Entrepreneur Intel

Wes Mathews: So today's guest, super excited. Uh, his entrepreneurial journey started with a single piece of real estate, but has since grown to over 900 units. He has over 35 employees doing 3. 5 and more property management, over 130 million in property holdings. He also helps investors harness the business power of real estate investments.

He's a pilot, a helicopter pilot, a pilot of planes, owner of Epic Property Management. Josh Sterling. Josh, welcome. Thanks, Wes. Appreciate you having me on. Man, that's, uh, that's a mouthful there. Uh, that's a lot of stuff. Uh, but I gotta start with this question. So you've been doing this entrepreneurial thing for, I think, about 15 years.

What's the most important lesson you've learned thus far?

Josh Sterling: Um, all right. So, yeah, I definitely didn't start, uh, out as an entrepreneur or with the goal to be an entrepreneur. It was, um, I'm sure we'll get into it. Um, quite the unintended journey. Um, and, uh, you know, the. Looking back and, and, you know, uh, knowing that you might ask me that today, I, uh, I racked my brain a little bit to, to think about what is this big, key piece of success, you know, knowledge, this tip that I could, you know, provide.

And, uh, frankly, it's, it's back to the most simple thing. It's boring. So here's, here's your amazing, uh, here's my amazing advice on that for neural journey. Um, I truly believe that any success I have found is. 90 plus percent tied to unwavering efficiency and relentless tracking. How boring is that? Right.

Process. I I've always, I've looked back and I've, you know, thought about the journey along the way and what has helped me and what is, you know, of course, I think any entrepreneur does. And, and what I've realized is that it's, it's about the most boring thing in the world, but, but I am the guy that follows through on every single thing to the end of the day.

Zero inbox, nothing left on the list, whatever it takes to do. And again, it sounds boring, but I don't know how common that is out there. And I think that that has been a huge driver of success for me.

Wes Mathews: So did you find that out? Like early on as a kid, were you doing things where you're just like. You know, where, where did you discover that you just kind of yearn for that?

Josh Sterling: You know, I've always just been, I've always just had a lot of perseverance. Um, and you know, I don't think I've ever been the smartest guy in the room and I certainly am not the most creative. Um, you know, there's a lot of businesses out there that I'm sure that that, that, uh, advice and that mindset doesn't, uh, doesn't get you very far.

Um, You know, but there's also a lot of businesses out there such as mine where it's really a day to day. It's almost a grind That's a a boring way to put it, you know, there's a lot more energy behind it than a grind but yeah for sure, but I think that um You know if you're in the type of business where there's these high flying opportunities and and there's this, you know this new technology coming about this new Amazing, creative idea that might not apply to you so much, but in, in a real, you know, boots on the ground day to day operational business, such as what we're in, um, to me, it really just comes down to just unwavering efficiency and, and just relentless tracking monitoring is, is truly where, what we've been built on and, and it's how we become, you know, successful in our industry

Wes Mathews: and our niche.

Yeah, I'm excited to unpack that with you, because there's a couple big things in there. One, I want to talk about, talking a little bit about, you know, you being a pilot. You know, was that early on in your career, because everything you're telling me, I'm like, man, like, that's a great pilot, right? Making sure that everything's done properly.

You know, measure twice, cut once kind of a concept. So, was that sort of your first I guess call it job coming out of high school before you became an entrepreneur.

Josh Sterling: you know, so, um, actually it's a quick side note, funny story. My first, uh, my first job, I worked at a McDonald's, which is like a assembly line back in my hometown.

I was like the one job you could get before you turn 16 years old at like 15 and, um, you know, three months or something. You could, you could work there. Some, some weird things. I worked there right away and it was very systematic approach, but I actually remember back to Getting that job. I had to go in there like 15 times.

Like it wasn't like today, I think we could just walk in anywhere and get a job. It was like, it was like a coveted position to get amongst high school kids, cause you need to make some money. And I remember that, that, uh, general manager telling me like, wow, you're the most persistent person I've ever met.

And it's just kind of stuck with me. I've always kind of been that way, but no, I went to, uh, I went off to college. I grew up in California. I went off to college at, uh, uh, a school in Florida called Amber Riddle, which is a, a large aviation school. Um, almost everybody that goes through there, um, in the aviation program goes to work for, for the airlines, goes to fly for the airlines.

So that was my master plan. And, um, you know, uh, it, it didn't go, I'm having to dive more into that. It didn't go exactly as planned and led me down the entrepreneurial path. But a lot of that training, a lot of that, you know, learning to be an airline pilot is absolutely

Wes Mathews: a systematic procedural type career.

