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Show Summary
In this episode of the Investor Fuel podcast, host Michelle Kesil interviews Joe Livesay, a seasoned investor with a diverse portfolio including self-storage and industrial properties. Joe shares insights on his journey in real estate, emphasizing the importance of education, mentorship, and making informed investment decisions. He discusses his current focus on self-storage investments, the significance of long-term financing, and the value of building a strong network. Joe also offers practical advice for new investors, highlighting the need for strategic planning and understanding market dynamics.
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Investor Fuel Show Transcript:
Joe Livesay (00:00)
I would say another reason we invest is we want to find freedom to do more of the things that we like to do. And one other reason we invest is so that we can give money away and help other people.And we, since I’ve been, some people ask me sometimes, hey Joe, tell me about your best investment ever. And I’m like, well, I’m glad you asked. I would say the best investment I’ve ever made in my life is one I do every Sunday when I, I commit to give the first 10 % of everything I make to the Lord. So I feel like I’ve been wildly blessed so that I can give more and help more people.
Michelle Kesil (02:09)
Everyone, welcome to the Investor Fuel podcast. I’m your host, Michelle Kesil Today I’m joined by someone I’m looking forward to chatting with, Joe Livesay, who’s been making serious moves in the investing space. So I’m really excited to have you here on the show today, Joe.Joe Livesay (02:27)
Well, thank you. I’m honored to be here. I hope maybe something I, that I have learned in my life could help others.Michelle Kesil (02:35)
Yeah, I think our listeners are really going to take something away from how you’re approaching your growing real estate business. I know you’ve been doing this for almost your whole life. So excited to dive into the wisdom with you.Joe Livesay (02:49)
Okay, let’s roll.Michelle Kesil (02:51)
Let’s roll. So yeah, first off, for those who are not familiar with you and your world, can you give a short version of what your main focus is?Joe Livesay (02:59)
Yeah, we’ve been involved in, my wife and I have been involved in everything from building 150 homes in Florida to self storage, which is our main focus right now and industrial buildings. We’ve owned triple net lease gas stations. We’ve owned over a thousand lots in Florida that we bought and sold.So I’ve done almost everything. other with the exception of the lots, I haven’t done any flipping.
Michelle Kesil (03:27)
Amazing. How did you get started in this industry?Joe Livesay (03:30)
Well, I, when I got out of college, I, got my commercial real estate, I got my real estate license and decided I was going to work in commercial. And I, I did that for about six years and I seemed to have a knack to put together deals for everyone else. And I, I saw earning a commission just didn’t appeal to me. I saw the big picture.I put a deal together with FedEx and they signed a 20 year lease at $4 a square foot on 10,000 square feet. So they signed a lease for $800,000 and I sold the land to the investor and I made a little money on the lease and then he got FedEx as a tenant for 20 years. I was like, I’m on the wrong end of this deal.
So I, that’s kind of how I got started. I, thing I believe in is education, but I think you’ve got to get an education from the smartest people on the planet, which are CCI. If anyone doesn’t understand what that is, that’s stands for certified commercial investment member. You there’s about six classes that you have to take and you have to have a certain amount of experience.
but it’s all about commercial. What I’d like to say is that CCIMs, see more than everybody else sees, and they see before everyone else sees. So they’re the ones that can identify the opportunities before they are made available.
So that’s kind of how I got my start. I actually bought an eight unit apartment building. I didn’t have any money. I needed $2,000 at closing, which I borrowed from an Indian friend of mine who was an engineer with Ford. That was in 1987. And I talked to him Sunday for about a half hour, just about life.
No one makes it on their own. There’s no such thing as self-made.
Michelle Kesil (06:13)
Yeah, can you expand on that? Like, what does that mean for you?Joe Livesay (06:14)
So.Well, what that means is, that when you look back over your life, there’s people that have been there that have encouraged you, that have shared wisdom with you, that have helped you, that have loaned you money, that, you know, mean, any, they have talents that maybe you don’t have and they have, ⁓ they have shared with you.
