Jake Harris on Investing in Distressed Commercial Real Estate – EP 027

Jake Harris on Investing in Distressed Commercial Real Estate

Today, I’m thrilled to be speaking with my friend Jake Harris — a very successful entrepreneur and real estate investor. In his new book, Catching Knives: A Guide to Investing in Distressed Commercial Real Estate, he shares practical advice and personal anecdotes to help you embrace the next economic downturn and navigate the risk of distressed investing.

Jake became a millionaire before the age of thirty, but soon found himself overextended and with massive debt in the middle of a monumental recession. However, he emerged stronger than before by building a portfolio that leveraged distressed market opportunities.

In today’s conversation, we talk through what went wrong for him early on, how he reinvented himself in his current field, and how to dream big, create leverage, and truly scale your investments.

Key Takeaways with Jake Harris

• Why everything fell apart for Jake’s early investments–and what he learned as he jumped back into the world of real estate investing. 
• Why it costs just as much to flip a house worth $25,000, $50,000, or $100,000 as it does for one worth $1 million–and the benefit of working at scale.
• Why things will never go back to exactly as they were before–and the unique opportunities this is creating for investors.
• How Robert Kiyosaki, Tim Ferris, and GoBundance helped transform Jake’s life for the better. 
• Why net worth is such a bad way to measure success, what really matters, and the magic that happens when you tap into your true passion.

The Money Multiplier Effect with Jake Harris

Jake Harris Tweetables

Resources

• Jake Harris’ Instagram
• Catching Knives website
• Catching Knives: A Guide to Investing in Distressed Commercial Real Estate
• Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!
• Principles: Life and Work
• The 4-Hour Workweek: Escape 9-5, Live Anywhere, and Join the New Rich
• GoBundance

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Read the Full Transcript with Jake Harris

Justin Donald: All right. Well, I am just thrilled to be here today with my friend, Jake. And, Jake, it’s been a little while since we’ve connected but it’s really fun thinking about just where we came from, how we got to know each other. And we actually met originally at a Front Row Dads retreat, didn’t we? 

Jake Harris: I believe so. I think we were, well, I think we’re having a barbecue. I remember kind of running around and I’m a fan of barbecue. And I think just that and then obviously sharing some parenting stories and I think connected up and then it was like, “Hey, you like real estate? Ah, I like real estate,” you know, and it just kind of took off from there. 

Justin Donald: We just hit it off but I remember back when was it Uncle Bill’s was still around. Unfortunately, that place went out of business, but we had some real good time catching up and finally learning each other’s business. We have a ton of mutual friends. And it’s funny because sometimes as your network grows, you have all these people that keep pointing back to the same person and that’s kind of what the situation was like just recently here with you. It’s like, “Oh, yeah, we should reconnect. I should bring you on the show. We should catch up and hang out.” So, how are you? 

Jake Harris: You know, amazing. I mean, it seems interesting as far as my wife and I were just talking the other day. Actually, some things are different, like church is still kind of online, more or less. They just started opening up. I’m most of the time here in California. I also split some time down in Texas and they’re talking through like how crazy life is and how everything is. And I was like, it’s kind of the same for us and it’s been unbelievable the blessings that we’ve had and the opportunities and things that just been really, really fantastic. And so, from a real estate perspective and I have a book coming out next week. And so, like during that kind of period where I had a little bit of extra time, I was able to pour it into some areas that I was, you know, had been intending to get to. And now all of a sudden I had extra time. So, I was like, “Let’s do it.” And so, it’s just exciting to see doubling down on my own kind of activity and then own kind of intellectual property. And I’m just really, really excited to be that to share it with you, to share it with the world more or less. 

Justin Donald: That’s awesome. Well, you and I have been on a very similar path in many regards from the standpoint of family to business, to the fact that we both wrote books during the pandemic when there was more time at home. It’s like, “Well, what do you do with this time?” Obviously, you give more time to friends and family and relationships, but at the same time, it created just an awesome opportunity to really capture some thoughts and ideas. So, I journalled. I decided to journal every single day for the year. And just after all these really cool moments and in the process of journaling, I was able to write this really fun and incredible book. And I’m just very pleased with the end result. And so, I’m excited on the show today to be able to talk about your book. And before we get into it, I’d love to have our audience, our listeners get a chance to learn more about you and kind of where you started and where you came from because you’re a very successful entrepreneur and real estate investor. You’ve done well in other things, too. But your success is going to leave some clues and I’m curious where you started and how you got there. 

