Going from Investor to Business Owner with Shelby Johnson

Shelby Johnson: [0:00] Yeah. Yeah. So with investing, it's just something that I realized now, like, looking back at I'm all about investing. I really am. But a lot of people and at least me at the time where I was like, I'm gonna be an investor and I'm gonna be financially free. It's like, look at my portfolio I have now and I'm like, I don't touch my cash flow.

Mike DeHaan: [0:19] Oh, this is.

Shelby Johnson: [0:19] Because I know that it's only gonna be there for a little while because when I bought this property in 2018, I said something of like, oh, that roof's got five more years on it. Well, guess what? It's fucking five years later.

Dan Austin: [0:32] Yeah. Right. Check is due now. Yeah.

Mike DeHaan: [0:34] Yeah. Okay. Welcome

Speaker 4: [0:38] to the collecting keys podcast. The show where you'll learn how to use real estate to create massive income, not just passive income. Real estate doesn't have to be a get rich slow game. Listen to the country's top real estate operators, and you'll have all the tools you need to replace your w two income and go beyond in under twelve months. Ready to take things to the next level? Let's jump in with our hosts, Mike DeHaan and Dan Austin for today's episode of the collecting keys podcast.

Mike DeHaan: [1:15] What is going on, guys? We have Shelby Johnson on the episode today, and I really enjoyed this show. Shelby is Exciting show. She's a very exciting show, super awesome personality. And if you haven't seen Shelby anywhere before, she has her fingers in so many different things in the real estate space.

Dan Austin: [1:34] You definitely know who she is if you don't know who she is. Like, you probably come across her.

Mike DeHaan: [1:38] Honestly, that's actually a good description. She's probably someone that you've seen on like an Instagram reel that you didn't necessarily process who she was, but she's everywhere. She has multiple podcasts. She founded Pines and Properties, which is a very successful meetup group. Uh-huh. She's one of the largest realtors in eXp. She has a massive team there. She has what a bunch of other different businesses that she runs. She's just kind of like all over the place. And this is a really great episode because I feel like it was, you know, she kind of started similar timeframe to us in the real estate world. And she has kind of gone through a similar arc to what we have. And it is sort of a deep dive into the identity crisis that a lot of people that start out as diehard and cash flow investors face, as they start to, you know, accumulate a large portfolio, and you start to realize that cash flow isn't actually what you thought it was going to be. When one of my favorite quotes that she had was she was talking about how she bought a property that she knew the roof only had five years left. And she's like, well, now that five years has come up and I have to deal with that.

Dan Austin: [2:37] That check is due. Yeah. I I think too, like, with that is like, also you grow and you pivot as a human and what your goals are as you learn more and you actually get exposed to the industry and you say, well, maybe that's not what I want. It could be you go from an agent to an investor, investor to an agent, whatever it is. For us, we definitely align with the whole cash flow thing because it changed for us. Yeah. And it's great deep dive into like

Mike DeHaan: [2:58] what that transition looks like, how she went and changed a bunch of her Airbnb. She had the long term rentals, how stuff she sold, like, saw the ups and downs that she's faced, and now what she's starting to do in the real estate industry as just like her appetite for what her goals are has shifted. So if you are an investor who has been doing this for any sort of length of time and you're trying to sort of figure out your next steps, this is a really awesome episode for you. Also, guys, definitely reach out to Shelby everywhere that she mentioned at the end of the show. She mentioned a bunch of different places, so we'll put the notes down in the show notes there. But she's awesome and more than happy to chat with you about what she has going on. So anyways, guys, shoot her a follow-up. And I really hope you enjoy this episode, because it's a great one too. Alright, we are here today with Shelby Johnson. Shelby, super excited to have you on the show for round two. We recorded a few months ago and had some technical issues. So I greatly appreciate you being willing to come back and work with us again. So Shelby, for people who don't know who you are, give us the too long didn't read, and then we will dive into some of the things that you're working on because I know you have a lot.

Shelby Johnson: [4:01] Oh my gosh. Hi. So glad to be back for round two. Yeah. So I was in the army for six years before realizing that that path was not the one that I wanted to spend the rest of my time doing. And so I looked around for other options, and I found real estate investing, you know, bigger pockets, Robert Kiyosaki. I drank all the Kool Aid. I was like, this is it. Doing it. So I decided to get out of the army. I got my real estate license as a way to generate active income to fuel my dreams. Passive. Because I bought one property, and I was like, damn. Can't do that. Lot of times, it was a turkey. And so then literally went full steam ahead into real estate as both an agent and as an investor and did well on the agent side of the house really well out the gate and was able to acquire 74 rentals in three years doing the Burnaby strategy and a lot of other creative financing. It wasn't a really beautiful time in real estate. Like, I got out of the army in 2018. So I did a lot of acquiring in 2018, '19, and 2020. So

Dan Austin: [5:04] Yeah.

Mike DeHaan: [5:05] Awesome. Good

Dan Austin: [5:06] time. Yeah. That's that's

Mike DeHaan: [5:07] a great time. I think that that's when I got started. Dan, you you technically bought your first property, like, 2016, I think.

Dan Austin: [5:12] Yeah. Which was Nope.

Mike DeHaan: [5:13] You know, a lot of people now, they talk about how, you know, it must be nice that you got started that back then before the boom. But funny the thing is, and you probably remember this too, Shelby, back in 2018, all the old, like, sort of zealots were saying, oh, it's too late. You already missed it from 2008.

Dan Austin: [5:28] It's been ten But It didn't feel easy either. Like, was still kinda, like, sketchy.

Shelby Johnson: [5:32] Oh, yeah. It yeah. I would agree. It did not feel easy.

Mike DeHaan: [5:35] Yeah. So that's awesome. And did did you say what market you're based out of?

Shelby Johnson: [5:38] I was in Fayetteville, North Carolina because I was in the army at Fort Bragg. Yeah. And then stayed there.

Dan Austin: [5:43] Vietnam.

Shelby Johnson: [5:44] Yeah, dude. I stayed there until 2000 almost 2021, and then I was in Charlotte. And I just moved to Lexington, Kentucky.