Michelle Kesil (06:37)
Yeah, totally. So what has been like your key to keeping your business running smoothly?Joe Livesay (06:43)
Well, I would say that would be a better question for my wife. one of the things too is we, I always get long-term financing. When I say long-term, I get 10 year. Right now I’m sitting on a loan that’s, uh, was around $5 million and I got it for 4 % for 10 years. So that provides steadiness and stability no matter what happens with the market.Michelle Kesil (06:48)
Okay.Joe Livesay (07:09)
or what happens with the investment.I told you, I’ll just throw this stuff in here, but there’s maybe six reasons why we invest. One is we want to earn a rate of return on our capital. If we put a hundred thousand down or a million dollars down, I want to see my way to earning 8 % cash on cash return. I don’t look at IRR. I can barely spell it, but
It’s not important to me. I’ll look at cash on cash. So that’s one reason we invest is to earn a rate of return on the money that we invest. The second reason is we believe we can increase the income over time. So that’s, that’s another key to investing in real estate, increasing the income over time. Ultimately, we believe we can reduce the expenses. Sometimes we can, sometimes we can’t, but
At we think we can. And another reason we invest is that most of our income is sheltered from taxes because of interest expense and depreciation. Does that make sense?
Michelle Kesil (08:10)
It does.Joe Livesay (08:10)
I would say another reason we invest is we want to find freedom to do more of the things that we like to do. And one other reason we invest is so that we can give money away and help other people.And we, since I’ve been, some people ask me sometimes, hey Joe, tell me about your best investment ever. And I’m like, well, I’m glad you asked. I would say the best investment I’ve ever made in my life is one I do every Sunday when I, I commit to give the first 10 % of everything I make to the Lord. So I feel like I’ve been wildly blessed so that I can give more and help more people.
Michelle Kesil (09:23)
Yeah, that’s beautiful.Joe Livesay (09:24)
So it’s not, Imean, it’s not about, you know, I don’t own an airplane and, you know, I mean, I have a nice Ford truck, you know, I’m not living a pauper’s life, but I’m, I’ve never missed any of the money I’ve given away. I think it’s multiplied.
Michelle Kesil (09:38)
Yeah, I love that perspective. That’s amazing. What do you feel has been like the key to your success in all of the investments that you’ve made and like understanding what are the good opportunities to invest in?Joe Livesay (09:55)
Well, I think it’s important to understand what to say no to and what to say yes to. And based on, based on your individual capabilities and the team that you have and the resources that you have, I always say if you’re going to, you know, if you, if you make it up to the seventh rung on a 10 rung ladder and eighth rung on a 10 rung ladder.You don’t want to go to the bottom again. So just be wise and make good decisions. And a lot of times, a really, a book that I really love was written in the 1930s called Think and Grow Rich. And it’s really not about thinking and growing rich, but it is about, um, you know, creating a network of people that could like say, Hey,
look at this deal for me. Is there anything I don’t see that maybe you see? And most people are too prideful and egotistical to ask for help. I would say that’s been one of the keys to my success is to reach out to other people and get their perspective on decisions before I make them.
Michelle Kesil (10:59)
Absolutely. Yeah, that is so important because we can only know so much and everyone has different layers of experience.Joe Livesay (11:10)
Right. Itell people someday when I croak, there’s a hundred thousand, they could sell my phone for a hundred thousand dollars because of all the people in there that I know that I could call on at any time for wisdom and help.
Michelle Kesil (11:25)
That’s the real value. Awesome. So what are you most focused on solving or scaling next in your business?Joe Livesay (11:34)
⁓ I would say, right now I’m in the middle of a 1031 exchange. and I’m just looking for income property because we sold an apartment, two apartment complexes and we’re looking for income property thatIsn’t as taxing as owning multifamily with 400 toilets and 500 appliances. And you know, that’s a lot of management headache right there. So honestly, we’re, we’re not, you know, we’re, really, feel like at some level we’re investing for the next generation. So, I mean, we’re 64. We’re trying to set up things that are.
