Creative Real Estate Strategies to Build Generational Wealth with Dedric & Krystal Polite – EP 267

Justin Donald: What's up, Dedric and Krystal? Good to have you on the show.

Dedric Polite: Justin, thank you for having us.

Krystal Polite: Thanks for having us, Justin.

Justin Donald: Yeah. You guys have an incredible story, and I feel like there are a lot of people in our ecosystem that are going to be inspired by what you've done, a lot of members of the Lifestyle Investor Mastermind that have had a similar path, different, but unique to kind of the way that you're building it. And I love what you're up to, so let's dive in.

Dedric Polite: Let's do it. We're excited for the conversation.

Justin Donald: All right. So, before we get into the dynamics of a husband and wife team, because this is something we have to talk about here today, I really want to dig into really how you got started because you guys basically went from no real estate as any first timer goes to building a big portfolio. You kind of started on the Airbnb short-term rental side, kind of pivoting to maybe more of the long-term rental side. And now you've got your own show, 50/50 Flip on A&E. So, you guys have really just catapulted into the major leagues, and I think the show started back in 2022. So, give us the story.

Dedric Polite: Yeah, Justin. I actually bought my first property in 2007. I house hacked, what they call it now. It was a triplex I bought in Boston, Massachusetts, before moving to North Carolina for $408,000. Actually, got 100% financing on it. I read…

Justin Donald: Nice job.

Dedric Polite: Yeah. The book was called How to Buy a House with No Money Down and Get Cash Back at Closing, and I literally got 100% finance and got $1,200 back when I closed. So, I lived in one of the units. I rented out the other two units, and that covered most of my housing expense at the time. I had to come out of pocket a few hundred bucks. So, that was my first property. Then I went back to work in my corporate job because I wasn't ready to take the leap into entrepreneurship. I still had a lot of personal development to do, and that was before I met Krystal. But, yeah, I was just doing the math. That's 18 years. I didn't buy my next property until we bought our primary residence in 2015. And then we really got into real estate heavy in 2017.

Justin Donald: Okay. Well, what a cool story. My very first property, I got seller finance as well. I bought a mobile home park. Only I still had to put down the down payment. So, I negotiated 15% down on mine. So, that was a lower down payment. And then the rest of it, it was a, let's see, it was a $500,000 deal. So, I think I put down $75,000 or so, and then they seller-financed the rest of it. And by the way, that deal is still seller-financed today. They did a 20-year seller finance note.

Dedric Polite: That's amazing.

Krystal Polite: Wow.

Dedric Polite: That's amazing. That's actually how we acquired our first mobile home park as well, was on seller financing. But the first house I bought, actually, it was through a bank loan, but I got 100%. I got an 80/20 mortgage, so 100% financing.

Justin Donald: Nice job. That is cool. And so, you were doing this before you two met, then. Is that right? Or were you together back then?

Dedric Polite: No, it was before we met. I'm 25 years old. I had read Rich Dad Poor Dad back in 2001, so the light bulb went on. I was like, “Alright. If I want to become financially free and live the lifestyle that I want to live, I need cash flow,” right? I knew my corporate job wasn't going to get me the passive income, so I was like, I got to figure out a way to get into real estate, to get into business. Ordered the books, the tapes, the late-night infomercials. I would watch them, and then they would sit on my shelf, right? I had a bookcase full of stuff. I would never take the leap because I was afraid of failing, right? I didn't want to fall on my face. Grew up in Section 8 Housing, so grew up in a lower-income area. So, I didn't want to go back to that, right?

And it wasn't until I met Krystal, she's a serial entrepreneur, right? She was starting businesses when she was in like elementary school, that she helped change my mindset towards risk and failure, and entrepreneurship.

Justin Donald: Well, I want to get into that, too. And I want to get into like what you brought to the table here, Krystal, because it sounds like it's a very complementary set of skills. You each have very unique skills. You've honed them in. It's fascinating to me that between that whole stretch, it was just that one property, and then you doubled down kind of 2017-2018, because I think you guys have flipped over 100 properties since 2018, right?

Krystal Polite: Yep.

Dedric Polite: Yep.

Justin Donald: Wow. Okay. So, Krystal, give us your backstory. Serial entrepreneur. What all were you doing?

Krystal Polite: So, I was still working in corporate America, but I had, at the time, constantly had my own businesses. So, I had an event company. I had a nonprofit also at the time when I met Dedric. So, for me, it wasn't about if I was going to be an entrepreneur. It was more so, what will be the business that I end up going into? And at the time, we were still living in Boston, Massachusetts. I was trying to get a nightclub open. And I was maybe about 26, 27 at the time.