Dan Austin: [5:54] Best of luck. Yeah. What was the, like, coolest thing you ever did in the military

Speaker 4: [5:58] Well

Dan Austin: [5:58] that you would think was cool?

Shelby Johnson: [5:59] I think it's cool that I was the honor graduate for my air assault school and the honor graduate for airborne. So that's like jumping out of airplanes and rappelling out of helicopters, and I got to be number one in both. So

Dan Austin: [6:13] Nice. You're the best at jumping at Number

Mike DeHaan: [6:15] fucking one. Yeah.

Dan Austin: [6:17] Yeah. That's awesome.

Shelby Johnson: [6:19] It wasn't like it was like literally test driven. So I was the nerdiest one. I got the answers on the test right.

Mike DeHaan: [6:24] I was about to say, yeah, did not number one at falling. Perfect. We nailed it.

Dan Austin: [6:29] So good.

Mike DeHaan: [6:30] Yeah. So Yeah. Yeah. Don't ask Dan what the coolest thing he did was. He'll have some horrible story about how he like killed people. I kinda don't know.

Shelby Johnson: [6:37] Oh, shit.

Dan Austin: [6:38] So but you literally got into the military the same year I got out of the military.

Mike DeHaan: [6:42] Really? Yeah.

Shelby Johnson: [6:43] Little little swap a roo there.

Dan Austin: [6:45] We did. Yeah. There's too much of me. They need a little bit of Shelby out there.

Mike DeHaan: [6:49] Yeah. Way way too much of Dan. That's funny. I've so Dan was a was an army ranger that was out there doing the crazy stuff. And the funny thing is is I've met a lot of other Dan types, I guess, in my time. And one of the things that is always shocking to me is how just, like, stone cold they are about stuff. You know? It's just like, you have so much energy. This is Dan's, like, maximum energy right now. He's just so Stoned cold Dan Austin.

Dan Austin: [7:13] Yeah. Stone cold Dan Austin.

Shelby Johnson: [7:14] It's good. We balance each other.

Dan Austin: [7:16] Yeah. Exactly. This will be good.

Mike DeHaan: [7:18] So awesome. So you got started in 2018, and you said doing the Burr B and B. So you're doing short term rentals back then? Or No. Did you start doing those along with everyone else in the last, like, eighteen months?

Shelby Johnson: [7:29] No. I like to say I helped bring it and then to the table, and then now I've I've completely backed out of it. Okay. Anyway, so to get into it, 2018, I did not do Airbnb's. I did the BRRRR strategy. I bought a couple turnkey where I could, but most of it was just straight up burger. And then in 2019, I tested because one of the guys in Five Fillers Nation, like, on our team back in the day tested one of his units with Airbnb, and it rushed. And at that point in time in Fayetteville, North Carolina, there were less than a 100 Airbnbs in on the market, like, entirely Fayetteville and the surrounding areas. And so he's like, yo. This is just crushing. And so I was like, everyone stop. We're doing this. And we did. We I mean, we did. Well, at my peak, I had 18 Airbnbs in Fayetteville. And this past year, I shut them all down because completely oversaturated. So 2019 is when I went Airbnb crazy with the BurnBee strategy. And then it was October 2020 that I got on the Bigger Pockets podcast and told the world about how great it was to invest in Fayetteville doing this strategy. Wow. Okay. Fast forward to, you know, two years from that, and I'm shutting them all down because we started at less than a 100 in the whole market. And when I shut them down, there were over 800. Wow. And it's just like, it wasn't working. But you adjust.

Shelby Johnson: [8:50] Right?

Dan Austin: [8:50] Dang it.

Mike DeHaan: [8:50] Yeah. Right. That's crazy shifts though. So, you mean, there were 800 of them. Do you think that all of those were people that purchased them specifically to do Airbnb, or a lot of them ones that overpaid for long term rentals and then pivoted to Airbnb?

Shelby Johnson: [9:04] I think that a lot of them were intentional. Airbnb. And then, you know what's crazy? It's like as I was doing these, like, mass buyer sales for all of the furniture, everyone coming through, I'd like, oh, what are you buying this for? And they're like, just set up my Airbnb. And I'm like, I'm literally trying to show them the numbers. I'm like, yo, I've been doing this for a long, you know, look at these stuff. And they're like, no. I'm just gonna try it. I'm like

Mike DeHaan: [9:25] Yeah.

Dan Austin: [9:25] Dang it. That's crazy.

Mike DeHaan: [9:26] So you say you shut them all down. Did you sell them? Or did you just turn them into long term rentals?

Shelby Johnson: [9:32] I sold some, and I four were arbitrages, so I just did not renew the lease. And then eight were it was one eight unit historic property and sold them. And then the rest, I just turned back into long term rentals. So that's the thing too. It's like you buy with the numbers in mind for long term. So that way if you have to pivot, you can.

Mike DeHaan: [9:50] Absolutely. Which is such an important piece that so many of, like, the new Airbnb crowd has missed, especially in these hot markets like up where we're at, you know, Eastern Washington, North Idaho. Coeur D'Alene was insane 2021. People were like buying these houses in, neighborhoods for $5,060,000 dollars plus over asking price to have an Airbnb in Coeur D'Alene. And now you see all those properties coming back on the market. They're selling them for majorly less than they bought them for. Soon. Yeah. Because they can't cash flow it as a long term rental. Airbnb's didn't pan out as they expected. Because I don't know if people realize this. It snows here in freaking October. It is snowing here right now.

Dan Austin: [10:27] It shuts down. It's a lake town, which means nobody's there in December, January, February. Yeah.

Mike DeHaan: [10:33] Right? And they just we saw this huge run up, obviously with no exit strategies, and it was all outside money that, you know, heard about it because Brandon Turner has a house here. You know, what what's his name as a house here, Dan? What's the multifamily name? Craig Kerloff.

Shelby Johnson: [10:46] Craig Kerloff.

Mike DeHaan: [10:47] Oh, Craig.

Dan Austin: [10:47] Yeah. Invest two Fog. Yeah.

Mike DeHaan: [10:49] Craig's a great guy. Yeah. Has a house here. Ken McElroy has a house here. So kinda like put it on the map.

Dan Austin: [10:55] Yeah, there's some there's some OGs here for the real estate business.