Josh Sterling: So I don't know if it was like The chicken and the egg. I don't know if I'm that kind of person, or if that career made me that kind of person, but, um, we are definitely a checklist driven, SOP, Systematic Procedural

Wes Mathews: Company. Yeah, what tripped that for you, right? So, you're a pilot, you go to school. I mean, I would assume that Going to school, being a pilot, like that's a big deal.

Maybe families are like, Josh is a pilot. This is your career or something, you know, and then all of a sudden you're like, I don't want to do this, or obviously you do it at a different capacity, but what kind of led you to look elsewhere? Cause I think about a pilot and maybe it's just a bad perception, but they're like career pilots, right?

They just kind of do their thing and then you retire. And life is good, but you were at some point where like, yeah,

Josh Sterling: so it, I mean, it is a great job. And actually right now, today, it's probably one of the greatest careers you could go into. Um, but it wasn't for a long time and there's a whole history of, you know, the aviation industry in America, but, um, going back to like deregulation in the late seventies.

Um, but my timing, my timing was terrible. So I, uh, I really didn't have any flying background. I don't have any family that's flown with airlines or anything like that, but. You know, I'd always grown up with my parents telling me, go to college, you know, get a good job and buy a house for yourself. And that's the American dream.

And I'm like, okay, well, how hard is that? You know, I grew up in a not extremely well off family. We didn't, the parents were okay, but certainly weren't, uh, weren't well off. And so when I went off to college, it was all student loans. You know, it was on me to do something. So I went across the country. I moved from California to Florida and.

You know, having no idea that a week after I get to school, 9 11 hits. So that started my terrible journey in the airlines. So I, what a time, what a time. I, you can't, you can't plan that. Um, so here I am, I moved across the country. I'm actually still 17 years old. I was always young for my age there. And, uh, for my, you know, graduating class across the country.

I know no one I'm starting out in this career. I've got like. I know I'm going to have 200 grand in student loan debt when I get done, um, but I'm going to be an airline pilot. It's great. 9 11 hits, industry is just in turmoil. And that basically was the, the, the background for the next four years while I was in college.

So. It scared me a lot because I knew this was on me. A lot of the guys I was there with at school, they, you know, parents might have been paying for it. They didn't have the pressure that I felt, I think. And so it made me work really, really hard, um, which was a benefit in that I graduated in 05, um, from Embry Riddle and, and I was in the top of my class.

So nobody had been getting hired that whole time because of that. You know, fallout from 9 11. And I was one of the few that got hired, uh, right, right into the airlines, right out of college, 22 years old. So now I think I've got it made. Um, and so I started out in the journey as a pilot, you know, and you work your way up from a first officer.

And, you know, I, I hit the progression well, and I was a captain at 23 years old. And I just, I kind of thought I had it made, you know, and. I bought a house for myself and I'm like, I've checked every box that I was supposed to do. Go to college, get a good job, buy a house for

Wes Mathews: yourself. Yeah, sounds great.

Sounds

Josh Sterling: great. I got this figured out, you know, I was like, you know, low, you know, uh, lower twenties and, um, you know, a couple of years into that, um, I'm just going to work every day. I'm just an airline pilot, you know, houses get little houses, get big. It's pretty. Pretty straightforward job. I don't even know what's going on in the economy or anything.

It doesn't matter. I just fly airplanes. Yeah. And, um, it ends up we're in like the 07, 08 timeframe. And I just changed to airlines. I'd just gone to an airline, taking a job as a captain. I mean, it was the right path. That's. That's how you get your, you know, the, the turbine PIC time. And that's how you move forward in the industry.

But it was January of 08 and I walk into work and I check my mailbox for my trip. And I've got this notice in there that says in three weeks, you're getting a 50 percent pay cut because we're going out of business. And I'm like, I just started here. I'm like, this is terrible. Like I, I can't even pay my student loan debt with this.

Um, and I'm like, well, I've done everything right. I've gone to college. I've done well in school. I've gotten a great career. most people thought it was a great career. bought a house myself. Oh, by the way, that was upside down by like 80%. Um, cause the economy had tanked and, and I'm like, I've done everything right.

And I have zero control, of anything that happens. You know Um, it's not like. I, or anybody I had worked with, it was in that same situation, had like flown the airplane improperly, or like, you know, not past the checker or like, whatever, like we were just a victim of the greater economy that we had zero control over.

So it was a real, it was like the worst time, but ended up being a great. Time for me because it, made me realize that I've got to depend on something I can control. So the entrepreneurial journey was born.

Wes Mathews: of things happen, right? That's, that's crazy to start that journey at the time of 9 11.

When I remember that time vividly of planes getting grounded. Everything was disrupted. I think I was 21. So, I mean, I'm different headspace than, than where we're at today. But, and then you get to a point where the economic collapse of 08, 09. So here you are, thought you did all the right things reflecting back.