Justin Donald: And that was a cool thing to do back then. I remember I was looking at the same thing. I'm like, "Man, this is where the people are. Let's do it.”

Dedric Polite: Instead of spending money going out, we make some money off the nightlife.

Krystal Polite: Very much so. And I had just come off writing, producing, and directing a stage play that I did in college. So, I was coming off of that. So, I knew I wanted to pivot into something that had to do with entertainment in business. And when I met Dedric, it was our very first date with a business meeting. So, sat down, got all the formalities out of the way. What are your three-year goals? What are your six-month goals? You know, what's your credit score? Any…

Dedric Polite: She grilled me. It was an interview. Our first date was an interview.

Justin Donald: It's quite fitting, by the way, right? I mean, the way that this has all come together, that this is your first date.

Krystal Polite: Yes. At that point in my life, I knew where I was going. I was very focused and I understood my assignment. So, when we sat down, it was more so trying to make sure we were equally yoked. Are you where I'm at, at this time in life?

Dedric Polite: Similar mindset or different?

Krystal Polite: Similar mindset. Definitely had similar mindset. I just knew he was not where I was yet in life. So, I ended up telling him like, “Hey.” He was like, "Yeah, I definitely want to be with you after the first date,” da, da, da. And I said, "Oh, okay. Not yet. I want you to take a year. Go live your life, and then come back, and we can revisit this.” And he was like, "Wait, what? No.” And I was like, "Yeah, take a year and travel the world. Go on dates, do all of this, and then come back, and we'll revisit this.” And that's what I had to make him do because I knew mentally, he was not where I was. He wasn't ready to settle down, and I was not in the business of wanting to turn red lights green. So, after he went off kicking and screaming, he did a year.

Dedric Polite: I thought I was being punked, right? I'm like this is like you say yes, but you really mean no. I'm like, "Do you really want me to go off and just do my thing and then see if we can make this work at a later date?” And she was like, "Yeah.”

Justin Donald: Because she probably felt the chemistry was good. So, it was kind of like, "Wait a minute, what?”

Krystal Polite: Yeah.

Dedric Polite: Yeah.

Justin Donald: Record stop, scratching along the way. I mean, yeah.

Dedric Polite: Exactly. I'm in my late twenties, just bought a house, bought a car, a new motorcycle, so I'm living my best life, so I wasn't ready to be settled down. And she realized that. And like I always say, if she would've forced the issue, like some women do, some men do, “Hey, let's just be together,” we wouldn't be together today because I wasn't ready for a long-term commitment at that time.

Justin Donald: My wife and I joke about that all the time. If we had met in college or if we had met earlier in life, there's no way it would've worked out. It's because we met later that we were both in a position where we're done with the dating game. Like, let's find someone and let's do life.

Krystal Polite: Yep, that’s it.

Dedric Polite: Exactly. That timing is key.

Krystal Polite: Let's do life. Let's build from here on out. And I understood that. And I knew he just needed a little bit more time, and I was okay with that. So, he went off, did his thing for a year. I went off and did mine. He came back around after a year. We were maybe two months into dating, and he ends up getting laid off from his job.

Dedric Polite: Unceremoniously. I'm like, hold on, I got a mortgage to pay. I got a car note. I got all these bills.

Justin Donald: But wait, wait, you got laid off from the safe job, as banks like to say.

Dedric Polite: Exactly.

Justin Donald: I just want to point this out, like let me see your pay stubs. I need a couple of pay stubs because this is safe if you have a pay stub. If you have a 1099, that's risky.

Dedric Polite: Right.

Krystal Polite: Exactly.

Justin Donald: If you have investment income, that's risky.

Dedric Polite: I was doing software sales for HubSpot in Cambridge, missed quota two quarters in a row, and got canned. And I was all depressed. If you're in sales, it'll happen. I was depressed. I didn't know how I was going to pay my bills. And you want to tell them what you told me at the time?

Krystal Polite: Yeah. So, I let him wallow in it for about two weeks, and then I came to his house and saw he was still wallowing, same robe. And I was like, "Listen.” At this point, I said, "Look, F that job. The job lost you. You did not lose that job. This is just God's way of letting you know that that job was for a season, not a lifetime. So, now get out there and truly do what Dedric is passionate about. Learn something new. Get out there and create your own destiny, your own path. Don't worry about your bills. Don't worry about no mortgage, no car payments, or any of that. I will hold you down, but I want you to truly get out there, ride your motorcycle, clear your head, because it's going to come to you.” And that's what he did. He was like, "Wow.” He never had anyone put it to him that way.

