Daniel Kwak – Founder at Miotti Partners Capital | How To Become A Real Estate Millionaire By 24

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About The Guest

Daniel Kwak first immigrated to the United States with his family at the age of 5. Due to a financially disadvantaged upbringing, at the age of 20, he had a negative amount of $187.65 in his bank account. Motivated by continued financial hardship throughout his life, he started learning about Real Estate Investing. 

For the first two years, he learned everything he could, and at the age of 22, he did his first deal. By age 23 he had 83 rental units, along with having raised millions of dollars in capital and also having done a variety of different deals and strategies. At age 26, Daniel founded Miotti Partners Capital, a core-satellite fund that has introduced the equities fund management model into the Real Estate space for the first time. He has also traveled across the country training and mentoring hundreds and thousands of aspiring real estate investors. 

Daniel and his brother currently run an online financial education company, along with a Youtube channel (The Kwak Brothers) that currently has around 200k subscribers.  Overall, Daniel aspires to be a great husband, leader, and friend by being more aware of God’s love today than the day before.

Talking Points

  • 00:00 — Intro
  • 03:19 — Daniel Kwak’s origin story
  • 13:19 — How does Daniel use his childhood story to action what he learns?
  • 17:24 — What are some of the action steps that Daniel Kwak takes to grow his business?
  • 20:20 — What were some learnings of Daniel Kwak from 87 doors?
  • 24:10 — Did religion help Daniel Kwak in growing his business?
  • 27:26 — Why does Daniel Kwak think that it is important to speak about religion?
  • 29:46 — Is money regarded as good or evil in religion and how does Daniel Kwak wrestle with that?
  • 35:53 — How does Daniel Kwak ground himself?
  • 37:35 — Does Daniel Kwak find more value in investing profit doing charity or reinvesting into business?
  • 40:21 — How did Daniel Kwak raise money for his book?
  • 44:44 — What is the reason for people pivoting into real estate?
  • 46:40 — What is a real estate perspective on hedging against inflation?
  • 51:52 — What differentiates Daniel Kwak from other entrepreneurs working in real estate investment?
  • 1:01:33 — How does Daniel Kwak protect himself in the business deals he is doing?
  • 1:02:34 — Why did Daniel Kwak build his own personal brand?
  • 1:04:41 — Building a virtual relationship or community building; which one is more important?
  • 1:08:10 — Closing thoughts from Daniel Kwak
  • 1:10:16 — What was the biggest challenge Daniel Kwak had in his personal life and how does he overcome it
  • 1:10:32 — Who has been a mentor to Daniel Kwak?
  • 1:10:58 — A book or a podcast recommended by Daniel Kwak
  • 1:11:24 — What would Daniel Kwak tell his 20-year-old self?
  • 1:11:39 — What does success mean to Daniel Kwak?

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On this podcast, you’ll find interviews, Q&A, keynote presentations & conversations on sales, marketing, business, startups, and entrepreneurship.

The podcast is hosted by entrepreneur, business executive, author, educator & speaker, Scott D. Clary.

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Machine Generated Transcript

SUMMARY KEYWORDS

people, business, money, real estate, deals, banks, started, federal reserve, god, big, entrepreneur, grew, inflation, world, mentor, greatest, year, spoke, rents, relationship

SPEAKERS

Daniel Kwak, Scott, Scott D Clary

 

Scott D Clary  00:00

Welcome to success story, the most useful podcast in the world. I’m your host Scott D. Clary. The success story podcast is part of the HubSpot Podcast Network and the blue wire Podcast Network. The HubSpot Podcast Network has incredible podcasts like my first million. My first million is hosted by Sam Parr and Shawn hurry. They feature famous guests. They discuss how companies made their first million and then some they brainstorm new business ideas based on the hottest trends and opportunities in the marketplace. Here are some of the topics he talked about. If you like any of these, you will love the show three profitable business ideas that you should start in 2020 to drunk business ideas that can make you millions, asking the founder of Grammarly how he built a $13 billion company or Sass companies that anybody can start. If these topics are up your alley, go check out my first million. Listen to it wherever you listen to your podcast. today. My guest is Daniel Kwak. He is a real estate investor, portfolio manager. He is an authority on all things real estate finance. He’s built a YouTube community of over 200,000 individuals. I had a great chat with him a little bit of a story of Daniel, he immigrated to the US at the age of five at 20. He had negative $187. In his bank account, she was motivated to change his life by the age of 23. He had 87 rental units, assets under management in the millions roughly $10 million. He had raised millions of dollars in capital. At the age of 26. He founded my IoT partners capital, it’s a satellite fund that introduced equities fund management into real estate for the first time ever. Now he’s raised money, he has a huge portfolio. He also built an incredible personal brand and he is an authority on all things. Real Estate, finance, he built an audience in a community of over 200,000 individuals on YouTube. We spoke about his origin story, we spoke about his upbringing, his immigration, his faith, and his faith based roots. Some lessons that he teaches over he’s very in tune with God with the Bible. What the Bible teaches about money in business, why it’s important for him why speaks about faith and why it’s such a, an intrinsic part of who he is, and how he includes faith into everything he does in business. Then we spoke about very tactical real estate things. So we spoke about how he grew his portfolio how to raise millions of dollars in capital, with no capital raising the experience or portfolio how he went from zero to 87 units and doors in one year. We spoke about disruptive real estate investing models. We spoke about networking with investors. And then lastly, we spoke about some leadership topics, some entrepreneurial topics, some general advice that he has for people that are looking to start a side hustle or go full time into real estate, how to get started from scratch from the ground up. So let’s jump right into it. Tons of faith, entrepreneurship, real estate finance conversations. This is Daniel Kwak, one half of Kwak brothers and he is a real estate investor authority and entrepreneur.

 