Less active that need less active management. I’ll give you an example. I don’t care. You know, use self storage. You could own a self storage facility of let’s say worth $5 million and you could run it with one person and one part-time one day a week employee. So you got one full time and one, one day a week employee for a $5 million investment. Try, try turning that.
doing that with multifamily or with other types. mean, it’s going to, it’ll be very taxing.
Michelle Kesil (13:23)
Yeah, absolutely. So how does it work investing in the storage spaces? That seems like a unique niche.Joe Livesay (13:31)
Well, it’s really, it’s been really good. we, we haven’t been in it. We’ve been in it about four years and you know, it’s, have to know about the population and there has to be a gap in the market. Cause if you, if you buy in an area where there’s an oversupply, then prices go down and vacancies go up and you know, you gotta, you gotta actively market it. You know, it’s not just.Hey, we’re just going to have to put a sign out here and hope people rent from us.
There every, every specific investment has a, know, has parameters like in, in self storage, you know, you’re looking for the, the amount of population between one mile, three mile, five mile of your facility. You better know how many people are there. You better know your competition. You better know how everybody else is pricing their products. You know, it’s very competitive.
When you consider every year half of your tenants move out, you’ve got to be replacing those tenants all the time, every month.
Michelle Kesil (14:30)
Yeah, what kind of systems do you have in place for that?Joe Livesay (14:31)
People.Well, we, you know, we, we obviously we do marketing and, but, know, we, have, you know, software industry specific software and, know, um, I don’t want to tell you all my trade secrets. Yeah.
Michelle Kesil (14:47)
That’s fine.Okay, amazing. Yeah, a lot of the people listening to this are maybe earlier on in their investing journey. What kind of advice or tips do you have for people that are starting out earlier in that leg of their career?
Joe Livesay (15:06)
Well, one thing I would say is the easiest thing to get involved in a single family. And that’s a good place to start, you know, buy, you know, buy a house, rent it out. Um, and after you scale that, you know, make a goal, Hey, every, every other year we’re going to buy a house. And then over time, your equity grows and you know, you.You could maybe get to the point where you have 20 houses in 20 different locations with 20 different roofs, 20 water heaters, you know, in 20 different locations. And you’re probably going to want to consolidate that. But I think just be, you know, you’re going to have to put some sweat equity in and. You know, you got to buy right. You.
You have to know how you’re getting out of something before you get into it. That would be another key to success. So you have to imagine, hey, here’s how I’m getting out of this. Everybody wants to rush in, but not everybody has a plan on getting out. Does that make sense?
Michelle Kesil (16:05)
How does,yeah, of course, how can someone know what like the best strategy is to get out? there like certain criterias or how can someone understand that scenario?
Joe Livesay (16:16)
Well, I think you have to know the market. You have to, you know, there’s so much data available now, even with AI, you know, with, with average rents and, and, know, we’re, coming into a time period as an example, when interest rates, I believe are coming down. So, you know, that’s going to cause property values to go up. You know, I think now’s a, I think somebody said, well, is there some special time to buy? And I’m like,The day you have the money is the day to buy, but you have to find the right property with the right criteria that meet some of those things that I told you before. want to find a something that has an 8 % cash on cash returns, something that something I could see an 8%. It doesn’t have to have an 8 % the day I buy it, but something I believe it’s in a good area. I can increase the income and it can reduce expenses. And you know, I think that.
One of the things I would tell your listeners is stop listening to all these people that are all hat, no cattle. A long time ago, there was a guy named Carlton Sheets. And there’s another guy that wrote a book called no money down. Well, these guys, ultimately they knew nothing about real estate. Carlton Sheets did own the home that he lived in, but that’s all.
But he was a really good guy at writing books. So stop listening to all these people that are all hat and no cattle. They just know how to write books and so forth. Talk to people that have real money in the deal. That’s another thing. I’m going to partner up with somebody. I want to be able to see, hey, how much money do you have in this deal? And can I see it?
There is no, you know, if you’re trying to hide, then we probably can’t do business together.
