welcome back to the Hybrid Real Estate

Professional Podcast today in this solo

episode I break down the mindset shift

it took for my wife and I to go from

buying $200,000 rental properties to

leading an over $9 million groundup

development project for Everwood Reserve

our assisted living community we’re

building in Texas i’ll walk through the

frameworks that helped us get

comfortable with risk and share why

playing it safe started to feel like the

real gamble so before we get into that

I’m Aaron Amin my wife and I built a

portfolio of eight cash flowing rental

properties across three states over 3

years while bringing three children into

this world this podcast is a

documentation of my journey not only to

build that portfolio but more recently

we have made a very strong pivot into

residential assisted living which is an

asset class we believe is positioned to

benefit for decades to come so we took

our single family portfolio and we’re

making some pretty big consequential

decisions around what to do with those

rentals and how we can position oursel

for this next phase of our real estate

journey so our real estate journey

started with a single rental property

about 1 mile away from where we lived

and when I talk about putting myself

back in the headsp space that we were in

when we made that decision that felt

like one of the craziest things we could

ever do it was really hard for us to

make the decision to pull the trigger on

that first rental property we were

buying about as safe as we could it was

a newly rebuilt home this was 2019 it

was a newly rebuilt home all the

mechanical everything had been replaced

literally from the ground up all the

appliances were brand new nice flooring

nice finishes in an upand cominging

neighborhood and we put 30% down so that

we could even have a lower monthly

payment and this was in the era of 3.5%

investor interest rates so it’s hard to

envision a safer play than what we did

with that first rental but it’s still

just felt crazy it felt crazy at the

time because the idea of putting such a

large chunk of capital into a home and

then having to operate and actually be

involved in the outcome of whether or

not it’s profitable versus putting that

same money in the stock market it was

just a foreign concept at the time so I

just want to validate for I know there’s

a lot of people listening to this

podcast that are either buying their

first property considering buying their

first property or maybe they’ve already

bought a property and they’re trying to

figure out how to be more intentional

about it that early fear of what this

decision could mean for you and your

family and your finances and your

perception of where the downside is in

that risk is totally totally valid it’s

something that we went through quite a

bit before we were able to do it but

once we got in and we got a taste of

what the upside is on that idea the risk

also became clear why people are willing

to do this so that first rental fast

forward like I said we bought eight

rental properties over the course of 3

years across three states clearly our

relationship with risk changed over that

period of time or we would not be

willing to do that so what happened in

that period of time so this was a good

portion of this was before we had kids

and we had three kids in three years so

not only were we changing and growing in

our relationship to money our

relationship to entrepreneurship to real

estate we’re also growing in our

personal lives into parents which is a

huge shift right your whole relationship

with risk your relationship with growth

your patience your behavior everything

really does change when you have kids

and I don’t mean to sound overly

dramatic with that but it’s true a lot

of how you view the world how you use

your time everything kind of shifts so I

guess in some sense we were forced to

grow no matter what we decided to do but

it just so happened to play really well

that we were falling in love with this

real estate entrepreneurship during that

period of time we went from that one

house about a mile from our primary

residence into buying multiple

properties in a very short period of

time now for those who aren’t familiar

with our story our second and third

rental respectively we actually bought

and they were already leased to

residential assisted living operators so

that was where we got our first taste of

this asset class residential assisted

living and it was a model that I didn’t

even know about before so I always

thought of assisted living as these big

nursing homes with hundreds of people

and you know people walking around

dressed like a hospital basically not

like a home so this was the first taste

into that homelike environment where

people were getting assisted living

services in a residential environment

and so I won’t pretend that that’s the

moment that we decided to do what we’re

doing now but it gave us that exposure

and that taste but what also happened

with that is that we went from one

rental to three rentals in the course of

about 6 months and so our identity

really grew and I embraced very strongly

the identity of being a real estate

investor it went from hey let’s try it

out with one rental property to all of a

sudden we have three and we have three

different bases of tenants we’re now

have two leases with a company and this

is a real business so I had to grow into

that it went from being you know

essentially paralyzed and afraid of

investing in one single property that

was newly rebuilt from the ground up

with a very safe 30% down payment you

know we went from being almost paralyzed

by that decision to all of a sudden to

buy that second and third property we

had to sell out of a ton of stock we had

to do some financial repositioning of

our own just to be able to afford those

and so I can’t overstate

how quickly that mindset shift went we

