00:00
Dolf de Roos
I had a corner premise that I thought was perfect for a coffee shop. And so I advertised it and called up people who ran similar coffee shops nearby. No one was interested. I’ll start one myself. So never done it. I had to figure out what’s involved all the. I spent about $25,000 starting this coffee shop and after about, I think it was four or five months, I sold the business for $30,000. A lot of my friends who heard the numbers said, oh my gosh, so you spent four months of your life to make $5,000? And I said, no, I spent four months of my life to make half a million dollars.
00:40
Brad Weimert
Congrats on getting beyond a million. What got you here won’t always get you there. This is a podcast for entrepreneurs who want to reach beyond their seven figure business and scale to eight, nine and even ten figures. I’m Brad Weimert and as the founder of Easy Pay Direct, I have had the privilege to work with more than 30,000 businesses, allowing me to see the data behind what some of the most successful companies on the planet are doing differently. Join me each week as I dig in with experts in sales, marketing, operations, technology and wealth building and you’ll learn some of the specific tools, tactics and strategies that are working today in those multi million 8, 9 and 10 figure businesses. Life can get exciting beyond a million. Dolph Deroos, it is great to meet you in person officially.
01:26
Brad Weimert
I have heard you speak before and your reputation precedes you in the real estate education space. And now we get to hang out and talk.
01:34
Dolf de Roos
We do. It’s my pleasure, Brad. I’m happy to be here.
01:37
Brad Weimert
So you have a fascinating story. There are lots of little things that I know about you that I want to dig into that are just kind of interesting life business lesson things. But why don’t we start with the fact that you’ve done a tremendous amount of real estate investing all over the world, which is unusual. Normally people are very geographically specific. I want to talk about that. But how did you get into real estate investing in the first place? Because you were a electrical engineering PhD.
02:08
Dolf de Roos
That is correct.
02:09
Brad Weimert
Is that right?
02:10
Dolf de Roos
Yeah.
02:10
Brad Weimert
So those aren’t the same.
02:12
Dolf de Roos
They’re not the same. In fact, many people say you did a PhD in electrical engineering and you don’t work as an engineer. And the truth is I’ve kind of hardly worked a day as an engineer. But the true story is that I had parents who were involved in the war. You know, they were born in that period and they never had a chance to go to university. And their belief was that to do well in life, to really succeed, you have to study hard and get a degree, because a degree gives you a great job and a great career, and then you’re financially free. And they never had that opportunity. So they drummed into my sister and I that once you finish high school, off you go to university. So off I went. Didn’t know what I wanted to study.
02:50
Dolf de Roos
I didn’t really like the sight of blood. Still don’t, particularly, as that was medicine out. And the thought of peering into people’s mouths all day long, I didn’t enjoy that. So that standard, I wanted to do law. But then you’re restricted to practicing in the country in which you study. And I kind of knew I wanted to be more global than that. So through a process of elimination, I ended up doing engineering. But it was during my very first week at university that I looked around at all the people with the degrees, the tutors, the professors, the lecturers, and they didn’t seem to be that well off. They tended to have very modest cars, they lived in relatively small homes, and their clothing wasn’t that sophisticated. So I thought, there’s something wrong with this equation that degrees equates to wealth.
03:31
Dolf de Roos
So I took it upon myself to make a study of the rich. I wanted to know, what do the rich have in common? Thinking if I could identify 30 or 40 things that they did have in common and emulate some of those, then I’d have a good shot at being rich. Good theory, right? The challenge was I could hardly find anything that they had in common. It wasn’t age. You know, Bill Gates was a young man when he made his first billion. It wasn’t gender, it wasn’t religious belief, it wasn’t country of birth. We were an immigrant or not, whether you were the firstborn or the last born or anywhere in between, I could only find two things that the rich had in common.
04:02
Dolf de Roos
And to keep it short, one of the things I found that they had in common is that almost without exception, the rich either made their money or held their wealth in real estate. And I thought, man, if that’s all it is, I can do that. So without knowing anything about it, and without knowing any better, I decided to buy a property. And it’s a whole long story, but I eventually found a place. I managed to secure it, and at the end of the first month, what I’d collected in rent from my four tenants was more than that month’s allocation of mortgage and property taxes, insurance, maintenance. I’d made money and I hadn’t worked for it. And I thought, wow, this is cool. I’ve got to do this again. So I did it again and again. And I finished a bachelor’s honors degree in engineering.
04:46
Dolf de Roos
And at the end of that, the university came to me and said, dolph, four years for a bachelor’s degree. It’s only one more year for a master’s. Why don’t you do that? And I said, because. And I didn’t have a reason, so I did it. And halfway through that, they said to me, you’re doing so well. Why don’t you switch to doing a PhD? And I said, because. And again, I didn’t have a reason. And the moral is, make sure you know what you’re doing and why you’re doing it. Otherwise you end up leading other people’s lives. Right. So they say there are three kinds of student, part time, full time, and eternal. And I was the eternal kind. I spent eight years at university. PhD in electrical engineering. Remember my parents degrees equate to wealth. Do you think they were proud of me?
05:26
Dolf de Roos
Of course they were. They were sitting by the telephone waiting for me to call them to announce that I’d accepted a job. And I did. Full confession. I did go to two job interviews. And at the end of the second interview, I was offered a job at 32,000 a year, which back then, in the year.in the last millennium, it was a lot of money. But the problem for my prospective employers is that the week before, I completed a real estate deal that netted me 35,000.
05:52
Brad Weimert
Oh, wow.
05:52
Dolf de Roos
I remember thinking, why would anyone in his or her right mind work for 40 hours a week, 50 weeks a year, for 32 lousy thousand, when in one week you can make 35 and take the rest of the year off or do it again or read books on the beach or something? So I didn’t take that job. And to this day, I’ve never had one. It’s a long answer to your question, how I got started. That’s kind of it in a nutshell.
06:13
Brad Weimert
Yeah, it’s perfect. So you said something that I think that I. I think about very often, which is you said something to the effect of make sure that you know where you’re going.
06:22
Dolf de Roos
Yes.
06:22
Brad Weimert
Otherwise you’ll end up living somebody else’s life.
06:24
Dolf de Roos
Correct.
06:26
Brad Weimert
I don’t really believe in absolutes, generally speaking. I think that there are generally exceptions to every rule, but I generally believe that I would rather be taking action, even with the absence of a defined goal or defined outcome than sitting around ruminating, waiting, because I don’t know exactly where I’m supposed to go or what I’m doing. Do you wish that you didn’t have the PhD and didn’t go to university?
06:51
Dolf de Roos
You know, people have often asked me that. They’ve said, what a waste of eight years. Imagine how far you could be in real estate if you hadn’t wasted that time there. I don’t subscribe to that. Firstly, I don’t think that we go to university to learn facts and figures. Almost everything I learned in university has been made redundant by new technology. And look at what AI is doing these days and compare that to the fact that I learned the operating characteristics of valves. And I’m not talking about faucet style valves, I’m talking about valve radio style valves. And they’ve been replaced with transistors and integrated circuits and vlsi, very large scale integrated circuits and ASICS application. I mean, it just keeps. So everything I learned has kind of been made redundant. I didn’t go there to learn facts and figures.
07:33
Dolf de Roos
I went there to learn creative ways of solving problems. And that’s one of the great things about engineering. Unlike most things you study, which are analysis subjects, you analyze what’s there. You read the English language, you analyze it. Here’s a sentence, subject, verb, object, put it back together, history, analyze what went on, put it back together. Even mathematics is often analysis. But there are a few subjects. Sculpture, architecture, creative writing, engineering, where here’s the problem, create the solution. So I had eight years of studying how to creatively come up for solutions for known problems for which there was at that stage, no solution. And when you think about it, real estate is an unending series of challenges. If we can find a solution for this challenge, then you make a lot of people happy.
08:21
Dolf de Roos
And it puts money in everyone’s bank account, not just yours. We don’t become rich at the expense of other people. We help them and help ourselves become rich as well.
08:30
Brad Weimert
Hopefully.
08:31
Dolf de Roos
Well, in most cases it happens that way.
08:33
Brad Weimert
Yeah. And that’s a choice. I mean, to a great extent, right. It’s how greedy you want to be with a given deal or not.
08:40
Dolf de Roos
Well, I mean, yeah, it can be that way. But I’ll give you a bizarre example. It’s one I often come back to because it’s so stuck. One of the first commercial deals they did was a funeral parlor. Now, funeral parlors don’t conjure up images of things. I mean, they have cadavers there and they put hollow stainless Steel tubes in and remove the blood and replace it with formaldehyde and all kinds of weird stuff like that. But it had been vacant for three years and the owners couldn’t find a buyer. It had been on the market. They had a real estate company representing it. And to me that was a problem. Why do they not have a buyer? And back in those days we had newspapers where they ran ads in the newspapers, Funeral parlor for sale. So I took a different approach.