Dedric Polite: Changed my perspective.

Justin Donald: Yeah. Well, Krystal, you're a visionary and a motivator, right? Like, you can see that right out of the gates. And I think that's a nice compliment for someone to say, "Yeah, actually, I now have the space to breathe to not do it the traditional way. Like, I can actually think and create and figure out what do I want to do versus I need to make money, I need to pay bills.”

Dedric Polite: First time in life.

Justin Donald: “Let me fall back into the trap.”

Dedric Polite: Yeah, I was on that treadmill, go to school, get good grades. I went to an Ivy League college, graduated, went into corporate. First time in life I was able to get off the treadmill and say, "Man, what type of lifestyle do I really want to live? Let me design my lifestyle.” I had read 4-Hour Workweek by Tim Ferriss. All these ideas in my head like, "Man, how are these guys doing this working four hours? They're using automation. They're using technology. They're using all these tools.” So, yeah, I mean, she breathed life into me at that moment.

Justin Donald: See, I love that. I love that. I read 4-Hour Workweek. That was Rich Dad Poor Dad, Cashflow Quadrant, and 4-Hour Workweek were early on three of the more pivotal books for me. And for early days, like I really got clear on what I wanted life to look like. That's why I talk a ton on my podcast and in my mastermind about life by design and hitting your freedom number, and what does it take? What does it cost you to live your current lifestyle? How do you get into surplus income? That sort of thing. And I love that you got an early start.

Krystal Polite: Yes. And that's really what it was for me is giving him that breathing room to be okay with now trying to figure it out, which is something my mother did for me, right? When I got out of college, she said, "Don't rush off and get your own place, where now you have the headaches of bills and rent. Come back, live with me, while your headaches can be my headaches. Your worries can be my worries.” And I wanted him to understand that. So, in doing so, that's what he did. He went out, took his time. He figured out within two weeks he had his own company started. Same marketing with clients and…

Dedric Polite: Teaching inbound marketing.

Krystal Polite: Teaching inbound marketing.

Dedric Polite: This is in 2012.

Krystal Polite: And then he came to me and he said, “Hey, I found this business called Airbnb.”

Dedric Polite: This is when Airbnb was new. It wasn't a verb yet. So, at the time, we had just started dating. She was always at my apartment, at my house, right? She couldn't get enough of your boy, and her apartment was sitting vacant most of the time. And I was like, “Hey, this guy at work told me that every time he goes to New York, he pays for his trip by renting out his apartment in Cambridge.” So, I was like, "We can rent out your place because you're never there.” So, I was like, "Hold on, well, your brother's staying there.” And she was like, "Hold up. He was staying there.” Let me make a phone call. So, she calls her brother. He was crashing on her couch at the time. He wasn't paying rent. He was a couch-crashing.

And she said, “Hey, listen, you got two weeks to find a new place,” and he was like, "No, no, I'll start paying rent.” She was like, "No, you got two weeks.” So, within that timeframe, we furnished it, we put it on Airbnb, and the very same day, we started getting bookings. And this was in 2012. We did that for about five months, made about $40,000, $50,000 renting her place on Airbnb. That allowed us to pay for her mom's wedding in cash. And also, we ended up moving to North Carolina at that time.

Justin Donald: And was North Carolina strategic for a business decision? Was that like a personal choice? Was that family?

Dedric Polite: All the above. One of the best decisions we've made was moving from Boston to North Carolina.

Krystal Polite: Yeah. So, I had told Dedric in our business meeting/first date…

Dedric Polite: You asked me, suggested.

Krystal Polite: I said, no, I had asked him.

Justin Donald: Strongly suggested.

Krystal Polite: Well, I asked and told him. So, I asked him, I said, “Hey, are you tied to Boston?” And he was like, “I mean, well, no, not really.” I said, “Well, I'm just asking because anyone who plans to be with me must understand I don't plan on living here in the next two years. I plan on moving. So, anyone who's planning on being with me has to understand that. So, either you're going to plan on moving or this is not going to work.” And he was like, "Oh, okay.” He was like, "Well, yeah. I mean, I don't have no kids or anything, so I'm always open to moving.” So, it wasn't me telling him like, “Hey, you have to move.” I'm letting you know I won't be here.

Dedric Polite: And I'm glad we had that upfront conversation. In a lot of couples and even partners, business partners, we don't typically have those difficult conversations upfront. And then when you don't set the expectations, that's when surprises and disagreements happen later.

