Unlocking Real Estate: My 7-Step Journey to Investment Success

Michael Stansbury (00:00.925)
Hello everybody and welcome to the Real Estate Pros podcast. How are you folks? I got a special guest from Indianapolis, Indiana, John Merrill. John, how are you sir?

John Merrill (00:05.537)
Hahaha.

John Merrill (00:19.16)
Doing great. We’ve had wonderful weather and it’s race week here in Indianapolis so it’s always an exciting time.

Michael Stansbury (00:24.895)
That is, it’s at the ND 500, right? I got that slow hanging fruit, right? Well, that is awesome. I’m a big F1 guy, but that’s really cool stuff. Well, folks, at Investor Fuel, who sponsors this podcast, we help real estate investors, service providers, and real estate entrepreneurs 2 to 5X their businesses to allow them to build the businesses they’ve always wanted and live the lives they’ve always dreamed of.

John Merrill (00:29.368)
Yeah.

Michael Stansbury (00:49.469)
So John, this is my question for you. What was your origin story into real estate? How did you get into real estate? Did you start off in this career or what put you down this yellow brick road?

John Merrill (01:02.488)
Well, people that know me now don’t believe this, but I studied accounting in college and I started my career as a CPA. And I didn’t really know what I wanted to do. after examining my inner self, I determined I like to not do the same thing over and over, that I like tangible things and that I like people and I like creative things. So that…

ended up in real estate. I started as an accountant at a local developer here that was called Duke Associates, later became a public read, which I had a hand in, and then later sold to Prologis. But that’s how I got into it.

Michael Stansbury (01:46.504)
Okay, so you’re a CPA, you’re doing the same thing over and over again and you’re thinking, all right, this is not what I thought it was going to be. So what was that first deal like or what was that first foray into real estate? Was it just by proxy or, yeah, tell me about that.

John Merrill (02:04.024)
So I worked with a gentleman I had worked with in public accounting and he had gone to Duke and so he hired me. I did accounting things at first, know, filing construction draws, doing what we call a construction loan analysis, which was our development analysis, et cetera. And then the opportunity came to become an asset manager for a small public group that Duke had with Prudential.

Duke was the advisor for, so I did that and then I just kind of grew from there into more and more expertise.

Michael Stansbury (02:40.447)
Okay, so as you’re growing in expertise and kind of growing and you’re seeing things, so this is kind of, I’m throwing spaghetti at the wall here, but you’re seeing things happen kind of behind the scenes in how real estate works and the numbers and I guess whether you look at rents or compounding interest or something triggered you to say, oh okay, I can build a career doing this. Take me back to there, what did you see when you kind of maybe upgraded your career a little bit that said,

John Merrill (02:47.662)
Sorry.

Michael Stansbury (03:10.607)
I get this and now I know how to do this.

John Merrill (03:15.416)
Yeah, great question. I think, you know, not to be overly religious, but God puts the path in front of me because I’m not smart enough to see it myself. And so after Duke went public, I had run all the numbers and I had also had a public company. was the chief accounting officer and asset manager and et cetera for, so I also was the investor relations person for that smaller entity. And the leadership at Duke, my

smaller company legally purchased their bigger company. Leadership Duke said, go home, talk to your wife, tell us if you want to come back and be an investor relations person, which is very relationship oriented, or if you want to run our financial underwriting group, which is now not only going to be working on development deals, but acquisition deals. So I went home, I talked to my wife, I decided I was going to do shareholder relations. I came in in the morning, they said, you’re running financial underwriting. I’m like, well, why did you give me the choice? So

But again, it was best for me because I then, we got organized around how to approve deals and I was the person that had to write the deal memorandum. I actually invented the system that Duke used for tracking their returns, et cetera. And then I was in the room with the CEO, the CFO, the COO and the treasurer on

discussing every deal that was getting approved or not approved and it was just me presenting the deal which was a lot of pressure but I learned so much. So I did that for a while and then a guy that worked for me in that group said I’m going I’m going I love working with you but I have another business opportunity and my friend I’ll just throw out the friend’s name because he’s one of my best friends now I didn’t know him then. My friend Andy

Michael Stansbury (04:53.929)
It’s

John Merrill (05:14.07)
is looking at this little company called CB Commercial to be an investment sale broker, but if we do this venture together, I’m going with him. And that’s what they ended up doing. So I sat there for three more months and thought, I don’t know Andy, but sounds like we have a similar background. And so finally I called and inquired and they go, yeah, that position is still open. So I went and I interviewed for it and I had zero sales experience.

but they needed somebody that understood the numbers, I guess. And I thought it would be an hour interview. I was gone for five hours. And the next thing I know, they make me an offer and it’s a straight commission deal, although they did help me with transition.