09:20
Dolf de Roos
I employed someone at then going hourly rate per hour of $8 an hour and got them to phone every funeral director going further and further away from this location to say, hey, there’s a vacant building. Do you have any interest in running part of your operation there? And it took two days for her to come across and said, oh my gosh, I’ve always wanted to operate there. What’s the deal? And you know, that’s when I got on the phone and said, well listen, there’s a vacant building. Buy it if you want, but if you don’t, if you like it and are willing to become a tenant, then I’m willing to have a crack at buying it. And he said, well, not so fast, sonny Jim. I’ll only do it if you give me a long term lease. I mean, that’s pretty good, right?
09:56
Dolf de Roos
So my point is, we ended up buying it. I got it for a song because it was vacant and no one knew what to do with it. But the owners were happy. I offered them more than anyone else had offered them. They finally got it off their books and the bank was happy because they could offer me a loan. In fact, they lent me all but the last 10,000 required to purchase it.
10:15
Brad Weimert
Wow.
10:16
Dolf de Roos
Because the appraisal was not based on the purchase price anymore, but what it was worth with a 10 year tenant locked in place. And so the bank was happy, the sellers were happy, my tenant was ecstatic and I was happy. And that’s really a situation where I think everyone won.
10:30
Brad Weimert
And do you attribute your time in college and getting a PhD in electrical engineering to being able to do that kind of creative problem solving?
10:38
Dolf de Roos
I don’t know if there’s a direct cause and effect relationship there, but I think it certainly helped. It got my mind into this creative mode and I still try and figure things out. What can we do differently? Why has this not worked? What can we do differently to make it work?
10:52
Brad Weimert
Well, I certainly grew up through the lens of you’re supposed to go to college to get a good job, et cetera. Do you think that kids today should spend their time going to college.
11:05
Dolf de Roos
Gosh, that’s a tricky one because I know there might be some listening and their parents might be hovering around and if they say absolutely don’t go, then the parents are going to excoriate you for having me and me for saying it.
11:15
Brad Weimert
I feel comfortable with that.
11:17
Dolf de Roos
No, I am too. So I’ve got the guts and courage to say that if I believed it. But the answer is not that clear cut. From a pure financial standpoint, I don’t think it’s any more correct that you need to go to college to do one in life. Financially, there are plenty of examples of people who haven’t gone to college. In fact, when we look at the extreme outliers, the people have done extraordinarily well. Like Bill Gates, whom I mentioned before. At one stage he was the richest person on the planet. He was a dropout from Harvard. Larry Ellison, the owner of Oracle Computers, college dropouts. Paul Allen, the two I see at Microsoft. College dropout. There’s a pattern there. So I don’t think you need to go to college to do well, but college does do a number of things for you.
11:59
Dolf de Roos
And firstly, it’s discipline. You know, you have to be disciplined and that serves you well. Secondly, you do learn things that in a bizarre way, and as Buckminster Fuller would say in a processionary effect, you learn things that if you didn’t know them, you mightn’t have made that one leap of faith. And thirdly, you get to meet people that might be lifelong friends or business colleagues and without university, you’d miss out on all of those things. Now, you might meet other people because you’re doing other things, but I get the sense that many people benefit from college and that it’s the transition from being an at home kid who goes to school under the authority of parents to being out on your own in the sort of safe environment where you learn to be an adult and all the things that go with that.
12:41
Dolf de Roos
So it’s a mixed answer. I don’t think it hurt me.
12:45
Brad Weimert
Yeah, no, I think it certainly it doesn’t seem to hurt you. But there is that opportunity cost and there’s also the real cost.
12:53
Dolf de Roos
Yes, there’s a real cost. Well, that’s where you know, and I love it here in the States. I live here by choice. I’ve got multiple passports. I can live just about anywhere that I’d want to and I choose to live here. So don’t get me wrong. But there is one anomaly or number of anomalies between the US and other countries. And that education is so ridiculously expensive. I spent eight years at university. I think at the time. It’s probably gone up a bit since then, but I had to register a V. And that was $300 a year and that was it.
13:20
Brad Weimert
Yeah, well, you bring up a good point in today, some of the most well known major institutions like Harvard publish all of their course content online for free.
13:31
Dolf de Roos
Right.
13:31
Brad Weimert
Yet people voluntarily pay them egregious sums of money to attend the university.
13:37
Dolf de Roos
Right.
13:38
Brad Weimert
And that’s not a great example because there is something about the Ivy League schools that is still a feather in your cap.
13:45
Dolf de Roos
It is. But there again, just as the value of education has gone down a bit, I think compared with two, three generations ago, the value of going to an Ivy League college is not as great. I mean, sure, it’s much more prestigious, but in all honesty, no, when people hear I have a PhD or doctorate, then it’s, oh, which college? What I’ve soon had in this country is I was living in San Diego for a while and people would say, where do you live? And I’d say, well, in San Diego. Well, where in San Diego? I’d say La Jolla. They say, yeah, but which zip code? As if the zip code matters. And for them it did.
14:18
Dolf de Roos
And when you come from New Zealand, where we don’t even have zip codes, I guess we have postal codes, but I’ve never heard any and say, oh, you live in that city. Yes, but which postal code? It just, I mean, who cares, right? So here it’s important. So there is an element of, oh, you went to Harvard or Princeton or Yale or MIT or Stanford. That’s very prestigious. But they don’t ask you that. People don’t ask me whether I got my PhD with honors. And if so, was it Division 1 or Division 2? I did, by the way, but it doesn’t matter, right? No one cares. You did the effort to get a PhD. Yeah, and I think so. Yeah. Again, to spend whatever it is, 80, 100,000 a year to go to Harvard. It’s very precise.
14:55
Dolf de Roos
It might put you in certain circles that you otherwise wouldn’t get into, but I don’t think you need to do that in order to do well in life.
15:03
Brad Weimert
Yeah, no, I definitely agree with you. And I think, you know, were, I can’t remember if we had hit go or not, but were talking about this event that we’re at, the Family Mastermind. And such a big part of the proposition is people and it’s relationships and connection and the college definitely serves that role.
15:24
Dolf de Roos
It does.
15:25
Brad Weimert
Now the question today for me is are there other areas that would also serve that role that might be more beneficial? And I don’t know, but live events are certainly a place for that because it hones like minded people. Right. You get a much more narrowly focused group of humans that are interested in the same topic. And college is a very broad spectrum of people, which has its own benefits. Anyway, enough about college. Let’s go back to real estate. Okay, you jumped in pretty quickly in the story of then I made a shitload of money and that’s why I didn’t want to have a job. But how did you learn how to invest in real estate? And how is that different than how you would learn today if you wanted to learn?
16:07
Dolf de Roos
So I guess I learned the hard way. There weren’t many mentors around. I had one person who I watched and I saw what he did and I liked it and I asked him for a few pointers and helped me a bit. But other than that, there were no mentors. In fact, I, for the first 40 years of my life, I sort of went around thinking that I’m pretty good at things, I’ll do it all on my own. So I was fast at typing. I can type pretty fast. I learned in the era before the computer. I got my bachelor’s degree before the PC was invented. That’s horrifying.
16:39
Brad Weimert
So you had finger muscles, you could actually push the keys.
16:41
Dolf de Roos
I literally got an old Remington typewriter and got insulation tape, not even masking, but I had insulation to write electrical engineering. And I covered all the keys so I couldn’t see what the letters were. And then I tried to type something. I had to figure out, where is that done? If, oh, there it is. So I learned that. But I could touch type pretty fast before typing was even popular. And so I thought because I can type the fastest, I should do all the typing. And I did. And it’s a crazy situation because.
17:08
Brad Weimert
Terrible rationalization.
17:09
Dolf de Roos
Yes, of course. But there was no mentor to teach me that. So that’s just stupid. If they taught me that at 20, I might have, you know, who knows what I might have done? But anyway, there it was. So I did everything on my own. So then I realized that working with teams is fast matter. Even if the typist I employ is only a third as fast. And usually they weren’t, they were pretty good. But even if they’re only a third or half as fast, doesn’t matter. Let them do all the typing. At what their hourly rate is. And I can focus on those few hours a week that are left after sleep and eating and showering and getting dressed and undressed and everything else where we can look for the nice big deal that’s got a lot of profit in it.
17:44
Dolf de Roos
So I worked as a loan operator for a long time, so that was something that inhibited me. And then we all have this mental belief as to what we can achieve. And when I bought my first commercial building, which was worth a lot more than my net worth, like 10 times my net worth, and it wasn’t that expensive, I thought, man, I better not look for something else for the next two or three years. Well, that’s ridiculous because now I know that when you buy a building, and by the way, it’s easier to do in the commercial space than in the residential space. By buying that building and putting it in your name, you can put money in your pocket.
