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Show Summary
In this episode of the Real Estate Pros podcast, host Michelle Kesil interviews Micheal Miller, a real estate investor and construction company owner. Michael shares his journey into real estate, emphasizing the importance of creative finance and networking. He discusses the challenges he faced, the lessons learned, and his current focus on expanding into sober living facilities. Micheal also provides valuable advice for new investors and explains the workings of real estate funds, highlighting the potential of self-directed IRAs for raising capital.
Resources and Links from this show:
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- Investor Fuel Real Estate Mastermind
- Investor Machine Real Estate Lead Generation
- Mike on Facebook
- Mike on Instagram
- Mike on LinkedIn
- Micheal Miller on Facebook
- Dead Presidents Club on Facebook
- Micheal Miller on Instagram
- Micheal Miller on Tiktok
- Dead Presidents Club with Micheal Miller on Youtube
- Micheal Miller’s Email Address: [email protected]
Listen to the Audio Version of this Episode
Investor Fuel Show Transcript:
Micheal Miller (00:00)
And so a lot of times people go, well, when I start talking about raising capital, they say, well, I don’t have any rich friends and family. And I go, I bet if you scroll through the Rolodex of your iPhone and just ask yourself who’s been working in the same type of job or the same career for the next, for the last 20 years, you’d be amazed at how many of those people have a hundred, 200, $300,000 that they don’t even think of as their own money.because it’s just sitting in some account. I can’t tell you how many people I’ve said this to that go, yeah, I think I had an old 401k from like one of my old jobs. I don’t know what’s in there. And then they go look at it they call me they’re like, I have a hundred grand in that account. didn’t even know, like I didn’t even realize.
Michelle Kesil (02:12)
Hey everybody, welcome to the Real Estate Pro podcast. I’m your host, Michelle Kesil and today I’m joined by someone I’m looking forward to chatting with, Micheal Miller, who is a real estate investor focusing on long-term rentals as well as owning a construction company and real estate fund. So excited to have you here today, Micheal. Yeah, definitely, so.Micheal Miller (02:34)
Thank you, excited to be here.Michelle Kesil (02:38)
Let’s dive in. First off, for those not familiar with you and your work yet, can you share what your main focus is?Micheal Miller (02:46)
Yeah, we are real estate investors. I’m about four years full time. My background is banking. I was a VP.for Bank of America, the majority of my adult life. And I woke up one day and had kind of a light bulb go off, which sounds obvious now, but at the time it was just a brand new thought to me that I wasn’t building anything I could give to my kids. And so about four years ago, I pivoted and went full-time into real estate and haven’t looked back. From there, we started building portfolio. We bought a little over 10 million in single and small multifamily our first year. We did that with none of our own money.
So all creative finance, all capital raising, different structures, debt structures, capital structures. We also don’t syndicate. So we own 100 % of our portfolio. ⁓ So when we talk about building quickly, we definitely did that. And since then, we’ve been working to strengthen our operation to get more focused on our ⁓ vision and to build strong companies that can provide really, really good returns for our investors and also stable work for
employees, our family.
Michelle Kesil (03:57)
Yeah, awesome. And which markets do you operate out of?Micheal Miller (04:00)
Yeah, so I live in Northern California, far north, a little town called Redding. And ⁓ we live and work here originally from Seattle. We invest, I’d say maybe a third of our portfolio is here in Northern California. And then we have a chunk of property up in Michigan in the Upper Peninsula. We have some stuff in Ohio, Texas, and ⁓ one lowly lake house Airbnb that’s really more a lifestyle investment in Washington state.Michelle Kesil (04:30)
Awesome. And so how did you get started as an investor?Micheal Miller (04:33)
Yeah, I’ve always, ⁓I’ve been passionate about real estate. I’ve loved it. I used to joke that when my wife was watching The Bachelorette or whatever on TV, I’d be doom scrolling Zillow. And so I’ve always been passionate about real estate. I bought my first deal in 2007. So I’ve been a guy who’s bought real estate for a long time, but like I said, I really went full time about four or four and a half years ago. And the reason why we ended up doing it with none of our own money is because I had already bought into a construction company.
And my thought was that we would buy a bunch of dirt and develop it and build spec homes and sell the spec homes. thought this is how we were going to do it. So I went out and I spent all of my cash on dirt thinking that we would, we just develop it and we get hard money for the vertical and it’d be fine. Well, that was kind of in the middle of the COVID era. And as you know, the construction costs doubled and tripled in some cases and all of this dirt that I had spent all my money on all of a sudden didn’t pencil to build.