Daniel Kwak  03:20

Yeah, well, you know, every superhero has their origin story, right? You know, Peter Parker got bitten by the spider, you know, Ironman got rich, and there was no actually there’s no origin story with Ironman. He just, he’s just super rich. You know, he’s just having a hobby. I’m gonna be a superhero. You know, that is not my story. I did not grew up super rich. I actually grew up quite opposite. So I emigrated to the United States. When I was five years old 1999 from a little country called South Korea. The only reason why you probably even though that country is you either watch squid game, or maybe you listened to BTS. I don’t know, you know, but my family and so my dad was a pastor still is. And he actually went back to Korea to preach and run a church. But we came here initially because my dad and it may sound a little weird to, you know, perhaps non faith oriented individuals. But you know, God called my dad to come to Chicago and start a church. And so my brother myself in Aisle Five, my brother was seven at the time, we came to the United States, for people listening who know anything about immigrant life, sometimes it’s not the easiest scenario. So I remember we came here, we had barely anything to our name, our studio apartment that was about probably 500 square feet, was one of those situations where you turn the light on in the kitchen and the Cockroaches have spread, you know, and they would go to the walls and but I will share this story. This is kind of if you want to hear my real origin story who made you know the story that made Daniel who Daniel is today? I remember I was six years old. And there are many nights where our family had to sleep in the car because it couldn’t afford to pay the heating bill. And obviously winters in Chicago are not necessarily the greatest, you know, you’re not necessarily out hunting or camping or roasting wieners on a fire But I remember there was one night, when you know, it was probably around March or April, I don’t really recall, I was six years old. And as a kid, I always had trouble sleeping. And I remember there’s one that I looked out the window, it was about 1:30am in the morning, and I saw this guy who was stumbling out of let’s call it a gentleman’s entertainment center. And we our apartment complex we lived in was next to a gentleman’s entertainment center, because that’s all we could afford. And so I see this guy stumbling out and you don’t have to be an adult or a grown man to know or, you know, to know that something is expensive. You know, you could be a kid and you can tell, okay, that’s probably worth a good bit of money. The suit that he was wearing was probably a two $3,000 suit. I saw that he had a really shiny watch on he little expensive. Absolutely. He looked rich, you know, and he got in the car, but you know, it got Lexus. You know, which back in the 90s. Lexus’s were like the luxury car brand, right like they were it. So he got in this Lexus. And what made me really sad was he had a wedding ring on his hand. For some reason that made me really sad. But he Yeah, six years old, I was six years old. Yeah. And I was like, alright, this guy is probably going to kill somebody because I literally saw him swerve, right? Because you stumbled, he stumbled out of the gentleman’s anything center. So he was pretty well off. And I turned my head literally 90 degrees to my left. And I saw my parents who are sharing a twin bed, in a room that doubled as our parents bedroom, dining room, kitchen and living room. Next to you know, rusted appliances, Joe’s place where our rent was, I think $380 a month, just not the greatest place to live. And the question I asked myself was, imagine if we had a world where people who had my parents heart because they were God fearing people, I mean, my dad was the type of man where even if you only owned one shirt, he would take the shirt off his back and give it to, you know, a homeless guy or some stranger that needed it. And I started asking myself the question from six years old, what would it look like for my dad to know what the other guy the guy who stumbled out of the gentleman entertainment center, because granted, even though he might be a jerk, and not be the greatest person, he know, something that my dad doesn’t know about making money. He knows something about accumulating resources and putting together a business plan and executing and granted, he may have been the most transactional, horrible human being in the world. But let’s give the guy some credit, you know, and I started asking myself, what would the world look like if we had every single person who was like my dad, who had that knowledge of the guy who stumbled out of the job was entertainment center? Or if the guy who stumbled out of the gentleman’s entertainment center had the heart that my dad did? What would the world look like? What would that mean? And I started asking myself that question, almost every day ever since I was a kid. And growing up even further and more and more. So when I was a teenager, young, my dad’s church, I remember every month we had a guest speaker. And these guest speakers were phenomenal people, whether you’re religious or not, you know, there are missionaries who will go off to other countries to help those people in those communities and tribes, you know, and one of the most common denominators was they’re always asking for money. They’re always fundraising, they’re always needing financial support for anything, it held them down from what they really wanted to do, which was help people. And so again, that question just kept playing over and over and over in my mind, and for some reason, I just didn’t, it just did nothing about it. Because I didn’t know how, right like, how can I get? So how do I even do this business thing? How do I even you know, like I just didn’t across to me. So it all led to a breaking point. You know, we all have our moments where we say enough is enough, right? I’m sure you had that moment. We all every entrepreneur has that moment of forget this. I’m starting my business. It’s time I had to take the first step. So I remember I was 18 years old, I found myself having negative $187.65 in my bank account. And I still remember that day like it was yesterday, I looked down at my phone. And it was super embarrassing, because I had a big crush on this girl and my brother came to me said, Hey, man, are you still in debt? And like, dude, just shut it. Right. But that was the day right? That was the day I decided to do something about it. And I read an article by Forbes magazine that says that out of the top 1% of wealthy individuals in the world, like three fourths of them made their money investing in real estate. And so I was like, I gotta invest in real estate. So long story short, I’d get up at very early in the morning wouldn’t go to sleep till late at night. And I would just learn everything I could about investing, finances, real estate, and all to answer the question, Why did my parents grew up broke, while that guy who stumbled out of the gentleman’s entertainment center was rich. Why was that? Clearly there was a knowledge gap there. So I spent about three years learning my butt off. And this is really like the the first major lesson of how my success occurred, takes place. So I’m 22 at this point, 2122 At this point, and I haven’t done a single real estate deal yet. And mind you, I’m probably the smartest person in every single room I walk into when it comes to real estate But I think one of the reasons why most entrepreneurs and business owners, even individuals starting side hustles fail is because they have the knowledge, but they lacked the skill to be able to translate knowledge and information and inspiration into a blueprint that they could tangibly do on an app, you know, on a daily basis on a weekly basis, after spending hundreds of hours and 1000s of hours actually training different entrepreneurs investors, that, in my opinion, is the number one problem, the ability to turn information and inspiration into a blueprint that works for you. They can turn it into what’s normal?

 

Daniel Kwak  10:31

I don’t know. I don’t think so.

 

Daniel Kwak  10:33

I don’t think that’s I don’t think that’s knowledge. I think that it has for one a lot to do with fear. But it has a lot to do with in my opinion acumen. Right. Like people say all as they have that X factor, they have the it factor will know a nine times out of 10 they just are really good at turning information into action steps. Most people do not I mean, I know Scott, I’m assuming you talked to a lot of entrepreneurs, how many beginner entrepreneurs and business owners or even just moms starting side hustles? How often do they just go? I just I just don’t know what to do. Like, I have all this knowledge I have like I I just don’t know what to do overwhelming. It’s super open. Thank you. That’s another word that they use, you know, where they just go, this is why I want to hire a coach. You know, this is why I want to take courses, which again, nothing wrong with it, right? I have a real estate investing coaching business, right? Like, I’m all about it. But that’s what I help people do. I help them translate the information that they have into knowledge and action steps and also KPIs leading like we can get into that here in a second. But 22 years old, I haven’t done a deal yet. I know all this knowledge. And so usually in moments of frustration, I have a conversation with a big man upstairs. And you know, I go to guy and I go hey, man, and by the way that that is actually how I talk to God, I go, Hey, Hey, Dad, or hey, man, what’s going on? You know, I don’t go Almighty Lord seven of thy you know, like, I don’t do that. I just can’t stand people who do that. It’s like a pet peeve of mine. But I just go, Hey, Dad, or Hey, God, or Hey, bro, you know, why am I having such a hard time with this? You know, like, Why? Why am I so frustrated? You know, why can’t I get this to move. And so he takes me to this passage. It’s in the Bible, which I hope you don’t mind me bringing up the Bible. But it’s in John chapter 13. It’s just a story how Jesus has this realization that he’s the most powerful being in the universe. So imagine you having the powers of Superman, Iron Man, Hulk, you know, like all of them combined. And he has this realization. And it actually says in the Bible word for word, that Jesus as he was entering the room, right, the upper room with his disciples, he had this realization that the Father had put everything under his authority, and that he was from the Father and was returning to the Father. And literally, the verse right after that is so like, so cause and effect, he begins to remove his outer garments, brought out a basin of water, and began to wash the feet of his disciples, which, historically speaking, in terms of context, was actually the task reserved for the lowest ranking slave, not even servant, but the house slave was reserved, and the lowest ranking slave had to do that. And by doing it, you know, he exemplified his humility, right? I’m a big believer that money doesn’t change anyone, it just magnifies who they were a whole time. And if you consider what power does to an individual, that’s exactly who Jesus was. So the story and the morals and

 

Scott D Clary  13:15

now you’re seeing and that story in that particular story, I want to understand how you actually use that story to sort of action. Yeah, you learn. But more importantly, I’m seeing, I’m seeing the thread between what you saw as a child, and then what that story means to you. Because I think what you’re getting at, in your opinion, this is the issue with money and power and wealth, it’s that you don’t have that humility, and that constant, tying back to humble that will sort of set you in a in a good spot so that you can be an ethical, moral, and still successful person.

 

Daniel Kwak  13:53

Yeah, in some ways, yes or no, because I didn’t, I don’t think it’s a bad thing to drive a nice car or have a private jet. Or, you know, like, it’s not, it’s not a bad thing at all. Most people who have hundreds of millions of dollars that are might their friends of mine, they continue to make hundreds and millions of dollars, not because they’re selfish, but because for them, they love it. They love business, they love expanding and growing it. Otherwise, why would they still work? You know, but for me, the lesson that I got from it was, you know, and I spoke to what’s called the Holy Spirit, right? So that the Holy Spirit is God’s presence in your day to day life. And I asked the Holy Spirit, like, what does that story mean for me? Right? Like, how can I apply that and you know, and work it into my life. And God was very clear in his voice, he says, Daniel, the problem that you have, is that you have a very smart brain, you have all this information, but every single room you walk out of the people’s feet are still dirty, you know, and, for me, that was my big epiphany. So what I what I started doing is actually really simple. I got a notepad out very simple, something very similar to this right, like a journalist, a journalist with us. And at the time, I belong to a couple of different weekly networking events. And I started asking everybody that question, and by the way, this is like Five 600 people, right? I started asking everybody a question, what is your biggest obstacle you currently have in your business right now? Right? And it actually points to an epiphany that I had four years later that every successful successful business has three things locked down. Number one, who is your ideal client? Number two, what is your grand slam irresistible offer? And number three, what is the market telling them? So the problem was, I had a kick ass product, right? Like I knew who my ideal client was. But I had no idea what the market was saying. So me washing other people’s feet and asking five 600 people, Hey, like, what’s your greatest problem you currently have in your business? Allow me to unlock that third question that I needed to answer for myself. And so that led us I started doing that survey in 2016 2017. In January 1, I had a goal of acquiring 20 rental doors. That’s what I wanted, I want to 20 rental units, 20 income streams within real estate. And then my mentor around that time very wisely told me Daniel, don’t set goals, set standards and expectations. Right. And I said, really? Okay, so I started doing that I spent three weeks in January refining, what are my daily action steps? What are the things that I have to do every single day for me to succeed? You know, John Maxwell describes it perfectly. Right? You know, he talks about how, you know, he gives the metaphor of cutting down a tree, but doing five, you know, swings every single day, every single day, no ifs, ands, or buts, just a daily habit. So I wrote down, I spent a week writing down all the action steps that I could do, I reverse engineered me hitting 20 rental doors. And I reverse engineered that goal of acquiring 20 rental doors. And I reverse engineered what action steps I have to take to get there. And I wrote all those action steps down. And then I brought it to my mentor. And I said, How can I make this more efficient? Right? Like if I keep doing these things, I’m confident that I can get the school done in a year, how can I get this done in a month? In a week? What would you do differently. And after a four week process of just going back and forth, my mentor making corrections, new drafts, I came up with five action steps that I would do every day in the year 2017. And again, this is after I asked five 600 people, what are the greatest problems you have in your business? So I had all those till

 

Scott D Clary  17:11

this point of actually still not. Now you still have not actually occurred just knowing you have not?