18:18
Dolf de Roos
And when people who don’t know real estate first hear that, they, that’s just a pitch to get us hooked and then you’ll give us the bait and switch type thing. But it’s true, you can buy a commercial building when you find it empty by getting a tenant. That act of finding the tenant, remember young lady, at $8 an hour for two days, so that’s 16 hours, that’s $128, which is tax deductible, by the way. I got someone to sign up for a 10 year lease with a right of renewal for another 10 years. So in the bank’s eyes, it was basically a 20 year lease. And that increased the value of the building so much that when the bank only gave me 60% of the appraised value, that covered all but 10,000 of it.
18:56
Dolf de Roos
Now if it had covered a bit more, it would have put money in my pocket. Here in the US we can claim depreciation and I think it’s still valid. Now there was going to be a cutoff date, but they extended it where you can claim seven years of depreciation in advance. Yeah, well, they can put money in your pocket. Why would you not do the deal?
19:13
Brad Weimert
Yeah, that the bonus depreciation laws are, they are moving to, they’re 60% this year. We’re in, we’re in the last quarter of 2024 right now. And it was 100% three years ago, then 80, then 60. And I think it’s supposed to go 40 and then gone.
19:32
Dolf de Roos
Right.
19:32
Brad Weimert
But of course, you know, that’s probably dependent on the administration as well.
19:37
Dolf de Roos
Oh, that could change Again, it could change in January. And you know, here again, the number of people I’ve had come to me and say, but my CPA accountant tells me not to claim depreciation because when I sell the building, I just have to pay it back. Well, you know something, you do have to pay it back if you sell. And it’s called depreciation recapture tax in this country. In other parts of the world, it’s called depreciation, whatever it is, reconciled or something. So yes, you have to pay it back. But firstly, if you never sell, and I’m a proponent of not selling, I haven’t met anyone who has sold something and then 20 years later said, oh my God, am I ever glad I sold this. Oh my gosh, if I’d only hang on to it would be worth so much more now.
20:19
Dolf de Roos
So if you never sell, you never pay it back. But even if you do sell for whatever reason and you do pay it back, have you not received hard today dollars from the government and you’re paying back soft future dollars and could we not look at it as an interest free loan from the government that you never have to pay back unless you’re forced to sell? Why would you not take that? So there’s a lot of misinformation out there.
20:43
Brad Weimert
Yeah, I agree with you. So you figured out real estate on your own somehow?
20:49
Dolf de Roos
Trial and error.
20:50
Brad Weimert
What, what type were you? Opportunistic. So real estate investing is. I spend a huge chunk of my life investing in real estate, debatably the majority. And I’m fascinated by it because it’s divided into all these different asset classes and each different asset class, single family home, multifamily, different types of commercial, different retail, et cetera, et cetera. It’s just this huge list of things. Many investors are very narrowly focused one asset class.
21:24
Dolf de Roos
Correct.
21:25
Brad Weimert
And they become very good at it, hopefully.
21:27
Dolf de Roos
Yeah, hopefully.
21:30
Brad Weimert
I am an opportunistic, geographically specific investor, meaning much of what I’m looking at, the proximity of it adds some additional value for some reason. And so the notion of location, location rings very true to me. And I’m often learning a new asset class or something about it because I want the location, because that location is relevant to me for some reason and it might be future development, it might be proximity to something else that’s going on, whatever. How did you approach real estate investing? Was it asset class specific or did you just find fun stuff and figure it out?
22:11
Dolf de Roos
Well, that’s sort of a two part question or My answer is kind of in two parts. Firstly, like most people, I started in residential, and I think that’s where most people get their start, because let’s face it, nearly everyone on this planet hopefully has lived in a house at some stage. So if we’re looking at a house to invest in, we would know that if it’s missing a front door or if there’s no roof over the kitchen, we’d say, oh, my gosh, what’s going to happen when it rains or can’t close the front door? That’s a problem. We’d know it. Whereas when it comes to commercial real estate, I’m using commercial generically here. Retail, office space, industrial, storage facilities, you name it.
22:46
Dolf de Roos
We don’t always feel comfortable knowing what is required there, so we don’t know what might be missing, and we feel out of our comfort zone and where we’re scared to make a move. So, like most, I started in residential, but as time went on, I segued into commercial. And there are a whole bunch of reasons. I’ve written a few books. You say you spent a big chunk of your life in real estate. I never thought of it that way, but I’ve written quite a few books, like, over 20, but 15 of them are on real estate. So in that sense, my focus has been on real estate.
23:16
Brad Weimert
It’s a lot of books, man.
23:17
Dolf de Roos
Yeah. And one of them is on commercial real estate. And I delineate nine specific reasons why. Commercial is so good that once you fully understand it, you’ll no longer really want to look at a residential property unless it’s a house you’re going to live in. And, you know, I don’t want to make this an event where we talk about the nine ways, but to give you some examples, most commercial tenants earn their income on the premises, so they have a vested interest and keeping it looking good. And they’ll call you and say, hey, according to the lease, I have to contact you before painting the building, but is it all right if I paint it? I’ve never had a residential tenant say that to me.
23:50
Dolf de Roos
In fact, in a fit of rage, if they punch a hole in the wall, instead of feeling embarrassed and patching it, they’ll call me and say, there’s a hole in the wall and it’s drafty. So that’s one reason. And with residential, the typical residential tenancy agreement length is one year, and you might renew it yearly or after the first year, it goes month to month, and everyone seems comfortable with that. With commercial, leases tend to be a Lot longer now. They’ve been getting shorter. But in the city of London, which is different from London, typical lease lengths for 25 years. And I mentioned my funeral palate, 10 plus 10 years now for smaller retail commercial things, 5 years is not uncommon. It’s certainly longer than residential. So there are many reasons why commercial is great.
24:32
Dolf de Roos
So I sort of made the segue into commercial as a way of. Yeah, I just think it’s more lucrative. I get fewer phone calls. I might get three phone calls a year from a commercial tenant. And one of them is typically, hey, can we get an extension on the lease? And I’ll look it up and say, but you’ve still got three years left to run. And they say, yeah, anyway, getting back to the question, can I please get an extension on my lease now? Why would they want an extension when they’ve still got three years left to run? And partially it’s certainty for them that they can continue their business from those premises. But even if they want to sell their business, part of the value of their business is based on what’s called goodwill.
25:14
Dolf de Roos
And goodwill is how many people know where they are and where they operate from. And we need this piece of hardware or medical supply, whatever it is they’re going for. And they know where to drive. If they change address, they would lose some of their clients. So there’s goodwill value in having longevity of premises. So all those things point to commercial, you know, being the one that’s favorable.
25:35
Brad Weimert
Yeah, I love that. I think that the notion of there’s this recurring theme in life which is look at the incentive. And if you look at the incentive, you can figure out the outcome.
25:46
Dolf de Roos
Exactly. So part of your question was geography. You know, where do you. And is location important? And a lot of people say, because I live in Phoenix at the moment, Phoenix, I’ve been there longer than anywhere else actually. And people say, oh well, you invest in Phoenix because you live there. And I can see how they would jump to that conclusion, but it’s actually the other way around. I choose to live in Phoenix because I want to invest there. And I know that by living somewhere you tend to look at more things. You hear about deals going on in your local proximity, far more than 1,000 miles away, let alone 5,000 miles away. So why did I want to live in Phoenix? It certainly isn’t for the heat.
26:22
Dolf de Roos
You know, this year we had 102 consecutive days where it hit a minimum of 110 degrees Fahrenheit.
26:28
Brad Weimert
Whoa, that’s great.
26:29
Dolf de Roos
That’s the long. The previous record was only 72.
26:32
Brad Weimert
Wow.
26:32
Dolf de Roos
So we’re going to boil soon and.
26:34
Brad Weimert
Well, Austin’s up there also, so I live in Austin.
26:37
Dolf de Roos
Oh, you do? Well, you’ve been up there. Very hot.
26:39
Brad Weimert
Oh yeah.
26:39
Dolf de Roos
You’ve also got the humidity to deal with.
26:42
Brad Weimert
Humidity fluctuates in Austin. It’s not desert, but it’s not Houston.
26:45
Dolf de Roos
Right?
26:45
Brad Weimert
It’s not a swamp.
26:46
Dolf de Roos
No, it’s not nearly as bad as Houston.
26:47
Brad Weimert
You know, we get the toggle, but we track days over consecutive days. Over a hundred.
26:52
Dolf de Roos
We do that too, but.
26:53
Brad Weimert
But you track 110 in Phoenix.
26:55
Dolf de Roos
It’s nuts.
26:56
Brad Weimert
That’s brutal.
26:58
Dolf de Roos
But having said that, for the last 50 years, Phoenix has been at the leading edge, usually number one, sometimes number two, behind Las Vegas and Nevada. But those two cities have been growing at an extraordinary rate. And there is a very strong correlation between increases in population and increases in the capital value of real estate. I mean, take Japan as a contrasting example. I love Japan. I learned the language as a kid. I love the culture, I love the food. I love their technology and their passion for excellence and their passion for cleanliness.
27:29
Brad Weimert
And that is delightful.
