Subscribe via:
Show Summary
In this episode of the Real Estate Pros podcast, host Erika speaks with Gary Shelton, a seasoned real estate investor. Gary shares his inspiring journey into real estate, influenced by his grandfather’s teachings on saving and earning. He discusses his strategies for scaling his investments, the importance of learning from mistakes, and the value of networking and mentorship. Gary emphasizes the significance of a winning mindset and continuous improvement in business. He also highlights how he leverages AI to enhance his real estate operations, making it a powerful tool for success.
Resources and Links from this show:
-
Listen to the Audio Version of this Episode
Investor Fuel Show Transcript:
Gary O Shelton (00:00)
I would say this today, there are so many real estate gurus out here that often someone has paid someone a lot of money, 20,000, 30,000 to teach them how to get started as a real estate investor. And I would say this, I don’t care who teaches you, I don’t care what you learn from them.until you actually take action. You’re not going to benefit from anything they taught you. The way you’re going to learn what you need to know is from the mistake you make when you take action. No one succeeds according to plan. Absolutely no one. You should plan. I do. You plan, definitely. But…
like Mike Tyson says.
I can’t quote him exactly, but it’s something like Well until you get that first hit to that you get hit in the rain Whatever you were planning before then went out the window
Erika (02:32)
Hey everyone, welcome to the Real Estate Pros podcast. I’m your host Erika and today I’m excited to be chatting with Gary Shelton. He’s been making serious moves in the real estate investing space and man man, I think we’re gonna have a lot to learn from Gary today. Gary, I’m glad to have you on the show today.Gary O Shelton (02:53)
Well, thank you. I’m so happy to be here. My oldest daughter’s name is Erika, so I know I’m in good company.Erika (02:59)
I love that how how awesome. Well, Gary, I want to dive in today first with your story. Can you share with our listeners who are familiar with your world? What inspired you to get into real estate?Gary O Shelton (03:15)
My grandfather, my mother’s father, was a landowner in the South. He built and owned about 85 % of the homes from his funeral home, which he built, to the railroad tracks. And he was a living legend in my family, and I wanted to be like him.That was my inspiration. taught me to save money when I was four years old. When I was four years old, I asked him for a dollar and he asked me, how could I earn it? I said, well, Papa, I’m just asking for a dollar. You’re rich and I’m just asking for a dollar. And he said, well.
If I’m rich, I didn’t get rich giving away dollars, how can you earn it? And he made me earn the dollar. So I did earn it. And I came to him. I’m just four years old and he’s the living legend of my family. He’s my grandfather, Papa. I got the dollar. I’m proud. I’m happy. He said, okay, what do you want to do with that dollar? I said, I want to buy Ruth some Easter candy. That’s the little girl that lived down on the corner.
And he says, okay, how much the candy costs? I didn’t know this was a loaded question, so I had a dollar. So I said, it costs a dollar. So he’s told me, well, you’re going to have to get some more money. well, Papa, why do I have to get some more money? I have a dollar and the candy costs a dollar because I’m not going to let you spend all of your money on that girl. He took me in the kitchen, got an apple, cut it in half, cut that in half, cut that. And so he said, look, from this day forward, I’ll let you pick the poor
But I want you to save a portion of every dollar that you get. Well, that’s what I did. I cut grass, I raked leaves, I threw newspapers. I graduated from high school with $25,000 as a result of him forcing me and teaching me, forcing me to get the dollar in the first place and teaching me to save with that experience. So that’s what launched me.
that relationship with my grandfather. And guess what? He died when I was only four. So I just had him for a short period of time, but it was long enough for me to be motivated and inspired by his life.