I went home, talked to my wife and I said, I want to do this. I’ve always wanted to be an entrepreneur. I want to do this. And she said, straight commission? And I said, yeah. And she said, you know, I’ve worked on straight commission and you’re too nice a guy. Those sharks will eat you alive.

I’m not kidding. This is true. And I sometimes tear up when I tell this part, Michael, but here’s what she said. And she’s in heaven now. Okay. But here’s what she said. She said, but I love you and I believe in you and I will follow you wherever it leads. I never until she got ill, I never made less than three, four times what I had been making. So it worked out.

Michael Stansbury (06:43.241)
Wow.

Michael Stansbury (06:51.559)
Yeah. what a, what a great, wife and not to just to kind of, what a, what a great, wise saying it’s like, Hey, this is what I know, but I know that I’m your wife and I believe in you. And I think you can, I think you’ll do it anyway. That’s pretty cool. That’s pretty cool. That’s it. No, she, she, well, yeah, you’re right. All right. Where it leads. Well, and you know what? All she was doing there was she was just re vowing.

John Merrill (06:56.173)
Yes.

John Merrill (07:09.934)
No, that’s not what she said. I’m going to correct you. I will follow you where it leads.

John Merrill (07:21.088)
Yeah, that’s true.

Michael Stansbury (07:23.487)
She was doing a call back to when you’re at the altar. It’s funny you say that. They’re for richer or poorer. But that’s really cool. That’s very, very interesting. So you went from, I wouldn’t say a cushy corporate job. I don’t want to say that. But it’s different from going to a salary to going, hey, you go kill what you eat here.

John Merrill (07:31.703)
Yep.

John Merrill (07:46.357)
yeah.

Michael Stansbury (07:52.124)
And so some people shrink back at that. Some people say, well, I can’t go on full commission. and obviously you could, if you’re making three to four times what you were making as a, in that other position. so what was the difference there when you decided you were an entrepreneur, then, then what happened next? Or was there a mentor? Was there a, was there a book? Was there a, a coach that helped you along the way? What did that look like for you, John?

John Merrill (08:20.91)
Yeah. So great question. So first of all, I had been making the same amount of money. knew some other people that had the same background experience, et cetera, as me. They were making quite a bit more money than I was. I was getting bonus on how the company did, not on how I did. And I had done some things that really, I thought, added substantial amount of or value to the company. And so I actually left in 96 after

Duke had got in January of 96 after Duke had gone public in 93. So I was only in the chair of running their financial underwriting for about two years. And when I went to leave, everybody goes, why would you be leaving that growing dynamic company? And by the way, the guy that replaced me is younger than me and retired and doing very well. So maybe I should know. But anyway, my answer was I want a closer relationship between what I do and what I earn.

And I’m not going to tell you, you’re right, it’s not easy. People that don’t do it don’t understand how difficult that can be, you know. Trust me, I’ve had, I’ve been on my knees in church praying, please let this deal close so I can pay my mortgage. Yeah.

Michael Stansbury (09:38.348)
Yes, I can identify with that statement as a person that I I’m on my I’m a fix and flipper. I’m a wholesaler signer. I do real estate investing and There’s no salary. It’s just go go figure it out and But I’ve been I’ve been exactly in that place all my knees in my closet at church Distracted not listening to sermon just talking to Jesus. So been there

John Merrill (09:50.371)
Mm-hmm.

Yeah.

John Merrill (10:05.919)
Yeah

Michael Stansbury (10:07.207)
And I think that’s a, and I don’t think I would have it any other way. How about you?