So was left with, I’d already left the bank and I was kind of left with a choice that either I got to get in the room and figure out how to do this without any more cash or I got to go back to the bank. And so that’s what we did. I just started running around to every real estate mastermind conference, events I could get my hands on, started building relationships, started learning about different deal structures. And ⁓ that’s how we kind of started building it from there. So it started with this idea and I still own all that dirt.
the way. So we’re still waiting. Someday, know, dirt is good. Someday we’ll develop it it’ll make sense. But we’ve built our entire portfolio ⁓ around what I would call a very early mistake of ignorance. ⁓ And it’s taught us a lot about how to not only how to invest better, but how to get in the right room with the right people that have the right information.
Michelle Kesil (07:11)
Yeah, absolutely. And what do you feel are some of the main keys that made the biggest difference in your business growth and success?Micheal Miller (07:21)
⁓ yeah, I mean, it’s a good question. I think, ⁓I mean, being willing to be creative, to think outside the box was critical. We wouldn’t have been able to move forward had I not been willing to think creatively and to structure deals in a way that other people weren’t structuring them traditionally. So definitely creative finance was a big part of our early success. But I would say the bedrock of that success was my quick adoption of this idea of getting in the right rooms.
You know, I’ve paid you don’t want to know how much money at this point to get into rooms and sit at tables and rub shoulders with people in the industry that I would have never had access to had I not done that. And those relations people always ask me like, oh, you know, I there’s one in particular I paid $50,000 to get into a mastermind with Brandon Turner. And people always ask me like, oh, did you get a you know, did you get an ROI on that? And what they mean is did I get more than $50,000 in deals or
capital
or whatever. And the answer is no. But what I did get was relationships that have absolutely changed the game, changed my life. And now Brandon and I have become friends, we partner on a coaching program. And so the ROI isn’t always just about direct dollars and cents. It’s about the network. It’s cheesy. I know we hear it all the time, but it’s true when they say your network is your net worth. And sometimes you just got to pay to get in the room. And I did that early and I did it aggressively. And I don’t think I would have been successful without it.
Michelle Kesil (08:54)
Yeah, definitely. think relationships are crucial in this space. What have been some challenges or hurdles that you have had to overcome that now looking back in hindsight, you can see the lesson.Micheal Miller (08:58)
Yeah, for sure.gosh.
I mean, I’ve screwed everything up at least once. know, so I, I mean, all the cliche stuff that people say is true of me and my business. think, ⁓ you know, you can go broke buying good deals. ⁓ You can, you can, ⁓ you can’t eat equity is another one, right? Like I built really heavily for equity early on and I under emphasized how important cashflow was and it felt okay early on until our team grew to a point where we demanded more cashflow.
So that was a painful learning. I think the biggest one for me that we’re still working through now is making sure that we put the right people in the right seats. And you know, I’ve hired, I’m a pretty relational guy. I have a high value for loyalty and trust and relational equity. But I’m learning and I’ve learned that you can’t, that loyalty doesn’t replace capability. And so we have to be able to put the right people in the right seat. It’s not just that they get it and they
wanted it’s they’ve got to have the capacity to be able to do the job ⁓ and that’s been a painful learning for me and we’re still working through some of that.
Michelle Kesil (10:13)
Yeah, absolutely. I think that as you grow, you have new responsibilities to face. Yeah. And so what are you most focusing on solving or scaling to next in your business?Micheal Miller (10:19)
It’s true. ⁓Yeah, there’s two things for us right now. ⁓
We are going up in asset class. We’ve bought a largely single and small multifamily to date. We’re now ⁓ kicking the tires on several larger apartment deals. I think there’s a unique window of opportunity here while the rates are still higher and the potential sellers are a little bit more distressed. There’s some opportunities to pick up some really great discounts on larger assets. And so we’re really working hard to do what we’ve done with single and small multi to do with some apartment buildings.
But adjacent to that and maybe more exciting and more important to us is we’re really starting to lean into this idea of sober living. One of the things I’ve struggled with in my building of the business is that we are a big heart driven organization. Our vision for our company is that we build companies that build and restore families. I’m big on the family, I’m big on helping people be restored back to family.
whatever that looks like, everybody’s family looks different. We’re big on adoption. I was adopted, my mom was adopted, my three kids are adopted. So family is just such a big part of what we do. And ⁓ I’ve had a hard time reconciling our passion for this with the work that we do, right? It’s like, you know, what does real estate have to do with building and restoring families? ⁓ And we’ve landed on these opportunities with this sober living that feels super aligned ⁓ with that, where we can potentially provide housing.
and provide programs and partner with really great organizations that are doing really good work to help men and women who have struggled with addiction ⁓ not only get clean, but get healed up and potentially put back into their family design or at least figure out who they are and who they want to become again. And so that’s a really exciting side of our business. Actually, after this interview, I’m going to meet the director of a large sober living ⁓
organization here in the North State, talk about partnerships. So I would say that’s the one I’m the most excited about. ⁓ But ⁓ it’s fun when you can find things that align your vision and your passion with your profit and your growth. ⁓ Man, how cool is it to be able to help people and make money doing it too.
