’t turning around, folding the tents and surrendering. Whatever it costs and however long it takes, you have to be willing to endure it. I don’t think a lot of people understand that when they’ve got those three sentences on the paper. This is a business strategy for executing our value add on an apartment building.

Could you walk us through an example of a deal that you did for an apartment complex from start to finish and maybe the opportunity, challenge and conflict you went through? Perhaps, I don’t know if he sold it, needed to refinance or backed out. Walk us through a deal story.

My favorite one is called Myers Pointe at Greenbriar. Our first deal in Greensboro, North Carolina is a twenty-unit and we purchased it for $840,000. I won’t give you the money that we put into the rehab but we’ve renovated 14 of the 20 units or maybe even fifteen. It started out rough. We hired a property manager who wasn’t capable of performing the things that we thought they could. We had to jump in and start executing our business plan getting the vacant units turned. We bought that property thinking there was 80% occupancy and there were four vacancies. It turned out that there were seven and we had to work through that. We thought we were going to renovate 4 or 5 units in the first year but we renovated twelve. We went through this process of dealing and fighting with vacancy.

What we did in that space was to figure out what indicators are telling you if you’re going in the right place. When you think about modeling, you put these numbers in and it gives you this average for rent so that you can figure out what your gross income numbers are going to be. You project against that and then everybody that I know models as a percentage off of the income that they generate, but the reality of the situation is there are real numbers behind that. Throwing off 1% or 2% can be a big change. One of the mistakes that I made when we’re remodeling that was I modeled the property taxes wrong. I left the zero off so I had $1,000 and it was $10,000. The property made over $100,000 a year. It wasn’t a huge deal in the grand scheme of things but it’s a reminder of the things that can go wrong and having to understand the details of what we’re doing here.

We’ve taken average collected rents from $500 to $650. There’s a blend of the legacy residents plus new residents. New units are getting rented for $685. When we purchased it, it was $525. We’re in a period where we’re cleaning up our financials, getting our trailing three together, so that we can go to the bank and refi out. It’s our expectation that we’ll be able to refinance all of the original capital that was invested in this deal. We’ll be able to deliver that back to our partners. We prefer JVs over syndication. Our partners in the JV will get their cash back and we’ll be looking for another deal for them to go back into if they want to do that. If not, the people that signed alone have that box checked and they can go off and do their own deal, which we encourage people to do because we want to bring people in the game. When I talk to people normally, I ask, “How many people do you know that own apartments?” They usually say, “You.” It’s my interest to expose more people and have more people qualified so that if they want to get into the space, they can without having to go through a deal with me or one of the people that I’m working with.

I have a couple of thoughts. You mentioned JV over syndications and you mentioned the refi. For capital gains tax, the neat part about the refi is it’s not taxable, which is nice. It’s tax-free money. I’ve asked you what may be a strategy you use with someone you’re considering and you mentioned an opportunity zone. Would you walk us through a little bit about your strategy there if and when you do sell something like a Myers Pointe or a different property you’ve sold, and looking at opportunity zones and why you like those so much?

CGT 6 | Overcoming Stagnation

Overcoming Stagnation: A lot of people who are educators will try to make it as if you can do real estate with no money.

 

This part excites me, Brett. We’ve got six acres under contract and we’ve rezoned it from 72 to 120 in the opportunity zone. It’s going to be our first foray into new construction. We’re going to do a mixture of townhomes and three-story walk-ups. If we were to sell Myers Pointe, everybody will be ready to go into our new deal technology realm. We like opportunity zone space because I feel like the 1031 is kicking the can down the road. You’ve got 1031 into the next 1031 and unfortunately, a lot of people end up in a space where they don’t have the money to pay the taxes, so you can’t get out. The things I love about the opportunity zone, and I’m not a CPA, but the basic understanding that I have about it is you can put your money in your gains. Even if you don’t have gains, if you want to put money in, you can put the money in. Those gains are allowed to grow without you paying taxes on them. Years ago, those deferred taxes had to get paid.