Jake Harris: Yeah. So, I kind of break this down. Some of this is in the book, some is not in the book. I kind of grew up on a construction site. My dad and mom had bought this old farmhouse and it was the head house of an orchard, a thousand-acre orchard in Central Valley of California. It was built in 1888 and we lived in a 16-foot camp trailer on the property and fixed up this old house. And I mean, like this old house that didn’t even have a foundation. It sat on rocks. And so, we jacked up the house and poured a foundation and like a multiple-year project of fixing up this old house. And so, like that was kind of where I grew up is there’s pictures of me carrying sheets of plywood and I mean my mom used to give us baths in a wheelbarrow. And so, it didn’t really dawn on me until later when I was kind of looking back. They say that hindsight’s 20/20. You know, it was like, now I see that string that it’s kind of like my childhood. I went off into the army and somebody gave me the book, Rich Dad Poor Dad, and it was just like, “I like it. This is what I want to do like this is it.” And so, as I got out of the army, I started bartending in a country club. I wanted to be in proximity of people that had levels of success. And I leverage some of that and some of those relationships to kind of clue in to the next steps and they said commercial, or actually, just said construction in general. But the people that come from the trades have the shortest learning curve to real estate because everything involving real estate has a contractor. Fixing the kitchen, building a high rise, building a subdivision, there’s a contractor involved in that. 

And so, the guys that come from the trades or gals or whatever, the people that come from the trades they know what things should cost, how long they should take, and every single kind of aspect of that. Because let’s be honest, contractors want to make as much money as they can possibly make and take as much time as they can possibly make. And so, he advised me to kind of get in and do that. That’s what I did. I got into commercial construction, estimating then superintendent, and then project management. And I worked, our main client was Equity Office Properties, which was Sam Zell’s REIT, you know, monster REIT before he sold it off to Blackstone. And I ran fixing up office buildings, basically gutting three, four or five, six-story office buildings, putting in new tenants, cleaning them up, kind of doing this value-add component. I went off on my own, created some success, ran down to Phoenix, and started flipping houses. And then kind of the start of the story is me losing everything. You know, I remember sitting on a street corner outside of a house in Tucson that I was working in an adobe house just up the street from the UofA and I was crying and I was saying a prayer, “Could I just be worth no money?” Zero, like I wanted to start over, wipe the slate clean because I had a portfolio that was declining in value and I ran out of money before I could liquidate the portfolio. And so, it was still going down and I owed hundreds of thousand dollars more than I had money and I just had no way even to get out of that. But the flip side of that same coin was what birthed the distressed investing. I was able to kind of get back in and it was like real estate is really what I want to do forever. 

And so, I plan on living another hundred years from now. And so, I was just when I look back at that, it was just kind of the start and there are some stumblings and failures. And then that really kind of what you can get a lot more details into the book is what some of the things that I made mistakes, some of the systems that I needed to put into place because I didn’t have them. And so, that’s the hope is to give people some of those nuggets while I happen to feel that doesn’t have to be the reality. There are people that have success and then just build upon that success. I didn’t have, well, I did have some mentors. I just didn’t know what I didn’t know. And now this is the opportunity to kind of share that out with the world is that, hey, man, there’s lots of stuff that we can learn from and help each other out, kind of raise the tide of the collective, the masses of people looking to do real estate investing. 

Justin Donald: Wow. That is really intense. So, I’m curious what you see as the biggest, I guess, reasons that everything fell apart and then at the same time what the biggest lessons were that you came out of that experience with. 