Justin Donald: Yeah. Transparency right out of the gates, it does wonders for building trust. I would love to get into some of your creative financing. You guys have done a great job of this. I think most people kind of go the traditional route when they're trying to do real estate right out of the gates. For you guys, you avoided the traditional finance structure. You move to seller finance, you move to no money down deals, at least on that first one. So, I'm curious what a typical structure for you looks like. Like, what has to line up for you to say, "Yes, I'm going to pull the trigger,” like this would be the ideal way of doing it?

Dedric Polite: Yeah. It was actually an evolution, Justin. We started out wholesaling, and the only reason we wholesaled real estate was to build a rental portfolio for the lifestyle, for the passive income. So, we wholesaled a bunch of properties, started buying properties, cash, started renovating them, adding them to our portfolio. And after a certain point, you run out of money, right? Whether you have $500,000 or $5 million, you're going to run out of cash when you're using your own money to renovate and acquire properties. So, then that's when we actually had to pivot, and we found a mentor who had built 300, 400-property portfolio, all off creative financing.

And we cornered him. He was like, “I'm not taking any more students.” We were like, "No. Take our money because we need to learn how to do this creative financing.” We paid him $10,000 to join his mastermind and his coaching program, and he literally taught us subject to seller financing, how to structure these deals over like a 12- to 18-month period. And that's how we got into creative financing. And once we learned that, then the whole world opened up because now you're not just looking for wholesale deals. You can pay retail if you get the right terms on that property.

Justin Donald: Yeah. And I think it's wise that you forced access to membership. I tell people all the time, the greatest investment I ever made was into mentorship and peer group. And so, I've joined a ton of masterminds over the years. Obviously, I have started several of our own, but I have paid top dollar. People think I'm crazy for how much I've spent on coaching and to be in these groups, like I actually have a target where I want to spend at least $250,000 a year on coaching and mentorship. So, peer group and mentorship, because the return is the greatest return of any investment dollars I have ever made. And I'd love to kind of hear your thoughts on it. I love that you're believers of masterminds but help me understand that mentorship personal development piece.

Dedric Polite: That is the cheat code.

Krystal Polite: Yep.

Dedric Polite: And listen, I didn't want to do it at first. I'm like most people. I'm like, “$10,000 for some information? $16,000 to join a peer group to meet with a group of people every quarter. What are you talking about? What's the value?” I didn't get it at first. And again, Krystal being a visionary, she saw the value right away. And she was like, "All right, we got to do this. If we want any chance of being successful as real estate investors and being in a financially free lifestyle, we need to get around people who are already doing it. We need to find someone who has the receipts and documented success and have them teach us their ways.”

Krystal Polite: Yeah. And help us shorten our learning curve, right? So, we thought that was, we're already a year in, hadn't done any deals, and Dedric is subscribing to the YouTube University. And I told him…

Dedric Polite: I'm trying to do it the free way, which didn't work.

Krystal Polite: That can only take us so far. So, we joined our very first mastermind after going to a marketing bootcamp, and at the end, they called for anyone who wants to join this mastermind. Dedric was still sitting there. I was like get up and go to the back of the room.

Dedric Polite: It was $16,000. So, I'm sitting there like…

Justin Donald: It's hard, hard to pull the trigger on the very first one.

Dedric Polite: And here's the deal, we didn't have the money, Justin. We were working corporate jobs. I was making six figures. She was making good money, but we were living paycheck to paycheck, right? So, we didn't have $16,000 saved in the bank. So, we had to put it on credit, right? So, we had a business credit card that had about a $25,000 limit. And when I walked to the back of the room and swiped that credit card, that was the fire that I needed to take action.

Justin Donald: It's like game on. Now, we have to. We have to pay these bills. Yeah.

Krystal Polite: But I think even more so, it was for me, us going to these mastermind meetings every quarter.

Dedric Polite: We flew out to St. Louis for the mastermind.

Krystal Polite: We're going there, and we're like one of the only ones in the room that actually still had 9-to-5s. Everyone in there was like full-time investors.

Dedric Polite: The only way we got in is because we paid the money. Otherwise, we wouldn’t have been admitted into the group.

Krystal Polite: But we also then had to understand we would go there, no results. Quarter one, same thing, no results. Quarter two…

Dedric Polite: Not for lack of effort.