There’s a real opportunity for some people if you can bank some losses along the way to reduce that amount that you have to pay in capital gains on that. If there’s some type of correction over the next 6 or 7 years, we may have an opportunity to reduce your obligation there and then in addition to that, the gain that was invested grows tax-free. If you stay in the property for ten years, on your exit, you don’t have to pay any taxes on that money. For me, that’s exciting. The government is going to incentivize you to do what they want. I’m trying to be opportunistic. I want to do what they want and particularly in East Greensboro. It’s an area that hasn’t had a tremendous amount of investment for many years so we feel like it’s prime for the people that we want to house. We do workforce housing as a business strategy. We like teachers, firefighters, police officers, and people who are working in retail. We think they make the world go round so we want to make sure that they have quality, safe and affordable housing. That’s our strategy. What most affordable housing is doing is build a class-A and wait 30 or 40 years, and then maybe it’ll be renovated or updated. Those people can move into something like that. I personally believe that they deserve something a little bit nicer.

Six acres, building some apartments, townhomes and three-storey walk-ups. The key thing that you said is 1031 and kicking it down the road, whereas in the o-zone, we have some key opportunities. We do have to pay some of that tax within seven years. Anything above and beyond that grows over a ten-year period is going to be tax-free, which is definitely attractive. If you happen to have losses along the way, you can use that to offset those as well. Overall, the opportunity zone is a great way to defer capital gains taxes.

Also, I like the comment that the government’s going to incentivize you to do what they want. This is the study of Macroeconomics. This is why they have these legal loopholes in place so that investors are incentivized to spur economic growth such as doing a 1031, IRAs, deferred sales trust or charitable remainder trust. There are different things that the government says, “If you do this with your money, we’ll give you a break,” which in turn creates more jobs, construction and more tax revenue. Ultimately, it’s what they want and what we need to help keep the whole US going here. Any other thoughts on that or is that a good summary?

That’s a great summary. It is way more articulate than me.

We work as a team. I’m curious, when did you shift from, “Me and corporate job to coaching others and bringing them in with you.” As a part of that, what’s the most rewarding part of doing that?

At the end of the day, once you're in, you have to finish. Click To Tweet

When they get a deal. Either I’m in the deal with them where they do the deal by themselves, for me, there is no difference. Whether I make a dime or not off of them are getting into space because it’s proof of concept. If somebody started out, they wanted to do this and they got to do it. If I’m close enough and I want to do something, “Maybe I can do it too,” because the person down the street did it. That social proof of concept is enough for me to be extremely excited and ready to celebrate what they’re doing. That’s absolutely the most rewarding piece of it. I want to expose more people to the space because we’ve boxed a lot of people out. I don’t think it’s fair. Other people should have the opportunity.

It’s the belief that, “If the guy down the street or my friend down the street or so and so down the street can do this, I can do it too.” That’s the fabric of society. Having a mentor or somebody who you can see, touch, feel and know is doing it. “If he’s doing it, I can do it too.” Otherwise, it’s easy to fall into the trap of limitations in our minds and our hearts because we don’t have that other person who’s broken that barrier and done the thing or whatever that we want to do. How many people have you helped along the way? Maybe give me a story of one journey where you’re like, “I helped him or her do this,” and some of the outcomes that have come from that.

I’ll use another one of my good friends from college. My friend, Devin, did his first deal. It was in Greensboro. We all did it together. In that deal, the property was listed on LoopNet for $1.5 million. We bought it for $1.375 million. The appraisal came in at $1.75 million. Before we even got started, there was $400,000 plus whatever our contribution was. We were smiling all the way in. That property wasn’t a heavy value add property. It’s an operational value add. The past owner was running it as student housing. They were paying everything, lights, water, internet, gas, paint and all that stuff. We said, “It’s separately metered. We’re going to let you have all that back. By the way, most of the people that live here aren’t students, so we’re going to transition this to workforce housing. Let adults pay their bills and pay their rent.”

It’s been an amazing success. We’ve been able to keep rents the same, but we decreased the expenses dramatically because we don’t have $60,000 or $65,000 or maybe even $70,000 worth of expenses each year in just utility bills. There were people who had 900 square foot townhomes with $400 a month air conditioner bills. The electricity that was powering those things was extremely inefficient and it showed a complete lack of responsibility because somebody else was paying the bill. We’d like that type of stuff where we can be creative, but as we look through the P&L, we’re like, “Here’s what’s wrong. We can fix this. We can do something different here.” That’s exciting. That got him into the game. He’s working his way out of Corporate America and this is going to be great for him, his wife and two beautiful daughters.

I’m curious about the utility. Are these master meter and now, you’re individually metered? Are you getting more efficient air conditioning systems or appliances or all the above? Walk us through maybe the top three things to take that utility bill down.