Jake Harris: Yeah. So, fortunately, I was able to connect up with Robert Kiyosaki at some points during that time in the run-up, and I actually thought I was smarter than him and all the advisors and the other people. They’re like, “Hey, a crash is coming, a crash is coming,” and I was like, “Dude, you guys just don’t know. I’m so smart,” you know? And then it was like, “I’m so naive and just uninformed.” And so, I actually went back to school. I went to grad school. I went and got a degree in international real estate and finance. Part of that because I was like, hey, I’m doubling, tripling down on myself and the future kind of investment. I kind of learned the bigger macro plays of things that were going on. And so, then why did the market crash and how was obviously I think some people or most people are familiar with the movie, The Big Short, or the book of that and how there was an oversupply of the market of homes across the country, and you had people buying three, four or five, six, eight, ten houses and not living in them. And so, they were overbuilding the housing supply and then caused this kind of macro-level kind of correction. And so, that additional education was very valuable for me because it also started educating me on the new languages of kind of institutional investing portfolio kind of management and even one of the things I use it as kind of an illustration is so I started flipping houses at scale. And so, I’ve done, I don’t know, 1,200 flips in 23 states. 

We put together some single-family rental portfolios that we sold off to Invitation Homes and Tricon and some of the other big institutional investors. What was interesting is I’ll give you a little nugget to that is they were buying houses for more than market value. So, I was there flipping houses. I was like let’s say arbitrarily that a house is worth $300,000 so you can do the math. You’d be like if the house is worth 300,000, I need to buy it for $225,000 just to make a mortgage. I’m going to have to fix it up, I have the sales commission, I have all of these other things. And so, to make a good deal, I need to buy it for less. Well, they were coming and buying at auction and they’re buying it for $325,000 at auction. And I was just like, “Whoa! What the heck is going on here, like it’s worth 300 right now fixed up and you’re buying it not fixed up for 325.” And so, I even became a vendor for them and so I sold them a portfolio, we sold them some houses. And so, I bought it at trustee sale. I had fixed it up with my construction company. Then we sold them turnkey ready to go and then I got a work order to go fix up the houses again from them. And I was just like, “Man,” because it was like, “This address looks familiar.” I went to the house and I was like, “Hey, this is like perfect, brand new carpet, brand new appliances, freshly painted turnkey, ready to go.” I was like, “Hey, maybe you guys made a mistake and you sent me this order,” and they’re like, “No, no. We want our color carpet and our appliance set and our paint colors. Take all that stuff out and put in our stuff. And so, we’re still going to pay you to do that.” 

And I was just like Sir Jonathan Gray, who is like uber-smart on real estate investing. He runs Blackstone’s Real Estate Division. And I mean like the guy’s like wicked smart. And I was like so that guy puppet master is doing this, but there’s people that are paying crazy prices. So, then what I really boiled it down, it took me some time, some years was I was really good at kind of the micro-detail. I could save $0.05 a linear foot on baseboard. I knew where to get the tile for the cheapest or the paint or the other thing. Like, I was really good at that. And that’s how I could add some additional margins into some of these deals. Blackstone was macro correct and so they were buying off a previous peak price. So, they said previously these houses were 500,000, so we’ll pay up to 75% of that value all fixed up. And then when it shoulders off that 500,000 price, then we’ll sell it again. So, it doesn’t really matter what that baseboard cost or putting appliances in twice or painting the interior twice or whatever because they were playing a different game with a different kind of portfolio management. And so, they were macro correct and made $7 billion. I was micro correct and made or saved $111. You know, like it was just like which one do you want to be? And so, to me, that was the understanding is like I need to do things bigger, I need to think bigger, I need to expand what I’m doing. And then that obviously subsequent over some years expanded us to a nationwide kind of investments and other things. It’s a pandemic right now. Hopefully, we’re winding down the pandemic. Is there going to be distress? Is there going to be opportunities? I believe there is. I believe there’s going to be certain asset types that want some of the printing and the PPP loans and the other things like that wind off, there’s going to be some opportunities. 

Justin Donald: Well, Jake, I love your story. And we have a lot of similarity because I helped build a company with a couple of my friends and partners that we ended up doing similar work for these institutional investors, Blackstone being one of them, Invitation Homes, and American Homes 4 Rent. I mean, just the list goes on and on and on. And so, our company, IFM Restoration, services at a high level these Main Street Renewals and other one of our big clients here out of Austin. And there is just so much opportunity in that space. It was cool, you know, hearing your story, I see that you are able to capitalize on each side, right? So, you are able to act as a vendor where you got paid to do the work of a rehab, a turn, a maintenance, or whatever. But you got to see the bigger play, the bigger story, which is, “Hey, when you have economies of scale and you own this big of a portfolio of single-family homes in a certain market and they’re all done a certain way, a certain look, a certain color, a certain appliance, you know, they have the luxury of being able to buy things at bulk and having their discounts as well. And it is interesting what happens at scale versus a one-off deal. It is night and day. I’d love to hear more your thoughts on that because I’ve lived this firsthand. 