John Merrill (10:11.877)
Yeah. Yeah, so I don’t want to overly talk about it. It’s been a long time ago that I lost my wife, but I needed something different. I was a little bit burned out. I had achieved most of the things I had foreseen as my goals in investment sales. And opportunity, more of a need came up where I needed somebody to run the Indianapolis office per CBRE. And I’m like bound to determine I’m going to get the right person. So I,

spent way more time and energy on it than I probably should have. And then finally, a number of people, friends, said, you know, you’re the one with the vision and the passion. You should take that job. So I did. I did it for five years. I’m really proud of the job I did. But then I fired myself because I didn’t have a vision for the next five years and it didn’t fulfill me. I got back to where I needed that challenge and

guess my ego needed the boost of eating what I kill.

Michael Stansbury (11:16.383)
Well, it’s so interesting though, I think this is the big nugget that people can take away from this is when your vision changes, when you had a specific vision, you had a vision for it, I think that people can execute in that. It’s when you know that something has ended, do you have the guts to end it? And you obviously did and know that there’s another, you know, there’s just another path or another vision.

that I guess the good Lord has for you. So yeah, tell us about that. Tell us about transitioning from that to what you’re doing currently and what are the lessons that you’ve learned and that you can tell our audience.

John Merrill (11:56.686)
Look.

John Merrill (12:00.856)
So at CBRE, you’re either a player or you’re a coach, right? So I went from being a player to being a coach. A company that was then called Holiday Phenolio Fowler HFF, it’s now JLO Capital Markets, had been after me for some time. I have a friend that runs the Charlotte office for them and another friend that runs the Denver office for them. And they’re like, you need to come over here and you can be both a player and a coach. So I did that.

For one, I didn’t realize how rusty I was at playing after five years of coaching. And anyway, I did that and I really enjoyed it. But, and I love the organization nationally, but long story short, I had a conflict locally and it was getting in the way of me achieving my goals. So I left and then I learned a lot there. And then I went to become…

went to a small privately owned minority company. I was the only non-minority in the company, which was actually pretty cool and pretty eye-opening. And the idea was we were going to buy and syndicate deals. And we did our first deal. I started there in January 2019. We closed our first deal by the end of May. Now, that’s fast. That’s fast. that’s identifying it.

Michael Stansbury (13:22.015)
That’s fast for a syndication. Yep.

John Merrill (13:28.256)
negotiating it, raising the money, everything to close. And that was great. Everything worked just like it was supposed to. But then we couldn’t figure out what we wanted to look at next. And everything I dragged in the door was a no. I’m just not feeling it. And I couldn’t even really have the discussion of what, okay, so what’s no about it? Let’s develop our strategy, et cetera. So anyway, that…

began looking more like a, instead of what I perceived as a partnership, it started to be more of an employer-employee relationship. And,

Again, I knew it was wrong. came home, my wife, I’m remarried now. I come home and I tell my wife we had a beautiful house on the lake and we had just spent a hundred grand remodeling it and it was just gorgeous. And I go, yeah, I’m quitting my job.

or I’m thinking about it. And she goes, her eyes got big and said, are you crazy? Like what the heck? And I said, well, you asked me to come back in on Monday and talk about it. So I will, we’ll see if we can square things away. And she started asking me questions and I started answering them. And by the end of the conversation, she says, why in the hell are you going back on Monday? And I will say my wife,

Michael Stansbury (14:53.449)
Mm-hmm.

John Merrill (14:57.398)
She devised the plan. She had already started a company called Merrill Property Group to flip houses, et cetera. Played off of our name because I’ve been in leadership roles in the industry here. And one of my jobs was to recruit. So when you’re running a CBRE office, you take every top broker in the market out to breakfast, lunch, dinner, and drinks, and there’s nothing more flattering to people than that. anyway.

We started our own company. I’m affiliated with KW commercial in January, 2020. Obligatory laugh about my bad time. Yeah. Yep. Exactly. Yeah. But you know, we’ve built a pretty good business now. And like I said, we’ve syndicated, put together some investments. I want to do more of that. The ones I’ve done have gone well.

Michael Stansbury (15:38.697)
How about that? Just a couple months later, so much fun. Yep.

John Merrill (15:55.756)
All of my investors are retired or semi-retired developers that are smarter than me, but they’re the limiteds. They want me to do the work and I have a great partner that we co-operate things. And so I love the situation because these people, while they trust me and they trust my judgment, they wouldn’t put their money in a deal that didn’t make sense. So it reduces risk for all of us.