The first thing that we checked for, is it individually metered? In North Carolina, we’re not able to use RUBS, that Ratio Utility Billing System, and we have to have a bill that people can pay. For the electricity at that property, all of them were individually billed. For about half of the units, the water was individually billed. For the other piece, we’re rolling into the rent. The next step on that will be to get individual meters in each one of the units for the water, and that will further drop our utility obligation. The gas was separately metered so they were able to do that. From an efficiency standpoint, if you’re going to pay bills, and what I’m seeing with a lot of quads or townhome communities, is there’s one pipe going into the building. One thing you’re going to do if you’re going to pay the bill is to switch everything out, low-flow sink, showerhead, and toilet. Those things will dramatically reduce expenses. The payback on them is less than two years.

CGT 6 | Overcoming Stagnation

Overcoming Stagnation: Your real estate is going to be worth something as long as there’s a building there.

 

Most business plans are a minimum of five and it makes sense to make that improvement. Depending on the size, Fannie has a program called the Green program, where you can go in and make those adjustments, and you’ll get preferential treatment on your interest rate. The government is going to incentivize you to do the things that they want you to do. Those are probably the top things from a billing perspective as well as, “I’m going to grin and bear it. My competitors are paying this. I’m going to have to pay for it too. Here’s how we can limit our exposure.” We’ve got a couple of quads and I had a $1,000 water bill when the bill is usually $200 in one month. I’m like, “What’s going on?” We went in and swapped all those toilets that month. Have we done that already, I would have never had that leaky runny deal going on. Of course, you can get some money back once you do that for the water company but for us it was like, “We don’t ever want that to happen again during our ownership. Let’s go ahead and take care of it.”

Set the system in place and fix it the first time at the right time as soon as you can. I’m curious, top two wealth-building strategies? If you had two things to say to somebody who A.) Has already built some wealth or B.) Just starting out and building some wealth with commercial real estate, what are the top two for you?

A lot of people who are educators will try to make it as if you can do real estate with no money. I don’t think wholesaling is investing in real estate. I consider that marketing and not buying an asset, adding value in some way, shape or form, and then either keeping it for cashflow or selling it. The first thing you have to do is be financially fit. Don’t make your expenses as much as your income. Use that gap that you’re creating to save and grow your wealth. If real estate is your play, I don’t think 401(k) is where the money goes. You save that money outside of a 401(k) or in some type of self-directed IRA so that you can push that money to where you want to go. I know that we’re taught, “It’s 401(k), get to match all that other stuff.” That’s great if you don’t plan on using that money for another 30 or 40 years. If you’re trying to get as big a shovel as you can to get into real estate as quickly as you can, then you probably don’t want to put your money there.

The first thing is to take care of your personal business. Run your personal finances like a business that allows you to start creating wealth because instead of being negative, you become positive with the actual cash you have in hand, and then you go buy real estate because you’re positive. I don’t see real estate as a way to get out of debt. I don’t see real estate as a way to create income right away. There’s some form of investment. With multifamily, in particular, you’re buying a business. It’s not likely that your business that you started or you bought is going to be profitable in the first year if you bought it at a discount. There’s going to be something that goes into it where you have to make some investment in order to make that thing the goose that it needs to be to keep laying those golden eggs.

For me, start with yourself first. Run, work your job. Work your second job. Get rid of all your debt and then start building as many savings as you can and put that money in a place where you can deploy it if real estate is your play into real estate. I do believe real estate has asymmetrical returns, specifically multifamily. That’s not something that gets outsourced. It’s not like buying a tech stock. The tech stock can go to zero. At the minimum, your real estate is going to be worth something as long as there’s a building there. The other piece of that, there’s a tremendous amount of tax benefit in the asset class, which you can’t get anywhere else and the ability to leverage.

The first thing you have to do is be financially fit. Don't make your expenses as much as your income. Click To Tweet

Our loan on that deal was $1.1 million that I talked about with Devin. That $400,000 in equity that was created, that’s ours even though we’re using the bank’s money for the $1.1 million. Whatever we brought is money that’s at risk if we don’t perform but that equity, that’s asymmetrical and your ability to grow. We feel like as long as you buy the deal right and you’ve got to compensate an operator, it’s going to be difficult to lose money in real estate, especially at the multifamily level because it’s not what’s happening next door. It’s value based on your ability to make a profitable business. As long as you’re operating it and running it well, you can probably make your business profitable.

I can see how you’re a great coach to get people inspired to go and take action because it’s right there. You do a great job of breaking it down and making it simple for our readers. To remind you guys, you can find all about Jerome Myers at D3v3loping.com to connect with Jerome. Jerome, I’m curious on some of your top things for our lightning round. What’s your favorite book you’ve read?

