From Broke to 200 Doors: Hugh Carnahan’s Wealth Blueprint for Business Owners

Quentin (00:04.309)
Hello everyone. Welcome to the Investor Fuel podcast. I am your host, Quentin Edmonds. And you know how I do, just call me Q. And today I am joined by someone I’ve been looking forward to chatting with. My friend here, Hugh Carnahan, who’s been making serious moves. I like to talk, this guy is dominating real estate. Like he is a master operator helping business owners.

build wealth and I am so happy he’s here and he’s going to tell you more about just how he does that within his market. So here man, I’m so glad to have you here brother. How you feeling this morning? Well, not this morning, this afternoon.

Hugh Carnahan (00:48.242)
I’m feeling great. Thanks for having me on Quentin. This is awesome. I’m excited to be on the Investor Fuel podcast.

Quentin (00:51.069)
Absolutely, Absolutely, man. I think our listeners are really going to take away a good something from your approach in a way that you are out here helping business owners. And so I just want to dive right into it. So first off, if people who may not know you may not be familiar with your world, give us a short version of what is your main focus these days.

Hugh Carnahan (01:16.718)
So I am a, I’m in business and I’m in real estate. So that’s kind of the Venn diagram of the two. I’m an operations overlord and a master of operations is my strong suit. It’s what I used to do. So I applied that to real estate. ended up retiring a millionaire in 15 months, scaled from zero to 200 doors in 20 months. And I think it’s been about a few years and we’re at a $40 million, you no syndications all that’s all owned internally using predominantly the burr strategy. So.

What I do now is I’m effectively retired because of real estate and I just help business owners and friends, help fix their businesses and then invest to build generational wealth. Just cause so many, business owners out there, they, they need that help. They don’t, they don’t know what they don’t know. They’re, they’re putting so much out there and, and a lot of people don’t have anything there. If they, they quit today, you know, hopefully they have a paid off house and, know, they put their kids through college and got a mini van, a pickup, but a lot of people don’t have, the way to walk away from their business.

You know, and they, and they’re just crushing it. So trying to get the word out and helping them help those folks. So that’s what I do daily with the business wealth blueprint.

Quentin (02:26.506)
I love it, man. I love it, man. Hey, what markets are you operating in?

Hugh Carnahan (02:29.998)
So for, uh, on the real estate side, it’s pretty much in the Midwest. Uh, we’ve got, we’ve extended it out to Kansas in the past. Um, we are in, uh, Missouri, like 99.9 % in Missouri, but we’re observing maybe moving into, uh, Dallas, uh, or maybe some Texas markets. Uh, biggest thing for us is we’re focusing, we focus on value add. So buy some crummy, fix it up, right? We’re to force the appreciation. We don’t care what the market’s doing.

we’re going to go buy something that’s underperforming or it’s distressed and we’re going to, you know, we’re going to buy a crack house and we’re going to flip it. That’s what we’re going do, but we’ll flip and hold.

Quentin (03:08.298)
Yeah, yeah, yeah. Now I love that, man. I love that. think what I really, really love is how you trying to, your heart and passion about building wealth for these business owners, making sure that they are in a better position when it comes to their family, right? So when things happen, they got a place to pivot, right? Because we never know how things are going to go, right?

And so you are positioning people to be in a better circumstance when life happens. Right. And so that’s for me. That’s a beautiful thing,

Hugh Carnahan (03:39.043)
Right.

Thanks. Yeah. Yeah. Exactly. So many business owners, they’re just like, Hey, uh, I’m, you know, Bill’s pizza, you know, and they’re, and Bill’s crushing and he’s putting in a hundred hour weeks and dealing with employee problems and the inventory, you know, expires on the shelf and in the fridge and, and it had been doing that for 10 years, 20 years. And then he looks back and it’s like, okay, well, Bill can’t step away from his business. He’s still got to put in the hundred hour weeks. So it’s turning on its head, you know, we, you know, real estate.