Mike DeHaan: [10:58] And then all of a sudden, you have these Airbnb investors that have no exit strategy. Yeah. Right? So that I mean, that's great about what you're doing. I guess when you're going to that route, you've that portfolio, were you buying things? You said BurbnB. Were you buying distressed properties and fixing them up as well?

Shelby Johnson: [11:11] Yeah. A lot of these were Yes. Distressed. Or some of them were turn and burn. So like, in in sample back in the day, you know, you just go on the market and you see what had been on the market for seventy days, and then you just You come calculate, how can I, you know, acquire this cash and turn around and do delayed financing and recoup immediately? Some were were like that, and those were lovely. But a lot of them were like I mean, I did a lot at the a courthouse.

Dan Austin: [11:39] Court house.

Shelby Johnson: [11:39] Yep. Court house foreclosures. And then, I mean, in the beginning, there were MLS foreclosures, like VA foreclosures, HUD's. And then in, like, 2019, a lot of them were courthouse foreclosures turn and burns. Yeah.

Mike DeHaan: [11:52] Nice. That's awesome. So did you fund all those with just hard money? Because I guess buying a foreclosure, especially in that kind of volume, requires a lot of cash, and it can be hard to get hard money to support that.

Shelby Johnson: [12:03] Yeah. So I tried not to use hard money when I didn't have to. We were really creative with, like, layering different strategies. So, like, I worked really closely with First Citizens Bank, and I had way too many lines of credit. It's crazy. Like, I'm like, why are you giving me these? I don't understand, but I'll accept. I should. So I had lines of credit, and they also had, like, really cool loan products back then where you could, like, buy an investment property under a $100,000 for no financials and 15% down. So, like, I do this thing where I'd, like, use my line of credit as, like, the 15% down payment on these you know, so you could come in cash Yep. You know, at the at the courthouse, and then I would use the rest of the line of credit for the renovation and then go and refinance, do delayed financing, and get, like, a thirty year fix secure. Like, this shit was ridiculous.

Dan Austin: [12:53] Damn. Yeah. Yeah. We missed the boat on that. We had a first citizens line of credit for a while, and they took it back from us.

Mike DeHaan: [12:59] They called it yeah. We had it fully utilized, and they called it with a two week notice last year.

Shelby Johnson: [13:03] Oh my god. Seriously?

Dan Austin: [13:04] You were the OG with that, man. Yeah. Hang it. We missed that boat.

Shelby Johnson: [13:07] Dude, I'm sorry. And I I did private money too, luckily. Like, I had connections from from the army who were just, like, watching me on the Internet being like, what are you doing? I I don't have the time to invest, but I have some money. I'm like, okay. I also accept.

Mike DeHaan: [13:21] Yeah. Yes. Nice. Yes, please. That's awesome. So you're you're building all that out. And then what was the time frame of when you started that to when you got your 74 units? It was pretty quick. Was it a couple years?

Shelby Johnson: [13:30] It was basically three years. So my first intentional I say intentional because I bought one as a primary residence back in 2013. My first intentional purchase was November 2017. And then I got out in January 2018, and that's kind of when I went full steam ahead. By the end of twenty twenty is when I had up to 74. But they weren't all like single families. I mean, you know, I had a portfolio of 21 that was seven TriBloxes. And then I had like an eight unit, a six unit, a five unit. Nice.

Mike DeHaan: [14:02] Yeah.

Shelby Johnson: [14:02] So it's like a it's a fucking hot mess of stuff.

Dan Austin: [14:06] Yeah. Yeah. Yeah. It's the best.

Mike DeHaan: [14:08] Yeah. It's always challenging scaling like that because, you know, it requires so much capital and you don't get a lot coming back for a while. So Yeah. I know you were also growing your your brokerage team at the same time. How did that sort of work hand in hand with your investing? And I think that actually became your primary gig too, if I'm not mistaken, a little bit later.

Shelby Johnson: [14:25] The brokerage side.

Mike DeHaan: [14:26] The brokerage side. Yeah.

Shelby Johnson: [14:27] Yeah. Yeah. So with investing, it's just something that I realized now, like, looking back, it's like, I'm all about investing. I really am. But a lot of people and at least me at the time where I was like, I'm gonna be an investor, and I'm gonna be financially free. It's like, I look at my portfolio I have now and I'm like, I don't touch my cash flow. I know that it's only gonna be there for a little while because when I bought this property in 2018, I said something of like, oh, that roof's got five more years on it. Well, guess what? It's fucking five years later.

Dan Austin: [14:59] Yeah. Check is due now. Yeah.

Shelby Johnson: [15:02] Right? Dude, it's ridiculous. And like, so this year alone, I mean, I've probably $50 into a quad through the roof, through, you know, the fucking plumbing issues. There was an eviction. And so, like, my my rose colored glasses with investing, no regrets. Love, you know Mhmm. What we have. I'm super glad the RV and Bs are done though because I'm really more appreciative

Dan Austin: [15:25] Such an

Shelby Johnson: [15:26] than ever. Yeah. Exactly. Like, less is more. No headaches. That sort of thing. But all that to say, it's like, this is such a long game.

Mike DeHaan: [15:34] I

Shelby Johnson: [15:34] will cash out on these down the road, but until then, my cash flow goes straight into the LLC's appropriate buckets to be used next fucking week when the fridge goes out.

Dan Austin: [15:44] I'm so glad you say that because like Mike and I talk about this quite regularly where we don't look at cash flow as like a living wage. Yeah. It's like to protect your equity. 100%. Allowing the leverage, and the tax benefits, and the equity growth. Like, that's literally what we see our cash flow as. And not that you can't live off it, it's just like you need a lot of cash flow to actually live off it, but you still need those reserves getting built, because you're right, like when you're burning properties and you're buying distress and you don't fix every little thing, a roof or a hot water tank, this or that, it just adds up and it always happens, you're like, God damn it.

Shelby Johnson: [16:17] Dude, 100%. And the thing too, it's like, I know that this is an issue of fine. It's like my property manager, not that good. They're never gonna listen to us. But they're like, I've been considering leaving them for years, and I have way too many evictions. You know? And each one of those, the turnover is just so expensive. So Mhmm. Anyway, that's like if you're out there thinking you're gonna get those five rentals and live off your $200 a door, which I don't even think you can get anymore with, like, the interest rates and oh, that's a whole another story. But just like reality check.