Krystal Polite: And everyone there was like moving the needle tremendously in their business. And I told Dedric, I said, "We're not coming back again without having done something in our business that we can report.” I said, "We're not going to do this.” So, the third quarter, we did it via Zoom. And the mastermind was great because everyone, what people don't understand about getting into these peer groups, these masterminds, is it does not matter if you're not at their level. They understand that you wanted to be here.

Justin Donald: And you want help.

Krystal Polite: So, you invested to be here, so they are willing to help you any way they can. And we had to understand that. We're thinking that they're going to be gatekeepers. We didn't want to ask people for any questions and stuff at first, and then we realized after they kept saying, “Hey, what do you need? What do you need? What do you need help with?” And they were like opening up their vaults to us, that helped us tremendously with getting to the next level, pivoting in our business, understanding what wasn't working, now realizing why it wasn't working by being around these investors. So, that's what really helped us.

Dedric Polite: Even the lifestyle design, we met a couple in that group who are full-time. They're making seven figures. And Krystal sat down and was like, "Look, I'm a mother, I'm an entrepreneur, I'm a business owner,” with the wife, and she was like, "How are you guys doing it?” And the wife sat down and broke down how she outsources so much so that she can be a mother and an entrepreneur. What are some of the things you learned?

Krystal Polite: Yeah. And she basically just gave me her life hacks and understanding the different life hacks that'll buy you back your time and understanding and learning the value of your time as well.

Justin Donald: Yeah. And I think it's so important to get in these rooms with people that want to add value. Like, we're so picky with who gets into our mastermind. Number one, you got to want to learn and grow and be hungry, right? And then, number two, you got to be willing to share of your gifts, your talents, your expertise, because I want people to show up where everyone's pouring into them. And I think it's really encouraging. It can be discouraging, but I think it's also encouraging if you're using the logical side of your brain when everyone is getting results. Maybe you're new, but everyone's doing it. So, it's like, "Okay. Well, if it's working for all them, it's got to work for us if we follow the same playbook.”

Dedric Polite: Exactly.

Krystal Polite: There you go.

Justin Donald: So, what were some of your most impactful early investments that kind of developed the biggest learning experiences for you?

Dedric Polite: I think the most impactful one for us is that, again, we started out wholesaling because we didn't have the cash to start buying rental properties with our own cash. So, our first deal, we made $11,000. This was a deal Krystal found on Facebook Marketplace motivated seller. Our second deal made $5,000. Krystal actually made the cold call on that one. She doesn't like cold calling. Then our third deal was a virtual wholesale deal where we made $105,000. Virtual wholesale deal, did a double close. And then that was the eye opener. I'm like, "Man, I can really leave my corporate job off this.” Now, don't get me wrong, I didn't quit at that moment, right? I kept my job strategically so I could get loans for more rental properties.

But once we made that deal, we brought like 18 units within the next three months in North Carolina. Took down a bunch of properties. So, that was a big eye-opener. Like, man, I can really leave my job once we started making $30,000, $40,000, $50,000 a month consistently from wholesaling and build our portfolio.

Justin Donald: And so, what was the gap here? Like, how did you go from basically investing in properties to having your own show, 50/50 Flip, on A&E? Like, how did that materialize? Because that to me seems like another cheat code where you are becoming more and more high profile that, in the beginning, you have to hunt for the deals. If you can get out there, the deals start to come to you.

Dedric Polite: Absolutely.

Krystal Polite: Yes. And again, that…

Dedric Polite: That mastermind.

Krystal Polite: That mastermind is really what did it for us. So, Dedric had posed a question to the group when we were on our hot seat, and he said one of our problems is we can't find enough private investors. How do we get more private investors?

Dedric Polite: To buy more deals.

Krystal Polite: To buy more deals. And the guy who ran the mastermind had said, “Hey, listen, you guys are a great-looking couple.” He said, "And you're very relatable.” He was like, "You guys need to start documenting what you're doing on social media. Get out there. Show people what you're doing every single day, walking properties, doing this. Just document it so people can see that you're actually doing what you say you're doing, and then they're going to be more inclined to want to invest in you.” So, Dedric was like, “Well, I can do it, but my wife, Krystal, she's super private, so she's not going to want to be on camera,” da, da, da. And he said, "Look, just get it started.” So, that's what we started doing, documenting 2017. Documenting our journey, putting everything on social media.