Erika (05:22)
That is even more amazing of a story knowing that that advice from him stuck with you all those years, Gary.Gary O Shelton (05:31)
or you just don’t know. I began, I asked my grandmother, I told her what I was doing, I said, mom, please open me a bank account. So I got addicted to seeing my money grow. And so I didn’t like buying a hamburger.because I could see that my account would shrink. So it was a very powerful, addicting experience for me. I just wanted to see my money grow. I didn’t like spending it. Now…
Erika (06:05)
Yeah, you got that, you bought your first house graduating high school, right? Your first property investment. Can you?Gary O Shelton (06:14)
I actually bought my first businessgraduating college, but I didn’t graduate when I was a senior in college. I bought my first business, but I bought my first house right after graduating high school.
Erika (06:25)
So from there, how did you grow and scale? What was the strategy there?Gary O Shelton (06:32)
Well, the first thing was I bought a two-family flat instead of a single. That enabled me to rent out one unit, live in the other unit free. I liked that so much that I decided I’m going buy another two-family flat and I’m going to collect rent on those so now I’m going to be living at a profit. Remember now I had this habit. I don’t want to see my money grow from age four. Well,I bought a two-flat every month for 12 months from HUD. So once I started, I just didn’t stop. I just kept doing it, and it piled up.
Erika (07:10)
Yeah, wow. And then at what point for you did you realize that you needed a team, that you had grown so much that you couldn’t do this on your own?Gary O Shelton (07:20)
wow. I rented a, I rented a, I bought a small apartment building and I rented a unit to a girl that I had met when I was like 17 years old. And because I knew her personally,she thought she didn’t have to pay rent. She would be laid and she thought I was rich and she thought she didn’t have to pay. So I learned, I better stop letting people know that I own the building because I’m too young. They think I don’t need the money. And so that’s when, that was the first teammate I got. Someone to manage the building.
So that I could say he owns it, not me. It’s his building.
That was the beginning of my team.
And then I learned the hard way about contractors. I call contractors the Achilles heel in any kind of acquisition renovation situation. You better watch those contractors. They will give you a nightmare if you don’t.
Erika (08:25)
Yeah, I’ve heard a story or two like that on the podcast here. actually, we do like sharing some of those stories because usually there’s something that we can learn.Maybe you have.
Gary, what would you say was one of the more difficult moments on your journey with the deal? How did you pivot? How did you deal with it? And what did you learn from it?
Gary O Shelton (08:53)
The first time I gave a contractor half the money that he asked for to start a job, that was a big mistake. I do not do that anymore. ⁓ I pay for work done. If I can’t find a contractor that’s willing to work with me like that, then.I’m not going to give anyone half the money up front. There’s just too much risk to doing that. And also, amount of money is so small that you can’t win suing. You hire a lawyer, it’s going to cost you too much money. You can’t win to sue. I learned that. I actually learned that doing a large deal. Someone owed me $100,000.
And the lawyer wanted 10,000 retainer. If they were to owe me less, I definitely would have said, no, this wouldn’t be worth it. There’s too much risk.
So I learned that in business, you better be making moves where you can protect yourself. Because if you have to sue, you better be large enough to justify hiring a lawyer. Otherwise, you shouldn’t be doing that.
You should just say, nope, I can’t do it. So I’m not giving you half the money up front. Let’s say, for example, we’re talking about a $20,000 renovation. I’m not going to give you $10,000 because what am I going to do if you don’t do what you’re supposed to do? I’m going to sue you. Lawyer’s going to want at least five grand retainer. No, too much risk. No, can’t do it.
Erika (11:09)
that makes ⁓ a lot of sense. Well, I know that you’ve been doing this for a long time. Gary, could you share for our listeners what you have going on today? What kind of opportunities you see in the market? What excites you?Gary O Shelton (11:27)
Well, my situation is probably going to be a little different than most people when it comes to what I have going on because for example in my city, the…The premier piece of real estate in my city is the General Motors headquarters, which is the Renaissance Center, which is right on the river of Detroit. Well, I have an offer to purchase the Renaissance Center. I’m right in the middle of negotiations right now to purchase the Renaissance Center.