 

Daniel Kwak  17:15

So So I got the got those answers from my mentors. And I did them every single day. Right did my first deal in March of 2017. And by the end of the day, you don’t mind me asking? What were those? Those action steps?

 

Scott D Clary  17:28

Yeah, yeah, perfect stuff. I’m just curious what they are. Yeah,

 

Daniel Kwak  17:31

yeah, so one of my biggest hurdles of acquiring deals was I needed to raise capital, you know, so I needed to acquire investors. And that’s one of the things that my mentor helped me point out was, hey, you know, you’re trying to do these deals, no money down. So I was trying to buy them seller financing, which is you get the financing from the seller and not the bank, you know, and when you get the seller to finance you, you could be a little bit more flexible with the terms, you know, you can do a 0% money down, you know, two percentage, but you can get a little bit more creative. So, that’s what I wanted to do, because I had no money. And then my mentor goes, Hey, you gotta utilize your investors that you already have a relationship with, like, that’s just low hanging fruit. Why not just do that, that increases the likelihood of you doing a deal by like 40% that, you know, expands the amount of deals that you’re able to do. So that was one of them, constantly building new relationships, investors, the daily action step for me at that point was go to two networking events minimum per week, and then reach out to one potential investor a day, that was my, that was my actual stuff. That was the stuff that I had for myself. Not only that, but look at at least three to five deals every single day. And you know, and I had to I had daily ones, I have weekly ones and a monthly one. So I had eight, I had eight, total nine, nine, I’m sorry, I had nine, five every day, three every week, one every month. And the one every month was just, you know, taking two hours to make sure that the ball is continuing to move forward. That I’m continuing, I’m holding myself accountable. Every single week was stuff like, you know, going to networking events, you know, every single week. Another one was introducing myself to a new real estate professional, right. So a lot of it surprisingly, was network based. Because my mentor saw my strengths, my weaknesses, he goes, Look, you know, a lot, you have all the information, you just got to expand your network. You know, knowledge plus people is going to equal success, you know, you just got to network it yourself out there more. So all like probably about half half to about the majority of my nine, you know, regular action steps were some type of networking, yeah, some type of networking. And then the other ones were just, you know, spending every morning looking at what’s happening in my local market. That was that was one of my what’s known as KPIs key performance indicators. And so as a result, December 31, I had 87 By the end of the year 87. So I went from shooting for 20 and I actually ended up with 87. And that’s actually one of the key advices that I would tell every entrepreneur, every real estate investor like you can set a goal but focus more of your time on the process and

 

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Daniel Kwak  21:00

how you get there and reverse engineer your action steps. And that will actually take you a lot longer and farther than what you actually couldn’t be capable of doing. Because if you think about setting a goal, you’re setting that goal based on what you know, and who your network is right now. But if you focus on the process, you actually expand the network and expand the knowledge that you currently have. And then your goals can be infinite. You know.

 

Scott D Clary  21:21

And then, as you as you so how you got these first 87 doors. So you went into your network, you had these action steps, you found investors, you found properties. What was what were some of the learnings of having 87 doors, because you’re not owning these outright? So what kind of what kind of financials are we talking about when you actually do something like this?

 

Daniel Kwak  21:41

Yeah, so 87 doors, you know, when we bought them, and we kept them, we raised the rents, that was one of our strategies. And I think the the portfolio valuation ended up being somewhere around $10 million worth of real estate, one of the things that I’ve learned the hard way was the importance of leadership, and what it actually means to lead people and cast a vision and move towards it. That’s something that I really underestimated. One of the things I told myself early on, I was like, Well, I just, I could just do deals, that’s, that’s completely fine. And then I realized, once you get to a certain point, you got to have a team around you. And you and this is one of the things that I really attribute to is knowing what people want. Everybody is driven by different things. I thought everybody was driven by money, I was dead wrong. I learned through a couple of hard ways that No, like that maintenance guy over there is actually not driven by money at all. He’s driven by different things. Surprisingly, some people are driven by words of affirmation, believe it or not. So I looked at a couple of assessments that really helped me. So one of them’s a book called drive by my business coach, Woody Woodward. And literally, the book was all about how people are driven by different things, and how you could utilize what people are driven by to your advantage. And it’s not like an inauthentic, like I’m gonna take advantage of that type of thing.

 

Scott D Clary  22:56

But it’s actually it’s actually a more human empathetic, absolutely. How to lead people. Totally. I think you nailed it. Like, the worst thing you can do as a leader is just think that everybody thinks like you.

 

Daniel Kwak  23:08

Yeah, yeah, absolutely. As a matter of fact, my definition of leadership today is, most people think like, Well, how do I get that? How do I, you know, ring the most out of my people, right. And like Simon Sinek talks about how like, most CEOs, they visualize their people as like a towel, you gotta ring the most water out of the towel, right? My definition of leadership today is my job is to create the utmost premium atmosphere for people to be their best they could possibly be, right, that is my job as leader, to help somebody become the best versions of themselves, is what I believe, you know, and sometimes that means not being a part of my organization, you know, when instead of having them be a part of somebody else’s organization, but I think they have a that’s my job, that is to help them become the best versions of themselves in and out of the office is to help them win in all aspects of life. You know, I truly believe that. So, through the painstaking process of learning what that people are driven by different things. I learned what it means to be a leader. And even in my faith journey, you know, I asked God, he got your You are the greatest leader that has ever walked the earth, right? Like, I truly believe that Jesus was the greatest leader that ever walked here. I said, How do I do that? Right? And it’s amazing, right? Jesus just said two words. He goes, you want to learn how to lead follow me. Right? If you want to be the greatest leader learn how to follow but more specifically, follow me. And that’s what I started doing. Because I grew up very religious church kid, right? Like my parents didn’t even want me watching Harry Potter. Like I was very conservative growing art. That’s hardcore. That’s super hardcore man. Like I was I was allowed not allowed to drink. My mom was one of those people who’s like, you can’t kiss until your wedding day. Sorry, mom that secrets out. You know, that happened long before my wedding day. But you know, that’s how it kind of I grew up and was very religious was very rule following and then, you know, when I started having an actual personal relationship with God. I realized that didn’t matter a lot to him. And so I learned how to be an amazing leader by following him not by following religious rules. I guess that makes sense.

 

Scott D Clary  25:10

Yeah. Do you feel that that religious upbringing cuz I don’t think I’ve spoken a lot of entrepreneurs? I don’t think we’ve ever like spoken about religion on the show really? Not much. But do you feel like it helps you or hurt you? With that kind of strict upbringing?

 

Daniel Kwak  25:26

I’m in many ways the strictness you know, growing up super strict, it kind of sheltered me. If you think about the ability of being an entrepreneur, I’m just

 

Scott D Clary  25:34

thinking of networking. I’m thinking, Oh, for sure. And then going into networking, and that seems like Hell

 

Daniel Kwak  25:38

yeah, absolute hell for sure. Because, you know, people will say, the F bomb and a bit, oh, my gosh, you know, and like, but if you think about what it really means to have a relationship with Jesus, it actually doesn’t mean following a set of rules or being offended if you have sex before marriage, or if you drop the F bomb or whatever, you know. But it’s actually more so loving them despite, right, like, that’s what Jesus was all about. Right? Like he saw people’s heart, not their actions. And I think a lot of religious institutions, see the actions of people and then judge their heart. Jesus did the opposite, he saw the heart first. And because he loved their heart and created authentic relationships with these individuals, by seeing their heart, the actions then were transformed afterwards, just by simply being around him. And for me, that’s what I really emulated is, myself having an authentic relationship with God allowed me to have a more authentic relationship with people. I got to a point where instead of seeing people and what they could do for me, in my business, I saw their heart. You know, I saw who they were, I saw their heart, I saw what their dreams were, what their goals were, what they wanted out of life, and more importantly, as a leader, how can I help them win and obtain that? And that is opposite to what the business world says. Right? The business world says network based on what people can do for you. Well, Jesus told me know, like, like, connect with people authentic authentically, and get to know their names, their spouses, and their you know, see their heart first. And then you know, once that relationship is built, then the business can happen. But now it can happen from a much better place.