Like what was that, what was that next step or push, right? Because to me. You seem like the type of guy that's like, okay, well, let's go to this airline or go over here or, you know, maybe fly private. Like, what was that next push for you? So, you know,

Josh Sterling: at the time, um, it was a little bit, it was a little bit of frustration.

I think mostly frustration. You know, I, I'm a believer that a lot of things, if you're not happy about something in Usually it takes a massive frustration to actually change that, right? And so for me, that was something I remember vividly feeling the frustration of, I've really done nothing wrong at all.

Um, and I am in a very, very bad spot. Um, with not much future upside, you know, back then. The airlines were not looking good at all. I mean, they were laying people off. They were going out of business. People were getting downgraded. They were giving pay cuts. Like it was just, it wasn't like I could go, okay, let's go to this next airline.

Now you're on the, if they'll even hire you, cause they did, they had more pilots than they needed because the economy was contracting there. There wasn't much upside. Um, and so, you know, for, for me, it was just a realization. I've got to do something where I can control it to the best of my ability. Um, and so I just, I started looking for just business opportunities.

You know, that's, what can I do myself that at least I can, you know, having a big effect on what the outcome would be. And I mean, I started several different little endeavors that didn't work out, just trying little things out. Um, but you know, an advantage that I had was I had been flying all over. North America, you know, all over the U S Canada, Mexico, Caribbean.

And I'd seen all kinds of markets, um, that I think probably most people had it. I mean, I might be in Des Moines, Iowa one day, Charlotte, the next San Francisco, the next, you know, and so I, I, that was a little bit of a benefit. Um, and I, I just kind of had this thought of, I don't know how to do anything about fly airplanes, but.

What's an easy business? Well, I can rent out a house. That's easy, right? You buy a house and someone sends you a check every month and then you cash the check. You're like, cool. Greatest business ever. It's turns out there's a little more to it than that, but that's kind of how it started.

Wes Mathews: So introducing you earlier started with one single piece of property.

So you have this idea. Hey, real estate, people pay rent, send a check. It sounds to me like with your process and your background, real estate's already there, right? The process has been created to a certain degree, but now you're able to play. So talk about that, that leap, because I think that leap is really scary for people.

I mean, you left, well, I mean, you were kind of forced, but at the same time going to be, you know, from, from a. Let's call it a corporate job to become an entrepreneurial, you know, leap and take that jump. Like, how did you, how did you, what did you do for that one property that propelled you? Did you, like, self finance that?

Did you have a mentor? Like, what was that, like, first day like when you decided to go down this path? Of real estate.

Josh Sterling: So yeah, keep in mind, you know, now real estate is kind of sexy, right? Uh, you know, here in 20, what, 23 in 2008, 2009, real estate was not sexy, right? But there's, again, another, I guess, benefit to, you know, getting your pay cut in half and not even having enough money to pay your student loans or your mortgage on your upside down house or anything like that.

Is it backs you into a corner and there is nothing more explosive or dangerous than a man backed into a corner with nothing to lose. So, um, that was my propellant. You know, I, I, I had nothing to lose. I had a couple hundred grand in student loans. I had a house that was way upside down that I still to this day own.

And it's probably barely not upside down today. Um, I mean, it was looking really bad and I knew how to do nothing. But fly airplanes, which was not a good career at the time. So I went out and I took out a bunch of 0 percent credit cards because I said, well, fuck it. If I'm already broke, I might as well be a broker and have a bunch of 0 percent credit card debt.

And I use that. I ballot you, you get the balance transfer, your checking account thing, and write yourself a little check. You know, back then you could buy houses and, you know, fairly decent downer markets, um, for, for really, really cheap. And I balanced transferred a bunch of, you know, credit card funds, basically 0 percent for 12 months to my checking account and bought a rental.

And rented it out and it worked and it like rented right away. Cause I, back then I didn't really get the whole picture, but people were losing houses and there was a lot of demand for living somewhere. And it just kept like the light bulb just went on and I'm like, man, I could do this and I can do a little better.

I can actually fix up these houses and make them nicer. You know, buy more of them. And I just started to slowly, slowly just add a single family house at a time as, as quick as I could get capital. That was the limiting factor. Um, took me, I don't know, uh, maybe what did I get? Two years, 18 months or something.

I got up to like five houses. And that was a big, big like turning point, um, for, for business growth. Um, I think what separated, you know, maybe me getting a few units up to getting to where we are today is I found a lender, I started looking for a lender that would, that would give me some debt on these houses.

I couldn't go qualify for a mortgage personally or anything. I had like almost no income, you know, at the time working between my airline job when I changed to. But. After much, much searching, I found a lender who was able to go in and give me a blanket loan, like a portfolio loan across all properties is like unified collateral.