Jake Harris: Yeah. And exactly as you said, scale, you know, leverage. And so, that’s I think one of the most important things. And so, we break down is, first of all, goals are very important to determine direction. However, I’m also a big believer, so like goals are great for people that want to win once. Systems are for people that want to have repeated success. And so, when you take that is the goals and then the systems that you build allow you to kind of scale that and then, more importantly, is then taking and adding leverage to that. That can be leverage of just a traditional sense of financing or that can be leveraging who’s, not how. Leveraging people or leveraging a greater force than just you. And so, I think the commonality that we have understanding is that you can make more money, you can’t make more time. And so, time becomes super, super valuable to you. And that’s where the institutional players and investors understand the big scale of this is it’s the same amount of work to flip a $25,000 or $50,000, $100,000 house as it is to flip a $1 million house. It’s the same amount of work to do a $2 million deal as to do a $200 million deal, same amount of work, same amount of time. The numbers have then been moved over a little bit. And then when you’re playing on these bigger kind of scales is the multiplier is much greater. You make a 10% return on a $200 million deal. Wow. That’s $20 million, which could be a life-changing amount of money where you make a 10% return on a $100,000 deal. That’s $10,000. I’m not saying $10,000 is not a lot of money, but it’s not typically a life-changing amount of money. 

And so, that’s where scale and where we’ve kind of been looking at is how do we do this on a bigger level? And where I found that my sweet spot is that $3 million to $30 million kind of deal size because it’s not competing with the institutional investors, I go do the hard work that puts the pretty bow and hands it off to them because they don’t want to write checks for less than $50 million or $100 million. I have one. We’re trying to queue up kind of a bigger kind of assemblage and they’re like, yeah, 50 million equity check is just too small. We’re not even going to really look at that. And so, I was just like, wow, that’s kind of crazy to me but that just is trending as far as one of the other crazy facts is that one-third of all the US dollars ever in the history of the world were just created in the last 12 months. 

Justin Donald: Yeah. 

Jake Harris: $20 trillion. So, it was like, to me, we can get into some nerdy finance talk as saying that every central bank in the world is doing it at the same time that causes and pulls down inflationary pressures. And is there going to be deflation and is technology going to drive down? Maybe. But to me, when you print that much money, you create that much money, it causes inflation. And so, then again, to leverage and to scalability is I think we’re ushering in a golden era of opportunity for anyone that wants to kind of be in solid assets. And I would just rather use my time on things that are a little bit bigger in size and check size. Again, that happens to be I have 20 years of investing experience. That’s not going to be for everyone. A good deal for me maybe, a terrible deal for someone else, and vice versa. A good deal for them, maybe a terrible deal for me. So, it’s very hard to determine and say what’s the right deal. Scale might be doing 10 houses in a year for somebody. For me, it might be a thousand. I don’t know. But there’s definitely a multiplier effect when you start getting and thinking bigger. And then what happens is you get momentum and then it snowballs on itself. And then you get the people that want to throw big money at you or projects. 

Justin Donald: Yeah. There’s no doubt. I mean, we can talk about so many of the things you just said in depth. I mean, we could have a whole show just on two of the topics you just mentioned. I mean, let’s look at this whole idea of like leverage and scale. So, what a lot of people maybe don’t realize is you gave a great example of going from like a $200,000 home to a $2 million home to a $200 million home. But then let’s take like the work that you’re using. So, you hire a crew to do one job. Well, instead of having them do one job, let’s say you have two homes for the same price point or three homes. You have the same crew do them all and you can get their labor for cheaper and there are a lot of different ways to do that. One of the things we did at IFM Restoration is we utilized technology for leverage and we were able to build a proprietary software, like you said, that implement systems, has a protocol, routes people properly, handles the work order flow just in its own special way that’s different than what anyone else was doing. And so, that’s really why we had so much interest when we’re looking to raise money on a Series A is because of that, because of the technology platform that was overlaid over a service-based company. So, in other words, we were considered a tech company, even though we, by any other stretch of the imagination, are nothing more than a service company. But it really enhanced our multiple, but it gives so much leverage. 