started to understand what it takes to

be a profitable deal we started better

understanding how to account for

expenses and we started to understand

the upside potential that’s the other

thing if you’re just taking risk in a

vacuum and you can’t actually recognize

where the upside might be then of course

you’re not going to want to take that

risk in real estate investing one of the

most powerful concepts I can think of is

this idea of owning your upside when you

buy especially using bank leverage when

you buy a piece of real estate all of

that appreciation that future

appreciation and the loan payown that

all belongs to you and so the value that

you create from that asset it belongs to

you and the goals that you’re trying to

advance for your own family and your own

purpose now of course a lot of people

might position the counterpoint of

tenants are the ones making you rich so

what’s up with that that’s kind of a

separate discussion here but I would say

that you ultimately when you start to

view yourself as a contributor to the

economy and the communities that you’re

a part of if you’re being fair if you’re

being a good landlord if you’re

providing good housing and service and

you’re charging at or near market rent I

do not think that you are the problem in

society so again all of this kind of

mindset shifting around single family

rentals our place in the community our

ability to engineer our own upside and

the fact that the risk is correlated

with a very very strong reward that

helped us get more courage when we

decided to do things like invest out of

state now the other big barrier we

started running into over time fast

forwarding is that we started running

out of our own money we were dual income

no kids and then we had our daughter in

2021 and then we had twins in 2023 our

financial profile changed dramatically

so we went from that dual income no kids

where we’re living in a cheap market in

Las Vegas very low personal expenses and

we weren’t making a ton of money but we

were living in a way where we could save

money and we could snowball our rental

income into buying more rentals no

matter who you are some point you run

out of personal funds and we hit that

point and then it really kind of changed

the strategies that we had to employ to

continue to find ways to grow towards

our objectives i believe that it you

know should be tied to an outcome that’s

meaningful for you and your family

because sometimes creating extra

complexity can make things worse in your

lifestyle it can put you in a higher

risk position that might not be lined up

with your long-term goals so that’s

another shift as we had kids sometimes

that actually makes you have a lower

appetite for risk versus higher so then

they begs the question as we’re about to

take on a 9 million plus dollar

development deal well that sounds like

the riskiest thing we’ve ever done and

we have three kids so how do I square

those two number one our timeline

changed so we built a cash flow stream

of about $5,000 a month in net profit

from our rental portfolio i’m very very

proud of that because I think it’s one

skill to be able to build a portfolio

that generates positive cash flow it’s

another to be able to keep that money as

profit positive monthly gross cash flow

is different than the net profit that

you actually put away and can use for

future growth so I’m very proud of that

outcome now what sounds crazy maybe at

the surface is that that was basically

the ceiling of where we could get with

our current portfolio most of our equity

most of our money and our net worth on

paper is tied up in real estate equity

which is not accessible to us at the

time we had low interest rates so we

felt like there was not actually

responsible ways to access that equity

and continue to grow and increase the

ceiling on that $5,000 per month net

profit so the math changed for us we

lost an entire income my wife had to

take two separate breaks from her W2 for

maternity leave and it created this kind

of different track for our family and

our financial goals what’s going to give

us the financial flexibility that we

need to arrive and then ultimately

thrive as a family and also as a parent

I became keenly aware of the fact that

we have a very limited window of time

where our kids actually want anything to

do with us and so right now my

daughter’s three and a half and our

twins are about one and a half and that

window is closing quickly yes you have

18 summers of them in the house but from

age 12 and up till they graduate high

school hopefully we still have a good

relationship but I don’t think that

we’re their everything the way that they

are right now so there’s this window of

time this window of opportunity there’s

the amount of money that we need to

sustain a household of five people in

the modern world and then there’s our

growth goals and what we want for

fulfillment and impact for our family so

this all kind of circles back to risk

right so in order to achieve those

higher financial goals we had to be

willing to incur a certain level of risk

we could either go back to W2 jobs and

continue to climb the ladder which I

still plan to do by the way but my wife

had to make a similar decision did she

want to slot back into a traditional

career path and try and grow her income

year-over-year few percent at a time and

continue to advance in responsibility or

do we want to own our upside just like

we originally thought about with our

rental portfolio and the way we thought

about that there’s asymmetric risk when

it comes to a project like the one we’re

taking on the downside even though it’s

pretty big you’re taking on millions of

dollars of debt you’re taking on

investor capital there is a lot of

downside there are a lot of things that

could go wrong that would be pretty

devastating for us in our reputation our