Dedric Polite: Facebook, Instagram posts. We started a YouTube channel, and we just literally did what we were coached to do, document our process. That grew us a following, and then after a couple years of doing that, people would reach out to us and DM us, and a couple producers reached out, but we never paid them any mind, right? We're like, "Is this spam? Is this real?” And then the exclusive casting agency for A&E Network reached out, and they got our secretary. Our secretary put them off a few times, didn't know if they were real, and they begged, like had her promise to get on a phone call with us. And we got on a phone call with them, and they were like, "No, we're not just some random casting agency. We are the exclusive in-house casting agency for A&E, which we've seen your guys’ content. We would love to do a TV show on you.”

And we're like, "Well, why us? Like, we don't flip houses. What we were doing was we were wholesaling and buying and holding rentals and renovating those rentals and documenting.” They thought we were flipping all these houses. We were like, "No, we keep everything.” And like, "Oh.” They were like, "We still want to do a show on you.” So, we went through Zoom calls after Zoom calls. This is during COVID. So, all these Zoom meetings with these executives from A&E, them interviewing us, and we're like, "Let's just go through the process, see how far we get.” We didn't think we'd actually get selected.

Krystal Polite: No, we were not planning on doing. So, we’re just like, "Yeah, we're not going to do it because we're super private, but we'll just see how far we can get.” That was the goal, right?

Dedric Polite: It'll be a cool story to say we got back into the finals.

Krystal Polite: It just so happened that they ended up coming back to us and saying like, “Hey, we want to offer you guys one of the slots.” So, they had three that they were launching. It was like, "We definitely want you guys to join us on A&E.” So, then we were kind of like, "Oh shoot. Okay.”

Dedric Polite: We kind of have to do this now.

Krystal Polite: Guess we're doing a TV show. So, we ended up doing season one, and you don't know what you don't know. And everyone that we spoke to who are on TV, they were like, "Look, season one is always going to be the hardest.” So, we went through season one, then we filmed season two, and the head of our network at the time, Brad, he had came into town and met with us and was like, “Hey. Some great news. Hulu just purchased the rights to your season two.”

Justin Donald: Wow.

Krystal Polite: And we were like, "What?”

Justin Donald: That's a big break.

Krystal Polite: Exactly.

Dedric Polite: Yeah. Hulu's got 40 million subscribers.

Justin Donald: Yep.

Krystal Polite: They said they had been trying to get on their network for years and years, and they said no because they have two different audiences. So, then he said, "Listen, submit all your shows that you want us to consider.”

Dedric Polite: Any shows to them.

Krystal Polite: “Any shows, and we'll let you know if any of them catch our attention.” Well, they selected three. They selected Rachael Ray, Big Boi, and then our show was the only one. And I mean, we were the only ones with really no name, no brand at the time, compared to Rachael Ray and Big Boi. So, that's how we think about that.

Justin Donald: Well, there's something cool about that, too, because it's kind of like from the ground up. So, I like that they did that because sometimes it's only the name brand. But I think there's something pure and interesting and relatable to the newbies on the block, right?

Dedric Polite: That's what people say. When they see the show, they're like, "You guys are not like the other flipping shows out there.

Justin Donald: That's right. That's right.

Dedric Polite: Like, "We learn something when we watch it. We are inspired. You guys are not flipping million-dollar homes.” I mean, we flip starter homes, right? 450,000 or below is the sale price that we typically sell our homes for, but we believe we use something called affordable luxury. So, we try to give people a luxury, high-end-looking home for an affordable price.

Justin Donald: That's great. That's awesome. Now, let's talk about like marriage and money. Because making the marriage work in the midst of working together isn't always easy. My wife and I have done this. We work together, so we started buying mobile home parks about 15 years ago, and we worked very closely together and built a very large portfolio. We never brought in outside money, so it was just our dollars, and we would just buy whenever we could afford to buy. And we got to a season where we worked well for a good amount of time, and now there's this big joke in our family that my wife says she quit, and I say I fired her, and it's somewhere in the middle.

But it was a good number of years ago, and it's probably like seven years ago or something that we did that, and that was really good for our marriage to kind of have a clean break and bring someone else in that was doing what my wife was doing, so that way date night didn't focus on like what happened. The default, the date night is we would just talk shop, you know? It’s like, “Let’s problem solve.” And so, it was like less of a date night and more of like a business meeting. And so, you got to be real strict with that if you're going to work together, I think. And so, I'm curious how you guys make it work.

Dedric Polite: Not easy.

Krystal Polite: It sounds very similar to what you're saying, right? So, for us, this was Dedric’s dream originally, and I told him, "If this is something you want to do, then I'm 10 toes in with you,” and I had to learn it at the same time as him.

Dedric Polite: You mean real estate.