So, it created the two things at once. It created leverage and it created those systems, a protocol to follow the standard operating procedures, which I think is big. Something else that you mentioned is the money in the system and how much is being printed. And so, I have read some reports that say that it goes even as high as 40% of the money in circulation today was printed in the last 12 months. And that doesn’t count the 1.9 trillion that is about to come out and it doesn’t even take into account the 3 trillion that is now like surplus spending for all these ancillary things. I mean, this is a lot of money and there is going to be a long-term ramifications. There will be some form of ramifications to this money printing. It just depends when it shows up. Whenever the money printing stops, that’s generally what’s going to happen. So, how long can an economy, how long can a government, how long can a nation continue to print money and prop up something that is completely artificial? It’s really fascinating. And it’s like a time that we’ve never seen before. 

Jake Harris: Yeah. which is interesting, you bring up that. So, I gained a lot of insight from books. And so, one of the things as far as we’re talking leverage and I say the return on investment or return on time of a book is probably one of the greatest that you can ever get because really think about it, even your own book, as far as maybe now I’m just maybe using my personal experience of my book coming out is it took me maybe a year, nine months, a year to kind of work through the writing of it during the pandemic. But it was like it really took me 20 years of experience to get to the level to be able to write it in that years’ time. And so, really what people are getting is they’re getting 15, 20 years’ worth of experience and call it a few hours of time. That’s trying to be very concise to do the lessons learned. I mean, if you compare that to blogs or to other types of articles, even long format kind of medium articles or the business journals or some of those other ones, those might be weeks or months. And you leverage that out is that you’re getting a significant return on investment by reading books. And so, I bring that up because Ray Dalio, his book, Principles, which is like one of those just like fantastic books. I was listening to him and I was reading through it and how he went short on the market when Reagan became president and lost everything, like wiped out, had to go borrow money from his dad, you know, those kinds of things. And he really broke it down. 

One of his principles was, was he only investing given his lifetime’s experience? And so, the market that he’d only seen in his maybe at that time 20 years or 15 years or whatever it was, and he’s like he went and did a deep-dive study to study like markets forever. And how have they reacted? How have there been similarities? And to me, it was that kind of same exact thing where I was just like, “Am I making and basing all my investment thesis and things that I’ve experienced in my 15 years or 20 years of investing experience and not forever. And so, I spent a good year-and-a-half and it’s still kind of ongoing, call a couple of years’ worth of diving and studying every real estate market in the United States since its inception. So, since people came over and will not say the Native Americans but like the British started speculating on tobacco crops and the ebbs and flows of those markets and how they change. There has been some similarities as far as when they over-inflate. A national bank kind of component was a roll-out in the early 20s that led to the roaring 20s and then the Great Depression. And I was like, there are some things that look real similar to what’s happening today. Like we could have the roaring 20s, a huge, amazing, fun ride, and then a very, very sad crash. And the people that are starting to pay attention to that and looking for those opportunities, you know, my book is about investing in distressed commercial real estate. So, I was like there are some of these things that you need to be learning before the crash actually happens. 

And also, subsequently like there are going to be stuff that goes into foreclosure right now. I mean, I think there’s going to be hotels, there are shopping centers, there are assets that are going to be going into foreclosure and going into distress today. Is work from home going to be a real thing in the foreseeable future? Is our office going to ever come back? We don’t know. But there are some things that you need to be taking nuggets that I got from Ray Dalio, from his experience of 40 years that then fall back. And so, it’s like that book and leveraging other people’s knowledge. Again, technology is very valuable and way to do that as well. But, yeah, it’s just like so many of those things. We’re just in a whole new time. It’s not going to be like it was before because we’re doing different weird stuff. 