Mike DeHaan: [16:50] Yeah. Yeah. I mean and those are the words spoken of a true operator. Right? Like Dan said, we've all learned that. Everyone starts the same thing. Like, I'm gonna have this cash flow from all these properties. And we always see all these dipshits on social media who are like, oh, you know, we're the 28 year old traveling couple and we own we bought six properties in three years and this is how we live off of $5,000 a month. I'm like, you're not making that. Totally.

Shelby Johnson: [17:13] Right. Yeah. You're full of shit.

Mike DeHaan: [17:15] Yeah. You're you're Totally. You're gonna be in for a really rude awakening when you have to fix one thing in

Dan Austin: [17:19] any of those properties. Dude. Absolutely.

Mike DeHaan: [17:21] Yeah. Think I think it's that mindset shift of as you start to have some maturity and launch saving this business, you do realize that cash flow is purely a defensive metric. Right? Yeah. Not like an offensive metric. Yeah. And, you know, that's why you have all the old guys that that say real estate is a get rich slow game, like, a long period of time. Yep. That is absolutely true. Right? But the biggest thing I think a lot of people, especially in this current like instant gratification sort of generation that we have, is they are not willing to wait for the good deal because you really do make your money when you buy. Mhmm. Right? And that's where so many people for some reason have lost the plot. It's getting worse and worse now with a lot of these like creative financing nonsense deals out there where people are buying like above asking price. Yeah. That's because they're getting for cheap debt or they're getting like the seller finances that they

Dan Austin: [18:06] cheap debt.

Mike DeHaan: [18:06] They make no freaking sense. Mean, I even right now, we're like, talk about, like, oh, the check's due on that five year roof. Yeah. I can't tell you how many of these stupid deals are being seen sent out as, creative finance deals. There's, a three year balloon with a seller finance note that's being bought at retail. I'm like, that three years is gonna come really fast. So fast. Hoping that that property is somehow worth more. Yeah. Otherwise, you're gonna have to come out that 20% down payment to refinance that loan in three years anyway.

Shelby Johnson: [18:34] Dude. Right? It doesn't make any sense.

Mike DeHaan: [18:36] But I see it all the time. Right? It's just it's just a ridiculous situation.

Shelby Johnson: [18:40] You see a lot of crazy stuff on the internet. Yeah. And there's just like to your point where people will be like, yeah, buying rentals, like, they'll say like five little stuff. And they're like, it's just that easy. And I'm like, you clearly haven't been around long enough to see the life cycle. Because it is a

Mike DeHaan: [18:53] life cycle. Yeah.

Shelby Johnson: [18:54] When you first get it, you're like, this is great. I got my tenant in place. Like, no issues. It's because you haven't had a turnover yet.

Mike DeHaan: [18:59] It's because

Shelby Johnson: [19:00] you haven't had a fucking anything yet.

Dan Austin: [19:02] You haven't had a tenant that just let their dog shit all over your carpet and never cleaned it up? Yep. Mhmm. That'll teach you.

Mike DeHaan: [19:08] Well, if someone's say, well, I only buy like you know, I I have properties that demand the best tenants, and I only have the best tenants. It's like, well, you know what? Bad tenants do weird shit too. Oh, sorry. Good tenants do weird shit too after one day.

Shelby Johnson: [19:19] All do

Mike DeHaan: [19:20] weird shit. Yeah. So anyways, the real estate brokerage side of it, what did that look like as you were building that out?

Shelby Johnson: [19:26] Yeah. So I had a I started at Keller Williams, and I did like the traditional team model, Gary Keller, millionaire real estate agent type of there's the rent book. I followed the rent book if you guys know what that is. But, basically, it's like fifty fifty split where you join the team, you brand yourself the team as whatever the team is, you do what you're told, And then in exchange for the leverage and the guidance and the leads and all the things, you give 50%. And I did that for a couple years. And purely, that was not the dream getting out of the army. I was like, I need to be an agent so I can make money so I can invest. Like, period.

Mike DeHaan: [19:58] Mhmm.

Shelby Johnson: [19:59] But because I did well my first year and because I shared my story on the Internet, I got a lot of attention from that. And people would come and say, hey. I wanna do what you did. You should start a team. And in my lack of wisdom in those years, I was like, oh my god. Like, these people wanna do they want a team? Like, we can do this. Let's change the world. Like, you know, it's gonna be great. And so we started doing it. And with very little forethought on what my life would look like, I didn't know what my life would look like, and what that would mean, what type of people I would attract. And these are kind of different as I think now, as I'm getting into different business ventures, it's not just like, what does that mean? But also, what do I have to put out into the universe to make that work? And therefore, whatever I put out is what I attract. Do I want to attract that?

Mike DeHaan: [20:46] It's a

Shelby Johnson: [20:46] whole thing. I don't know if that makes sense to you guys.

Dan Austin: [20:48] Yeah. Makes total sense.

Shelby Johnson: [20:50] So I did the team, and I did that for a couple years, and we grew quickly, and it was really fun in some ways, and really challenging in others. And at the end of the day, what I found is the people who we were attracting after the initial startup. Because in the beginning, when it's a startup, it's like, yeah. Let's build this thing together, everything for the team. But once you get established, there's less of that startup mentality and more of that coattail riding mentality of like, wait. What do you do for us? And I'm like, no. No. No. Wait. We're we're building this together. And they're like, no. No. No. So all that to say, I was like, fuck this. Changed the model, and now I have, like, a community where the individuals within the community can use all of the tools and the systems and the products that we developed over the years when we have that traditional team to start their own businesses. So the message is we are an entrepreneur incubator. We are where agents go when they're done being agents and wanna be business owners, and help people start their own empires. Does that make sense?

Mike DeHaan: [21:57] Totally.

Shelby Johnson: [21:58] Kind of.