Michelle Kesil (13:23)
Yeah, absolutely. That’s incredible that you’re able to serve in that way. Can you explain a little bit more about like what that looks like? Is it just buying these properties where the seniors live or are you also like managing it? Yeah, what’s that process like?Micheal Miller (13:38)
Yeah, so it’s a good question. There’s different levels ⁓ of this. the first level⁓ Is just being the real estate provider and partnering with an organization that’s already providing these programs And so that’s part of what we’re talking with some of these other organizations with is like hey, we’ve already got all this real estate ⁓ You’re short on places to put these people that come through your programs Let us provide the real estate via a master lease or some sort of partnership or a buy-the-bed rental You know, there’s different ways you can negotiate and structure those things you run the program will run the real estate
and now we’re all winning. So that’s kind of the first layer. The second layer, is where we’d like to go next, is that we actually become a licensed provider of service. ⁓ And within that licensure, there are different levels of care that are provided. There’s transitional housing for people that have already come through, like say, a rehab program, but they go into like a halfway house, right? They’re not ready to live on their own. They still need to develop life skills. They still need to develop job placement and all these different
different
things. ⁓ You that’s one level of care. Then you can ratchet up to the next level of care, which is ⁓ actually providing ⁓ rehabilitation services like methadone treatment and other forms of medical care that ⁓ these men and women need as a part of their recovery journey. And then there’s the highest levels of care, which are like actual 30, 60, 90 day inpatient rehab, detox, you know, care facilities. And so
So we’re just in the early stages of like going through the process and we want to be very careful to not make our ⁓ excitement and our passion and our business get in the way of the fact that these are human beings that need real care and real help. ⁓ And so we’re walking in very eyes wide open, very treading very slowly to make sure that we’re not going to get in over our heads because there’s lives at stake. ⁓ But if you’re asking about the mathematics of it, ⁓ you know,
on a net basis, house on that lowest level, a house that we rent for say $3,000 a month could be rented to one of these facilities for say $9,000 a month. So from a cashflow perspective, there’s a huge opportunity there. And then when you’re talking about providing the actual services and care, depending upon the level of service, the level of care in the state that you’re operating in, the economics of this could be anywhere from a hundred to in some cases, a thousand dollars
Person per day that they’re inside of your care in your facility. Obviously, there’s a whole business that has to be built around this So it’s not just a rental play But but there’s lots of different ways lots of different levers that you can pull to partner with these types of organizations Make it a win for the business and a great service to people that need it
Michelle Kesil (16:31)
Yeah, that’s amazing. Sounds like a win-win on both sides. Yeah.Micheal Miller (16:35)
I hope so.Michelle Kesil (17:19)
Yeah, you can help and you can take action and yeah, trust will unfold.Micheal Miller (17:24)
I love it. That’s right. We’re going to take some action and see where it goes.Michelle Kesil (17:28)
Yeah,absolutely. So what advice would you give to an investor that’s earlier on in their journey or just looking to get started?
Micheal Miller (17:37)
⁓ man, I would say…Deep is better than fast when it comes to growth. What I mean by that is that if I were to do it all over again, I think we bought about 100 properties our first year. I probably could have bought half as many of those and been twice as happy. ⁓ And the reason for that is because sometimes it’s exciting for rapid growth, but we forget that if there’s not a good foundation of systems and people and operations and capital and all of the things that are required
to really get these things to stability, ⁓ you can turn your dream into a nightmare very quickly. ⁓ And so I would say to a new investor, slow is the new fast, ⁓ and build deep before you build high and wide. I’m not anti-rapid growth, I’m just anti-responsible rapid growth. Or I’m pro-responsible rapid growth, not anti-responsible growth, of course. ⁓ So that’s one piece of advice I would give. The second piece of advice I would give is get in the room. ⁓
with folks like yourself, get with folks like me, go find a conference, go find a mastermind. It is wild how much we underestimate the power of collaboration, connection, and relationships. You never know where your next deal, your next idea, your next funding source ⁓ is going to come from. And I will continue, I mean we’ve done very well for ourselves, I think, and I will continue to pay tens of thousands of dollars every single
year as a line item on my PNL specifically to get me in more rooms with more people that I haven’t met yet that are doing things that I want to do ⁓ because I don’t want to be I don’t need advice from people who haven’t been places that they that I want to go right I want to get advice from people who have been to the places that I want to go and can tell me how to get there too so I would make an early and aggressive investment first in my knowledge and network and build from there.