Justin Donald: Yeah. It’s interesting because you have experts on both sides of the equation. You have really smart people. They’re like, “Nope, it’s going to be fine. There’s going to be another boom for ten more years,” and you’ve got other people that say, “Actually, we’re starting and it’s going to be a seven-year recession and this is year one starting within the next six weeks.” I mean, literally, just in the last seven days attended events with some very high-level people that I’m not even allowed to say who said these things but very big, prominent movers and shakers in the United States, in the banking system, in just kind of high levels of investing. And I got literally both of those extremes inside of this last week, inside of three days apart from each other to like top-secret meetings. So, it’s fascinating. You know, one thing I do just want to point out, it’s really just to me a testament to the person that you are that you could experience the adversity that you had, that you lost it all. But instead of folding, I admire and respect you so much for saying, let me double down, let me go to school, let me learn more about real estate, let me read books like Ray Dalio’s book, which, by the way, is on my bookshelf right behind me. If any of our audience hasn’t read it yet, it’s a great book. And in fact, he just came out publicly with his concerns for the future, and Ray Dalio is very concerned about the future. And so, it’s fascinating, just like considering all these options that exist and you really don’t want to be fearful but at the same time, you want to be cautious. I think that you are a great story to anyone. I’m excited to learn more about it as your book comes out, just seeing how you were able to make that decision. But I just want to give you total praise for doing that, because most people that get punched in the face, they just fall, they stop. They don’t fight back and it’s game over for them. 

Jake Harris: Yeah. I appreciate that. I think most sane people would have given up. So, I would kind of joke my wife when I met her, I started dating her and I met her and I told her she was the one, we’re going to get married like pretty early on, like within the first call it maybe a month, a few weeks, a month. And I was like, “You’re it like we’re getting married. We’re going to have kids like you’re it.” And she’s like, “You’re crazy.” And I was like, “Ooh, that’s firmly established. I already know that I’m crazy.” And so, I have just a personal theory that everyone’s crazy once you get to know them, like we put this whole facade like, “Look, I’m totally normal. I’m just like everyone.” I’m like, “No, we’re all crazy. We’re all winging it.” And then what happens is your crazy aligns with their crazy and you’re like, “Oh, I like that. Let’s do it.” My wife is super funny. I just remember she’s super witty and so she like do these kind of like pun things and text messages and I was just like to me, I was like, “I love that.” She’s amazing. You know, that didn’t address kind of your question of diving back in. I was like, but it’s just like I believe that God gave me a certain set of talents and a certain set of skills that I need to play full out with. I happen to believe in a higher power and that I go to other people that might be the universe or maybe nothing at all. But for me, that belief is that I was given a certain set of skills and talents and real estate really highlights those and really fires in on those. 

You know, a lot of it has to do with numbers and creatively solving problems and seeing things that don’t exist yet and seeing those opportunities. And so, again, to leverage other people, Ed Mylett, I love Ed Mylett, hearing him, hearing his story but he said there’s a version of it. I’ll kind of give the cliff notes. But when he goes to heaven, he’s like, “I envision that I’m going to see the man that of the potential I could have been if I played full out.” And he’s like, “My goal is that be my mirror image of who I was.” And so, when I look at that is, you know, if God is with me, who can be against me? As far as when I look at that and I was just like, “Well, if I was given and blessed with these certain talents,” this is oftentimes me getting in my own way, “I need to just go double down into that and triple or quadruple. And so, I just pour in and I’m going to do what I can do.” There’s a lot of things that I’m not good at. I tell my wife, I know she’s shocked that I’m not perfect. She is but there’s lots of things that I’m not good at. There are some things that I’m pretty darn good at and I’m just going to keep hammering away at those things that I am good at and that fire me up. 

Justin Donald: That’s great perspective. And we’re very much on the same page on that. I do believe that everyone is blessed with God-given gifts and that when they can really tap into those gifts, that’s their genius zone. That is where they get in the flow and where time will disappear because they’re doing what they’re created to do. And so, I think it’s great and exciting and really just inspiring that you have figured that out, what that is, the gifts, and the skillset that you have, I think that’s incredible. And that doesn’t necessarily make the journey easy, but it can give you the willpower when things don’t go as planned to be able to push through and to persevere, which you’ve clearly been able to do and you’ve done a great job with. So, not only did you build things back to be successful, you built them back to be much more successful, incredibly more successful. And you really are a great example of the guy that gets knocked down, that totally gets pummeled and gets back up and becomes the champ. And so, I think that that’s really admirable. You know, I’m curious who along the way besides Robert Kiyosaki, he was very pivotal. He was a very pivotal person in my life from the standpoint of reading his books and having his influence but who else were influences that helped you kind of move back up after you had your fall? Who picked you up? 