Krystal Polite: Real estate, yes. So, I learned it at the same time as him. So, for us, it's something that we both love, and it's mainly also because of our why. We have the same why. Both of us are trying to build something that outlives us so that we can make it a little bit easier on our next generations and generations after them, and their kids, kids, kids. So, we each have our own whys also as to why we're in it. Now, with that being said, date nights are typically like that, right? We'll get in, and we'll find ourselves talking about something business-related, but we also do a lot of date nights. Dedric is really great with planning those date nights, so I think he does it purposely, where our date nights are date nights that we can't talk.

Dedric Polite: Going to a show or something.

Krystal Polite: So, we're going to a concert, or we're going to a comedy show, or something.

Dedric Polite: Yeah, no business talk.

Krystal Polite: So, we're really engrossed in whatever's happening.

Justin Donald: That's good.

Krystal Polite: Our date nights are very rarely like we're going to dinner type date nights. So, that also keeps us focused on whatever we are doing.

Justin Donald: That's good. That's a good hack.

Krystal Polite: I'm glad, like you said, you and your wife are kind of doing something separate because Dedric and I are…

Dedric Polite: That's kind of what we're migrating.

Krystal Polite: Yeah, that's what we're migrating to. We got into real estate because that was Dedric’s dream. He said, “Hey, listen, first, I know a way that we can make sure your dreams happen as well. We can utilize the money from real estate to do what you want to do. My dream has always been to own a chain of FECs, family entertainment centers.” So, that's what we did. We utilized money from real estate to buy our first franchise, which is the Sky Zone Trampoline Park franchise.

Justin Donald: Yep. Familiar with those.

Krystal Polite: So, we'll be migrating into that. I'll be kind of pivoting going into that space within the next year as well. So, I mean, we'll still be working in the real estate business, but I won't now be in it full time.

Justin Donald: Yeah. Well, it's fun. Your path is really cool because you went from wholesaling to fix and flip. You did some short-term rentals, you did some long-term rentals, you do some real estate education, you're pivoting here into a franchise. So, you've got your hands in a lot of things. And I guess one of my big questions for you is, what is your strategy for balancing cash flow, passive assets, versus the active deal-making? And what does that look like moving forward?

Dedric Polite: Yeah, that's a good question, Justin. So, you need both, right? Some people just focus, "Oh, I've got to get passive income,” but you can't eat equity. And as far as real estate, our mentor told us that, you can have millions of dollars of equity, which we do, but you can't eat that. So, you need the cash flow from those rental properties, but you also need the active income. So, that's where wholesaling comes in. Doing two or three wholesales a month, that's $30,000, $40,000 a month right there. And then we get into other things like real estate coaching and mentorship and things like that. So, you got to have that mixture of the active income from flipping and wholesaling or some other type of business that you're doing, plus the passive income.

Justin Donald: Yeah, I like that. And I really try and encourage our community, and our audience here to focus on utility income. How do you get the passive income to buy your time back, to buy your freedom, right, your financial independence, so that you can go do what you want to do? And so, instead of having the 60/40 split in the stock market, why not figure out how to get your assets to be kicking off cash that covers your life so you make different decisions, better decisions, upgrade your life, upgrade your decisions? And I love that you guys are doing that. I'm a huge believer in coaching. You guys are doing a lot of coaching now. I'd love for you to talk about that too.

Dedric Polite: Yeah. I mean, just to your last point, Justin, it's so powerful to be able to own your time. And when you think about it, when you don't have to report somewhere, you can really focus on what are you passionate about. What did God or the Creator put you on earth to do? And that's what real estate has been able to do for us. And then with us sharing that story, we have had so many people reach out to us like, “Hey. I see what you guys are doing. I love what you guys are doing. How do I do it?” So, we created our courses and our educational coaching programs because we just have an outpouring of people over the years who've wanted to learn, right?

So, we created something called Polite Wealth Portal, and our whole idea is it's a portal into financial freedom. It's a portal into lifestyle support, into building generational wealth. We lay out the blueprint of exactly what we did so people can follow that.

Justin Donald: Yeah. That's cool. I love hearing that, and I love when people can step into their God-given gifts and talents. And really just live those out because I really believe that's where you're going to have the most impact. And it's where you're going to have the most fun. So, there's the most longevity. You can keep doing it over and over and over. And I think that's really cool.

Dedric Polite: When you're doing what you love, it literally does not feel like work.