Um, which put me on like a different level compared to what I'd been used to. Now I had, I don't know, I think the first one was a hundred grand. I had a hundred grand to go work with when I'd been used to working with like Let me pull three grand from here and five grand from there. And, you know, Oh, I got a personal loan for 12 grand or whatever.

So now I had, what to me was a lot of money at the time, um, to go out and acquire, and that's what really like set our growth path forward was, was that newly found access to capital.

Wes Mathews: So you mentioned like back in 08, you're coming off the, you know, your, your pilot career. Mentioned like the economy. Do you think then, like, you didn't really, did you really understand what was going on in the economy or were you just like, I'm going to buy real estate?

Cause I remember that time. And there was like, it was like a big meltdown, but I'm like 20, I'm not that old. Right. So, um, you know, it's interesting cause you mentioned, cause I, a lot of individuals, how do you get that first house? It sounds like you got to that clip of five and you were able to kind of.

Open up the next level, get some blanket, blanket financing, but talk a little bit about, yeah, like you don't have a job or your job's over and you've got to get money or you're borrowing 0%. Now, did you look at this business as, you know, I'm just going to reinvest back in these properties or is it going to spit off some cash so you can like, Eat day to day or like, how are you living for these first two years while you're doing this?

So

Josh Sterling: at the same, roughly the same time that I started, uh, buying real estate, I also realized the airline career was terrible. And I, uh, transitioned into an air traffic control, uh, career, which was a much higher paying, you know, job and more stable and whatnot, but that, that took probably like 12 months of a process.

So. Um, I was flying for the airlines. I was, I would like bid, we had like what was called reserves. You could bid to be like on call. And since they didn't really need to fly much, you weren't flying much. So I was like on call to work, but I would really just go work on these houses I was buying, which was a nice benefit.

I was driving like an old beat up Honda Accord. It was like the rice and beans story. You know, I was actually living at my mother in law's. In like a bedroom at her house. Like this is not glamorous shit. Um, but I was building this business up. Um, and, and until it started to go somewhere. So. Yeah, there was a ton of sacrifice, both in like hours worked and lifestyle, um, but it was, it was really clear to me that there was a path forward, um, in that, in a scaling that business, you know, in, in getting much beyond one, two, or even 10 or 20, um, you know, pieces of property.

I could, I could see that the income was there, that the demand was there. Um, you know,

Wes Mathews: that it was scalable. So you sort of built your side hustle, like you're into five air traffic control, nine to five supporting your life, but your passion was real estate and you're starting to accumulate real estate, which is great.

I, you know, my, my wife was a nurse, which supplemented my income, starting my first business. Otherwise we would have been behind a dumpster. So thinking back, like I, I get scared sometimes thinking about those times. It's kind of crazy to think about. So you're an air traffic controller, you've got five pieces of real estate.

Sounds like, you know, you probably hit, I'm just assuming, love you to elaborate that. Repeatable process or whatever you set up is starting to work. And at some point, you know, you, you go from five to over 900, I'm gonna say, in a very short amount of time because 2023, but I mean, probably within a decade you grew, you've grown, grown a massive portfolio to like what, when you, when you get to that point of, you know, your air traffic controller, at some point you're probably like.

You know, the real estate thing's taken off and now you got to level up or maybe cut that loose. Like what was going on during that time? How'd you make that transition?

Josh Sterling: So, you know, in hindsight, I probably made that transition like three years too late, but it's hard to give up that safety net. Right. So when I first started, man, I thought if I can get this to 30 properties, like that would be amazing.

That would, I think the math back in the day that would basically replace my air traffic control income or, or, or match that. And I thought I'll have like either a great side hustle or if they ever Did away with their traffic controllers. I don't know, give them a pay cut or something. I at least have some, I was always, I was scared of that, you know, what the airline industry had done to me.

So I wanted to as quickly as possible, you know, have the ability to be financially free. So when I, when I achieved that, which wasn't that hard to do actually, especially when you don't, when your lifestyle is not that inflated, it's really not that hard to achieve financial freedom. Um, and so, you know, it wasn't much to replace.

Beyond that point, then it was kind of just a game. It was just like a running up to score in a way. So I, I, you know, add a unit, I'd add a few bucks in cashflow and that's where I talked earlier. Like I, I enjoyed tracking it. I started tracking my net worth in September, 2011, because I realized that although you might not see the dollars in the bank account every single day that you, I was building some real wealth behind what I was doing here.

And the only way to see it was to track that. So relentlessly to this day, I track it on the 20th of every month. I did it yesterday.