Super basic, you can get into it. You don’t need money. People think you do. you can figure it out. And then let’s say just every year he buys a duplex or a fourplex or a 10plex or something. Boom, you know, 10 years ago by he bought a duplex every year. He’s got 20 units. Bill’s pizza place can burn down and Bill’s set. Cause he’s got 20 things that’ll pay for him indefinitely. And so that’s kind of what we’re talking about. You know, how do you make the pizza place make money? And, and then.

Do real estate on the side. Just keep doing our day job. Good. We’ll invest that into real estate.

Quentin (04:43.915)
Absolutely, absolutely, man. I love it. That can’t be easy in this climate. And I love the fact that you’re finding these dilapidated places like, listen, it’s dilapidated, but we’re going to build this thing up. We’re going to get this thing rocking up and looking good. And we’re going to help people, business owners build their wealth. So I know that that can be arduous at times, but what keeps that machine kind of running smoothly? What keeps you running smoothly and always ready to go after it?

Hugh Carnahan (05:11.758)
You’re asking me what keeps me doing that?

Quentin (05:14.559)
Yeah, yeah, what keeps you, your business, your operation running smoothly.

Hugh Carnahan (05:17.75)
And my backend is called two-second lean. That’s the basis of it. we kind of built a framework and it’s taken, you know, there’s nothing new into the sun. I’m taking them and combining a whole bunch of stuff. So on the business front, I’m using my operations background, which is basically two-second lean. It’s free book out there on YouTube, four hours long, changed my life. million I’ve made millions and millions of dollars because of that book. There’s a book called profit first.

And then, we basically cobbled the basis of that together. And then I use a lot of basic real estate principles. So check out it like most business owners, just Jack of all trades. The other thing too is, business owners are perfectly set up to do this. I mean, they’re perfectly set up. They’re already in the community, right? You know, my hypothetical example, Bill’s pizza, Bill’s pizza. There’s a million Bill’s pizzas out there. And where does he live? He lives in his town. He’s, he’s with the people. He’s in the neighborhood.

Bill’s going to see different things, right? If you’re at Bob’s plumbing, Bob is his guys are running routes to places that have problems. Bob’s going to see some that’s off market or Bob might accidentally kill a deal and not even know it. And okay. So now Bob might be able to step in and buy that deal. So, business owners are uniquely qualified, because they’re already in the community and we have just, you know, the skills, problem solving skills, cause that’s all we’re doing every day. So.

The problem solving skills plus the two second lean is how we run our operations. And then just being proactive, not being reactive. Most business owners are reactive. So we meet every day. It’s super, super simple. We have a daily routine. All my companies, we meet 30 minutes in the morning. No one’s allowed to do any work. You can only make your job easier. Right. You know, if you’re, if you’re, you know, mobile site, you’re running around, you’re going to clean your truck. You’re going to, you know,

Check out, make sure all the tools are working. You’re going to service those. you’re going to make an improvement. That to fix what bugs them. That’s taken. Then the next half hour is training. So we train every single day, just a little bit of training. And then the rest of the day is dedicated to the customers. So it’s just like going to the gym. Don’t, don’t, don’t go to the gym once and work out super hard and then expect to see change. Go to the gym, you know, an hour a day or 30 minutes a day frequently and.

Quentin (07:28.735)
Yep, come on.

Hugh Carnahan (07:39.522)
That’s, that’s, that’s really it. There’s a basic routine and it lets us keep on track of things. Super simple. You know, the communication between all the departments, you know, we have, we’re very, very spread out. We’re decentralized and it really helps that communication side of things.

Quentin (07:55.307)
Absolutely. So this is what I said. This is what I surmised what you said, how you keep yourself running smoothly. Education. I you name some books out there. So educating yourself. You talked about consistency. You talked about building a routine. And number one thing for me in any relationship, business or personal communication. And so these are some of the things that you hit on, on how to keep things running smoothly. So I love it, man. I absolutely love it. Please do.