 

Scott D Clary  27:09

Well, it is funny, because I feel like the, you know, the transactional like use and abuse relationships, it actually doesn’t end up paying off. No, really ever No, I’ve never really seen it. I’ve never even when you break it down to like, you come from a real estate background and world and I come from more of like a tech and sales world. But even if I’ve ever sold a deal in the tech space, like, yeah, there is a transaction, but I can guarantee you, like I have a good relationship. And sometimes like, like, you turn into friends with the people that you’re selling to, and you’re doing business with. And those are the people that come back again and again and again. And those are like, at the end of the day, any transaction is always built on trust. And you can’t get trust if people feel like they’re being used, even if you have something that they want.

 

Daniel Kwak  27:55

Yeah, it’s very difficult. Yeah. And you know, most people call it vibe, some people call it energy, I call it the spirit. Yeah. You know, I mean, it’s very much similar to like, you know, if you grew up and you do something bad to your neighbor’s yard, you know, your neighbor is gonna yell at you, because you did something bad, your mom’s gonna yell at us because they want to help you become a better person. Right? The, the words that are used may be the same, but the spirit is different. And surprisingly, having an authentic relationship with God, allow me to see the heart of people, and therefore allow me to see people’s true intentions.

 

Scott D Clary  28:25

Do you feel I want to, I want to ask you more like, my tactical real estate stuff. But I think it’s really interesting, because you’ve brought up God and Jesus, and you’ve and you’ve quoted the Bible. First of all, why do you feel that it’s important to speak about these things? Obviously, it’s had a huge impact on you. But it’s not a common thread or topic that you usually hear, even if it is important for people. So why do you speak on it?

 

Daniel Kwak  28:49

Yeah. And by the way, I don’t, I don’t speak on it, because I’m here to, you know, convert people to like, that’s not why I’m

 

Scott D Clary  28:54

here. I can tell because it’s important to you, it’s important to you, but it for me, it’s

 

Daniel Kwak  28:59

impossible to talk about my business success without talking about my relationship with God because of how much those things have been intertwined. Like let me be very clear and honest and vulnerable. Like every single business decision transaction I do. I always ask God, what should I do? You know, it’s a god, you know, my heart, you know, this person’s heart. This is now the time to get into it. Most Christians when they’re in business, you know, a lot of Christian and there’s a lot of those communities out there, like faith based business, you know, movements,

 

Scott D Clary  29:27

it’s not just it’s not just we’re talking about, like your religious beliefs, but I’m sure any faith based community is operates the same way. Absolutely.

 

Daniel Kwak  29:34

Very nice. Most Christians will go, Oh, God, you know, like this, this this money that we got for you and all this stuff, and you know, but they don’t hardly ever ask God for the strategy on how to actually make the money. If you actually look throughout the Bible, like there’s Joshua eight, so you know, Joshua was this young king, and there’s, you know, the entire chapter in Joshua eight God outlines the specific strategy on what Joshua is to do to overtake this, the city that the enemy is is currently in. And it’s the same thing, right? Like for me, you know, I invite God into my business and but more importantly, I invite myself into God’s business. So a lot of times, you know, when, when I’m in the business world, you know, sometimes God’s win is for me, it’s just to love that person unconditionally as he would. It’s not for me to make a million dollars or $2 million, it’s just for me to show up in a way that’s very authentic and genuinely care about the people that’s around, you know, the zoom, or the conference table or the business table. And so for me, if I can show up in that manner, I know that God wins, I know, I win. But I will tell you, I’ll be very clear that some of my best business relationships have happened due to me showing up in that manner. And that for me, it’s just like, wow, that’s mine. that’s mind blowing to me.

 

Scott D Clary  30:47

How do you? Or maybe you can educate me? So why is there at least in my mind, and I’m pretty sure this is something that could be confusing for other people that like, look at somebody who is very religious or who always tries to include God in in sort of like the conversation regarding what should I do next for my business?

 

Scott  31:08

Is money not regarded as not great and or evil in most religious contexts? And how do you wrestle with that? Is that something that is incorrectly interpreted? Because I feel like that’s the one thing that I would always hear if you’re talking about business like to, to be successful to be hyper successful, like in the multi millions of dollars, it seems like, that’s not necessary for one person to live, it’s much more abundance than any one person should ever need. And that would be something that almost seems like selfish or hedonistic.

 

Daniel Kwak  31:39

Yeah, as a matter of fact, it’s not just Christianity, but almost all religion condemns living a life of luxury and worth and you know, of abundance, right? Like most religions do, right? Even looking at Buddhism, you know, like, and I’ve kind of gotten around the block and studying a lot of different world religions. But, you know, even looking at the concept of Buddhism and Nirvana, right? Like, what does Nirvana even mean? It means that you are literally detached from everything, or nothing means nothing, like everything means nothing. And, you know, even with Christian, like most Christians in America believe that they have to suffer, that that’s living a very spiritual life. It’s actually not true. Like, you know, if you see God as who he really is, which is at the end of the day, it’s just a loving father, right? A father that just loves his kids. What loving father doesn’t want their kid to do well in life. But at the same time, as a good loving Father will, will do. He wants his kids to live well, but at the same time, have grit, you know, and have and be willing to work hard and have humility and have a great heart. You know, that’s what every loving father wishes for their kid is they want to do more, but they don’t want them to be a prick. Right? The problem was with Christians on both ends is the poor Christians are like, well, we’re doing it right. We’re suffering for the gospel, whatever. And the rich Christians are going, Oh, no, God has blessed me and all this stuff. I don’t think that’s a blessing. Right? If you’re a Christian, and you have a nice car, nice house, whatever. If you’re the enemy, if you’re the devil, I want you to make a million dollars a year. Because that way, you’re actually put yourself in a position where you don’t need God anymore. You know, it’s true, like, why would you need God if you haven’t, if you have a million dollars to your difficult,

 

Scott D Clary  33:14

it’s more difficult and successful, you start to think in like, you know, this is all me, like, I feel absolute self. Like, it’s easy to fall into that

 

Daniel Kwak  33:23

100% Like all most group Christians that I know, they’ll say All Glory to God, this is a blessing from God, whatever, but they actually secretly kind of go now this is all me, you know, like, I don’t need God anymore, you know, and the proof is in the pudding, you know, because if you ask them to sell everything they’ve got and just follow Jesus 99% of them won’t do it. You know. So the mentality that I’ve learned, and I’m still learning to adopt is, and there’s, there’s a great book called Kingdom economics by guy named Brett Johnson, but he outlines how, you know, he uses this example how the Israelites were enslaved in Egypt, right, and they have the slave mentality of, hey, we just go to work, you know, about our housing needs are taken care of food is taken care of. But he talks about how every Christian in general, not just entrepreneurs, or business owners have to go through the desert period, where they have to learn how to lean on God. They have to learn what it means to live with the Spirit of Jesus every single day. But the purpose of the desert Mint is to get rid of the slave mentality that they had in Egypt. That’s the purpose of being in a desert and historically, it’s true the Israelites were in the desert for 40 years before they can get to the promised land. But the problem is that most Christians romanticize being in the desert. They romanticize not having a lot they romanticize suffering because that’s what they believe they have to do. Right. And most Christians don’t go to the promised land, the mentality of the Promised Land, we’re in the Promised Land, all the Israelites, everybody had land. Everybody had cattle. Everybody was living abundantly. Everyone, like not one person was in poverty. You know, everyone was living a good life. And most Christians forget that a lot. Promised Land is there, right? Like God wants us to do? Well, and most, a lot of times most Christians, and I’ve seen it myself, don’t start that business. They don’t go after those ventures, because number one, they’re secretly afraid, right? But number two, they’re just like, oh, no, like, I can’t the love of money is horrible. You know, it’s, we can’t, we can’t do it, you know? Well, you can still create an awesome business without, you know, chasing money every single day,

 

Scott D Clary  35:23

you can do, I would actually argue that actually, most businesses that are successful, the people actually aren’t chasing,

 

Daniel Kwak  35:29

they’re not that you’re exactly right. You know, also, some of my friends who do really, really well, they’re value driven, they love solving problems for other people, and then they monetize the value, right. But a lot of times, my friends, the people that chase the money are the ones who they go away after a little while.