Wes Mathews: Do you feel, do you feel, you know, from a real estate perspective, I want to go back to like, you're just, you're, you're persistent for process and repeatable. And did you see that industry and did you kind of add your own flavor and build out your own process or did you find yourself just adapting to like, there's a million real estate books or like one plus one is to buy this, I'll do this, do that.

Or did you have like your own sort of version?

Josh Sterling: So, you know, thinking back, I was probably always pretty process oriented. You know, we'd have like back in the days I'd be doing like water bills from my laptop, like, you know, in a bedroom in my mother in law's house or some stupid thing, but it was always like documented, templated, but I think it really started to show when.

I, I started to get some scale and we got to about 50 units and I started the management company that today is epic. And, and then I, after going the wrong way for a while where I was wearing every hat myself and, oh, only I can do it. Right. And, you know, I think most entrepreneurs have made, made that kind of E-Myth mistake.

Um, which again, that's a whole nother path where frustration leads you to make a change. And I did, but that got me. Starting the management company and I eventually started hiring people to work for me, that's when it, it was again, super clear. This has to be structured, process oriented, operations, manual procedures.

I mean, you know, phone calls scripted for outbound call, things like that. Um, because how else can you expect somebody to do something to a standard you expect it to be done if you don't give them a parameter to work with? Or, you know, for me, I'm a fan of the ops manual approach where You know, I like to say a drunk monkey can do this.

It's step by step. Click here, you know, enter this. Um, it's very straightforward. Um, and that's where that

Wes Mathews: came from. No, it's great. You think like that, because I would say in my sphere of entrepreneurs, I know they don't think like that. And then they wonder why things go wrong. I think a lot of entrepreneurs like process, either it's lacking or it's in their brain.

And they're like, why didn't this person understand what I'm telling them? It's like, well, what are they supposed to do? Like, I struggle with that as an entrepreneur at times, just thinking that people. Should know what I'm thinking or, um, so no, that's really interesting. So you get to a point, right. And I just kind of have a visual of Josh running around on cloggy toilets and, and fixing things, right.

Cause you're the jack of all trades. Nobody's going to do it better than you. Cause we're the entrepreneurs, right? So like what, what drove that, you know, what made you realize that? I've got to start hiring myself because, you know, again, like that, to me, like that's the next level of, of probably explosive growth for you when you could kind of look in the mirror and say, man, all right, now I've got to do, I've got to grow, but what forced you to do that?

Josh Sterling: Um, I just like anything else, if you're not super smart. So I, you know, I didn't know what the heck I didn't know. And I. Took on so much that, you know, a 16 hour day of work wasn't enough to do everything. Um, and it led to a level of frustration, um, where, you know, I, the, the breaking point for me, I remember thinking that a vacation without phone and internet is absolutely out of the question.

Like I am way too tied to every, even if I had somebody in the business working for me, they needed me. To answer certain questions, right? I was the bottleneck at the top. Um, so frustration is what led to, to really breaking from that. Um, and, and saying, okay, I've got to trust that the person I put in place is going to follow the procedures I put in place and run the operation as good or better than I could.

Um, and it took just being able to let go of the handle a little bit, let go of that control and let someone work within the parameters that we laid out.

Wes Mathews: So you were forced to do it because you just didn't have capacity. Um, it sounds great. Cause you have your systems and process guys. So I'm sure onboarding new employees is a little bit easier because you've kind of thought all this through.

Um, but then also as an entrepreneur, you're probably like, I got to give up a piece of the pie. Like that's revenue now that you have to pay. So it sort of shifts there. So at this point, I'm assuming you're making pretty good money. You're probably feeling really good, but now you got to start investing in people and bigger process.

It sounds like. Is this when you spun up Epic Property Management and made that a real company?

Josh Sterling: You know, so we had started, I think, you know, Epic was, um, you know, officially started back in 2012, but it was small. We had, I had, you know, one part time, you know, assistant and I think I had a maintenance tech.

It was, it was pretty small scale. Um, it grew as we grew. So the benefits of those times were Real estate was still fairly reasonable valuation and I can go out and acquire a building. Well, that brought in some top line revenue. You have a budget for management. And so I kind of forced Epic's growth by adding real estate.

Now I've got some top line revenue to grow the management company. But for those first, it took for me, it's about 700 units to get to where it went from a losing endeavor to run a management company to actually profitable.

Wes Mathews: Um, 700 units, right? Which

Josh Sterling: I think the industry, I get, I talk about this all the time with other people in property management that are either starting out or want to start out.

You could probably do the same thing and get profitable in like three to 400 units. Um, but we do some things that are really unique at Epic that of course require a lot more capital, a lot more cost to operate, you know, things like we're open seven days a week and we have all this, you know, we have all these vehicles out on the road.