Justin Donald: Ah, amen to that. All right. So, I'm going to give you kind of like a glance into some of what we do in the Lifestyle Investor Mastermind because I think it's really fun. I would imagine there are some aspects that you guys are doing that are very similar. But we love when people come in. People are antsy. They want to just start doing deals, and we're like, "Hold on. Hold your horses. Let's not just go swinging for the fences. Let's work on your investor IQ, your investor education. Let's build a foundation. Let's figure out what your investment criteria is. What is it that makes it a yes for investing? What do you need? Does there need to be cash flow? Does it need to be a sponsor that's been doing this for 10, 20 years?”

Do they need to have deals full cycle? How many deals? So on and on and on. Build out that investor criteria. Figure out what your freedom number is. What does it cost you to live the current lifestyle you're in? There's the bare minimum survival number like, what does it cost you just to survive? Not get ahead, but like cover all the necessaries. But then how do we get to lifestyle? What is that per, you know, broken down on a monthly basis, not just annual. Monthly, I think, is key. And I think you guys do a lot of that. And then, so it's building that passive income to cover that.

And then we need to diversify. We need to do what the single-family offices do, what billionaires do. They do something different than everyone else. Their asset allocation is different than any financial advisor has ever shared. Financial advisors really live in a world where, for the most part, it's 100% in the stock market or 90% in the stock market with some sort of a split, whereas the wealthiest families in the world really only have about 15% to 25% of their net worth in the markets, and they've got about 50% to 60% in alternative investments. And we could break that down into it's usually 20% to 30% in private equity. It's about 5% to 15% in private credit. It's about 15% to 25% in real estate.

You've got 2% to 5% in Bitcoin. You've got 5% to 10% in cash, 5% to 10% in fixed income. You've got 1% in infrastructure, 1% in precious metals, 1% in art or collectibles, and 1% in commodities like oil and gas. And so, that would be a very typical breakdown of what the wealthiest class of American, but also worldwide would do. And so, as people get their financial passive income where it needs to be and create that surplus income, we're just so big about allocating in a way that protects them. And so, you have all these people that invest super high risk because they don't know better, but the wealthiest families only put about 1% of their net worth in early-stage seed round, pre-seed type of investing.

They only put 4% to 10% in venture, which would be like an institutional round of Series A, Series B with a bigger player. And so, when people understand the framework of what makes them wealthy and helps them to grow long-term, I think it helps them make different decisions. But when you can get to surplus income above and beyond that lifestyle number, well, now instead of saving 10% or 15% or 20% of your money every year, you got 100% of surplus income that can go towards building more wealth, creating more impact, and that's where the magic really begins in my opinion.

Dedric Polite: Yeah. No, that asset allocation of the wealthy, I mean, that's eye-opening. So, thank you for sharing that, and that definitely can add some insights into not just the listeners, but how everyone allocates their portfolio. And even us, with us, that's why we’re doing the franchise because that diversifies us. A lot of our assets are in real estate, but in a Sky Zone franchise, it diversifies us, right? And our goal is not just to open one Sky Zone. Each average Sky Zone does about $4 million a year in revenues. EBITDA is about 20% on average. Our goal is to open up about 10 to 15 over the next decade. And then what a lot of folks do is they'll roll those 10 to 15 franchises up and then they'll sell to private equity for a multiple of that.

Justin Donald: Oh, yeah. I've been involved in those transactions. I've got some franchisees, and in fact, we have a lot of franchisees and franchisors in our mastermind, one of which I need to connect you guys with. His name's Eric Van Horn. He has the largest franchise mastermind that would be worth you guys kind of checking out. They do some really cool stuff.

Dedric Polite: You’re the second person who's mentioned him to us, so that's a sign. So, thank you.

Justin Donald: He is a dear friend, a business partner, and we've got another mastermind community together called Tribe of Investors, and it's a lot of fun.

Dedric Polite: Awesome.

Justin Donald: Well, hey, this has been a great time. Where can people learn more about you? Where should they go?

Dedric Polite: So, they can go two places. One is social media. If you just look up Be Polite Properties on Instagram, Facebook, YouTube. And then also, you can go to Polite Wealth Portal. Anyone who's interested in learning how to build wealth, starting with real estate and then in business, you can go to Polite Wealth Portal to learn about some of our educational programs.

Justin Donald: Well, thank you for your time today and for sharing your stories and your wisdom. I love ending every episode with a question to our audience. So, if you're watching this or if you're listening to this, what is one step you can take today to move towards financial freedom and move towards living a life that you truly desire, one that's on your terms, not default like most people in America, most people in the world, but life by design? And what's one thing you can take from Dedric and Krystal today that can get you moving on your way to that next step? Thanks! And we'll catch you next week.