27:31
Dolf de Roos
But I wouldn’t invest there, much as I’d like to go there to look after an existing portfolio to find you. Currently there are 16 million homes on the market that you can buy for about US$100. And I could say, hey Brett, let’s go over there and buy a few out. But we’d be silly to because we can’t get a tenant because the other 15.999 whatever million owners are also trying to get a tenant. And the reason is the population is shrinking. It’s currently 127 million. They think that by 2060, which is not that far away, it’s going to shrink to 80 million.
28:04
Brad Weimert
Do you think that Japanese people should have more socks, more tax sex?
28:09
Dolf de Roos
Oh, more sex, yes. And I can add to that. And the government thinks they should have more sex. They’re encouraging people to have more sex in the form of subsidies whenever you have a baby. For the first baby it’s X million yen, and for the second is this, and third is that. So they’re encouraging it. They used to have the lowest birth rate in the world. They’ve now been surpassed by Korea, which is even lower. It’s come out as having the lowest birth rate, well below what they need to replenish. And by the way, China we’ve always talked about as were growing up. I shouldn’t say that because I Probably grew up a bit earlier era than you.
28:44
Dolf de Roos
But when I was growing up anyway, we always learned that China’s population was booming and it was going to be 1 billion and then 2 billion. No, it’s in steep decline. They had that one child per couple policy for years and now it’s shrinking. They think it’s going to drop dramatically. It’s good for getting rid of pollution, it’s good for getting rid of congestion on the roads, but it’s horrible for real estate value. So I wanted to invest in Phoenix because of strong population growth. So I invest there. It brings up another topic, is how come I’ve invested around the world? Did I have a reason for thinking real estate could be good here? Or I’ve got to go there to invest in real estate and the answer is no. It’s the same as I happen to be in these places.
29:25
Dolf de Roos
And if you live somewhere, then I look at, I’m a real estate person. So you look around, I look around and every country has some advantages. Every person does is an interesting aside. Did you know, Brad, that you can do something on this planet better than everyone else? What you do better than person A might be different from what you do better than person B, but you can do something better than all of the other 8 billion people on this planet. But to sober you up a bit from the elation perhaps of hearing that is that everyone else on this planet can do something better than you. And what person C can do better than you might be different than what person D can do. But it’s sort of a sobering thought.
30:05
Dolf de Roos
And so every country has some advantages and I’ll give you some examples in New Zealand where I’m from and you know, I love it there, I don’t invest there right now for another reason, I’ll come to that in a minute. But in New Zealand there’s no capital gains tax. It’s not on the statutes. Now there is a new rule that if you sell within a year or something then they can charge it, but in general there’s no capital gains tax. That’s sort of an interesting anomaly, if you like. Now here we do have a capital gains tax and it changes the equation. I know we can do a 10:31 or a starter exchange, but that just defers it. Right?
30:41
Brad Weimert
Right.
30:42
Dolf de Roos
And the thing I love about America and the primary reason why I focus on investing in the US is when we take out a mortgage, if it’s a 30 year mortgage, we can fix the interest rate for all of those 30 years. You can even get 40 year mortgages and fix the interest rate for 40 years. You cannot do that in any other place other than North America. And that makes a big difference because when we had the massive spike interest rates that we’ve had lately in Australia, something like three quarters of all outstanding mortgages came up for interest rate review while interest rates were still high. They’re starting to come down now and that changes the equation.
31:19
Brad Weimert
It does, yeah, it does quite a bit. One of the things that I’m struck by as you talk about this is, and this goes back to kind of the single asset class versus multi asset class versus declining birth rate, or in addition, declining birth rate. All these things require study and understanding to be able to practically apply them to your investing strategy. So most people find a asset class, learn it, and then stay in their narrow lane because they understand it. Right.
31:52
Brad Weimert
And one thing that struck me as I was listening to you is just the value in being able to step outside and look at sort of the macro picture of things, to be able to apply a broader sense of knowledge around the topic, to see how that might change the equation in a different market, in a different asset class, et cetera, which, you know, might be your electrical engineering background. I don’t know.
32:16
Dolf de Roos
Could be.
32:16
Brad Weimert
Yeah, but why not make it easier on yourself and just fucking invest in one country?
32:26
Dolf de Roos
Well, I can give you some examples of how that would make life easier. I wouldn’t need to renew my passport. I could let it expire and be done with it. I wouldn’t need to apply for visas anywhere. So, I mean, I could come up with all kinds of seemingly cogent arguments as to why never leaving town is good. You don’t need to come to if here. We’re in Florida today from Austin, Texas to do an interview because we’ve now got Zoom. We could have done it over a Zoom call. You would have only seen me in 2D, two dimensions. But technology is going to overcome that soon. Already the latest phones have got the ability to shoot in 3D type things, spatial, whatever they call it.
33:06
Dolf de Roos
And the reason is as I think, you know, I should let you answer it, but I think it’s fair to say that by being here and meeting people in the flesh, it’s a different experience, a different connection, a different way of understanding than meeting people on Zoom. And so I think that firstly, you know, we’ve got to have experiences, but there’s a more salient reason, a more pertinent reason why travel is in fact good. In fact, I can’t understand it for the life of me, Brett, we’re living in the richest country on this planet in terms of GDP per capita, and yet the US has one of the lowest uptakes of passports in the Western world, and only 5%, apparently, of people who have a passport use it in any year.
33:46
Dolf de Roos
And I mentioned an event in Europe to someone recently, and it’s next week, and they said I couldn’t go anywhere. I don’t have a passport. I can’t imagine that.
33:57
Brad Weimert
I can’t either. Why do you think that is?
34:01
Dolf de Roos
Again, I love it here, so I’m not trying to be critical at all, but I think there’s this notion that this country is so big and great, we’ve got everything. We’ve got the ice fields of Iceland up in Alaska, and we’ve got the plains of the Sahara, wherever in Phoenix, I guess. And we’ve got, you know, everything you want, so why would you travel anyway? And they speak funny languages and the food is different. They don’t have McDonald’s and all that. For heaven’s sake, get out of your country. Because all growth occurs outside of your comfort zone, right? And you pick up new ideas and new ways of doing things. I can’t tell you the number of ideas I’ve had for real estate that I picked up by traveling. I’m addicted to travel. I love it.
34:39
Dolf de Roos
So in Japan, for instance, talking of Japan, it’s about the size of California. They’ve got 127 million people, but only 16% of the landmass can be built on because it’s so rugged. So they’re squashed up a lot, and parking is at a premium. So they’ve developed these systems where there’s a hole in the wall where you drive your car into and behind it’s a thing like a Ferris wheel, if you can imagine that. So you drive your car and you get out of the car, but it’s a squashed Ferris wheel. Well, if you know what a paternoster elevator is, that’s one of those elevators that goes in a continuous loop, and they have all these cages, and the elevator never stops. And see, we need to get you to travel with me to a paternoster elevator.
35:20
Brad Weimert
Where are those elevators?
35:21
Dolf de Roos
Because most Americans who said, that’s right, I bet legs get lost and heads get chopped off. It’s never happened, right? They’ve got safety features. And I can think of lots of downsides of paternoster elevators just to get on a tangent. They’re relatively slow. You know, they Go around in this big loop and you have to wait for the right moment and then you jump on. And how will someone with a broken leg do it, let alone someone in a wheelchair, et cetera.
35:43
Brad Weimert
Seems like it would take up a lot of space too, to have a circular.
35:46
Dolf de Roos
No, the same space as an ordinary. Well, a two carry twist. But here’s one of the differences. Because it’s in continual motion and the weight of the people coming down helps it. You only use about a quarter of a horsepower to power this continuously. Whereas to get a car with 20 people inside it and an elevator to start from zero and accelerate them takes enormous energy. Secondly, you never wait more than 10 seconds for a cage because if you miss that one, there’s one right after it. So there are all these advantages of them. They’re kind of fun anyway.
36:16
Dolf de Roos
But the point is, these car parks are like a paternoster where you drive in and it goes up to wherever and for the depth of one car and two and a half width, two and a half car widths, depending on how tall it is, you might stack 80 cars in there.
36:30
Brad Weimert
Yeah, it’s wild.
36:31
Dolf de Roos
So it’s very space efficient. But secondly, there are no assaults or rapes or murders or anything in those cars. There’s no pilfering of belonging. You don’t need to lock your car. You don’t need Japan anyway. And there’s no scratching of doors or it’s completely safe. So would I recommend that for Phoenix? No land is so cheap there that we tend to build out rather than up. That’s why there’s a ridiculously low number of high rises in Phoenix. But in places like New York and Paris and Sydney, where it’s all squashed up and parking’s at a premium. So we’ve introduced this technology to some of these cities and, you know, they’re not cheap. They cost about half a million to put in. But in terms of cap rates based on extra revenue, you get about 2 million in value back. That’s a good equation.