In I have a meeting this coming Thursday, which will be the third meeting that I’ve had with General Motors. So most people wouldn’t be looking at deals like that. I have a business partner. are three ⁓ casino hotels in downtown Detroit. The Motor City Casino, my partner Herb Strather was chairman of the Motor City Casino. We’ve done a Home Depot. ⁓
national award-winning Woodbridge Estates, which was public housing, the Jeffries Projects. By the way, when I was in the second grade, I had the experience of actually living in the Jeffries Projects. Well, not projects now. All the streets are named for Motown Acts. I still do houses. I just finished doing a two-family flat. I have a two-family flat under contract right now. I’m looking at some auto units right now in Chicago.
I’m always looking at opportunities to help someone solve a problem and at the same time I accomplish my goal of.
more wealth for myself.
Erika (13:04)
Yeah, Gary, when it comes to how you’ve grown in scale, have there been any networking groups or just any relationships that you’ve built in real estate that’s been a game changer for you?Gary O Shelton (13:17)
Well, yes, I was mentored. I was mentored by Reginald Lewis. Reginald Lewis was a Harvard-educated lawyer. He was the first black man to own a billion-dollar business when he bought Beatrice in a leveraged biotransaction. He mentored me, and I began to acquire businesses that were available.Which right now there are just millions of men with successful businesses. They are baby boomers. They’re ready to retire and they don’t have a succession plan. So it’s a very, very unique opportunity right now. When it comes to real estate, Don Barden who wired Detroit for cable TV, he was my client. So I had these unique personal relationships.
that were very meaningful for me. And when I was younger, I was a ball player. I played baseball and basketball, and my coaches taught me how to live. They taught me how to be a man. They taught me how to have a winner’s mindset, how to play to win and not play to avoid losing. And I carry that with me to this day, playing to win.
No matter what the score is, as long as there’s time left on the clock. And I’m 74 years old, but there’s still some time left on my clock. So I’m playing to win. That’s for sure.
Erika (14:44)
love it. ⁓ Mindset is so important for you. How do you, you know, is there a part of your routine that helps you with your mindset or what do you do to, you know, keep realigning yourself with your goals and keep growing?Gary O Shelton (15:42)
Well one thing I do when I acquired E3 Engineering was when, by the way E3 Engineering was doing 8 million a year in contracts with General Motors, Ford and Chrysler and it was when Toyota finally surpassed.the big three to become number one. And of course the big three wanted to know, how? Why? And it was the Toyota production system. And one of the pillars of the Toyota production system is a continuous improvement process. I carry that with me to this day. I live my life in that way. Often as humans we kind of resist change, not me.
I gravitate towards change, continuous change, continuous improvement process. I never get full of myself. I don’t care what I achieve. I don’t care how impressive it may seem to someone else. Continuous improvement process is how I live my life.
Erika (16:36)
That’s a really wise way to look at things. Gary, well, when it comes to our listeners who are new to real estate, new to investing, ⁓ if you were in their shoes and you were just getting started today, what would you be doing? What advice would you give them?Gary O Shelton (16:59)
I would say this today, there are so many real estate gurus out here that often someone has paid someone a lot of money, 20,000, 30,000 to teach them how to get started as a real estate investor. And I would say this, I don’t care who teaches you, I don’t care what you learn from them.until you actually take action. You’re not going to benefit from anything they taught you. The way you’re going to learn what you need to know is from the mistake you make when you take action. No one succeeds according to plan. Absolutely no one. You should plan. I do. You plan, definitely. But…
like Mike Tyson says.
I can’t quote him exactly, but it’s something like Well until you get that first hit to that you get hit in the rain Whatever you were planning before then went out the window
and so Here’s what happens You you have a plan you move forward You make a mistake I? Say make sure that you know
bet the farm unless the crops are on fire, meaning I’m not trying to hit a home run. I just want to get on base. I get on base, I work my way around. I don’t want to make the kind of mistake that puts me out of the game. I’m not going to be that aggressive. I just want to win. I want to proceed with caution. I know I’m going to make a mistake. I want to learn from that mistake.