Michael Stansbury (16:22.217)
Right.

Michael Stansbury (16:25.961)
So your limited partners have been in the business. so I’ve heard of syndicators that they have such high trust value, like whatever the next deal is. But you’re actually leveraging their expertise and saying, hey, we’re going to buy this industrial complex in ABC city and take a look at the specs and get some feedback before you execute.

John Merrill (16:44.654)
Yes. 80 % of our investors, maybe even 90%, have some, either they own a construction company, their investment brokers, their developers themselves, yeah, and real estate attorneys. And so a lot of different expertise, and a lot of people told me I should start a fund and this, that, and the other, but I don’t want to do that. I want each project to stand on its own.

Michael Stansbury (17:14.388)
Mm-hmm.

John Merrill (17:14.53)
and people would be able to invest in what makes sense for them at the time that they’re making the decision to invest, et cetera.

Michael Stansbury (17:21.619)
Yeah, but you have high trust though and the folks have high trust in you because you’ve done multiple deals with them as well.

John Merrill (17:29.346)
Yeah, and I’ve known all of them for a really, really long time. so, and by the way, that was one of my criteria. It was by design. You know, things can go wrong. And when things go wrong, I want investors that look at me and go, okay, we didn’t see this coming. Let’s roll up our sleeves and figure out the best route. I don’t want people going, hey, you took my money and you lost it.

Michael Stansbury (17:32.446)
Yeah.

Michael Stansbury (17:37.929)
Mm-hmm.

right?

Michael Stansbury (17:49.095)
and get to work. Yeah.

Michael Stansbury (17:54.504)
Right. Yeah, I totally understand that. One thing I was talking to, I just had a call, a podcast recently with somebody that does similar to you, but they, one thing that she does with her investors, she does syndications at highest trust value, but she also, when they don’t have deals going, she has a debt fund and they fund fix and flippers. And I thought it was a wonderful way to keep the capital money flowing. The rate of return they were given her syndicates was between seven and

10%, but she was, you know, she’s lending it out at two points between 11 and 13 % and it was a win-win for her folks and a win-win for her while she was waiting on the next deal and things like that. I just wanted to, yeah.

John Merrill (18:39.95)
Yeah, I think that’s a great model. I’ve actually looked at trying to do that for hard money lending for commercial deals actually. But I’ve gotten busy with other things that hasn’t happened.

Michael Stansbury (18:47.037)
Yeah, yeah. So,

I know. So it was funny because this is what she said. She goes, I was doing all this other real estate stuff. was landlord, all this stuff. And then I just found the easy button with this lending. is super easy because again, and she’s somebody that sees the deal, looks at the deal and can tell if the ranges are good and then the borrower and all those other things. And she can make a decision pretty quickly because again, it’s not her first rodeo.

And then your first rodeo is your commercial, know what a deal is, probably within 10 minutes of looking at it, probably shorter than that. But yeah, but that’s interesting that that’s a great place to be in the career. It’s always interesting to make real estate investors or people in the real estate community. The end goal is not necessarily to be the lender, but it seems like that’s where people end up. And that’s their happiest and the easiest

jam to be in.

John Merrill (19:52.012)
Well, it’s the least risky position if you do it right. So you get to sleep better at night, that’s for sure.

Michael Stansbury (19:58.28)
Yes, you don’t get tenants texting you at 6 a.m. that there’s a leak in the roof, which is pretty cool. yeah, that’s awesome. So John, what else do you do for fun? What does family look like today with you? What’s a little bit about you that’s not real estate related?

John Merrill (20:16.108)
Yeah. So my wife told me I should, I needed hobbies cause I don’t have very many, quite frankly. And I used to run a lot. I’ve kind of gotten away from doing that. and so I collect vintage stereo equipment. I came across that. I came across that because a guy I knew was ex professional football player and he owns a thousand McDonald’s now. And he’s like, I collect.

Michael Stansbury (20:33.489)
Okay, tell me about this.

John Merrill (20:44.206)
cars that I couldn’t afford when I was a teenager. I’m like, that’s pretty cool, but I can’t afford that. But I can afford vintage stereo equipment at two or $300 a pop. So yeah, that’s what I do. then that same wife, and I love her so much, but she’s kind of like, you have 22 pieces of extra stereo equipment in the garage. And I go, yeah, I know. And most collectors have 400.