Dan Austin: [21:58] Yeah. I've always wondered because there's like, you always see this in in the big agent like groups is like there's either you're either a Keller Williams or you're like an e x p like the when you see like really successful people, so that really so you're saying the latter is more of the eXp model. Like, hey, we're agents that wanna be entrepreneurs. Is that kind of the idea?

Shelby Johnson: [22:15] It's so Five Pillars Nation, we're like the sub community within eXp.

Mike DeHaan: [22:20] Gotcha.

Shelby Johnson: [22:20] I think that you can be successful no matter where you go. One of the reasons why the model works our model works at eXp is because eXp has revenue share. So Mhmm. I was like, I don't wanna take splits from people because then they expect something from me. You know? In exchange for something, you are expected to do something. I don't want any responsibility to you guys. I just wanna do what I wanna do and help you along the way. So in order to not take splits, the eXp model makes sense because eXp has revenue share, whereas Keller Williams has profit share. Does that Gotcha. Yeah. Kinda and I could go deeper into whatever you guys want, but

Dan Austin: [22:59] No. I was just curious on that. It's a one off question because, like I was saying, like, we know quite a few people in this space that they're big time Keller Williams people, or they're big times eXp. When I see big personalities, they're one or the other a lot of times.

Shelby Johnson: [23:10] Yeah. Totally. Well, and I'll never speak poorly of Keller Williams. I loved it for my first year and a couple months that we stayed there. We changed pretty early. It was in 2019 in May when we changed.

Speaker 4: [23:21] So

Mike DeHaan: [23:21] Yeah. Yeah. No. It's interesting like that that whole route. Right? You're talking about people expecting things from you and writing in your coattails. You know, and I think that there's so much talk right now around, like, I would say, like, the wealth gap or or different things like that that are sort of, you know, happening in the country. I think, honestly, one of the bigger gaps that's gonna be interesting is we're gonna have people that are, like entrepreneurial driven, and those that aren't like those that are happy to be the co tail writers. Right? Uh-huh. Just like with the way things are going, I feel like you want to do as much as you can as to be someone that's in control of your own destiny. Because there's gonna be more and more people that are exactly like you said, where they're like, you just wanna ride on the coattails of this. Like, we don't need you. Yeah. Like, you know, we you can go and do something else. And we have we have other people who would be more happy to receive value from us. Right, that could bring more to the table. I mean, even like looking within our team, right, like you start to build a team with employees, you get employees that are obviously just there to sort of get strung along, you get a paycheck, and there are people that are there to, like, wanna make an impact on the best one or do different things. And I understand that a lot of people that have jobs get a paycheck, but those are the first people to go. And there's gonna be more and more companies that like, I don't really want any of those people.

Mike DeHaan: [24:34] If I just want the paycheck I don't. People, I can get I can get some Filipinos that could do the same thing that you're doing, and I pay them, you know, a tenth of the price. Right? And they show up every day, and they're happy to be there. Yeah. But I think, like, in the sort of the American culture, that's gonna start to go away pretty quickly when people start to start to realize that. But I don't know. Wanna tangent there? I don't know was trying to say.

Shelby Johnson: [24:54] No. I totally agree. I think there's a lot of entitlement too where it's like, I see this all the time within agents or within investors, whoever when I'm talking to people, it's like they expect time. They expect to be provided resources. And like, I don't know how you guys when you were starting out, but like, I remember, I mean, I didn't have a mentor when I showed up at Keller Williams. It was a huge firm knowing he will fuck who I was or what I did.

Mike DeHaan: [25:21] And, you

Shelby Johnson: [25:22] know, I'd like, track down, go to people ask, hey, like, would you mind if I shower you? You don't have to train me. Can I just listen to you when you have conversations? Can I ride in the car with you? Like, you know, you have to kind of create your own destiny. And so I think just to loop it back, I think that you're totally right. There's gonna be like a level it's shifting. I don't know what's called, where it's like the ones who take control of their destinies will rise to the top and the others will, I don't know, they no one deserves fucking anything.

Dan Austin: [25:50] Absolutely. Yeah. No. That's a great point, because like, what I see if I were just like to sum it up, is is like, there's people that are perfectly happy to show up to work every day and wait to be told what to do. Mhmm. Yeah. And those people are the ones that are gonna be on the lower tier, because they're they're never gonna go get things. They're never gonna go after, like you're saying, Shelby, going to the into the broker just saying like, holy shit, if I don't do this, nobody's gonna get it.

Shelby Johnson: [26:10] Yeah. No one cares.

Mike DeHaan: [26:11] Yeah. And the funny thing is, especially in real estate is a lot of the models that are out there, especially with brokerages, talking about Keller Williams, their whole model is like, okay, peasants, come and pay your desk fees. We don't really care if you're successful on that, you'll be here for a year or two years. And then you'll have like the five or 10% of people that do come in and do very, very well. And then they go and they and they tell their church, they tell their CrossFit gym, they tell, you know, their social circle. Stereotyping

Dan Austin: [26:38] the real estate agents?

Mike DeHaan: [26:39] Yeah. I mean, they're they're all the same. Let's be honest.

Shelby Johnson: [26:41] I do CrossFit, those directed. Fuck.

Mike DeHaan: [26:45] And they go and they they tell them about how they're a real estate investor and they're selling and they recruit the next round of peasants that come in,

Shelby Johnson: [26:52] yeah, the

Mike DeHaan: [26:53] desk fees and do all the things. Right? And then out of those 10% will be successful. And I mean, in the real estate, like, industry, that's kind of the model for, the higher ups. Right? They give you the opportunity to make real money if you want to. But the people that are actually running, the industry, they don't really care. There's there's more about getting more and more people into their system and paying those those fees that just trickle up. It's almost like you have like this big triangle shape, you know, where everything just goes up to the top. Like a pyramid? Would you

Shelby Johnson: [27:23] call it a pyramid?

Mike DeHaan: [27:24] So is that how it's called? Yeah. Don't know. So no. It's just funny. So that that that's cool. So I guess with the way that you're shifting now, it sounds more like a group coaching program because people, I guess, do they like hang their license underneath you or is it just purely like business consulting and education?