Millionaire Success Habits by Dean Graziosi.

What’s your favorite podcast that you’re following?

This one is going to be self-serving, Brett. I follow the Dreamcatchers Podcast. I’m the host. We tell the stories of ordinary people doing extraordinary things, giving people that social proof. I talk to people from a bunch of different backgrounds and they give us those tactics on how they caught their dream. We’re taught to chase and there’s a whole lot of conversation about the process. I like completion. I like for us to finish. I’m going to plug the podcast there.

CGT 6 | Overcoming Stagnation

Overcoming Stagnation: As long as you’re operating it and running it well, you can make your business profitable.

 

What’s the best restaurant in North Carolina?

I like this place called Luxe Lounge. It’s unhealthy. You get some good macaroni and cheese, fried pork chops, collard greens and yams. It feels like Thanksgiving over and over again. The pricing is reasonable and the food is great.

That concludes the lightning round and now we’re moving to our last question. This is the most important question that our readers look forward to the most. It centers on your values, Jerome. We get a chance to get to know you a little bit more and also provide some inspiration. How do you stay centered in your values? Second, how do you stay encouraged to reach to new heights for new goals?

I told the story about the guy who told me I need to charge, that I had no budget, not to charge at my budget, take a vacation. At that point, I realized that I didn’t do stuff for money anymore. For me, it’s all about being able to look myself in the eyes, in the mirror and we call it a mirror moment and say, “I did the best that I could do. I can sleep with a clear conscience now.” I’m going to be accountable to myself and we struggle with that. We justify regularly the things that we do or don’t do. For me, I’m extremely aggressive on my self-accountability and encouraging others around me to hold me accountable to the things that I say are important.

How do you stay encouraged to charge forward to reach to new heights or new goals? After you’ve accomplished so much, how do you stay encouraged to keep that fire going?

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In the organization, Dreamcatchers, that’s on the backside of the podcast where we do our coaching, we have a mastermind called the Pow Wow at the Mountaintop. In that Pow Wow, it’s my responsibility as Chief Inspiration Officer of Dreamcatchers to inspire other people to reach to their goal. There are people that I haven’t met who are counting on me to do the things that have been placed in my heart to do and I execute from that place. I don’t want to let those people down. Even though I don’t know what they look like or where they are in the world, I know that they’re relying on me to do that thing, whatever it is. Whether it’s housing or speaking at a specific event, putting together a conference, whatever it is, I know that it’s been placed in me in order to make the world a better place. That’s the inspiration.

Bringing it full circle, that second question I asked you about, what gift were you given? It’s the gift of encouragement, which sounds like what your mom had as well. Have you had your mom on the podcast to run one of these events to help encourage some of your followers?

No. My mom is shy. She wants to hang out with my two girls and play dress up and do that kind of stuff. She’s over me. I’m not so much fun anymore. She prefers to play with them.

I want to thank you for being on the show and sharing all of your wisdom and insight. Do you have any last words for the readers? Please remind them where they can connect with you.

If you are interested in our operating company, you’ve already heard about our D3v3loping.com website. If you’re interested in multifamily education and getting into the space either to get an education as a key principal, somebody signing a loan or as a passive investor even or you want to be a deal lead, we’ve created an educational brand. It’s called Myers Methods. The website is MyersMethods.com. You can get a free four-step guide. It breaks down why we like JV over syndication and a whole lot more depth than what we talked about here.

The other thing I’d like to promote is our conference. We’re doing the Mid Atlantic Multifamily Investing Conference in Greensboro, North Carolina. If you type in Mid Atlantic Multifamily Investing Conference, you’ll be able to find it on Eventbrite. We’d love to connect with people who this message resonates with. For us, we’re scouring the Earth looking for people who are looking for ways to avoid capital gains taxes, ways to create wealth for your family because, at the end of the day, that’s what it’s about, improving the world and creating wealth for others. We call it doing it good while doing well.

CGT 6 | Overcoming Stagnation

Millionaire Success Habits: The Gateway to Wealth & Prosperity

It’s been a real pleasure. I appreciate your time. I appreciate your wisdom and sharing your story with us. That concludes another episode of the show. I want to thank our readers for reading another show. As always, we believe most high net worth individuals struggle with clarifying their capital gains tax deferral options when they go to sell their highly appreciated multifamily properties, businesses, high-end primary homes. Not having a clear plan is the enemy and using a proven tax deferral strategy such as an opportunity zone, 1031 exchange, deferred sales trust is the best way for you to create and preserve more wealth. With that, we look forward to seeing you on the next show. Thank you so much.