Like we operate an amazing. niche in the property management industry. That's, that's really hard to touch. Um, but it takes a lot of investment to do that, which I've been happy to make. Cause for me, it's always been about how can I run my properties the most efficiently? That's where I've made money. And that's, that's how Epic was really founded and still really what guides

Wes Mathews: us today.

Now, with that process, are you looking at specific types of properties?

Josh Sterling: Like, so, yeah, it's, um, you know, our niche has morphed into this is. This is kind of accidental again, just like everything else. But, uh, what I started acquiring was kind of scattered site. So it started with single families. Then I worked into like small to midsize multis, you know, you know, 10 to 25 to maybe 50 unit apartment buildings.

And I didn't really know why. I was buying those types of deals. I wasn't specifically targeting them, you know, but I, I knew that I would run analysis on, let's say 150 unit apartment building, and I could never justify paying what they expected it to sell for. Well, there's good reason behind that. It turns out looking back and that's it.

You go buy a 150 or 300 unit apartment building, and that is set up to run, that's set up for success by its nature of its construction. It's got enough scale right there at that building that you can put on site leasing, on site maintenance, maybe a couple of each. Very easy to run. We've got some in the portfolio that are that way, and they're generally much, much easier to run than a 50 unit building where There is no capacity for onsite leasing, no capacity for onsite maintenance.

What you end up getting is the lady that lives there, walk around in her bathrobe, smoking cigarettes, showing your units, and the guy who got off work and he's three beers deep and he's fixing your garbage disposal. Just not a very professional way to run a property. So if you think about it, there's a big reason that a midsize multifamily property does not attract the valuation of a larger multifamily property.

Cause they're really, really hard to run. And that just so happens to be the portfolio we had built because I had found good value buying those size properties. And so we built our management company. In a way that we can operate that 50 unit building, just like you would operate that 200 unit building.

And from a tenant perspective, there's very little difference. And that's that's become our niche is small to midsize multi family properties from, you know, single family to say 90

Wes Mathews: units. So it sounds like you started this really successful, you know, real estate business and then almost out of necessity You started another business epic properties support those properties.

Are you are you does epic? Do other investors properties if people want to get involved in single family like if I had one property Is that a good opportunity for epic or does somebody have to have a certain amount of doors to work with epic? No, so we've got, yeah,

Josh Sterling: we do a lot of third party business now.

Um, and we manage anything from, you know, one single family house for a guy or several single family houses, you know, makes, makes no difference, uh, of just some larger multifamily and anything in between. And, you know, the benefit is it really fits into our model. Uh, you know, I don't have to own every piece of real estate.

Of course, we love owning it. Uh, it's great, great revenue stream. Um, but if, uh, you know, Wes comes along and has a house or three or whatever that, that he wants to have managed, it fits right into our system and it makes no difference to our operations who owns that house, they're all treated the same.

Wes Mathews: Is there a, is there a coverage area?

Is it Michigan only? Are you outside of Southeast Michigan or?

Josh Sterling: So we are, yeah, we go from, uh, it's basically Southeast Michigan and Northern Ohio is, is right now where we operate. So it's a, um, an area from, you know, Shelby Township, Clinton Township up, uh, you know, East Point, those are on the Northern border down to Toledo on the Southern border in Ohio and everything in between.

We don't do Detroit at all. That's a whole different animal there. Um, you know, the actual city of Detroit, um, a whole bunch of other reasons we don't go in there, but everything around. Kind of the inner city stuff. We'll do it a lot of down river down. It's a great market. Um, you know, Redfords, Livonia,

Wes Mathews: those places like that.

So I want to dive into a couple of things, but one, you know, Why real estate, right? I mean, there's a traditional route of, you know, giving your money to a financial advisor. It's easier. It might be safe to some people, right? Maybe make four to 8 percent follow the market, right? You think about real estate and there's all these things that can go wrong.

People not paying their bill and all these different things, but there's a lot of competitive advantages. Uh, can you touch on like accelerated depreciation or just some of the advantages there of why? People should think about real estate. For

Josh Sterling: sure. So, I mean, what early on, I realized this, just a couple of properties, you know, and in most investments, there's basically limited ways you make money.

You might get some cashflow or a dividend paid or something like that. Maybe some appreciation, but there's usually not several different avenues, you know, but with real estate, so you've got, you know, potential appreciation, right? You've got depreciation. So you get to depreciate the asset. That's actually appreciating at first.

You know, for tax purposes, which is amazing. Um, you've got, uh, cashflow, which is a major consideration, right? You've got principal pay down. So which one, probably my favorite. So you're paying your mortgage every month. And right now I'm, you know, lots and lots and lots of mortgages. So I pay down a lot of principal every month.