Shelby Johnson: [27:40] Yeah. So they hang their license with eXp, but depending on who they name as their sponsor, it determines what sub community or sometimes it's not even community. Sometimes it's just a person that they belong to. And so, like, within for our people right now, there's, like, the free, you know, through eXp. If you're a part of us, then you have access to our you know, we do training. We have scripts. We do, you know, our we have our courses and our library of resources. But starting out, like, before you hit record, I was talking about how starting out this this upcoming this year, it's we're going to have that accelerated. I don't know what to call it yet, whether it's, like, focus group elite, whatever, where it's like application only, and it is paid. You pay to show up, and it's a lot more intensive and smaller groups. But, again, it's it's to be able to, like I think about who I wanna spend my time with. And I love giving and sharing, but I love it way more when that person's gonna do something with it. So I don't wanna give to everyone if I can pour into those that are gonna take it and fucking run.

Mike DeHaan: [28:45] Mhmm. They're gonna be the more high value individuals for sure. So I guess when they come into that Yeah. What are they ultimately receiving? Like, what is their end outcome going to be? Is it like just like mentorship? Is it guidance? Do you have like a playbook? Do you have systems?

Shelby Johnson: [29:01] Yes. We have all these things. I I'll come back in, like, a month once I've sifted it out. Because right now, just so you know, we're doing we used to up until Esquoy did once a year team trip, which was an international fun trip where anyone who wanted to go, you know, could go. And we have Costa Rica, Tulum, Colombia, Belize. Nice. But this year is the first ever, like, stateside retreat. And retreat is happening in three weeks. Nice. That's like kind of like the next target for me. And then after that, I'm like, okay. How do I wanna build out this coaching to make it, you know, x y and z and what's my goal for it?

Dan Austin: [29:42] Nice. Got it. So you do this retreat with your team? Is that kind of the the idea?

Shelby Johnson: [29:46] Yes. It is 100% just the Five Pillars Nations members. And it's only Nice. There's only 25 of us who are able to go of the there's a 140 total. So Wow.

Dan Austin: [29:58] That's awesome. So you you've put a 140 people on your team.

Mike DeHaan: [30:01] Yes. That's incredible.

Shelby Johnson: [30:03] Yes. Yeah. And there's there's more to it. You know what I mean?

Mike DeHaan: [30:06] No. Get it.

Dan Austin: [30:07] But yeah. That's incredible. It's that's incredible. It really it really is.

Mike DeHaan: [30:10] Yeah. So no. That's that's cool. Yeah. Yeah. You're welcome. Yeah. No. I mean, no. That that's massive. Do you think I guess, like, what was the secret to finding those people? Is it purely just like this media and stuff that you've been doing? Or is it like I know we haven't even talked about the Pines and Properties stuff that you started, but did that play a role in it as well?

Shelby Johnson: [30:26] Pines and Properties definitely played a role. I would say all of the podcasts did a big role. Like, BiggerPockets was huge.

Dan Austin: [30:32] Yeah. It did.

Shelby Johnson: [30:33] Because, you know, especially at that time when I was very much investor agent, then when you come on a podcast like that, it's like every investor agent wants to be or interested and curious about that. So podcasts, kinds of properties, social media in general, and then just like word-of-mouth. So, you know, we've had people come. It it's really nice now that we opened it up. It was a huge mistake that we only were taking people in Charlotte and in Fayetteville when BP came out. Such a missed opportunity. Yeah. Because now we're nationwide. And literally at the time, I was like, you can't be a part of us. Yeah. Fucking idiot. But that's okay. Okay.

Mike DeHaan: [31:09] I mean, it's one of those things like hindsight's 2020. Right? You wouldn't have been prepared for that Yeah. When you started. Just like, you know, when Dan and I first started our wholesale business, there's so many houses that we wholesale were like, man. Would have Should've kept that. Multi 7 figures more on our net worth if we had been able to keep that. But we didn't know. You know how you got it?

Dan Austin: [31:27] We just didn't have the capacity then.

Shelby Johnson: [31:28] That's true. Can't kick yourself. But, yeah, all of those things layered would be the reasons.

Dan Austin: [31:35] So I got a question then. Yeah. Like, maybe we can pivot to the pints of property swings. How many are there now? Like, how many

Shelby Johnson: [31:42] Yeah.

Dan Austin: [31:42] How many, I don't know what you'd call it, groups are there across the country?

Shelby Johnson: [31:45] Last time I checked, there were 23, and that's across 11 states.

Dan Austin: [31:50] Nice. So, yeah, we know a mutual friend, Tim Gurule up in Seattle area. He has a pints and properties set up that he does up there.

Shelby Johnson: [31:58] Yeah. I love seeing those pictures.

Dan Austin: [32:00] He's good dude.

Shelby Johnson: [32:00] Very cool. Yeah.

Mike DeHaan: [32:01] Yeah. If our investor population here in Spokane wasn't so freaking lame, I'd say we should deal in. But I Yeah. The thing is what's funny about this area We have a weird dynamic. Weird dynamic.

Shelby Johnson: [32:11] Oh, you two were there. So

Mike DeHaan: [32:13] Exactly. That's how weird it is. That's the problem. This is a very weird No. There there's literally, like, I don't know, a couple dozen investors here that are like the entire market. And out of that, there's like six that are 80% of the market. Right? But like so like you see these other places where they have these huge meetups where like all these people come. That just doesn't even exist here. People have tried to do it.

Dan Austin: [32:38] Yeah. Well, if you start a what happens is you start a new meetup and like a lot of people come. What do you think? Like sixty, seventy, 80 people? And then by the next one, only 30, by the next one, ten. Yeah. So it's a super weird dynamic here.

Mike DeHaan: [32:49] And then when it gets to the 10, it's the same 10 people.

Dan Austin: [32:52] Yeah. Right? Exactly. You're all the same people you were doing business with before. Yeah. So Well,

Shelby Johnson: [32:58] I I would say that it's definitely not perfect. Everything in general, everything looks cooler online. You know?

Mike DeHaan: [33:04] I know. Yeah.

Shelby Johnson: [33:05] I'm biased. I do love the Pints of Properties events, but I also have been running it since August 2018. So, like, I know there's a lot of struggles that go along with it. Similar to what you're saying where it's like, you know, it takes a lot of effort to market and get new people. And then if you don't or maybe you guys were I'm not saying that you weren't. But, like, you will just get the same people. You know what I mean? Especially since real estate's like that. Everyone wants to do it. It's shiny and it's cool and it's fun. And then they do it and they're like, wow. This is fucking hard.