Jake Harris: That’s interesting. So, I think books, again, I’m going to keep going on that and harping on the books is that they get to be a little bit of mentors without necessarily getting that same proximity to them. So, what I realized is I’ve been myopically focused on, hey, being a millionaire like I kind of didn’t do anything else. I was 80, 90 pounds overweight, had relationships falling apart. My brothers were like, “Dude, Jake, you’re an assh*le like we don’t even want to hang out with you.” And so, at that time was Tim Ferriss’ 4-Hour Workweek came out. And so, for the people that do know that, it’s not about working four hours in a workweek. It’s actually about how do you 10X everything and magnifying and using leverage. We are talking about that earlier. And so, for me, for the kids out there that are too young, there used to be bookstores and you could go to them and they are full of books and you could like just read there because I had no money. I’m like figuring out how to make ends meet. And so, I walk over to a bookstore and I would read at Barnes & Noble and sit there in the coffee shop, not buying the book, just reading it, and then I put it back on the shelf and then go back home, and then the next day. And I read 4-Hour Workweek and it was the start of an introspective kind of journey of like, what did I do well? What didn’t I do well? And obviously finding those things that and then really starting to tap in. 

And it wasn’t until I kind of started discovering some of those in slivers. GoBundance for me was a huge like next level up. I just started having some levels of success and Aaron Amuchastegui was a friend of mine that said, “Hey, you need to go look into this GoBundance group.” And so, it’s allowed me to get a lot more intentional, and it’s been a journey. And I was like, “I’m still not there like today, I’m better than I was a year ago and better than I was a year ago before that.” But like that whole thing is like when is enough enough? Never. Like until I’m dead, there is a constant progression of my journey and that’s one of the other key kind of takeaways was a realization that life is an uphill journey. 

Justin Donald: That’s awesome.

Jake Harris: So many people think it’s going to be like I’m going to get at 65 or I’m going to retire, and then it’s going to be super easy. I’m going to make a million dollars and then it’s going to be easy. And then it’s like no. It’s all uphill. I mean, you’ve hung out with David Osborn. You do the other thing. You’re like, “I’m worth a hundred million dollars. Now what?” And you’d be like, you know, it’s not the number. Money doesn’t matter like that’s the big thing that the epiphany that a lot of people. But it’s about the growing, the getting better, improving yourself, putting those things in place that really give people value and allow them to kind of give back. So, I mean… 

Justin Donald: By the way, Jake, I want to chime in here because I couldn’t agree with you more, that when you think about who someone is and what defines them, unfortunately, from a societal standpoint, a lot of people do it based on net worth like that is their barometer of how great or successful or wonderful someone is. I actually think that there are so many better ways to measure success. One of them being relationships, how well they do in the relationships that they’re in, another one being helped, another one being how generous they are with the income that they have assembled. I think net worth is a component of it but it shouldn’t be the one that dominates in terms of like figuring out how good is someone from a, I have air quotes, “How successful are they?” But at the same point in time, people realize that they work so hard to achieve this certain amount of money, whatever it is. And no matter where you are, the goalposts are going to move. At some point in time in your life, you’re going to say, “Hey, if I could only earn six figures or if I could only have a million in the bank or if I could only get to 10 million or 100 million or whatever that number is, every time you get there, the goalposts move. So, it’s not about that number. It’s about who you become in the process. Now, I will say that it is about covering your expenses and covering your lifestyle so that way money can become more of a game so you don’t grip it like you’re going to lose it, that you can actually kind of relax and be a lot more abundant-minded instead of scarcity-minded when it comes to money. I think that is one huge game-changer. When money becomes a game, earning it, investing it, that’s when it gets really fun. But until you get to that, it can create a lot of stress and it can create a lot of problems, and it is still one of the greatest reasons that couples get divorced. 