37:16
Dolf de Roos
And I wouldn’t have thought of that had I not traveled to Japan. And that’s just one example. Countless things where you can bring technologies from another part of the world and bring it back here. Or another twist on that. Why not take technologies that are really ahead of the game here and take them to other countries? And if people pay you obscene amounts of money for an idea that you picked by walking down the street.
37:37
Brad Weimert
Yeah, I mean, my immediate answer to that is it seems like a lot of work. And so this is back to the narrow box versus the broad thing. It’s like you are a perpetual learner and you know a lot of things, which I love. It’s fascinating to hear all of the different areas that you have more than surface level understanding, where you’re pulling the topics into other areas of your life and applying them. And many people don’t do that.
38:01
Dolf de Roos
That’s true. And the reason why, I think, is that. And it’s getting worse and worse as time goes on with social media, we’re becoming consumers of information.
38:09
Brad Weimert
I agree.
38:10
Dolf de Roos
We stare at the TV and we watch a program because we want to know who slept with whom or who killed whom and all that sort of thing. And when you think about it, most of those. There are some exceptions, right. There are good documentaries or whatever, but most programs that we watch on TV are scriptwriters, fantasies designed with one principle in mind. Engage the audience long enough for them to watch the ads because that’s how they make money. So the more salacious, the more swear words and all that, the better it is, the more engaged them. So we consume these reruns on all the social, on all the. What’s it called, the TV rerun channels I try to not meet, but Netflix, Hulu, all that sort of thing.
38:44
Dolf de Roos
We have social media where it just gets wilder and more audacious, more salacious, more revealing, more provocative. And we consume and we talk about doom scrolling and all that. So we’re absorbed. We’re not creating anything. We’re not reading books anymore. The number of bookstores in this country in the last 20 years has gone from 46,000 to under 6,000.
39:05
Brad Weimert
Yeah, yeah. I think that also with the advent of new technology, most people are looking for a shortcut. And so they’re looking for the technology to take over what they’re doing instead of it being a supplement to allow you to do something better.
39:21
Dolf de Roos
Right.
39:21
Brad Weimert
So people look at when AI is a really good example right now. But when GPS first hit, when it came out, I was a traveling salesman. So I’m driving around metro Detroit selling all day, every day.
39:34
Dolf de Roos
Right.
39:35
Brad Weimert
And I have a book of maps in my back. The back seat of my car. So I’m flipping through the maps. You know, I’m calling people at home to get directions to how to get there.
39:43
Dolf de Roos
Yeah.
39:43
Brad Weimert
Then I’m on the road and cell phones were out. But I’m.
39:47
Dolf de Roos
They didn’t have maps on them in the early days. No, no.
39:49
Brad Weimert
I’m looking at my map book.
39:50
Dolf de Roos
Right.
39:52
Brad Weimert
And when GPS came out. I bought a GPS unit for the car for my girlfriend at the time. And mostly because she would call me like every six minutes to ask me for directions.
40:02
Dolf de Roos
I’m on the street, which way do I head now?
40:05
Brad Weimert
And I knew Metro Detroit really well because I drove it all the time and because I studied the maps, right? So GPS comes out and what I told her was, don’t follow the blue line. Use this as a three dimensional map to allow you to understand the area that you’re in, so that if you are ever without it, you will now have a better idea of where you are in general.
40:28
Dolf de Roos
Right?
40:28
Brad Weimert
But as you know, the world just follows the fucking blue line. And so AI comes out and produces something and the expectation isn’t, hey, I can use this as this phenomenal research tool for me to learn, grow and get better at what I’m doing and allow me to amplify. It’s an effort to abdicate responsibility to this new tool and try to wash it away. And I think that the long term detrimental impact of that is wild. I agree, because it’s not immediately noticeable. But you are programming yourself to not.
41:01
Dolf de Roos
Learn, to not think. Exactly. I fully agree. And I think we’re creating a generation of zombies is maybe a strong word because apparently there are zombie programs on tv. I haven’t seen them, so I don’t mean it quite in that literal sense, but people who have lost the ability to think, yeah, I guess they can still think, but they’ve lost the training of doing it spontaneously. They just absorbed everything’s thrown at them all the time. And our attention spans have gotten less and less. So there’s no need to be creative. And you know, I’ve been afflicted with something all my life and that’s a general dislike of alcohol. It’s not for moral or religious. I just don’t like it. I try beers all the time and I think, how can people drink this? And full disclosure, I’ve owned vineyards and don’t drink wine.
41:46
Dolf de Roos
I don’t like wine. And the vineyards came about, by the way, because I’m from New Zealand. At one stage were a nation of 72 million sheep, of which 3 million thought they were human. Right? And were the largest exporters of sheep wool and sheep meat in the world. And we had a cool store in Bahrain with 3 million sheep carcasses. And it was a big industry. And then all of a sudden the bottom dropped out of the sheep market and one third of sheep farmers literally went bankrupt. And they were Having marches through the streets of our capital and herding their sheep there to do all their droppings and in protest, like, you got to help us. And most people thought, yeah, that’s unfair, or no, it’s your own.
42:25
Dolf de Roos
But I thought, what can we do with these farms that are being sold for pennies on the dollar? So I bought them for next to nothing. And then I planted a crop and I had to wait five years to get my first harvest. But the harvest was grapes and we turned it into wine and we sold them off as vineyards. And everyone who was anyone wanted to say, oh, I own my own vineyard, you know, in fact, do you want to taste my wine? Here’s a sample. Bottom I gift to you. So we sold them for about 10 times what we paid for them.
42:53
Brad Weimert
Wow.
42:54
Dolf de Roos
And it’s thinking differently. So in a similar vein, I happen to like coffee. Don’t know why I don’t like wine. Do like coffee anyway. Just.
43:02
Brad Weimert
That is weird because they both taste terrible inherently.
43:04
Dolf de Roos
No, I love coffee. That’s the thing.
43:06
Brad Weimert
I do too. But they’re both acquired taste.
43:08
Dolf de Roos
Oh, interesting. Interesting, right.
43:09
Brad Weimert
You don’t grow up liking coffee. No. Children like the flavor of coffee.
43:13
Dolf de Roos
I did initially. I wonder if it’s a bit like cilantro. You know, for some people, cilantro tastes like soap, they say, whereas I love it. I don’t taste the soap, but. So apparently it’s a gene and you either like it or you don’t. So I’ve. Well, let me say this. If you’d come to me. Was it 45 years ago when Starbucks started and said dove, hey, I’ve got this idea for a coffee chain. We’re going to start it up and before long, within a few years, there’ll be a coffee shop on every corner. And in big cities like New York, you might have two or three on a block. Do you want to invest with me? I would have said, no, this isn’t a nation of coffee drinkers. It’s just not going to happen. And I was completely wrong.
43:49
Dolf de Roos
So now I try and see where there’s an appetite for a coffee shop. So I’ve had thrift stores, for instance, who are a charity type organization that don’t pay a high number of dollars per square foot in rent. I had one paying $12 a foot. Their lease came to an end. They didn’t particularly want to renew. I didn’t want to renew them. We mutually agreed they wouldn’t. And I went around all the major coffee brands, Pete’s and Seattle’s Best And Gloria Beans and you name it. And I found one who really wanted that location. It had high foot, $24 a foot. So by doubling the rental income with commercial property, unlike residential, where it’s value is based on comps with commercial, it’s a multiple of its rental income. So by doubling the rent, we doubled the value by putting a coffee shop in there.
44:36
Brad Weimert
I love that. I also, people that don’t invest in real estate don’t understand how value is established.
44:42
Dolf de Roos
Right.
44:43
Brad Weimert
And I really. Which is very frustrating if you’re trying to buy real estate from somebody that owns a commercial piece and thinks that they can comp it out based on a neighboring property.
44:55
Dolf de Roos
Oh, it’s so called pro forma. Yeah, it baffles me.
44:59
Brad Weimert
Right.
44:59
Dolf de Roos
And I’ll say, but it’s vacant. They say, yeah, but that’s what it would rent for. I said, I’ll tell you what, you find the tenant who is willing to pay and then I’ll buy it for your asking price. But right now it doesn’t have that tenant.
45:11
Brad Weimert
Right.
45:11
Dolf de Roos
Well, it should be pretty easy. They said, well then do the easy thing. Yeah, I don’t get that either. Bizarre, isn’t it?
45:17
Brad Weimert
No. I tried to buy a piece of property a couple months ago and it’s in a location that I really want. I really want it. And the saving grace is I just. I was so busy with other things that the irritation of this human that was trying to sell it to me, I just couldn’t even be bothered with it. I gotta get out of here. But it was a completely irrational approach to trying to sell the building. And it was enough for me to just let it go. It’s like you are not rational enough.
45:45
Dolf de Roos
To talk about this and then let it go. Price in your own mind, this is what it would be worth.
45:49
Brad Weimert
Yeah.