Mike DeHaan: [33:34] Yeah. Right. Yeah. This sucks. Yeah. And we never tried to run a local meetup. We attended lots of them and we recognized that it was weak. So that's why we started our instant investor programs. We can build our own online community with people that are actually good and accurate. Yes. So awesome. Well, good stuff, Shelby. Got you got so much going on. How do you keep everything organized?

Shelby Johnson: [33:53] I love organization. Okay. So I use Notion is for, like, my lists and my projects and keeping everything in its place. And then I'm big on calendar. So, you know, go through and plan out the next month or so with each one of my projects and put it on the calendar and time block it and make sure you stick to it. And then CRM. So go high level.

Mike DeHaan: [34:14] There you go. Oh, there you go.

Shelby Johnson: [34:15] Yeah. Those It helps. Yeah.

Mike DeHaan: [34:17] Do do you have a team at all? Are you doing most of the work? Like, just like an admin team that helps the any of the back end stuff?

Shelby Johnson: [34:23] Yeah. I do. I have one VA who's been with me for years now, and then I just brought on another one. The first VA, it's not like what you think. Like, she's Jetside. And then the one that I just brought on is a girl from The Philippines. Wildly impressed, though. She is doing great. I mean, it's only been three weeks, but, like, she's like a full ass human with with her questions and her insight. And she, like, knows more about things. She's like, have you thought of this? I'm like, I love you.

Mike DeHaan: [34:52] Yeah. Yeah. They have real humans in Asia. Believe it or not.

Dan Austin: [34:55] They do.

Shelby Johnson: [34:55] Like That sounds so bad. Someone's gonna clip that and be like this fucking terrible. They're gonna have to get canceled.

Mike DeHaan: [35:01] Terrible human being.

Shelby Johnson: [35:02] No. You guys know what I mean though? Where sometimes you Yeah. Just

Dan Austin: [35:05] We do.

Mike DeHaan: [35:06] Okay. I do. And it that's actually something that's very interesting. So we've had like, I don't know, over 40 VAs that we've hired and fired in our business. And we have, I don't know, but across various countries like 10 that currently work for us. And one of the most interesting things that I found is that so many Americans when they bring in VAs, and I don't think it may match the Americans might be European that who this too. But they like put them in a closet, and they don't like include them as like part of the team and the business. They don't have meetings. They don't do all this other sort of stuff. They're just kinda like, here's your spreadsheet that you need to edit. Go over here and do this. And then they're the first people to be like, my VA is only utilizing 35 out of their forty hours a week. Do I need to fire them? Michael, no, that's like, do you think that your stay side employees? No, they're they're productive for fifteen hours out of forty. What are you talking about? But like, but if you bring them in, you give them purpose, you treat them as part of the team and like everything else, they're the best employees. Oh my god. Totally. Yeah.

Dan Austin: [35:59] They show up day in and day out.

Mike DeHaan: [36:01] Yeah. They always have great attitudes. They're happy to be there. And then if you give them permission to provide feedback, they're more than happy to give it because they're the ones that are in the trenches. Totally.

Dan Austin: [36:10] Right.

Shelby Johnson: [36:10] Right? I totally and that's a lot from the army. I mean, Dan, I'm sure you know too. But like a lot of it came, you know, from the initial counseling is a rough word, but it's like, hey, like, let's talk about expectations. And then, you know Mhmm. Well, checkpoints once a week. And at the first thirty days, let's talk about what you're doing really well and what you can improve on. Let's get on the same page, you know. So I think that I totally agree with you. They are people. I didn't mean yeah. Damn it. I just

Dan Austin: [36:38] No. I think the I think the misconception that maybe you're leading to as well, Shelby, is like, we think of it as a contractor, and then like the States, when you hire a contractor, they're not on your team. Right? You're like, I'm hiring you to do this one specific thing, like, that's it. But then, when so, like, think a lot of folks think of it that way and put them in a weird box where you're experiencing of like, heck no, this person's on my team, and they're fully dedicated, fully committed. Like, it's just a different, I guess, different sense when you're hiring contractors.

Mike DeHaan: [37:03] Yeah. Well, I also think there's a sense of the fact that since a lot of them come from, you know, more third world countries, that they aren't gonna be as educated, right, or they're not gonna be as trustworthy. You know? And there are issues that you have to watch out for from time to time, but, I mean, there's whole systems in those countries around training people to be professional VAs that work for American companies.

Dan Austin: [37:21] Yeah. Our our VAs, some of the several of the ones we have now, like, literally went to university where they're only allowed to speak English in their native country. So it's like, they're pretty sharp. Don't I even know if our college kids speak English. Right?

Shelby Johnson: [37:32] My girl. Yeah. She's she's college educated, and her English is fantastic. And I think that that's sometimes language barrier can be difficult because if you are, you know, using especially if they're they're client facing, depends too. They're client facing, and there's, like, terms and jokes and acronyms. But you're right. Like, the the education level and even, like, the understanding of language layers in-depth is really impressive.

Mike DeHaan: [37:59] Yeah. I mean and and the it's funny. People also have the language thing too. Mean, we're in North Idaho. Right? People up here are racist as hell. If someone has an accent, they don't know what to do with them. But, like, see, we have the same thing we're doing with American people. Right? You get the guy that you're gonna try and put him in a sales group, and he's like the the dude with the red stapler on office space. He's like,

Dan Austin: [38:16] you know, I don't know. Trying to buy your house.

Mike DeHaan: [38:19] He's not gonna be a good fit either. Right. But, you know,

Dan Austin: [38:21] he's It just happens. You gotta be Exactly.

Mike DeHaan: [38:22] Yeah. You gotta find the right personalities and right vibes to do it. Totally. Man, we've covered it. We went all over the ship on this. That's great.

Shelby Johnson: [38:29] Okay. It's no problem.

Mike DeHaan: [38:31] Yeah. So let's dive into the end of the show here, Shelby. So we always have the same three questions that we ask everyone who comes on the show. So question number one, what is your craziest real estate investing story?