Hugh Carnahan (08:20.526)
100%. Actually, I’ll take it one step further. We have a routine. Our routine is that we integrate education and communication every day. The end. If everybody just did that, I want to learn Spanish. I do 15 minutes of Spanish every day. I still don’t know Spanish, but they will if they did it. What people are going to prioritize. That’s what they’ll do.

Quentin (08:41.163)
There you go. Absolutely. I love it, Yeah. Yeah. Absolutely. And you kind of hinted to this. So I’m going to ask this question. Of course, nothing runs smoothly. Things run smooth, but there are always moments when things get real. Maybe a day will go sideways, a time that you had pivot fast. You mind sharing any kind of stories like that?

Hugh Carnahan (09:09.234)
a hundred percent, a hundred percent. So, again, this was the reason I love business owners, business owners, their whole life is basically a giant toilet and they’re fighting fires all the time. Everything’s always going wrong. So that stress that normal people have for like, my gosh, this deal’s fallen through business owners. just their everyday life. Usually. so here’s a recent story is, you know, we had the steel tariffs come in like three weeks ago.

And we had one day our supplier called us up and they said, if you don’t lock in your, were building a, a self storage facility. If you don’t lock in your building and you don’t have a check to us by tomorrow morning, then we have to absorb the terrorist costs. have to pass this on to you. Your building is going to go from a hundred thousand dollars to a hundred and $25,000. Boom overnight. And our contractor wouldn’t have gotten the money. The manufacturer of the building wouldn’t have gotten the money.

The steel supplier wouldn’t got the money. just went to the tariff. so, you know, that was a bad situation that could have been happening, but then being reactive or being proactive and reactive, we saw it coming. We were prepared. And when that happened, we immediately took action. We went to our bank. We were able to borrow the money a little bit early. We bought that thing. We got him the check. I physically drove it two and a half hours to the supplier and said, here’s the money. Make sure that we get locked in and.

That right there could have put us out of commission, right? It would have blew up the deal. Well, we, we got there. We locked in the price. We’re set. Everyone else was like, Oh, let’s, let’s, let’s plan. Let’s analysis, pull up paralysis. What should we do about this? I’m in front of them. I’ve already did it. already did it. Then the, the tariffs now in place and it’s not going away. Um, that 50 % tariff on steel it’s staying. So that’s just one example of a deal about to implode about to go South and just.

Using that, you know, taking action is usually more important than what action you take. But if you take action consistently, then you get a good habit of like, this is critical. We need to do this now versus not. So.

Quentin (11:20.031)
Yes, sir. Yes, sir. Being proactive, like that’s the kind of stuff people don’t talk about, like being proactive. And honestly, that kind of would separate folks from like just that kind of like dabble from the ones who kind of stay in the game long term. And it’s like, you know, yeah.

Hugh Carnahan (11:36.322)
Well, Quinn, I’m a D student. I’m just a hillbilly from Missouri. am often, are often, you know, don’t, we’re not the most well-funded in the background. We’re not the most educated. We just react faster than everybody else. We take action. We fail all the time too, right? I’m just a walking failure all the time. We will take the action because I’d rather fail five times in a day trying to get to that deal.

And I’ll get off all when you fail, you’re going to learn immediately why it went wrong. Pivot fail a little bit harder pivot fail. Boom. All right. We got it done. All right. We locked that in today. Everybody else, they’re to, they’re going to, may or may not plan. They may be reactionary. They may plan too long. I got your deal. We consistently will dominate. We’ll buy the deal. We’ll take down the thing. We’ll lock up deals and then we’ll do a due diligence because we already have in the contracts. We can walk away.