 

Scott  35:44

Oh, this was interesting, not from like a religious perspective. But even like a nonprofit perspective, it’s like, people that want to help seem to have an aversion to understanding that. If you want to help people, you have to have a lot of money to have the resources to be able to help people. Even when you were talking about you know your story, when you’re growing up when you were six, and your parents were in the bed, and you saw the the rich guy that was tumbling out of the the gentleman’s club, and you’re like, Why can’t my parents that have committed their life to helping people have that level of luxury and wealth? Because ultimately, like you can’t help anyone, bro. Yeah, but you can never help anyone you can’t eat, you can barely help yourself. And sometimes you’re a draw on society. If you don’t have enough money. Yeah, to be honest, like, so. Anyways, yeah,

 

Daniel Kwak  36:27

no, we need more money in the hands of good people. 100%. Because if it’s not in the hands of good people, because the good people are religious and super spiritual. Well, which hands are they in? The people who don’t care? Yeah, you know, like, do we do you want to live in a world? Like, I don’t want to live in a world like that?

 

Scott D Clary  36:45

You know, I mean, like, that’s, I mean, it’s, it’s not like we’re not living in a world. We have some of that already. Sure. That’s yeah, exactly. So how do you how do you, you know, you have your values and your mission. As you do make more money? How do you base yourself? How do you ground yourself?

 

Daniel Kwak  36:59

Yeah, I have a cap, I pay myself a salary. I don’t pay any more than that. And everything else I give away? Really? Yeah. Yeah, I put my money where my mouth is, you know, so I mean, even going back to the teachings of Jesus, Jesus says, Where your treasure is there, your heart is also. Right. So Jesus is saying, Hey, you want to know what you really care about? At the end of the day? Look, where your money is going? You know, is where is it going? Is it going to serve you? Or is it going to serve others? Is it like, where’s it going? You know, so I mean, for me, you know, for my wife, and I put a cap, you know, I actually get I’m a W two employee of my own company, I pay myself a salary, I don’t pay my you know, you mean, and I put a cap on how much I earn every single year. And anything beyond that I try to, I try to give it away. You know, so I think pressive for me, that’s, hey, you got it. You got to put your money where your mouth is, you know,

 

Scott D Clary  37:51

I just want to take a second and thank the sponsor of today’s episode, HubSpot. And as a leader, you’re always on the lookout for more ways to arm yourself with knowledge, the books, the seminars, and most importantly, the podcast to help you make the best possible decision for you, your company, your customers, because when you know more, you can apply more. And you can grow with HubSpot CRM platform, you can store, track, manage and report on all the tasks and activities that make up your relationships with customers. With a bird’s eye view over all your customer interactions. HubSpot empowers your decision making like never before. So you can give your business and your customers all the good you’ve got learn how to make your business grow better@hubspot.com What but like do you do not? Do not find there be more value? And yeah, there’s good, it’s good to give stuff away. But you know if I’m a value and reinvesting that in your business as well

 

Daniel Kwak  38:46

, oh, yeah, no, we do that. So my brother and I, we still reinvest capital into our business, we grow much bigger, because, you know, at the end of the day, our business is our church, right? We impact people through our business. In my opinion, I think businesses impact the world more than churches do, right? Because most churches, they focus on building bigger and better programs and we want a bigger building, we want a better worship team, whatever. If you look at the budget of 99% of churches in America, very few money actually go towards what Jesus was talking about, which is, you know, taking

 

Scott  39:15

all the churches in like LA and like not even la like the mega churches and like the like the churches where it seems like I don’t I’m not part of these communities at all. So I don’t really understand it, but I do know that there’s a lot of money going into what looks like very elaborate productions. And like if, and if I think about like, what I think a church is, it’s not something that looks like, like an NBA game, basically, in terms of production and sound and lighting and camera crews. Sure. Like it doesn’t make sense to me. And that to me is like that. That seems toxic. Yeah, doesn’t seem like that’s the best version of religion.

 

Daniel Kwak  39:50

Now. I truly believe that based on what Jesus truly taught, like if you look at even in like the early church, there was no building that they met in like people met in homes, they had genuine community There was no true community, true community, right, there was no Lights, Camera Action, like there was none of that, you know, and if anything, I would consider that sometimes to be a waste of money. You know, like, I’m

 

Scott D Clary  40:10

like pastors like to have like G sixes, Oh, for sure.

 

Daniel Kwak  40:13

Like I do, Scott, between me and you, I genuinely believe that if we sold every single church building in America, and we met the like the way that they met in the Bible, like the way that was supposed to be done, I’m convinced we would have enough money to solve the world’s biggest problems, whether it’s sex trafficking, world hunger, water, I am genuinely truly convinced that that’d be the case. I truly believe that, you know, and entrepreneurship entrepreneurs actually had more of a bigger role in churches than some of these pastors did, because they are the ones responsible for allocating capital towards some of these big causes. And you don’t have to have money, right? Like, and I’ll, this is a training that I go into a lot. But I believe in any successful business, there’s four currencies, there’s money, there’s time, there’s knowledge, and there’s relationships, you know, any single problem can be solved, either a combination of two, or three or four, all four of them, or just with one of them was my journey in real estate, I didn’t have the money, but I had the relationships, the time and the knowledge. And I was able to use those three as a combination to generate money for myself and create a portfolio for myself and other individuals. I think every business owner should look at their business through the forms and the lenses of those four currencies.

 

Scott D Clary  41:21

Smart. Okay, let’s pivot back to some more real estate stuff. Because I know you also like you wrote a book on it. So we should. Yeah. So it’s, you know, it’s good lesson. So you know, you got your 83 $83.87 8387, sorry, 87 doors? How did you raise the money for it? You had no fundraising experience? You were networking a lot. But networking is fine. You have no portfolio? I would say it’s still probably not easy to go ask somebody for X 100,000 or million dollars plus, with no portfolio, maybe just some knowledge, but you don’t actually have any track record?

 

Daniel Kwak  41:57

Yes. So I had not, right. So what I did is I answered the three questions I mentioned earlier, right? So who’s my ideal client? What’s my product? And what’s the market really wanting. And most people, they don’t know how to raise capital, because they don’t know that they’re actually selling a product. And most people don’t actually even have a product. I tell people all the time, when you’re raising capital for real estate deals, your product is number one yourself, your strategy, and then the asset that you’re going after, that’s the product, right? And you have to sell that product. So number one, I asked myself, who is my ideal client, so my product was multifamily buying hold, that was my product when I first started out, right, so there’s me, there was apartment complex, that’s the asset that I’m going after, and the strategies for me to buy it and buy and hold it and raise rents, etc, etc. And I asked myself, who is the ideal client to be able to do that? Right, like, who are the individuals that that need multifamily. And through rigorous research, I learned that doctors were like the number one candidate to get into multifamily buildings, and they needed it, because a lot of doctors have pretty large tax bills, you know, and, you know, in the back good money, they make great money.

 

Scott D Clary  43:05

They don’t, they’re not entrepreneurial, I don’t think and how they think. Yes, that’s

 

Daniel Kwak  43:09

right. Some are and some, some don’t, but you know, most doctors, like they just don’t have the time. You know, that’s true, too. So, so for me, my ideal client was, well, I need somebody who doesn’t have time, they just want to be a passive investor, they need to get into real estate to be able to mitigate their tax liabilities, okay. And I need individuals who are bankable, because in case seller financing doesn’t work out, and we got to walk through the doors of a bank, you know, they got to have a high w two income that the banks are going to love, you know. So, again, through research, I learned that doctors were my ideal client. And so that changed the way I did sales marketing, right, because sales and marketing to get everybody as your client is tough. However, as you know, I’m sure you know, as a marketing expert, if you niche down on who you’re looking for all of a sudden, you can do what you can do like targeted ads, you could, it becomes a lot easier, right, you can have a way easier. And you can actually write your copy to fit and you know, align with those types of people and you could speak their language and there’s so many different things you can do to cater uniquely to that audience. So that’s what I started doing. I just didn’t know I was doing it at the time. I started writing all my marketing material on who I was my business plan, do the things that the marketing material that I will distribute, I would gear it towards doctors, and generally high w two income earners, you know, so I would emphasize the tax benefits, I would emphasize your ability to be a passive investor, you know, where you can just sit on the sidelines, just invest your capital and I’ll do all the work and you still get all the benefits, you know, so I emphasize those things. And you know, because of it I was able to attract a lot of high w two earners, right and then I had a grand slam offer I my irresistible offer. The thing that I put out there that made them impossible for them to say no. And I asked myself, okay, what do doctors value the most? Right and out of everything, all the benefits that real estate offers, whether it’s cash flow, equity accumulation, appreciation depreciation, they valued the dude, the depreciation the most the tax advantages. And so my grand slam offer was, and this is how I would close them right in the sales process, I would close them by offering them 100% Of all the tax benefits of the deal. I’d say I don’t even though we’re splitting this deal, 50, I’ll give you 100% Of all the tax benefits. And typically at that point, that’s when the people are like, Alright, I’m in, like, you got me, you know. And last but not least, you know, what is the market looking for? You know, that was a result of me asking all the doctors, hey, why you want to invest in real estate? Why do you want to do this, I started asking different occupations, what makes you want to get into real estate? And that’s what allowed me to answer the first two questions to the highest degree and with most clarity.