45:49
Dolf de Roos
But I’ve got another interesting example, not surprisingly, perhaps on the coffee theme. And that is I had a corner premise that I thought was perfect for a coffee shop. And so I advertised it and called up people who ran similar coffee shops nearby. No one was interested. And then I thought, dang, this is such a great location for a coffee shop, I’ll start one myself. So never done it. I had to figure out what’s involved. I bought the tables and the chairs and the crockery and the cutlery and an espresso machine, a fancy Italian one for $3,000 and a fridge and all this. I spent about $25,000 starting this coffee shop and I had to get staff and I needed a role there. So I made myself chief quality control officer. I thought that was a very good role for me.
46:34
Dolf de Roos
And after about, I think it was four or five months, I sold the business for $30,000. And here’s a very interesting insight into human nature and the way they think. A lot of my friends who heard the numbers said, oh, my gosh, so you spent four months of your life to make $5,000? And I said, no, I spent four months of my life to make half a million dollars. They said, is your math off the wall or something? Are you pretending it to be something it’s not? You spent 25 and you sold it for 30. I said, no, I had a vacant premise and now I’ve got premises which are generating about seven and a half thousand dollars a year. And at a cap rate of whatever was 7 or 8%, that’s worth half a million.
47:20
Dolf de Roos
So it’s a different way of looking at it, but it’s not one that’s limited to people of a certain nature. It’s just people who realize that’s what it’s worth. The value of a commercial building is a multiple of its rental income. Or to put it in technical terms, as I’m sure you know, it’s the rental income divided by the cap rate. Most people don’t understand what cap rate means. They know it’s short for capitalization rate, Brad. It literally means the rate at which you capitalize the rental to arrive at the value. And when you see it in that light, suddenly you go around, I can’t help it. My own properties or anyone else’s or ones I come across random, what could I do to that commercial building to increase its rent?
47:59
Brad Weimert
Yeah, definitely. I mean, anytime I’m talking about a specific area of investment, I want to make an effort. And you do such a good job of this when you are teaching. And I want to talk about teaching in a moment, but I try to make an effort to break down those terms because people get lost in the acronyms and the jargon within an industry, and it negates their ability to ever learn that industry at all because it moves quick. And acronyms are supposed to be there to accelerate the pace at which we can discuss a topic. Right? We’ve agreed upon a term. We’re compressing it. You know what it means. I know what it means.
48:41
Brad Weimert
But as soon as you open the door to somebody that isn’t thoroughly entrenched in the industry, man, lose people in real estate in a second, or people that are really quick in finance and run through numbers really quickly. No, no, give me the spreadsheet. I want to see, I want to see the breakdown here.
48:56
Dolf de Roos
Right.
48:56
Brad Weimert
Unless you’re doing it all the time, it’s hard to grasp those things. So I appreciate the breakdown. So you’ve done all sorts of different real estate, investment and just business fun stuff. I’ll call it business fun stuff. At some point you got into education and today, meaning teaching real estate. And today the path to making money in education, it has become ubiquitous. The creator economy is taking over the world as an opportunity to generate a lifestyle or part time income, supplement your lifestyle, whatever. But the people that really founded the real estate education movement had a totally different space at the time. The path to educating humans was different, the path to marketing was different. Infomercials, live events, ads and papers, magazines, mailers, et cetera. A lot of which still can happen today.
50:02
Brad Weimert
But at that time, what made you think that you should start teaching people real estate investing versus just investing yourself?
50:10
Dolf de Roos
Well, first I want to comment on something you said, which I think is very true. There are many people out there who decided that it was a good thing to get into Lucrat thing to get into by teaching something, be a real estate or any of a number of other topics. So they started teaching it. And then almost as ancillary thing to doing the teaching, they thought I better buy something to justify what I’m doing and more power to them. Some of them have done well and they’ve helped people. But I come from a different school of thought and that is I was a real estate investor first and foremost. And then I started sharing how I did it. And there’s a difference in philosophy. In fact, Malcolm Gladwell says that before you can teach anything, you have to earn the right.
50:49
Dolf de Roos
And you earn the right by spending 10,000 hours in that topic. To really know it, you’ve got to know it better than any question that can be asked of you. So that’s philosophically a big difference. But interestingly enough, I didn’t decide I wanted to get into education. It was sort of foisted upon me. And it happened because I was approached by a group of real estate agents and they said to me, dolph, we notice that you keep on buying properties. I said, huh. They said, are you rich or something? And I said, no, far from it. I said, well, how can you keep on buying these things?
51:21
Dolf de Roos
And I explained that if you find something with low enough value and you negotiate with the seller and get them to leave money and all those things that you know we discuss that you can sometimes get away with buying a deal without having a lot of cash. And they said to me, would you be willing to give a talk to a bunch of US agents? Because if we can understand what you do and how you do it, then maybe we can help you find more properties. And I thought, that’s a good deal. I’m just going to talk about what I do. So I didn’t prepare anything. I went along. I remember it was a Thursday night and I had, I think 20 agents there and I gave them this talk.
51:55
Dolf de Roos
And at the end of it, I didn’t know if they’d like it or not. They said, man, that was amazing. Would you come again next Thursday to do it again? And I thought they liked it. Okay. So the next Thursday I went again. I did a talk. It was a bit different because I didn’t have any notes to go off. And at the end of it they came to me and they said, dolph, that was really great. Would you come along next Thursday and do it again? And I thought, this is starting to sound like a program. If I say yes, I’ll be there every Thursday night for the rest of my life. I said, no, I’ve done my dash with this. How about I write down my thoughts and create a bit of a pamphlet for it? And they said, okay, great idea.
52:29
Dolf de Roos
So I wrote and wrote and it got bigger and it kind of got the volume of a book. And so I went to the biggest publisher that there was and I said, hey, I’ve written this book on real estate. Do you want to publish it? And they said, we’ll read it and get back to you. Well, they came back to me two weeks later and said, no, we’ve read it. It’ll never sell. It’s a niche market. It just won’t work. Well, I didn’t know what I didn’t know. I was an engineering guy, right? And I thought, well, they obviously know this man. I put all that effort into something that don’t work. It wouldn’t work. But in the meantime, I’d committed to a few friends and acquaintances that I’d get them a copy.
53:04
Dolf de Roos
So off I went to the printers and I literally said, what’s the minimum quantity that you’ll print for me? Well, nowadays, Brad, you can go to lulu.com and get a single copy printed for Nexium. But back in those days, old fashioned printing presses, no Internet, no PDF files and all that, they said 500. And what would that cost me? It was an enormous number, but I said, all right, let’s just do it and I can satisfy myself. Friends. Well, they delivered the books and I gave them out. But there was an order form, still no Internet. There was a, you know, send in this order form, rip it out, send it to this post office box. And the order started flowing. First ones and twos and then threes and fours. And before long, I’d run out of my 500 and I ordered another 500.
53:42
Dolf de Roos
Then I ordered a thousand and then 2,000. And after two years, the publishers came back to me and they said, we heard you’ve exceeded the bestseller requirements by a factor of six. I said, well, I didn’t know that. Who told you? They said, the printers. They said, can we stock it in our. In our bookstores? And I said, of course. Why would I say no to that? Right. Anyway, my point is that I sort of segued into this not intending it to be a thing, but after the first book, I came out with a second one. And then here I came out with my first book, Real Estate Riches. It ended up being on the New York Times list for seven months straight. It’s now in five languages. So it’s sort of was thrust upon me. And then the invitation started coming.
54:23
Dolf de Roos
Can you speak here? Can you speak there? You know, in 10 days I’ll be in Vietnam. I’ve got a big event there with 2,000 people. It just sort of grows. So I was, I wouldn’t say forced into it, but it was foisted upon me rather than me trying to get into that space.
54:39
Brad Weimert
Well, I couldn’t agree more with the sentiment of, you have to earn the right to teach something. We are not living in that ecosystem these days. And for as much information as there is out there, it is harder than ever to identify the people that you should be listening to.
54:58
Dolf de Roos
That is so true, because I seldom come across an author these days who’s published a book even three weeks ago without having the tagline bestseller or international bestseller. And it happens. And I often get these emails saying, hey, could you please buy my book at exactly 2:16pm on Wednesday coming up on Amazon. Because if they get, I don’t know how many does 20 or 30 buying at the time, it spikes and for that minute it’s high. So they extrapolate that and say, oh, that’s qualifies. That’s different from being a New York Times bestseller entirely. It’s just like when you have a movie and you want it to do well. It doesn’t matter. If you’re on the Helsinki Film Festival thing or Bombay, you want to be the. What is it called? The Oscars. Right.
55:42
Dolf de Roos
And if you do speaking, the ultimate holy grail is speaking in Madison Square Garden, not in the Sydney Town hall or whatever. There are other good things, and it’s the same with books. So, yeah, there are a lot of people who are on this bandwagon of seeing it as a way of earning money rather than sharing what they’ve done in order for them to become successful.