I don’t want to make the same mistake twice. I’m going to make my adjustment and then I’m going to move again. When I move forward again, I’m not going to be greedy. Haste makes waste. I’m not going to be trying to a home run. I just want to have success one step at a time. And like I said before, as long as there’s time on the clock, I’m playing to win.
And if you’re still alive, there’s time on your clock. So play it that way. Play to win. Play to win. But don’t be greedy. Pigs get fed, hogs get slaughtered. Don’t take horses and just take notes and don’t move forward. Don’t do that. Move. Move. Do something.
Erika (18:58)
Yes.Mm-hmm.
Yes, and you have really shown that with what you do that you’re always moving, always changing. before we were recording earlier, you were talking about AI a little bit. And as you know, that is something that is really changing the industry. Can you share more about that and how you’re leveraging AI?
Gary O Shelton (19:40)
I use AI to find deals, to analyze deals, to manage deals. I use AI to market, ⁓ to follow up. It’s a tool, and it’s one heck of a tool. It makes you more powerful. Whomever’s helping you, it makes them more powerful.It’s here to stay. It’s not going anywhere. I understand it’s going to take some people’s jobs, but it’s going to make some people that have jobs more powerful in their job too. So I’m not afraid of it. I’m using it all day, every day. I’m using digital tools, use a CRM ⁓ to be able to, for example, talk to an apartment building owner.
in a very friendly, healthy way. If they have a problem I can help them solve, If they don’t, we can just be friends. But I’m going to communicate with them and never stop communicating with them unless they ask me to. But I’m going to use automation to do it. It’s not going to take a lot of time for me to do it.
I’m going to be able to use AI to communicate with them on their birthday, on their anniversary, and never miss doing it. They’re not going to forget me. So if they’re not having a problem that I can help them solve today, they’re going to know me well enough that five years from now, if they have a problem that I can help them solve, they’re going to call me.
I like win-win long-term relationships. That’s what I want. Win-win long-term, never-ending relationships.
Erika (21:10)
Yes, yes. And I’m impressed with all the different ways that you’re using AI, even remembering those birthdays and anniversaries. That is really smart.Gary O Shelton (21:24)
yeah, let’s say you’re a real estate agent, for example. What do you think would happen if for 10 years, you sold someone a house, and for 10 years, every year on their house anniversary, every Christmas, every birthday, you had AI call them and say, happy birthday, and engage them in a conversation if they wanted to talk. But it wasn’t you, it was just, it was like it was you. It was your voice.But it wasn’t you. And you never miss. For 10 years. You never, ever miss. And how much of your time did it take? Five minutes to set it up. How valuable is that gonna be for your relationship? You can’t measure it. It’ll be so valuable.
Erika (22:05)
Gary, this has been such an insightful conversation. hope our listeners today were taking notes. If someone today listening wants to reach out, connect, maybe collaborate.Gary O Shelton (22:20)
All they have to do isgo to GOSHELTON.COM. G-O- my name is Gary Oliver Shelton. G-O-S-H-E-L-T-O-N.COM. ⁓
And they got me every way they want me. Okay.
Erika (22:41)
That’s great. Gary, thanks for being on the show. again, this was a man, this was a wealth of knowledge today.Gary O Shelton (22:49)
Well, thank you very much. It’s my pleasure. I love helping people. And because when I help them, I help me. We win together. All right.Erika (22:57)
Yep. Yep,that’s, that’s the beauty of what’s possible in real estate. For our listeners today, if you enjoyed this episode, make sure that you’re subscribed to the Real Estate Pros podcast. We’ve got more conversations lined up with pros like Gary, who are out there building amazing real estate empires. We’ll see you on the next episode.