That's already factored into your cashflow. People, most people don't think much about that, but at scale, it's a huge number. And then, um, an old Jason Hartman quote from like years ago, I love is inflation induced debt destruction. So you're buying, which now it matters like 10 years ago, you're like, what's inflation, you know, you're buying something with today's dollars.

That your, your debt's locked in at today's dollars, but you're paying them off with maybe 30 or later dollars, you know, and that can be hugely significant. You know, at 3 percent inflation, the value of a dollar, you know, gets, gets cut in half every 24 years. Right. So who knows what inflation has been recently.

Um, so that's a great way to buy something today and pay it off with much cheaper money, which is, it's hard to put a number on what that adds in value, but it can be significant.

Wes Mathews: So to me, yeah, there's like five, five ways to make money, right? Which there's not a, not a lot of, a lot of vehicles to do that.

But then you look at the market today, right? Houses are at the highest level that, you know, we've ever seen. Interest rates are, were they at 8 percent or they came down a little bit. So, I look at my own house and like the buying power I had when I bought it relative today, like, if I took a mortgage on it, it'd almost be like double, triple from what it is.

So, I think that's, that's scary for some, or there, you know, it's, it's unpredictable. What is your thought process as things change and where we're at today? Does that affect your strategy or does it make you more bullish, bearish?

Josh Sterling: So, you know, I'm, I'm pretty bullish, if you will, on, on the overall housing market because mainly I don't think you can reproduce housing at even today's prices in a lot of markets, you know, especially the rust belt Midwest areas where, you know, you can still buy a reasonable house for below replacement costs.

That, that's not, that at some point doesn't make sense. So it was, that was actually something that way, way, way back in, you know, the recession of, uh, 08, 09, you know, those years. When you could buy a house for 40, 000 that, you know, maybe say that house is 250, 000. Um, it just it didn't make sense and it was an opportunity, right?

Um, and I kind of still think of that. So we were building some new construction Um, we built single family built for rent model. Um back in like 2016 through 2018 There's a great model. Um And we stopped doing it in like 2018 because our labor costs got too high. Labor and materials costs got too high.

Again, this is back 2018, way before the recent inflation we've seen, but we couldn't justify the cost into these houses anymore to lease the property. Um, look at it, what it would be now. It's insane. That house that I was building then for, you know, we were probably getting it down for about a hundred bucks a foot, which is really efficient.

Um, I'd probably be 200 bucks a foot to build that house today. Wow. So it makes me, it makes me think that it's hard to over the long run, it's hard to not do well owning real estate because you can't

Wes Mathews: replace it. So talk a little bit, if you will, about. Like syndications. So I look at myself as this sounds amazing, but whether I'm just making an excuse or I'm just too busy for me to buy a single family home right now and do all this myself, like I'm just not ready.

I'm not comfortable. I've got other stuff going on. How can successful entrepreneurs get involved in real estate? I know you have some experience with syndication. You want to talk a little bit about that and the benefits there? Yeah, sure.

Josh Sterling: I mean, there's really two fronts of that. Number one, um, You know, I, I, I always try to make the caveat when I talk to somebody that's new getting into real estate, if you just want to get into it for one or two or three houses, don't even do it because the ebbs and flows of the business, if you don't have some scale will can eat you up, you know, you have one water heater, God, that's all your income for maybe a month or two.

Right? So, so I always put the caveat, if you're not going to get at least 10 units, don't even don't even get in the first place. But that leads into that syndication model. It's, it's a, it's a great model because it lets you get into properties. Yeah. So you can buy, you know, basically all a syndication is, is buying a small portion of a larger investment, right?

So, um, let's say it's a, you know, 80 unit apartment building that, that we're going to go acquire from time to time. We'll raise capital for that deal and we'll divide the capital being raised into shares. So, you know, a typical investment for us might be 50, 000 shares. And obviously depending on size of building and the equity offering.

Let's just say that's two and a half percent of that building. So if someone can put in 50, 000 into one of our syndications and in theory on, let's say, two and a half percent of that deal, that means they own two and a half percent of the cash flow, two and a half percent of the appreciation, two and a half percent of the depreciation, all the things I just listed, right?

The principal pay down, um, All of that, they just share in the bigger picture,

Wes Mathews: which you

Josh Sterling: start out with scale. And so it can be a, uh, you know, fairly simple way to get into real estate without actually going out and acquiring one house at a time.

Wes Mathews: No, it's really interesting. And I think one of the most exciting things for me about syndications is I don't have to do anything.

The smart guys are going to operate and kind of take on most of the responsibility. And the first year I did it, I got something in the mail, and it was a large percentage of what I invested as a loss on my taxes, and you know, I was already making money on this deal, and I think a lot of people just don't really understand the concept of accelerated depreciation, and some of the advantages that real estate have, um, it's very lucrative, but I want to go back to something you said, because I think a You know, you're a guy I trust and respect, especially in the real estate side.