family our investors and it is worth

considering and thinking about those

situations however that downside is

capped there is a limit to how much you

can in theory lose in this situation but

the upside the additional upside we’re

creating by building our own brand

aligning behind this vision we have for

senior care building actual physical

structures taking raw land getting it

reszoned creating additional value for

the community senior care that has not

only high demand right now but has

decades of tailwind behind it right so

the upside in the situation is

significantly higher than the downside

and of course the traditional logic of

high risk high reward this is a great

example of that there’s a ton of

downside risk but the upside risk is

significantly higher especially if you

have a strong business plan so it’s

thinking along that asymmetric risk idea

there are frameworks about what’s a

reversible versus an irreversible

decision jeff Bezos calls these one-way

doors or two-way doors oneway door means

once you walk through it no matter what

you can maybe resend some of the

consequences of it but for the most part

it’s an irreversible decision so in this

case taking out a $7 million loan

invasing raising investor capital

potentially millions of dollars but

those are irreversible decisions you

can’t put the genie back in the bottle

you could repay the loan there’s a

number of different ways to maneuver so

that you don’t lose everything but those

are decisions at which point you are

taking on that risk and you are beholden

to the bank and your investors for the

results of the project that’s an example

of something you can’t come back on so

being just aware of that being aware

that this is irreversible we’re also

planning to sell one to two of our

rental properties in order to take the

capital from that and all the equity

that we have trapped and roll it into

this project so there are some things

we’re doing that we cannot undo and I

think just being aware of that and then

being comfortable with it because we

believe so much in the upside of what

we’re doing that’s another riskreward

trade-off that just is really helpful

and then on the flip side two-way doors

right so there’s sometimes in this

process where there are micro decisions

that are reversible changing things with

the site plan choosing which vendors to

potentially work with putting them on

provisional basis and you know trying

them out there are micro decisions

within the broader decision to do this

project that are reversible so

categorizing those two types of

decisions also really helps us with risk

the third thing is regret minimization

framework so the idea is it’s rooted in

a simple question if you fast forward 10

years from now will you regret not

trying this idea now in this particular

case this doesn’t apply to every

situation but in our case my wife and I

were at a crossroads right she had just

come back from her second maternity

leave in 3 years and we had a really big

decision to make for our family do we

rally behind this impactful cause that

clearly my wife and I both have a

passion for and need that society has

and bring other investors in on the

opportunity and create wealth for a

whole section of people that we love and

care about or do we slide back into a

traditional W2 role i’m mainly referring

to her in this case because I’m already

in a W2 role but that was the fork in

the road we were at with extreme

confidence i don’t usually speak on her

behalf but in this case I know that if

we don’t at least indulge this idea and

give it a shot then there will be some

regret involved and yes you can argue

that with three young kids it’s a really

difficult time to be taking those risks

but thankfully through the risk that we

took earlier in our real estate careers

it would really really suck to take a

few steps back in our net worth and in

our wealth building journey but we have

a couple exit plans with our current

portfolio that if this really did fall

through and the project didn’t move

forward it would suck we’d be taking one

or two steps back but the amount that we

would have learned and being able to try

and make sure this project’s viable

would far outweigh that loss in the long

run so even with just answering this

question will we regret not trying we

know the answer is yes therefore we’re

going to do everything in our power to

make this project happen and make it

successful not only for ourselves but

for all the value that we believe we can

create for the world so these are

honestly just some of my thoughts around

the mindset of risk obviously there’s a

lot of tactical things that we’ve done

bringing on mentors joining mastermind

groups building a ton of relationships

doing unbelievable amounts of research

and validation of our business plan this

is not what this episode’s about there’s

plenty of time to talk about the tactics

but I just want to explain some of the

mindset of how we started with a very

difficult decision that most people

start with which is do I buy my first

property do I even start do how do I get

in the game and get past that fear that

I’m making an irreversible decision

that’s only going to realize the

downside how can I recognize the upside

that I’m now creating for myself and my

family and act on it and continue to

evolve and grow into it over time so I

hope this episode was helpful i had a

lot of fun recording it if you like this

type of content and mindset stuff I’d

love to know about it i love talking

about it but I don’t want to do it on

deaf ears so drop a comment or shoot me

an email and let me know what you

thought and I would love to hear if

you’re going through something similar

so share one risk that you’re taking

right now that you’re unsure of and

let’s work through it thank you thank

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