56:02
Brad Weimert
Yet you have now found yourself in lots of circles of people that have huge education companies. And somewhere along the path, you ran into Robert Kiyosaki and ended up participating heavily in the rich dad brand. Can you tell me how you connected with him and what that journey was like?
56:23
Dolf de Roos
Oh, gosh, that’s. I don’t know if you want the one minute version. The actual story, I think, is quite interesting.
56:29
Brad Weimert
I would love the actual story.
56:30
Dolf de Roos
Okay. So I was doing an event in a little town in New Zealand called Timaru, about 15,000 people. And the morning after, I was walking down the main street and I came across a bookstore. And there was a book there, a secondhand book called if you want to be rich and happy, then don’t go to school. Well, I’d missed out on a lot of school, and I believe to this day that I’d learn more on a week out of school than a month in school. So I thought, that book’s for me. So I bought it. I remember how much it was. It was $10. It wasn’t even US dollars. It was Kiwi dollars, so about six or seven US dollars. And I read it and I loved the book. And it was by Robert Kiyosaki. It was his first book.
57:03
Dolf de Roos
And from there I flew to a little town in the north island of New Zealand called Waikanai. It’s only got a population of 2,000 people. And the local real estate agent, his name was Mick Robbers, picked me up from the airport and I gave him this book, if you want to be rich and happy, don’t go to school. And said, hey, I just read this book on the plane. It’s a good book. Read it. He said, oh, that’s my neighbor, Bob Kiyosaki. And I said, mick, you live in a town of 2,000 people in New Zealand. This is a Japanese Hawaiian guy. He’s now living in Portland, Oregon, and he’s not your neighbor, you know, get real. And he said, no, I used to live in Hawaii. And so did he. And he was my Neighbor and we used to play rugby together.
57:42
Dolf de Roos
And I said, oh, well, tell me about it. So I got it in my head that I wanted to meet him. And then I attended an event as an attendee called Money, you knew, in Wellington, the capital of New Zealand. And it was a three day event. And at the end of it, this guy who was running at Dale Richardson, he was from Adelaide, he said, I’d like to meet with you for breakfast tomorrow morning. Morning. And there were three hundred and sixty participants there. So I thought, why has he singled me out? What’s going on?
58:06
Brad Weimert
Right?
58:06
Dolf de Roos
But I said, okay. So I met with him and he said, dolph, I’ve been watching you. I think you’d really enjoy going to an event in Hawaii. It’s called the Business School for Entrepreneurs. And I said, okay, I’ll go sometime. He said, no, I think you should do it. I said, how much is it? He said, 5,000. Well, back then, this is in the 1990s. US$5,000 for a museum was a lot of money. I said, okay, I’ll do it sometimes. I said, when is it? He said, next week. I said, I can’t go. I’ve got a real estate closing. I’ve got this and that. I had three things going on. And he said, no, I think you should go cancel all those things. Well, who’s teaching it? And he mentioned names Keith Cunningham and Blair Singer and Robert Kiyosaki. I thought, oh, Robert.
58:47
Dolf de Roos
All right, well, I’ll go. So a week later I was there at this event, like over 300 people there. And I remember that Robert said, he is the government. He makes the rules and he changes the rules and he enforces the rules and he’s here to teach you not to mess with the government. In fact, he said, if you’re even one minute late for class, we’re going to fine you $500 cash and you’ve got three minutes to pay. If you don’t pay within three months, we’ll double it to a thousand. And no questions, no, you know, whatever. And if you don’t pay within another three, you’re kicked out, you’re sent home, no refunds, nothing. And so on the very first day, this girl came up to me. Her name was Merrilu. And she said, dove, I’ve been fined $500.
59:32
Dolf de Roos
And I have a philosophy, Brad, that you always should have cash on you. Even in this digital age of contactless payments. Always have cash. It’ll always come in handy.
59:40
Brad Weimert
Show me you have cash on you right now.
59:42
Dolf de Roos
Yeah, of course I do. I’ve got cash here and always hundreds in my pocket. Love it, always. It’s a psychological thing. So she said, do you have 500? I said yes. So I peeled off 500 and off she scurried and paid her fine. And that afternoon she came back and gave me the 500 back. Well the next day she came up to me with a guy named Mike. He was on her running team, not her business team. I didn’t know Mike. Mike’s also been fine. Do you still have the 500? I said sure. So I gave him the 500, he ran off and paid it. But then I didn’t see him for a few days. It was a 10 day event. So eventually I tracked him down and I said, mike, remember me? He said, you’re the guy who gave me the 500.
01:00:20
Dolf de Roos
I said, well I didn’t give it to you, I lent it to you. When are you going to pay it back? He said, oh, I’m not. I said, why not? He said, I don’t have it if I had no wooden fit to borrow it. I said, well where are you from? He said, from Perth in Australia. I said, well you better get someone to wire it to you. He said, I don’t have anyone. And that night he wrote a letter to the government, to Robert Kiyosaki of complaints saying how pathetic it was to have the silly rule. So what if he’s a minute later for 300 and something people there, no one had noticed. It doesn’t matter, let’s get on with program. Well the next morning Kiyosaki says, mike so and so.
01:00:50
Dolf de Roos
I forget his so and stand up and he tore him to shreds. Well that night Mike writes a sterner letter to the government. Next morning, 8am Robert says, Mike stand up the whole audience. He goes town tearing him to shreds now really demeaning him and saying he doesn’t get it. He’s here to teach him a valuable lesson. He doesn’t get it. And then he says, sit down now where’s the sucker who gave him the money? And remember I’d gone there to meet with Kiyosaki and now I was having to stand up in front of her and be excoriated for being an idiot, you know. So I stood up, he glared at me. He said, do you always give money to complete strangers? I said, not always. He said, well, what do you have to say for yourself?
01:01:33
Dolf de Roos
And I don’t know if I was visibly trembling, but inside it was. And my Voice was throbbing, quivering. Because I was really. I had my heart set. I’m meeting the author of this great book. And here I was in this bizarre situation. I said, well, firstly, we should keep it all in perspective. It’s only $500, you know, maybe he needs it more than I did. But secondly, I said, and more importantly, we should not seek to become a repository into which money is stuffed, because eventually it will fill up and the flow will stop. He said, rather, we should seek to become a conduit through which money can flow and let’s just make that conduit as big as possible. And he glared at me for what felt like a couple of minutes.
01:02:08
Dolf de Roos
It was probably more like 10 seconds, but I remember the veins on his face sort of pulsating. He said, sit down. And so I sat down and I thought, I might as well go home now. You know, my chance of meeting him are zero. And even if I did, nothing will happen. But I stuck it out for the 10 days I was checking out. It was the Kona Surf Resort. It had a thatched roof over the reception area, but no walls. And from about here to that corner of the room away, there was Kiyosaki. And he said, derues, come over here. And I said, no, you come over here. And he did. And he said, we should teach together. And we started. The very next week we ran an event which we called MONEY in Brisbane, Australia. The week after that, were in Wellington.
01:02:47
Dolf de Roos
So that’s literally how it started.
01:02:49
Brad Weimert
Wow.
01:02:50
Dolf de Roos
The outcome was completely opposite of what I could have expected.
01:02:54
Brad Weimert
Wow.
01:02:55
Dolf de Roos
But it just goes to show that sometimes the most bizarre circumstances can come together to give what’s ultimately a beneficial effect.
01:03:04
Brad Weimert
That’s bizarre.
01:03:05
Dolf de Roos
I told you it was long.
01:03:06
Brad Weimert
No, it’s great. That’s bizarre. So. So at the time, did he have a education empire or was he just teaching?
01:03:15
Dolf de Roos
He was teaching, he was running events. And I think there were. I imagine there was something in my style and my sticking up for myself and giving him some information back that was contradictory to what he thought I would give him that I think he liked, I don’t know, but that’s why he invited me to join. And then I became one of the rich dad’s advisors. There were five of us. I was the real estate rich dad’s advisor. There’s one on sales and marketing and corporate structuring and intellectual property and whatever the fifth one was.
01:03:48
Brad Weimert
Did that. So I love the sentiment of, you’re a real estate investor that shares your journey with other people versus being a real Estate educator, right? Did that experience with Kiyosaki change your trajectory around the financial side of teaching people real estate? Did you see that as a more viable opportunity to make money? Did you treat it as a business from that point forward where previously you didn’t?
01:04:18
Dolf de Roos
I don’t think at the time I gave it much thought. I’d been teaching already. I’d been, you know, on the speaker circuit if you like. So I was already teaching and I saw it as a tremendous opportunity to join forces with someone else and teach. But this was, I think this was before Rich Dad, Poor dad came out. So it was really the early days and I would accept invitations to speak. Just like at this event. You know, a couple of people have approached me of an event on this date. On that date. Would you be available? Would you be interested? So things like that happen and I didn’t know what it would lead to. I didn’t know about Rich Dad Port. I didn’t know it would result in this massive, internationally recognized brand that would start up.