But I got the deal off the market before, you know, everyone else is doing the analyzing, you know, and I’m not saying be stupid about things, but you know, we are, we usually will win because we take action first and the actions that we take are consistent. Just like you were saying, and anybody can do it. If I, mean, if I can do it, you can do it.

Quentin (12:59.371)
Man up. Come on.

I’m probably going to butcher the quote, but it says success is not losing momentum after a failure. probably moving, I’m probably butchering that a little bit, but failure is if you’re going to succeed, you’re going to succeed because you failed. And if the, you have to keep your momentum after the failure because success is right around the corner. And so that’s where you, when you, you, that word consistency.

Hugh Carnahan (13:28.814)
100%.

Quentin (13:33.631)
That’s a huge word. And you gotta continue to be consistent. Just because you fail does not mean that you will not succeed. Get back up and continue to be consistent. And so, yeah, man, you didn’t have it the head.

Hugh Carnahan (13:45.858)
hundred percent. And I want to tie that right back to the habit that we were talking about a second ago. my company’s, know, every morning we meet and we try something and they fail every day. Me and my guys, fail every day. And because of that, they’re building that critical thinking. So, I tried it. I failed. Hey, should we move this here? Should we move this cabinet there? Should we put this, let’s just pick it up and take it there.

Let’s just see, Oh, it won’t fit because pipes in the way. Oh, it won’t fit because there’s the gas line there. Well, we should, uh, we should figure that out. You know, that’s well, now we found out right now, instead of after, you know, $2,000, three weeks of engineering plans, right.

Quentin (14:30.047)
Nah, man, you want it, brother. You want it, man. I appreciate you, bro. Let me ask you this. What are you most focused on solving or scaling next? Like, what’s the next goal for you?

Hugh Carnahan (14:42.062)
right now we are, you know, opportunities that we see right now, there’s a lot of pain out there. There’s tons of pain from the interest rates being so high for two years. you know, historically the, when they came in and rose rates, was the fastest that ever risen rates, I think in history. And then it’s been that way for two years. So it just caught everybody by surprise. everyone’s feeling it business owners, but real estate, mean, we, we live and die by interest rates, know? So.

Right now, what we’re looking at is actually we’re at, I think we’re at the end of the pain cycle. I’m an optimist. I think that rates are going to come down. think they’re going to have to come down or else we’re going to enter a major recession. Uh, actually we already feel it. We’re in one, think, but there’s just so much pain. So right now, while rates are still high, we are actually, I’m currently refinancing a lot of our, our stuff that has prepayment tendencies and we won’t get those penalties while rates are high.

because they want the new rate. want the money, the higher money. So I’m refinancing the penalty. So I’m, I get it penalty free into a floating interest rate so I can write it down. Then I’ll refinance it back into a long-term debt later. So that’s the first thing. The other thing too is the, there’s a lot of sellers out there that have not been able to sell things and their pain has been so high for so long that they’re willing to come to the table and negotiate. You know, when the, when they first rose rates,

Rates were the lowest they’d ever been in history for the, for so long that everyone was just, everything. no, I own a three, two. I have, this, this house is worth $500,000. I’m not coming down on the price. Now, all of a sudden it’s been two years. They haven’t moved that house. You can come in and do it. You know, you can, you can come to the table and get really, really creative for negotiating. So we’re looking at our debt. We’re looking at anything that’s a threat to us as far as bad debt. And we’re.

Cautiously looking at refinancing it and also we’re looking at buying and we’re buying on floating interest rates right now because rates are high Right. We’re at nine or ten percent rates or eight or nine percent rates here My lender that I’m using if we can buy high but it’s interest only and float that back down We can buy stuff that other people are afraid to because the rates with PIT I don’t make sense but interest only Yeah, I’m not paying down the principal but my tenants were gonna pay it down anyways over time

Hugh Carnahan (17:06.828)
But I’m going to be able to acquire it for, you know, that lower price. When rates come down, I can just refinance and actually in the deal will make sense. So I’m running the numbers at breakeven. What can I do? Can I sustain short-term pain? And you know, those operations as it’s really scary out there and it’s been scary for so many investors and mom and pops that are looking to retire. We’re able to take on stuff now. And so those are kind of opportunities we’re looking at is how can we solve someone else’s problem?

by buying their thing, how do we solve our problem by buying it for cheaper, and then how do we make it work?