Michael Stansbury (21:13.32)
Right.

John Merrill (21:13.918)
wasn’t buying or getting that. So she’s got me to, I pretty well thinned the herd to the things that I really, really appreciate. I got a couple of future goals out there of things I might try, but it’s not, it’s, you know, the thing is like I’m, I’m playing equipment that was designed and built in the seventies. It sounds so incredibly good. So. Yeah.

Michael Stansbury (21:37.799)
Right. And these are playing. What’s a yeah, but they’re they’re playing. You’re playing vinyls and things like that. Yeah, so we actually have.

John Merrill (21:45.838)
In fact, I actually have a tube amplifier behind me. You see that right over my shoulder?

Michael Stansbury (21:51.754)
There you go. Yeah, I do see that. That’s pretty awesome. Yeah, you even got the you got the office has it has it as well. We have in my I live in Memphis and we have a guy in Bartlett that owns a vinyl record maker and so he makes and he just started doing this 11 years ago and then when vinyl made a comeback, people were were musicians were wanting to put their albums on vinyl back on vinyl and so it’s become a

John Merrill (21:59.81)
Yeah.

John Merrill (22:05.645)
Mm-hmm.

John Merrill (22:20.302)
Yep. It has.

Michael Stansbury (22:21.107)
big thing. And he’s so he’s done really, really well. He’s opened. He opened in one office and then he got he bought an industrial park for to help him make these make these records and distribute. So it’s interesting because people are doing the same thing because it’s not just you out there that wants to play, you know, Coco Cabana on the on the record player.

John Merrill (22:45.198)
Yeah, the other thing we my wife, we own a best-seller thing. tell people my wife has a class ARV and she lets me write in it. So we try to travel some that way. And every year, for example, we go out to Red Rocks in the Denver area and catch a concert. We try to do that a fair amount too. So music’s big part of my life. I can’t play a lick, but I love it.

Michael Stansbury (23:11.231)
Alright, so who do you like to see? are your top three venues that you like to see? Not venues, but artists?

John Merrill (23:19.848)
Okay, so I’m a big Lynyrd Skynyrd fan, which Southern Rock, of course none of them are alive except for the one drummer who I got to meet and hear him tell stories, which was unbelievable. And besides that, I mean Hart, Tom Petty, you know, just classic rock.

Michael Stansbury (23:24.157)
Right?

Michael Stansbury (23:45.927)
Yeah, classic classic rock is good. My son is getting married

John Merrill (23:48.494)
I almost left that one out so. John Fogerty, yeah.

Michael Stansbury (23:52.116)
What’s that? Who’s that? John Fogarty. My son’s getting married on Saturday and his fiance, I got to meet her grandfather. And so I got to meet him when they got married, they got engaged and I got to meet him for the first time and I recognized him and I was like, I know this guy from somewhere. And he is the drummer for Hank Williams Jr.

John Merrill (24:20.239)
wow!

Michael Stansbury (24:20.995)
And he was also the drummer for Survivor and a couple other folks. I was like, man, let’s get out here. Let’s talk about music. So that was pretty fun. And so he’ll be playing at the wedding. So it’ll be pretty cool. Yeah. All right. So John, where can people find more about you and about your syndications and everything about you on the internet? Where can people find you, John?

John Merrill (24:24.878)
button.

John Merrill (24:34.983)
that is cool.

John Merrill (24:47.298)
Yeah, I’ve got a website MerrillPropertyGroup.com. It’s mostly about our brokerage business and if I’m being honest, it’s not the best website. I need to work on it, but that’s where there’s more information about me. And then, you know, I used to make the joke, go to the post office and look at the posters, but nobody knows what that means anymore. But anyway, I’d say the easiest thing is just our company website.

Michael Stansbury (25:15.251)
Gotcha. Okay. Well, John, thank you for being a part of the real estate pros podcast. Really enjoyed hearing your story folks. If you want to know more about, Merrill, John Merrill, there’ll be some information in the show notes below. thanks for watching and we’ll see you remember to like and subscribe and we’ll see you next time.

John Merrill (25:32.404)
All right, thank you Michael.