That concludes our show with Jerome Myers from North Carolina. He is an inspirational guest and with tons of wisdom. I love the way he’s giving back and becoming social proof of concept for everyone in his sphere. For everyone who’s following this show, with enough determination, with enough coaching, with enough persistence, you can achieve your next business venture and your next wealth opportunity to help more people, which I love.

I want to also share a few other thoughts here. Take control of your own destiny. Don’t be dependent on a corporate job. I can certainly relate to that. Building passive wealth through real estate, to me, is hands down the best way to do that because you get a chance to either partner with others and be helping your community and then also have all the tax write-offs and incentives there as well. Dream big. I like when he talked about the price of admission. We all have to pay the price for admission. It’s not going to come easy. If it were easy, of course, everyone would do it but it’s going to be worth it. Consider it a privilege and not a sacrifice to pay the price for your dreams. What are your dreams? What are your goals? Have you written them down? Consider it a privilege, not a sacrifice to achieve those. You have one life to live and let’s get after it.

Also, becoming financially fit. For those who are maybe newer to investing and having a budget and creating some margin. I like the thought of the 401(k). Not investing so much in the 401(k) but more so investing in passive commercial real estate or active commercial real estate and saving up that amount. My idea for that would be instead of waiting until you’re 60 to enjoy a lot of those benefits, maybe if you do passive real estate, you could retire at 55 or 50 or 45 and have more income versus waiting 30 years. I also connected with the self-accountability but also encouraging others to hold you accountable for what’s important to you. Who are you letting into your life? Who are you being vulnerable with? Who are you opening up to?

Let’s talk quickly about opportunity zones, 1031 exchanges and a deferred sales trust. Opportunity zones are a great way to defer tax as long as you have a longer time horizon is my take on those. Meaning, 7 to 10 years-plus you don’t mind being illiquid or be keeping those funds there with different owner-operators is what I’ve seen with these. I like opportunity zones. There are good opportunities, but also make sure that you’re not buying the deal just because it’s in an opportunity zone but you’re buying it for the fundamentals of the actual real estate. Some of these opportunity zones have the prices have gone even higher because they’re in the opportunity zone and so some of that savings, the market, in other words, has adjusted for that and you’re overpaying for that. Make sure the fundamentals make sense on those. I’m sure Jerome’s deal does make sense. He’d have a great opportunity there to build what he’s building.

The deferred sales trust on the other hand, you’re getting out of real estate to start with is at least what I found the best way to take advantage of it in this highly appreciated marketplace. Until and if you find a deal and/or you’re using it just to diversify into multiple properties, meaning, let’s say 2, 3, 4 or 5 different syndications of which the deferred sales trust allows you to do. It’s like a self-directed IRA. You sell, you pay off all your debt, the proceeds go into the trust and you’re in a deferral state, at which point you can move it into a deal or 2 or 3 or 4. Also keep it liquid, meaning stocks, bonds, mutual funds in case you want to access the cash quicker. Figure out what your needs are.

The same thing with a 1031 exchange, if you feel you have a good opportunity or a good deal to go into and you found the deal, do the 1031 but don’t overpay just because you want to defer the tax. Make sure you’re buying on the fundamentals of the real estate, not just to save in tax. I hope you enjoyed the show as much as I did. If we can be of any help to you, reach out to us at CapitalGainsTaxSolutions.com. We encourage you to look at every tax deferral option that is out there so that you can make great decisions when you sell your business, high-end primary home, real estate or other highly appreciated assets. Thanks so much. See you next time.

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About Jerome Myers

CGT 6 | Overcoming StagnationJerome Myers leads The Myers Development Group, LLC, which focuses on buying broken apartment building businesses and using innovative thinking and solid execution strategies to optimize the operational efficiency of the business.  Currently, Mr. Myers is asset manager for approximately 90 units and 90,000 square feet of workforce housing across Virginia and North Carolina and on a mission to hold 1,000 doors by the end of 2028.  When not actively working on his personal portfolio he coaches other real estate investors on the Myers Methods of Multifamily Investing.  Outside of real estate Jerome hosts the DreamCatchers Podcast, volunteers on STEM (science, technology, engineering and math) boards and enjoys traveling internationally.

 

 

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