 

Scott D Clary  45:44

And when I think the strategy is very smart, and when you’ve you’ve already spoken to these people extensively over the past few years, what is the reason why they want to get into real estate? Because I just made a huge assumption. I’m like, well, they’re not entrepreneurial. But you said actually, that’s not true. Some of them are, but is it time? Is it you said depreciation tax benefits? Like, or is it a combination of everything?

 

Daniel Kwak  46:03

Yeah, it’s a combination of everything. And the question, and I asked myself, those three questions every month, you know, for all my businesses. And recently, you know, inflation has been a really big concern for a lot of big investors. You know, I mean, inflation is at 7.9%, as reported in February of this year, a lot of real estate investors are worried about that. A lot of people who invest in the stock market are worried about that. And obviously, that has a big impact on what happens bonds and treasuries and etc, etc. So the big shift that I’ve been noticing in the market right now is a lot of investors are moving their capital from the stock market and the bond market. And they’re moving into precious metals, cryptocurrency, but mainly real estate, because it’s tangible. And all these assets that we just mentioned, they’re tangible assets, that hedge inflation. So one of the big things that I’m catering to my clients right now, my investor clients is the question of how are we with our strategy and the assets that we’re going after? How are we going to combat inflation? How are we going to do that, and not only survive, but how do we thrive in a very high inflationary market? So, you know, again, it’s all about answering those three questions. And you know, for for the question that you just asked is, What is the reason why people won’t invest with me? Well, back then it was the tax benefits. Today, it’s the tax benefits. And it’s the inflation hedge, you know. So, for that reasons why a lot of investors that I’m talking with, you know, I mean, I had, I had a call, actually, right before this, with an investor who’s got about 20 million that he wants to allocate to some of the projects that we’re doing. And that’s a big concern for him. That was actually the first question he had for me is, hey, like, what’s your strategy on hedging inflation? And so it’s good.

 

Scott D Clary  47:41

And without like, giving, like all the proprietary info away, like what is what is a real estate, you know, a real estate perspective on hedging against inflation? Yeah, so does that answer?

 

Daniel Kwak  47:51

Yeah, so in my opinion, real estate is the best way to hedge against inflation from an investment standpoint, because first and foremost, number one reason is you can leverage real estate. So by hedging the supply, by leveraging the real estate by only putting 20% down, I like to do seller financing deals where we only put 10% down. So by 10%, you’re by you putting 10% down, you’re able to allocate 90% of the value that you’re getting today, as as future value, as in the future, and you’re able to sell was

 

Scott D Clary  48:21

always the case. So that was always the case. So how was that?

 

Daniel Kwak  48:23

Oh, no, that’s, that’s, that’s exactly right. But but in a very high inflationary market, that’s more important. So by doing it, and it’s been over, isn’t this the positioning, so by doing it over a 25 to 30 year span of time, we’re able to hedge against that inflation by by literally stretching it out over a longer period of time. And I do it by, you know, doing longer amortizations today, but also doing a very low interest rate environment, putting as little down as I possibly can, and allowing rents to be able to increase along with the market, because you think about the things that go up and down with inflation, you know, stuff like gas prices, the and also the cost of the cost of living the cost of housing, which is rent, you know, so a lot of times, rents are the first things that will increase or decrease as inflation is Rise and go down. So if we can put ourselves in the position where we’re buying a piece of asset, like an apartment building, and we can hold it that way we can, that’s a really strong way, in my opinion of navigating inflation, especially if you have a fixed interest rate

 

Scott D Clary  49:23

pool that can actually they can actually increase or decrease. That’s exactly right. Actual Cash out the cash flow with inflation,

 

Daniel Kwak  49:30

right. And if I can obtain a fixed interest rate for all those 30 years, that’s, that’s phenomenal. Because typically, in a high inflationary market, interest rates tend to be a little low, right like they are right now. So if I can get a fixed rate, interest rate, I can lock down to benefits today, while mitigating over a future period of time, the disasters of what’s happening today as well. For me, that’s a strong win in my book,

 

Scott D Clary  49:51

and just want to take a second and thank the sponsor of today’s episode swag.com Now you know if you’ve ever received a corporate gift or swag in the past ask how many of those gifts did you actually keep? Probably not many, which is probably because the stuff that you got was not so great. I’ve gotten, like a lot of stuff and trade shows, and from companies in the past that I’ve just thrown out the second I get it. So this is why you need checkouts. why.com, I’ve been on the receiving end of getting garbage gifts. I’ve also worked in companies, where I only had access to a really, really small inventory of stuff that I wanted to give my customers and my employees. And I knew that it wasn’t going to resonate, I knew that was going to suck. So what is swag.com? Well, it’s like swag upgrade, it’s the best place to buy custom gifts and swag that people will actually want to keep. So they sent me a box, because obviously, they’re sponsoring the show. And I wanted to see what it’s all about, you know, I’ve worked in businesses, I want to make sure that the quality of their stuff actually was up to my standards, because I can tell you right now, that when I get garbage, it goes right into the trash it like really goes right into the trash is that gonna get back from the tradeshow or the conference, or whatever. So I received one of the custom swag boxes from swag.com, I loved the unique packaging. So it was a beautiful unboxing experience. I love the actual products they sent me and there’s a whole bunch more that obviously they didn’t send me. But the stuff that they did send was absolutely beautiful, it was very high quality. And I can only imagine that if I actually got this when I was working for companies, I probably would have actually use it. And to be honest, I’m going to start using them for people that work on my show. And in my company as well. Because I know it this isn’t just a novelty gift that somebody’s gonna throw, it’s stuff that they can actually use, they have so many unique and customizable gifts that I’ve never seen anywhere else. They have custom yoga mats, they have custom Apple air pods, they even have branded kayaks, which I did not know was a thing. So they carry all these premium brands like North Face, Yeti, Nike, and more. And it’s all customizable. With your company’s logo or artwork with swag.com, they take care of all of your swag at their warehouse, and they ship it to individual addresses. Or if you prefer, you can just send it to a bulk location in one single shipment. It’s easy to manage from their online portal, which you obviously get access to. So if this is something that you think would benefit you if you have clients, or customers or a team, and you want to go the extra mile and you actually want to give gifts that people appreciate, which is the whole point of giving these gifts in the first place. Go to swag.com for the perfect swag and custom gifts. Right now they’re giving everybody who’s a success story, podcast listener special offer, it’s 10% off your entire order, but only when you go to swag.com/success and enter promo code success 10. Remember, for 10% off, go to swag.com/success and use promo code success 10

 

Scott  52:53

is, you know, it seems like what you’re doing all makes so much common sense. Like even like how you you raise your money, how you position it the questions you ask yourself, the people you go after? Is there something you’ve done differently that has differentiated you in the in this in real estate investment? Or is this something that seems to be like the de facto like what did people do 10 years before you? Were they also targeting doctors, lawyers IW to learners, or just something that you’ve sort of crafted yourself? Or it’s just sort of like the standard for real estate investment?

 

Daniel Kwak  53:24

Yeah, you know, I think just based on the fact that a lot of people are putting their money into real estate right now, I think it’s pretty common knowledge, that real estate is a good inflation hedge. But one of the things that I differ than a lot of people in a lot of my peers in my industry is, especially in a market right now, where values are super high, I tend to stray away from the refinancing. So it’s very common for real estate investors to buy a property, fix it up, raise the rents and then refinance out the equity. I’m a for me, I’m very nervous about doing that right now. You know, because a lot of people that cash out their equity, you know, and they for cash, right? To go out and do the next deal? Well, you’re putting yourself in a position where values are overpriced. For one, we all know that we all know that real estate right now is overpriced. And at the same time, you’re, you’re taking your equity position as low as you possibly can. Well, depending on the financing, that you structure, what’s going to happen when the value of the loan is higher than the value of the asset. That’s a pretty big nono, especially for institutions that are financing your projects. And we saw that in 2008, where a lot of properties their value went underwater compared to the mortgages that they had. And because of it, most people were forced to sell or short sale and so you know, I mean, that makes me very, very nervous right now and we can get into the whole mumbo jumbo as to why you know I believe people are doing it and how banks right now are being propped up by what I call Mickey Mouse money because the Federal Reserve

 

Scott D Clary  54:55

let’s do it I don’t know what to do it no part of it I get into that so you give me a give me a preach like Grand down all of it. I don’t know how to Yeah, I don’t know this market like you do so,