you
Michelle Kesil (19:42)
Yeah, absolutely. The network is key.Micheal Miller (19:46)
That’s right.Michelle Kesil (19:46)
And so you also are working on a real estate fund. Can you explain what that looks like?Micheal Miller (19:54)
Yeah, ⁓So we can’t market it because of the structure of the fund, but we have raised capital through private money placement, through deeds of trust, through private money notes, like more traditional ways. And in recent ⁓ months, we have ⁓ launched our first ⁓ 506B placement. So the difference between a 506C and a 506B is that ⁓ you can’t publicly market, right? So I can’t get on and attract investors to my fund.
and market publicly. But what I get in exchange for that is the ability to take in up to 35 non-accredited investors from my personal network. And I, much like most new investors, have raised the majority of my early capital not from high net worth accredited investors, but from Joe the plumber ⁓ and really building that way. And so that’s our first run. We will likely convert or ⁓ launch a more traditional 506C offering where we can market.
promote and take in capital ⁓ in those ways. But that’s our first official real estate fund and we’re really proud and excited about making that step. was a big step for us and so it feels like we’re like, ⁓ you know, we’re like big boys. When it comes to real estate now, everything’s very legitimate and very, you know, you got the SEC involved and attorneys and all the paperwork and it was overwhelming but it also has really, I think, helped legitimize us.
as we’ve continued to grow.
Michelle Kesil (21:28)
Yeah, amazing. That’s an exciting new project to have.Micheal Miller (21:32)
Yeah.Now, one thing I would ⁓ offer people that ⁓ are looking to raise capital, which I imagine would be a large portion of your audience, ⁓ is to learn a lot about ⁓ self-directed IRAs. I don’t know if you’ve had ⁓ many or anybody come on and talk about self-directed IRAs, but that’s where the lion’s share of our capital, we’ve raised a little over five million in the last couple of years just from private individuals.
And a large portion of that has come through what’s called self-directed IRAs. And the short version of a long topic is that people do not understand that Joe the plumber who’s been working in the same job for 20 or 25 years, kicking a couple thousand dollars a year into his IRA can actually utilize that retirement money to invest in his own deals or into your deals as a private money partner, lender, investor, and get all of
the same tax advantages that he receives from a traditional retirement account.
And so a lot of times people go, well, when I start talking about raising capital, they say, well, I don’t have any rich friends and family. And I go, I bet if you scroll through the Rolodex of your iPhone and just ask yourself who’s been working in the same type of job or the same career for the next, for the last 20 years, you’d be amazed at how many of those people have a hundred, 200, $300,000 that they don’t even think of as their own money.
because it’s just sitting in some account. I can’t tell you how many people I’ve said this to that go, yeah, I think I had an old 401k from like one of my old jobs. I don’t know what’s in there. And then they go look at it they call me they’re like, I have a hundred grand in that account. didn’t even know, like I didn’t even realize.
Because people just tend to not think about retirement money as their money. It’s like future money for some day. And what’s really cool is you can typically get better than market returns for these folks back by a physical asset.
in real estate and they’re happy to do it because they’re already seeing this as tomorrow money, right? It’s not like trying to get somebody to write a check out of their bank account. And so I know that’s not what you were asking, but it’s a thought that came to my mind is when you’re thinking about your audience and raising capital, I’d really encourage people to learn about self-directed IRA. Cause I think it’s one of the most underutilized tools for new real estate investors in particular to get access to capital in a way that doesn’t feel ⁓ like
the battle or the hill is too high to climb in terms of getting people to give them money.
Michelle Kesil (24:07)
Yeah, amazing. Thank you for sharing that insight. I’m sure that’s going to help so many. Awesome. Well, before we wrap up here, if someone wants to reach out, connect, learn more, where can people find you and connect with you?Micheal Miller (24:13)
I hope so.you
All the normal places, YouTube, Instagram, ⁓ Main Street Miller is my Instagram moniker, if you will. Reach out, DM me. You can also get on my calendar. I love to meet people. We do all sorts of different types of support. And even if you don’t hire me as a coach or invest with us, like I still love connecting with people. There’s an old Zig Ziglar quote. It says, can have anything you want in life if you help enough people get what they want first.
We say we say it this way we say a culture of generosity always pays for itself So I mean it when I say if anybody’s listening they just want to connect and they think I can help them You don’t got to buy anything from me or invest with me or do any of those things I’m I really just love helping because it’s hard for me to believe that if I don’t help a lot of people win that I’m not going to be winning too And so Main Street Miller on Instagram shoot us a DM send me an email find me on YouTube whatever ⁓ I am happy to connect happy
to help and happy to support.
Michelle Kesil (25:25)
Awesome. Thank you so much for your time and your story. Appreciate you coming on here.Micheal Miller (25:29)
Michelle, thank you so much for having me and I appreciate you as well.Michelle Kesil (25:33)
And for the listeners tuning in, if you got value, make sure you have subscribed. We’ve got more conversations with operators like Micheal who are building real businesses. We’ll see you on our next episode. -