Quentin (17:46.699)
Yeah. Yeah. That’s big. That’s big. Especially again, showing your proactive, your proactive mindset. You know, I listen, I ain’t scared to buy while the rate’s still high. You know, I’m not scared to refinance. I’m talking refinance while the rate’s still high because you have a plan in place that’s going to benefit you and going to help benefit others in the long run. So again, that’s that kind of forward thinking. And so, and as you alluded, yeah. Exactly. Yep.

Hugh Carnahan (18:11.15)
And we can use the high rates. You know, you get to go, Hey, look, you know, Mr. seller, Mrs. seller. I would love to buy your place for a million dollars. You know, I love to buy this strip mall for a million dollars, but you know, look, it’s $7,000. I can’t, you know, I can’t rent make even the payment off to pay 800,000 or 750.

Quentin (18:32.491)
Yeah. Yeah. I mean, that’s, that’s, that’s big. And I think you, you, you kind of hit the nail on the head in a sense because what I want to transition to because your next move and you’re making moves, you’re proactive, you’re thinking ahead. And we know that the next move, can either compound things or it can like create chaos kind of depending on how you play it. And so, I mean, I know a lot of people

They’re listening to this and they’re thinking like, I’m early on my journey. I’m looking to level up. I’m looking to make some moves and I think they can benefit from this. So I want to ask when it comes to building relationships and growing your network, what’s made the biggest difference for you?

Hugh Carnahan (19:16.684)
Yeah, it’s absolutely, it’s definitely going to be getting into, real estate based masterminds and real estate based communities. you know, hanging out with people that have the mindset, you know, one piece of advice that I ever got was take advice from people, but make sure, have they done it before? Have they took taking the vice? you know, so, so many people, mean, first off one, those people can do it. So it’s going to be a hundred percent mindset thing, but if you’re hanging out with your old high school friends,

your old college buddies and they’re all still drinking on the weekends. And that’s the only, you know, let’s play video games. That’s all they can think about. Then that’s all you’re going to be surrounded around. Um, you know, there’s so much fear out there too, you know, make sure when you’re getting advice from people, have they done it before? Right. Um, if you, if you’re going to want to be a UFC fighter, you know, your mom might have your best interests and you might hire a coach that has your best interest.

Both of them have your best interests, but one of them has done it before and knows how to make you. they, they’re, you should take those advices very differently. So a lot of people give people advice. Oh, my uncle, Jim, you know, I had real estate once and they couldn’t do it, you know, and, and it’s just getting around the right people, listening to podcasts, right? Listen to investor fuel podcast. You know, if you’re a business owner, hop on and go over, listen to my podcast, listen to bigger pockets, get that information.

The more information is just, we’re all normal people with normal stories and we have extraordinary success, you know, and for those who just starting out, you know, I, I was just a guy working a W two job, you know, five years ago, you know, 2019, I was just me and a manufacturing job. Uh, yesterday we bought a trailer park. Last Tuesday we bought a two apartment complexes for $1.6 million. And then earlier in the year we bought another department complex for $1.2 million for zero money.

And zero money out of our pocket. So we were able to do that. All that actually, no, we got paid $104,000 when we quote bought that property. It’s so you can, you can do it. And also for the people, I’m just trying to get started. You’re going to hit that ceiling well before 10 units. If you do single family houses and you’re going to immediately be like, wow, my re my return on investments there, but my return on time is that I should look at a fourplex. I should look at an eightplex that you’re going to get there so quickly. So just keep listening.