 

Daniel Kwak  55:03

yeah. So hopefully that your audience will follow along, right. But I’ll do my best to try to keep this as simple as I possibly can. So a lot of dangerous. So the number one risk in real estate is financing. You know, so a lot of my buddies who own 1000s of rental doors and you know, even myself, we’ve done a good amount of deals will all tell you that the biggest risk in obtaining and acquiring a piece of real estate for investment sake, especially if you’re holding it is the financing that you structure. Well, who finances them? Well, the banks do, right? They finance a majority of the commercial loans that people do their deals with? Well, okay, so if you look at the state of the bank, right, now, let’s talk about where the banks are at right now. We’re living in a time where the Federal Reserve has bought $7 trillion, more than what they’re used to, when it comes to their balance sheet. And in terms of what they’re buying is or buying, you know, typical, typically assets that the banks don’t, or, or even sovereign wealth funds will own stuff like bonds securities, you know, the Federal Reserve has been buying $40 billion worth of mortgage backed securities for the last God knows four or five months, six months. And that’s taken a dent on the housing market as it’s propped up the housing market, it’s increased, you know, a lot of times the value of the overall housing market. So if you look at it from a supply and demand standpoint, if you have the Federal Reserve, who by the way, is having a 0% interest rate will as of March 2016, is that point to 5%. But for about 18 months there, especially while the pandemic happened, we were in a zero interest rate environment. At the same time, our government was printing trillions of dollars in the form of stimulus checks. And at the same time, the Federal Reserve was buying trillions of dollars worth of securities. I mean, almost overnight, the Federal Reserve became the largest owner private owner of securities. Like that’s insane, it took Warren Buffett 40 years to get high up on that list. It took the Federal Reserve, I think a matter of weeks, right to the point where they own something along lines of like 22,000 different securities. You know, I mean, it was insane. So imagine where you have an economy or an investment market, where you have trillions of dollars, whether it’s in the form of Federal Reserve backing, whether it’s in the form of fiscal policy with governments printing money to be able to give to their citizens, which by the way, On a sidenote, isn’t it funny how the sales of like Dolce Gabbana you know, all these luxury brands skyrocketed around the same time the stimulus checks were run out? Isn’t that funny how that works, right? You know, like, and we wonder why there’s a big wealth gap and in our country, well, maybe if you’re making $40,000 a year, you shouldn’t have, you know, Dolce Gabbana purses or Burberry gloves? Probably not the greatest idea, you know, and I’m not saying there’s anything wrong with them. But

 

Scott D Clary  57:50

no, but it shows you where where people’s heads are at if exactly those two events are correlated, right? Well,

 

Daniel Kwak  57:55

it goes back to you to the teachings of Jesus, right, where your treasure is there. Your heart is also, you know, yeah, so So anyways, so so we had the government and the Federal Reserve, trillions of dollars, and around the same time, we had the lowest interest rate that we’ve ever seen. So it’s no wonder we had the highest inflation we’ve had in 40 years, is because trillions of dollars are going into the economy. And no one’s accounting for it. You know, there’s a statistic saying that I think it was like, as of 2000, and I think at the end of 2000, and maybe it was the middle of 2020 21%, of all US currency circulating was printed, I think, in 2020, or something like that. This stat as well. Yeah. And that well, now it’s even worse, right? It’s especially now we’re, you know, at the end of the first quarter 2022, I think that number is actually closer to half, right? Was was printed in the last 18 Something months, right? I said it in a YouTube video recently. So I’m sure you can people can go find it. But that’s crazy. Like that is that is absolutely nuts. So recently, here’s what really worries me is that recently, Jerome Powell, who’s the chairman of the Federal Reserve came out, and he says, Hey, that $9 trillion that we spent propping up the economy, well, we’re going to start paying that back, we’re going to start reducing that balance sheet. So meaning that there’s going to be a reverse effect. So instead of the Federal Reserve pumping trillions of dollars into the bond market, the securities market and propping up the stock market and the economy. Well, now, we got to pay some of that money back. Now that money has to be taken out. Right. So if you think about that environment, and considering a lot of the banks, the central banking system, if you look at monetary policy as a whole, the central banking system borrows money from the Federal Reserve to be able to conduct their business. Usually it’s on a 10 to one it’s known as the reserve. You know, it’s the reserve requirement. Banks, if they want to borrow $100 million from the Federal Reserve to be able to lend to us the people. Well, they have to have $10 million in default. Right? That’s what they have to do in the form of any liquidity. So now, right since considering the central bank systems is backed by the Fed And now the Fed is focusing on reducing that $9 trillion balance sheet. And now at the same time, they’re increasing the interest rates, they increase it 25 basis points, which is 0.25%, in March, in March 16 of this year, which was literally two weeks ago, and they announced that they’re planning on raising it six more times this year when they meet. So let’s see, let’s let’s take a roll call here, no review, the Federal Reserve are increasing the rents money is going to become much more expensive. And they’re also focusing on reducing the $9 trillion balance sheet. And they’re also planning on stopping the 100 and $20 billion a month purchasing that they’re doing in securities and bonds 80 billion and US Treasuries, 40 billion and mortgage backed securities, what’s going to happen with the banking system? Not not good things, right? Not good thing, not good things you’re gonna.

 

Scott D Clary  1:00:47

So what does this actually lead to? How it affects people? Is this is this like an ultra recession? I just want you

 

Daniel Kwak  1:00:53

know, I’m not wanting to predict, right? Because I mean, I have friends who try,

 

Scott D Clary  1:00:58

you are forward looking. And yeah, if like, you know, if something happens, there has to be what, you know, there’s a if there’s an action, there has to be a reaction to that thing. So

 

Daniel Kwak  1:01:09

well, let’s, let’s put it let’s let me put it this way. I think a lot of real estate investors were putting together loans, where they’re stripping as much equity as they possibly can to get enough cash to the next deal. I’m very nervous about what’s going to happen to those loans. Right, because what happens when you know you have a situation where you know, you have a loan where you don’t have a lot of equity into it. And you have a bank that’s, you know, starving for liquidity. Not good things. A lot of that happened in 2008. Right, where banks were starving for liquidity. And they had to call a lot of notes do

 

Scott D Clary  1:01:44

is that going to happen again, and do that? And banks can do the banks can

 

Daniel Kwak  1:01:47

do that. If you look at if you look at a majority of loan origination documents, which most people don’t read, you know, the banks have the ability, they have protocols to be able to call notes do for the sake of self liquidating their portfolio, they have the power to do that. Is that going to happen? I don’t know. You know, I don’t know what I shouldn’t be told, I know what’s what’s most likely going to happen. I know what could happen. But, you know, it makes me very nervous, which is why for myself in our partnership, we’re going after a lot of these off market deals, and we’re setting up financing, that’s non institutional. You know, I think that’s extremely, extremely important right now, especially right now with everything that’s happening.

 

Scott D Clary  1:02:26

And that’s where you, that’s where you are focused on finding money. That’s where you’re trying to get the money from?

 

Daniel Kwak  1:02:30

Well, that’s what I’m focused on. Yeah, finding assets for my

 

Scott D Clary  1:02:33

Do you also build into your deals that they can’t, like, if you I guess, if it’s, if it’s not institutional, you’re not as concerned. But you also protect yourself by making sure that the deals that you do sign, if possible, don’t have clauses where you can make that loan come to fruition if that person needs that extra capital for liquidity reasons.

 

Daniel Kwak  1:02:54

Yeah. So what I do typically, the seller financing, yeah, we typically create it in a way where they cannot call the note do because it’s a contractual agreement. Right? With the bank, you know, they have all the leverage. But even when I do business with the bank, I’m pretty thorough on making sure that we have a long term balloon that our financing is secure, that we have enough liquidity. I personally right now, I’m not refinancing currently, all all of our commercial deals. Just because you just never know what’s going to happen. Right? You know, my mentor told me, If you protect the downside, your upside will take care of itself. And that’s true in real estate. That’s true in business. If you focus on the risk, then your profits will come.

 

Scott D Clary  1:03:35

First. Okay. Last last thing that I wanted to go into, I think it’s interesting. You built a personal brand. What What was the purpose for that? Why do you diversify? Why didn’t you just you had a path it was going well, what does the personal brand give you as a deal flow? Is it because you just want it to go on to other avenues? I see a lot of people in I’m, I’m a fan of it, obviously. And I believe in building a personal brand. What was it for you?

 

Daniel Kwak  1:04:00

Yeah, so I don’t kind of build like a typical personal brand, where I put out stuff on Instagram, and you know, on my on my personal Instagram, or like my Twitter, I don’t even have Twitter. I don’t have a tick tock or anything like that. But what I do focus on is YouTube.