01:05:00
Dolf de Roos
So no, I don’t think I thought, I’m going to shift gears now and go into this area. It was just an extension, sharing my message. Hey, look at what I’ve done. You can do it too. It’s quite easy.
01:05:12
Brad Weimert
That’s so interesting. What advice do you have for a 25 year old entrepreneur today that’s interested in real estate investment?
01:05:22
Dolf de Roos
Gosh, take your TV and throw it out the window. I always say, if you want to save some money, more for save money, open the window first. I don’t care, but get rid of the tv. And I don’t mean literally. Perhaps I do have a tv, but I seldom my TV in my hotel room here I’ve been in whatever two days, haven’t turned it once. There’s nothing I want to watch that makes, oh, I’m missing out on that. I’d rather mix and mingle with the people here. Read more, read some books. A lot of people don’t read one book a year at the moment. Read a book every two or three weeks, one a week if you can. It’ll change you in ways that you don’t even know how. Number three is be willing to make mistakes.
01:06:01
Dolf de Roos
So many people have been brought up in this notion that we’ve got to win. And that’s why now, Young sports team, no one loses. Everyone wins. Everyone gets a certificate of participation. Be willing to make mistakes. I am where I am, Brad, because I’ve made a ton of mistakes. But you learn from them. Even Einstein said, show me someone who has never had a failure and I’ll show you someone who’s never tried anything. Like, I’m not afraid of trying things and falling flat on my face because I get up every time I try. Thomas Edison more than a thousand attempts to make a light bulb, but he didn’t think he had a thousand failures before he stumbled across it. He had to go through a thousand ways of not making a light bulb to figure out a way of making one that worked.
01:06:40
Dolf de Roos
And you know. So go out there and try things, read some books, figure out whom you can learn from, be audacious enough to ask for advice, or at least ask their opinion. Just because someone gives you advice doesn’t mean you have to implement it. See what gels with you. But be curious. Have your curiosity on full beam. And when you go about your daily think of Is there a different angle there? Oh, there’s a for sale sign there. I wonder why it’s for sale. For sale by owner means it hasn’t gone through a real estate firm. Maybe they don’t know what that’s worth. Maybe they think it’s worth 2 million when it’s only worth 1. They’ll never sell it, but maybe they think it’s worth half a million when it’s worth a million. Does it happen every day of the week?
01:07:19
Dolf de Roos
You’ve just got to be open to the possibility. So my favorite saying and sort of my signature saying is the deal of the decade comes along about once a week. If you think that by definition and semantically, the deal of the decade comes along literally every 10 years, then when people hear that you and I just found a great deal, they’ll stop looking for the next 9.9 years. Because we’ve got this decade’s great deal. And their belief that the deal of the decade comes along about once a decade will be validated because they didn’t find one. They didn’t look.
01:07:49
Dolf de Roos
But if you do believe that the deal of the decade comes along about once a week, even if we hear you and I hear that 20 other people at this event found a great deal last week, it wouldn’t stop us looking because we know there’s another one around the corner, and our belief that it happens once a week will be validated. So have the courage of your own convictions. Read more don’t say to yourself that’s not possible. Say, how could that be possible? How could I make that possible? What can I do from what I’ve learned today, to change things? Do I know of a Building where one of these parking systems would work really well, or any of the other hundred ideas, what other farmers are going out of business where we can find an alternative use for the land.
01:08:27
Brad Weimert
What’s the worst mistake you’ve ever made?
01:08:30
Dolf de Roos
Oh, gosh. I mean, a big one I shared already is thinking I was good enough to do it all myself. My rate of doing things went up exponentially when I teamed up with people. So that was a big, costly mistake. Yeah, I bought properties that ended up not working well. And sometimes it’s not your fault. Sometimes the economy changes. I mentioned before that interest rates went up, you know, quite high from around three and a half, 4% to 7.58%. When you’re stuck with that increase because you didn’t fix your interest rate, that could really affect you. But as you get older, you gain a different perspective on things. Because when I started in real estate market, interest rates were 21%. And we didn’t think any. No one said, oh, that’s high, because that’s what they were. Right.
01:09:18
Dolf de Roos
We were born into that, if you like. In fact, my most expensive mortgage, which I happily took on and paid, was 23%. But I knew at the time that in all probability rates wouldn’t continue going up the way they did in, say, Argentina or Israel, where they had rampant inflation, thousand percent overnight. But they’d come down, and I knew that as they came down, property values would go up. And they did. And so you gain a different perspective through experience. You see what works and what doesn’t. Making your first million is always the toughest because when you haven’t done it, when you come from a family that, you know, we didn’t have a car for years, and when you come from that, you think, can I even make a million?
01:09:58
Dolf de Roos
But when you make a million and lose it, you don’t wonder, man, can I do it again? You don’t think no one’s ever wondered whether they can make the million they lost over again. Or they wonder is, I wonder how long it’s going to take me this time. Because you know you can. And when you know you can, your attitude changes and the way you approach people and deal with people changes.
01:10:18
Brad Weimert
Yeah, no question about it. I really firmly believe that establishing beliefs can be one of the most challenging parts of life. And the easiest path to establishing beliefs is having your own data points, which you only get from a lot of.
01:10:36
Dolf de Roos
Repetition and action and thinking things through. Because I can’t deny, Brad, when I applied for my first mortgage as a young university, I was petrified. And in fact, the first time I applied for the mortgage and gave a spieler, so I thought it was a good deal. The bank manager sat there patiently and then he leaned forward and he said, are you done? And I thought, that’s an odd question. I said, yes. He said, this is a hoax, isn’t it? This is a university prank. And I was devastated because I was there in full earnestness, and he thought it was a prank. But fortunately, instead of saying, I’m obviously not cut out for real estate, I better try my hand at something else. I went to bank after bank until eventually one said, okay, I’ll take a chance on wow.
01:11:17
Dolf de Roos
So you’ve got to be willing to go back and change your mind as to why you’re doing something. And that’s a skill that you can develop, you know, just always be willing to try a different angle.
01:11:31
Brad Weimert
Well, Dolph, I could talk to you for hours, but we’ve got a dinner to head to downstairs.
01:11:36
Dolf de Roos
Is it that time already?
01:11:37
Brad Weimert
Oh, my gosh, it’s creeping up there. You are still actively involved in all things real estate, in speaking and sharing your wisdom. Where can people find out more about you?
01:11:51
Dolf de Roos
You know, one of the upsides, there’s also a downside, but one of the benefits of a rather rare name is that it’s not that hard to find me. I don’t think there’s another Dorf Deroos. It’s not that hard to spell D O L F D E R O o S. So dolphdarous.com is a way of going there. I’m on social media, some of them have REI on the Endorph is my personal one. And then Dolph de Roos, REI real estate investor, is the one where I talk about real estate things. So I’m really easy to find like that. I’m passionate about sharing it and making others people’s paths easier than mine was. Apart from the one semi mentor I had no one to guide me, really.
01:12:28
Dolf de Roos
One exception to that I should add now because he’s here, is years ago in New Zealand still, I went to a place called the Book Warehouse, where they sold out of print books really cheaply. And I bought a book for $3 called Nothing down by Robert Allen. And I consumed that and really liked it. And years later we met up and we became friends. And he’s here at this event. And I caught up with him this morning. I hope to meet him a bit later on. So sometimes you go full circle but yes, check out any of those things. I’m all over the Internet in terms of what we do. I offer events at $20 ahead and $2,000 ahead. Oh, there’s one event I should mention that I run on the shores of Lake Como and in Queenstown, New Zealand.
01:13:10
Dolf de Roos
It’s not real estate centric. It’s about how to take everyone to whatever it means for them to go to the next level and to achieve that bread. We’ve got no agenda. There’s no agenda. Like Monday morning we do this and Tuesday, because what we end up talking about depends on who shows up and what they need to achieve that. And so that’s kind of an interesting sideline to what we do in fun locations and. Fun location. Yeah. In Queenstown, it’s known as the adrenaline capital of the world. So if they want to, that is, no one’s forced to do anything, but we throw them off mountaintops and we go jet boating at 200km an hour and paragliding and hang gliding and you name it. So it’s a lot of fun because remember, all growth occurs outside of your comfort zone.
01:13:49
Dolf de Roos
So by just tweaking that a little bit, it makes it easier to absorb new ideas.
01:13:53
Brad Weimert
That’s great. It’s been awesome talking to you. I’m looking forward to more conversations in the future.
01:13:57
Dolf de Roos
Likewise, Brad. Thank you.
01:13:58
Brad Weimert
Thank you. I hope you enjoyed the episode as much as I enjoyed doing it. I need your help. There are three places you can find Beyond a Million. The podcast itself, Beyond a million dot com, which has some cool free resources, including a free course. And we finally launched the Beyond a Million YouTube channel. I would love it if you would go there and subscribe. And if you don’t watch to, you still would probably enjoy seeing the visual content. Check it out YouTube.com@Beyond a Million.