Hugh Carnahan (21:41.206)
and take, take an action, you know, but get around the people who’ve done it before. Right. I try to get into rooms with a hundred millionaires and 10 millionaires because they think differently than one millionaires. and you know, I, you can grind your way to a million dollars. That’s easy. Right. you just put the work in, but your systems will break. It’s not the same when you get from, you know, to go to a million to 10 million is completely different. So, yeah.

Quentin (22:08.863)
Yeah, man. Nah, you can’t fake that, man. Relationships are everything in a space like this. And so you hit the nail on the head, get around to people who can help you catapult to the next level. So you’re right on, man.

Hugh Carnahan (22:21.306)
And help them out. know, when I was getting started, before I ever did anything, I went on, you know, bigger pockets and I created an event and I started hosting pints and properties in our local area. wasn’t a pint. There was not a place for local real estate investors to meet up. So one, if you’re in a major city, you know, Houston or Kansas city or, you know, Dallas, whatever, you know, you’re in California, there’s, there’s a hundred percent, there’s real estate groups. So go hang out with those people.

They’re going to know your market, your area. Most real estate investors are super friendly and are willing to educate you and they’ll share all their contacts except for their contractor probably with you and go, yeah, go, go hang out. And then when, and when you’re studying, if you’re just starting, mean, I studied, I listened to every, every podcast. read every real estate book and

Quentin (23:00.939)
Yeah, that part, yeah.

Hugh Carnahan (23:16.012)
When people were asking questions in the forum, I’d be like, Hey, I’ve never done this, but this podcast said that they did this. Now you’re providing that free value, right? I started hosting the meetups. Why? Because there were, there wasn’t one near me. Right. And so, Hey, who wants to get together? We’re going to grab beers and we’re to talk about real estate. So now we did that. Well, guess what? Now I have all the investors are coming to me. I’m the one that’s quote providing the service. I don’t know what I’m doing. And when I started out, I didn’t know anything.

I academically knew it because I listened to podcasts like investor fuel, I didn’t, you know, I didn’t, I didn’t do it. Once I got around the rooms of the yeah. Then just doing the, doing their first deal. Once you do one, you’re going to learn so much more. You’re going to fail. Everything’s going to go wrong. And then by the time you do your second deal, you’re be like, okay, I got this. By the time you do your third deal, you’d be like, man, this is easy. Then you’ll get bored. You’re going to, then you’re going be like, I should go buy an eight plex. Right.

Quentin (23:51.915)
You wasn’t applying it. Yeah, exactly. Yeah.

Hugh Carnahan (24:13.814)
It’s very, very quick, very quick.

Quentin (24:17.035)
Now, absolutely, Listen, listen, before we wrap, if someone wanted to reach out to you and connect with you or maybe collaborate or learn more about what you’re doing, what’s the best way for them to reach out to you,

Hugh Carnahan (24:28.718)
Yeah, I’ve got a, you can just type in a HughCarnahan.com forward slash let’s connect. And it’s, it’s got that on there. Actually, if you just Google HughCarnahan.com and my pop up, and then I also have free resources for business owners and investors too. So that’s HughCarnahan.com forward slash resources. And it’ll just take them, take them right to it.

Quentin (24:50.347)
Absolutely, absolutely, absolutely. Well, listen, I appreciate your time, Hugh. I appreciate your story. I appreciate your perspective. We need more people in this space who are doing it the right way. And brother, you’re doing it the right way. So thank you again for being here, brother.

Hugh Carnahan (25:06.264)
Quint, thanks for having me on.

Quentin (25:08.029)
Absolutely. And for those tuning in, if you got value from this, please make sure you subscribe. We have more conversations coming up where operators just like my friend, Carahan, who are out here building relationships and doing things the right way. So thank you so much and I’ll see you on the next episode. Y’all have a good one now.

Hugh Carnahan (25:29.902)
Thanks again.

Quentin (25:34.219)
And we are on.