 

Scott D Clary  1:04:11

Right? Why not? The awesome why not? Yeah. So for me, I

 

Daniel Kwak  1:04:15

don’t know. It’s a very interesting question. I think a lot of the content and things because I mean, what’s the typical answer, right, like typical answer as well. Like, if I if I post a lot of stuff on Instagram, I can, you know, help people I can help, you know, put out content. And there’s nothing wrong with that, right. I have friends who are influencers who have hundreds of 1000s of followers, and some, some have millions of followers, who put a really, really good content, you know, and they put out really good solid gold nuggets. And it’s amazing. But for me, the transformation that I’ve experienced that has helped me in business that have helped me in my personal life, have more so comfortable relationships, they’ve come through doing life on a day to day basis. So I don’t put a lot of stuff on Instagram, but I constantly have people in my office that are wanting to learn and I just said yeah, come on board, man. Just come hang out with for a day, if you want, you know, work on some stuff, if you need my input, I can help you in between meetings. And, you know, I’m pretty open about people who want to come to my office and just chill and learn. I open doors any day of the week for that. But yeah, I’m my wife and I were pretty private people. Even if we’re getting on this podcast, I had to hire a marketing agency to get me on this podcast, right? Because I do recognize there are things that I think I could I could offer that could help people. So I love the podcast format, because we were able to spend an hour to get deep and and you’re able to ask questions, and we’re able to do life. You don’t talk life. But I don’t know, just putting reels out on Instagram just never really resonated with

 

Scott D Clary  1:05:41

it’s funny. I think that I think people have over indexed on Matt, like, I think I’ve I’m, I’m probably not the best, not the best example of, of how to do social because I do all this like not I’m not the not the worst example, how do social but I do social, the way every other influencer does social, which is just massive amounts of content. And I actually do believe that I’ve over indexed on content and under indexed on personal relationships. And I think that to truly, to truly become known and respected and trusted, I do not think it’s, I think it’s very difficult to do that virtually, exclusively. And I think that my strategy was birthed sort of, through COVID. And my personal brand strategy, and when everybody was remote, and everyone’s virtual, I was looking for content at scale. But I have, I have been trying to be more in person and be more present and do more in person stuff, and maybe try and do meetups and build community and do things that impact people at a deeper level than just just content and just constant content. So I think what you have to actually break it down tactically, I think that the content distribution builds an audience. But I think in person, as much as possible, build a community. And I think community is where you have audience, people consume your content, community is where people love you so much, that they’re gonna go tell five or 10 of your friends of their friends to go check you out. But I don’t think they’re usually going to do that through social media, if they’ve never met you in person or seeing you at an event or had some sort of, like, more intimate connection or, or, or, you know, interaction with you. So that you I think you’re doing it a different way. But I think I am going to do it. And I thank you both.

 

Daniel Kwak  1:07:27

Yeah, somebody wants told me he’s like, people transform never on what you do, but who you are. And you know, and nobody can truly know who you are, unless you spend time and sit down with them. Kind of like what we’re doing now. Right and doing life together. 32nd real, you know, 100% That’s, that’s why for me, like, I hesitate doing a conference, but I will do retreats. So like I have this retreat coming up in November, where I’m hosting 35 to 40 entrepreneurs. And it’s mainly real estate entrepreneurship. But you know, it’s this is four days where we just get to dive deep and talk about your business individually and do life together know the people and you know that people exactly, and we, you know, I’m bringing in some pretty cool speakers don’t get me wrong, but that’s what it’s gonna be all about. So and by the way, I do do a free meetup. So I do it twice a month, if people want to, if you want people to join my meetups, I think you can just go to the clock where there’s dot com, we also just released a free course we call it Basecamp, where it’s literally I think, like 50 hours worth of material on real estate investing entrepreneurship, like we have a productivity course on there. You know, I’m filming a mini raising capital course to put on there, and we just give it up for free. You know, so I try to give as much as I can away, content wise, but yeah, it’s it. I think, if people want to find it, it’s, it’s you can I’m sure, you can just go to the Kwok brothers.com And you’ll be able to find it. It’s in the bio of my personal Instagram. I don’t have a lot of followers, I only had like 4300. So it’s not a lot. But it’s in the bio of my Instagram, if you want to check it out. You don’t even have to follow me just click on the link if you want the free stuff. But my instagram handle is just literally Daniel clock. I tried doing the underscores and stuff. I was like I can’t do it. So it’s just th e being a PA and by the way, it’s not like an arrogant thing where it’s like the Daniel pot. No, it’s just like, No, it’s just it’s just that’s just who I am. That’s like the only word that makes sense.

 

Scott D Clary  1:09:10

Good. Good. Okay, I want to do a couple rapid fire to closes. Yeah, love it for we before we pivot anything else that’s top of mind. Anything else you wanted to bring up? You sort of dropped your socials already. So that was you answered that question for me. But sort of closing thoughts?

 

Daniel Kwak  1:09:26

Yeah, no, I mean, I, you know, I think being an entrepreneur is the closest thing you can to. So I found a lot of intimacy in my relationship with God by being an entrepreneur. If you think about what the definition of entrepreneur is, it’s recreating the world using the lens of your product or service. Right? Like if you believe if you genuinely the world is a better place because of the product that you offer with the service that you offer. Fantastic. That’s exactly what God did. Right? He had an image of what the world could be any creative through existence of his words. So for you, you’re exactly you’re doing the exact same thing that God the Creator, the artist is doing And when He created us, right, you’re recreating the world based on your image, how He created us on our image. So I’d say, you know, the number one thing that is a success indicator of an entrepreneurship, as I learned is just don’t quit. You know, just keep just keep moving forward, reach out to as many people as you possibly can ask good questions to mentors, I have a rule of thumb as I try to have at least three mentors in my life at all times. You know, and I try to grab breakfast or lunch with them at least once a month, keep them updated on what I’m doing, give them the details. And they always are very quick to suggested the ideas on how I could do things differently. And journal right, that’s another really big thing. I journaled in a very different way. Every day I journal what did I learn today that helps me become a better entrepreneur. And every Sunday night, I reread all the entries I wrote every single day. And on Sunday night, I wrote, I write down what are the three big rocks I need to accomplish for my business and move forward? Every Sunday, and I assigned the time. So if you read Cal Newports, deep work, which I’m a big reader, I’m sure you have as well. I write down to three big projects that have to get done, when sometimes it’s four, sometimes it’s five, sometimes it’s one, right? And I actually look in my calendar right then and there. And I assign myself the time that I’m going to get that done. And that for me has been tremendously helpful.

 

Scott D Clary  1:11:15

So awesome. No good advice. Very good advice. Okay, let’s do a couple rapid fire to close this out. The biggest challenge you’ve overcome in your own personal life, what was it? Had you overcome it? What you learned from it?

 

Daniel Kwak  1:11:24

Yeah, probably getting out of my own way. It’s the realization that every bottleneck of every business, nine times out of 10 is the leader.

 

Scott D Clary  1:11:33

If you had to choose one or multiple people, obviously, there’s probably been more than one. But you can pick one if you want. One person who’s had a major impact on your life, who was it, what you learned from

 

Daniel Kwak  1:11:42

my wife, my wife actually helped me become a more selfless human being. My definition of marriage is marriage is just God’s number one way of helping you become a less selfish person. And, and my wife has certainly helped me with that.

 

Scott D Clary  1:12:00

Book, podcast, Audible, something you’d recommend people go check out.

 

Daniel Kwak  1:12:04

Yeah, so obviously, my book, you can just go to zero to 75 units.com. And you can get the book for free. All you got to do is just pay for shipping. But a book that I absolutely loved, was a real estate book. It’s called Am I being too subtle by a guy named Sam Zell. And it’s probably one of my favorite reads of all time, especially in real estate.

 

Scott D Clary  1:12:25

If you could tell your 20 year old self one thing, what would it be?

 

Daniel Kwak  1:12:28

I wouldn’t say anything. I’d probably just give that kid a hug. Yeah, I just say this guy. Watch out. You know, there’s nothing you could tell that kid.

 

Scott D Clary  1:12:39

And then last question, what does success mean to you?

 

Daniel Kwak  1:12:42

Yeah, success me. For me. It’s just whatever you want it to mean. You know, if it means making a million dollars a year great if it means, you know, making $12 million a year great. For me. My definition is, are the people that are closest to me better off than they were a year ago because of who I am. That’s success for me. Like, am I am I subconsciously helping people become the best versions of themselves? Whether they’re part of my team or not? Is there a zero a significant improvement? Is there a tangible improvement from one year to the next next next because of my relationship with them in their life?

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