You just said, unless you're going to get 10 units, if you want one to three, don't even do it. I think that's some solid advice from somebody who's grown to well over 900 units. Um, but again, Don't let that be fearful. I got a little bit of taste through syndication, which might get me to the next level, but I'm also realizing, like, I like syndications.

Like I don't want to do the work. And I don't, I don't know real estate. Like, you know, real estate. Now, are you guys open right? With. You're talking about Epic and your real estate deals. Like when you guys come across deals, are you looking to take on other investors or people that are looking to get in these multi family deals?

Josh Sterling: Yeah, absolutely. I mean, uh, the mark, so I would never buy a deal for a syndication that I wouldn't buy myself. Um, and so the market for the last. It's probably two years since all the liquidity came in after the pandemic. It really is what, what lowered yields so much. The market's been incredibly challenging to find any type of value, even in our niches of the market that are hard for most people to touch, kind of that midsize multi, where we really can typically find some great value.

There's just been really limited opportunities. So it's been a pretty slow, I think, I don't think we've closed on a syndication. We have one small one to close on this year. I take that back. But prior to that, it's been, it'll be two years now today since our last, you know, relatively mid sized to large scale syndication because the opportunity wasn't there.

So I personally think with my crystal ball, I think it's coming. I think there's some, some, you know, cracks in the economy, uh, macro economically, at least. And at some point that leads to some potential value. So yeah, as deals come about, certainly we'll be putting some more,

Wes Mathews: you know, marketing deals together.

Awesome. No, that, that, that's great. Cause I, I think, I'm not sure if people realize that that's an opportunity out there. They may think that they have to come in, buy the house. I've thought about this process before, you know, what's the max I can make in a house. Obviously you have appreciate and depreciate, all these different things.

Do I really want to Put some money down and break even a little bit of the money and have a tenant not pay me for two months and I'm a little bit negative cash flow? Or do I go into a syndication and potentially make six to fifteen percent cash flow, depreciation, appreciation, all that stuff. So I think, you know, weighing your options, there's opportunities out there for people that want to get involved, um, and work alongside super smart, successful people.

But I want to touch back on the pilot thing, helicopter, plane, like, is that, is that where you spend most of your time when you're not accumulating a bunch of real estate? You know, I love

Josh Sterling: it. Flying is like the ultimate freedom, right? So we've got a King Air 300 that you've been on Wes, I know, and then I've got an R66 helicopter, which is, I don't know, probably four years ago or so I got into helicopter flying.

It's a whole different kind of flying, but they're, they're completely different, right? You know, you can, uh, It's a big airplane. It takes you far fast, but you're up. It's like being on an airliner and in the helicopter, you're landing in your backyard, flying around low, you know, great visibility, you know, but you're not going real far, real fast.

So totally, I love both angles of aviation. It's just always been something that, um, that I've enjoyed just kind of my passion. And now we just do it for fun. Um, instead of for a

Wes Mathews: career, which is, I guess, good. That's awesome. That changes things. So you're, you're in Grozeal. no, I really appreciate the shares today.

You gave a lot of nuggets, a lot of information, a couple of things. Like where can people find you? If number one. You're a wealth of knowledge, super successful guy in a lot of different areas, but especially if people want to talk about syndications, like how, how can people connect with you? Where, where can they find Josh?

It's hard to call you when you're, when you're flying, but with your day to day business, how do you Josh? So, I

Josh Sterling: mean, probably the first and easiest is just social media. I saw Facebook, you know, Josh Sterling or Instagram is jk. sterling. Um, And then, um, syndication models. What we typically do if somebody's interested, um, we've got a regular investor letter that we'll just go out with, you know, general market updates, typically quarterly.

So if you want to get on that, um, my email is josh at epicpm. com. I would add you to that list. Um, and then, um, I've got a partner who works in investor relations, typically handles that communication. Um, that just keeps people aware of what opportunities we either may have in the pipeline or, or currently, um, offering on.

Either one of those models. Social is probably best for, uh, just following and keeping up and, uh, and email if you're looking for the syndication

Wes Mathews: side. Awesome, Josh. Well, hey, I, you know, I, I could pick your brain all day and night about this real estate stuff, but I want to thank you again for coming on and sharing your knowledge.

You, you added a wealth of knowledge. So thank you so much. All right. Thanks for having us. So thank you to the audience. If you learned something today or laughed or, you know, you, you now want to take over the world of real estate, tell us something about the podcast. Uh, this has been another exciting episode of Entrepreneur Intel.

Thank you again, Josh. Appreciate it. Thank you.