Does that make sense?
Michelle Kesil (18:00)
Yeah, that’s important criteria for sure.Joe Livesay (18:02)
Yeah, that’s you know, I would that’s Anyway, what other questions do you have?Michelle Kesil (18:07)
What do you feel has made the biggest difference for you when it comes to like growing your network?Joe Livesay (18:13)
All you have to do is ask. When I bought Self Storage, I found a guy that I saw on podcast. I literally did this. I called him up and I said, I got him on his cell phone and he’s like, his name’s Gary. was like, well, he goes, what can I help you with? I said, well, Gary, I need 20 minutes of your time. And when we’re done, I got a checkbook here and I’ll just write you a check for whatever you tell me.this 20 minutes was worth. And this is a guy that has 7,000 units of self storage.
That would equate to about $70 million. My ego, my ego is such that I don’t have a problem calling somebody that has 7,000 units. So just called him up and said, Hey, help me out here. What software should I use? You know, what locks should I use? What gate entry should I use? And what tenant insurance company should I use? And he just says, okay, all the.
Michelle Kesil (18:45)
Well.Joe Livesay (19:05)
He told me all those and since then I’ve met him in person three times and you know, I drove three hours one way just to buy him dinner one night. You know, like, I don’t care. Whatever. mean, a lot of people have helped me, but you got to be willing to ask for help. And a lot of people, their ego is too fragile or, know, I could do that because I’ve, I’ve achieved a level of success.You know, I’m not, I’m not all hat, no cattle. Okay. I had, I had a $5 million investment in self storage at the time I called him. So I wasn’t, I wasn’t playing with him. Does that make sense?
Michelle Kesil (19:39)
right?Yeah, absolutely. Thank you for sharing that. That’s so valuable, think, that bad advice is irreplaceable to just ask people and to not be afraid.
Joe Livesay (19:52)
Yeah.⁓ I don’t know. I just see so many people getting led astray by people that really don’t know what they’re doing and people are giving money to people. They’re joining some mastermind group. Just find people in your local industry. If you said, Hey, you could find people that are buying property, ⁓ pick Detroit, Michigan. Well, you don’t need to join some mastermind group and give some guy 10 grand, 20 grand and go to some cruise with this guy.
Just ask the people there in your local area that are buying real estate. Most real estate records are open to the public. So I could go to the property appraiser in whatever town you live in and I could tell who’s buying apartments, who’s buying self storage, who’s buying industrial buildings. I mean, it’s, it’s, it’s, it’s an open book right now.
We know what they paid, how much they paid, when they bought it. You know, all that kind of stuff.
Michelle Kesil (20:49)
Yeah, totally. Thank you for sharing that.Joe Livesay (20:50)
So.Michelle Kesil (20:52)
Yeah, so before we wrap up here, someone wants to connect with you, learn more from you, where is the best place they can find you?Joe Livesay (20:59)
Well,That’s a good question. I’m, fairly busy. I don’t mind helping people. I really don’t mind helping people, but I’m, ⁓ I’m fairly, you know, I’m fairly busy. would say if, if someone has a real need, I’ll hop on a call with people and encourage them or share ideas with them. But I would say over Facebook, if they send me a friend request, if I feel like.
They’re genuine and legitimate. don’t want people calling me with no money. And that’s what everybody’s promoting. Hey, here’s how I can help. Here’s how you can. It’s like, no, there’s money’s everywhere. You know, I don’t mind. I don’t mind helping people. would say through Facebook would be the easiest thing.
Michelle Kesil (21:25)
Yeah.Perfect.
Joe Livesay (21:38)
Yeah, I’m actually going to dinner with a friend in a little while. So I would, gotta go pretty quick, but.Michelle Kesil (21:45)
Yeah, we’re all done here. Thank you so much. I really appreciate your time, your story and your perspective. So yeah, thank you for being here. And for the listeners, if you got value from this, make sure you’ve subscribed. We have more conversations coming soon with operators just like Joe who have real businesses and we’ll see you all on our next episode.