Jake Harris: Yeah. I mean, you know, I was just going to say someone should write a book about that, but I was like, you did. And you did is a fantastic book about those things that, I mean, it’s about that lifestyle. It is exactly about the things that because let’s be honest, money does matter to a certain point, you know, and once you get Maslow’s hierarchy of needs, beyond some of those things, then it doesn’t really matter that much. But if your goalpost is always money, what’s going to happen is everything else is going to suffer for that. And obviously, you have a lot of why I was excited about coming on this podcast was your book is a fantastic evidence of that as far as creating that financial freedom, creating that passive income, creating those things, gamifying that to the levels of success. And I think why you and I connected so well was it just like that’s the real deal. That’s what it’s all about. You know, it’s about how much time and I would say, you get now control of what you want to do. And so, call it the external motivations, fear, money to a certain hunger, you know, you get past those kinds of things which are fantastic motivators to a certain point. But what happens is there are so many people that get beyond that that they don’t tap into the intrinsic internal motivators that is your passion, is your purpose, is your other things. 

And then when you find out is like those are infinitely scalable because, in my opinion, they tap into those God-given talents and that, like you said, that flow and that thing that just like that’s who you are and you lose track of time and become kind of almost like omnipresent as far as from the thing not on a deity-type level but is just like that’s who you really are. And then that motivation will take you through everything and it doesn’t matter. The money doesn’t matter to anything you’re doing the thing that you are meant to do. And so, that’s what I love about your book, I love about your energy and the way that you kind of bring this out. And so, I’m just super excited to call you a friend and get a chance to share some time on your podcast and the message that you’re putting out into the world. And I appreciate that. 

Justin Donald: Well, thank you so much, Jake. I appreciate that and I love that we both share a passion for reading and learning. And you’ve referenced your book several times. I want to know more about it and so does our audience. So, tell us what’s the name of the book and where can we find it? 

Jake Harris: So, Catching Knives: A Guide to Investing in Distressed Commercial Real Estate. It comes out April 6th. So, depending on when this actually airs, it’ll be available. I think they’re starting to do the first week might have the promo to try to stimulate some sales on the Kindle stuff. But paperback, again, I don’t think there are bookstores anymore so I think it’s all Amazon. Some other things, Buy Baby, Baby Buy, or Goodreads and I don’t know, wherever books are sold on e-books and paper copies, those are all available in those places. It has been an exciting journey to share that. Again, you’re getting a snippet of the lessons learned in case studies and things that I’ve learned. While I made those mistakes, people don’t have to make them. And if I can throw down the rope to help those that maybe young Jake or some of those people that have levels of success and they’re looking to do bigger deals and that’s been also a big kind of audience that’s been resonating with some of these advanced copies, like they’ve figured out the kind of the flipping houses game. They’re starting to have levels of success but then they’re like, “Man, I’m going to have to do a gazillion of these houses to get to where I want to go, to put the systems, or build that lifestyle for me.” I can either do a hundred flips or I can do a commercial deal. 

Again, time trade-offs, as I need to do deals that are a little bit bigger and so that’s where a big part of the audience is resonating with this is, man, I figured out how to be successful on this level. How do I go to the next level? And commercial real estate has different terminology, different factors to it. And then the website is CatchKnives.com. There’s going to be a lot of content. They’re building out some of those other things. And then you can also find me on Instagram so that’s jake.realestate. And then I put stuff out. That’s the place I’m most active. They’re trying to get me to do, I don’t know, live streaming and Facebook stuff and all these other things that I was like it’s new to me. I don’t know. Maybe I’ll have a Twitch account or something soon. But for right now, CatchKnives.com and Instagram are probably the two platforms and then I’m sure there’ll be more of them Catching Knives into the future. 

Justin Donald: I love it. Well, nice job snagging an awesome Instagram name, jake.realestate. That’s awesome. And we’ll definitely get this in the show notes. I just want to thank you for your time and for sharing all of this with us and something that’s important to me. I looked at people who have had struggled in their life and so when I find someone who has had adversity and they’ve been able to battle it and win, that to me is a great sign of a leader, someone I want to follow, someone I want to learn about and read about. And so, just knowing your story and knowing what I know about you, I’m thrilled for people, for our audience here to get a chance to learn more about you and to check out your book. So, definitely check it out. And the last thing I want to say is I always say to wrap up each episode, that is take some form of action today to moving towards the life of your dreams and a life that has financial freedom so that you can experience your gifts and your passions on your timeline. So, thanks for checking in and listening today and we’ll see you next week.

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