Shelby Johnson: [38:44] Okay. This was in 2018, so year one. I had just closed on a six unit apartment, small, small little apartment building, and it was not in a flood zone. Foreshadowing. And then, you know, two weeks later after closing, a hurricane came through. And we're in Fayetteville. This is like the middle of the state, And it got so flooded. Like, was flooded. The whole fucking city was flooded. And we have Damn. All of my little six HVAC units that aren't in a flood zone just just done. And so that was really crazy right out the gate. But luckily, there's a SBA loan, like an SBA disaster loan that we able to get to come in and give us six brand new HVAC units. And now we have flood insurance even though it's not in a flood zone.

Mike DeHaan: [39:31] So Yeah. Yeah. What a nightmare.

Shelby Johnson: [39:33] It was oh my god. Such a nightmare, though.

Mike DeHaan: [39:35] Yeah. That's that's rough. So did you ask to, like, redo all the units as well or just the HVAC units? Like, was that I mean, I'm guessing they were in the basements?

Shelby Johnson: [39:43] They weren't. They was just outside on flat ground.

Mike DeHaan: [39:45] I'm so sorry.

Shelby Johnson: [39:46] Yeah. So the interior of the units weren't that bad. Like, we didn't have to do much inside. And that, like, weirdly, the flooring was tile. So we're we were okay on the inside.

Mike DeHaan: [40:00] Saying. So everyone just lived in a pond for, like, a couple days and then they were fine? Yeah. Basically. Yeah.

Dan Austin: [40:05] Mike and I do not have the luck like that. We would have been wrecked.

Mike DeHaan: [40:08] Oh, totally.

Dan Austin: [40:09] If that happened to us. It's like, yeah. We've had bad luck with insurance and floods.

Mike DeHaan: [40:12] Oh, no. We had one property that was in a flood zone and we finally sold it this year and I was just like praying that we'll be able to get out of it.

Dan Austin: [40:21] Wait. Which one was that? Was it eighth in the flood zone?

Mike DeHaan: [40:23] That was it eighth in a flood zone, dude. That's why our insurance it was like $7,000 a year.

Dan Austin: [40:27] I never knew that. I was like, why are we paying so much in insurance? It's because it was our flood zone. Good to know.

Mike DeHaan: [40:32] So I was always just waiting for it to turn into a freaking disaster. And we were able to get in and out in the year and a half

Dan Austin: [40:37] and never for that. It comes out on live on live on air.

Mike DeHaan: [40:41] Well, it's because you wouldn't want to buy it.

Dan Austin: [40:44] We did make good money.

Shelby Johnson: [40:45] Perfect partnership, ladies and gentlemen.

Dan Austin: [40:47] Yeah. Exactly. So

Mike DeHaan: [40:48] Alright. Second question. What is the number one tip you would give to a new investor looking to get started or to a small investor that can take their business to the next level?

Shelby Johnson: [40:57] I think it goes back to accepting complete responsibility for anything that you want. Like, you want it, you have to pursue it assertively and make it happen because no one is going to help you. I mean, people might help you, but, like, at the end of the day, it's it's on your shoulders to make whatever you want happen.

Mike DeHaan: [41:16] Mhmm. Exactly. Gotta work regardless of what everyone tells you like that. Yeah. Cool. Easy enough. Alright. Last question, Shelby. Where can people find you, follow you, and reach out to you if they'd like to do so?

Shelby Johnson: [41:28] Okay. The Shelby Show on Instagram and on YouTube. Also, to the agentgoldmine.com. Listen to if you're an agent, this is an agent podcast. It's one that me and Ali Garced do. I also host the Real Estate Rock Stars podcast now, if don't listen to that, go to that. But, yeah, The Shelby Show on Instagram and 5pillarsnation.com. That'll

Mike DeHaan: [41:48] do it. You got a bunch of stuff. So say say this one more time. So you have Sorry. No. No. You're good. I just wanna make sure that you get it appropriately. So you said The Shelby Show on social media?

Shelby Johnson: [41:56] Yep. The Shelby Show. Okay.

Mike DeHaan: [41:57] You have the

Shelby Johnson: [41:59] The agent goldmine.com. Which

Mike DeHaan: [42:02] is a podcast with OG Garsteady podcast. Who just came out on our show, actually.

Shelby Johnson: [42:06] Yeah. She's pretty cool.

Dan Austin: [42:06] That was great.

Mike DeHaan: [42:07] Yeah. Her episode just came out. Yeah. So then Real Estate Rockstar, she's taking over that. She took over that from Erin Imuchiseggi?

Shelby Johnson: [42:13] Yeah. He still owns it. I just host it.

Mike DeHaan: [42:16] Okay. Cool. And then

Shelby Johnson: [42:18] In Five Pillars Nation.

Mike DeHaan: [42:19] Five Millars Nation. Five Millars Nation. Yeah. Alright. There's a bunch of stuff there. We'll put them all in the show notes if you can go through it and find the one that fits. No. I said, you got a

Dan Austin: [42:26] lot going You got Yeah. A lot going

Mike DeHaan: [42:28] After after Dan was talking shit at the beginning about how many businesses we've had, I think you have more and it's just you.

Shelby Johnson: [42:34] I don't know. And less is more is like actually my motto these days. So Yeah. Maybe I should slash a couple more.

Mike DeHaan: [42:40] Yeah. There you go. So awesome, guys. Well, thanks so much for listening. And you guys should definitely reach out to Shelby. In case you can't tell, she is just a ball of energy and she would love to chat with you and hear about what you have going on. And she's also released some great content as well across all of our different platforms. So go give her a follow. Shoot her a DM. Let her know that you appreciate what she's doing because that'll let people come on these podcasts so that you do that. We're not all weird, shy people that hide behind some veil. Like, we do want to engage with you. So please go ahead and shoot our fall and reach out. Besides that, everybody, we appreciate you all listening, and we'll talk to you all next week. See you. Thanks

Speaker 4: [43:17] for listening to collecting keys. Drop us a five star review on iTunes and send us a screenshot to Mike@collectingkeys.com for your chance to receive a free collecting keys t shirt.