CAPITAL HACKING | FINDING BUSINESS DEALS THAT FIT YOUR INVESTMENT GOALS

Mike Ayala: Today on the investing for freedom podcast. I’m going to bring you an episode that’s kind of in line with the series that we’re doing over the next five or six weeks on the little short Monday versions, or, just around some of the deals that Kara and I have done and how we structured them and low money down, no money down deals. And if you listen to the full-length episode from last Thursday, you heard Kar and I just talking about some of our philosophies, some things that we’ve been through as a family and, some of our business ventures investments, etc. So this week it’s kind of in that same thread, I’m bringing you an episode that was actually recorded on a friend of mine podcast. It’s called capital hacking

with Josh McCallen and Erik Cabral. Great, great podcast if you have not listened to their podcasts, go check out capital hacking. You’ll love it. They bring on syndicators and people who raise capital and their whole purpose is just to demystify, raising capitals or bringing stories. And just situations of real-world people just like you and I that have gone out there and done the thing. Well, anyway, I was on their podcast and thought it would be a great episode cause I really just go into some of the, we talk about some of the deals I’ve done and some of our business ventures and that kind of stuff, but I really feel that hopefully you’ll enjoy this episode because you really get to kind of pull the curtain back on how I think and what gets me excited and passionate. So anyway, I hope that you appreciate this episode. I won’t talk about it anymore. We’ll just get into it.

Are you looking for freedom, freedom from the daily grind and hustle, or just finding a way to live the life you always wanted? Then join us on the investing for freedom podcast. Our host Mike Ayala will help you discover new ways to find freedom with tips, insights, and interviews. You’ll learn the exact systems he’s used to travel the world and live his best life. True success and happiness are all about freedom. And here’s your roadmap on how to find freedom on your own terms. Welcome to the investing for freedom podcast. Here’s your host, Mike Ayala.

Josh McCallen: Welcome back to capital hacking this is Josh McCallen and Erik Cabral.

Erik Cabral: Always a pleasure to be here.
Josh McCallen: Oh, Eric are you drinking water while we’re starting to show? Erik Cabral: My lemon water.

Josh McCallen: Oh my God. This guys from the beginning has been eating and drinking the whole time, but no, Eric so much for eating and drinking. We have Mike Ayala on the phone. Who’s a good friend of ours, a gobundance brother, and he is going to teach our audience what you and I have been trying to teach your audience, which is that capital is obtainable. You can build it from your human capital, into your financial capital. And we’re going to demystify capital right here right now. And Mike Ayala is going to show us that you can really build multiple streams of capital and income. And I can’t wait until he gets on the show. So he’s here looking at us, talking about him. Welcome to the show, Mike.

Mike Ayala: You guys, it is such a pleasure to be here. I appreciate you guys having me on the show. I’m looking forward it.

Erik Cabral: Great to have.
Josh McCallen: Eric and I have been looking forward to, we had a great time with

you in Aspen. Was it Aspen?

Erik Cabral: Feels like ages ago.

Josh McCallen: A lot of people ask when we were in Aspen, did you and I drive there on a moped? And I said, absolutely. So we’re up there and Aspen going to a gobundance event. And Mike is telling us about one of his new passions, but I got to tell you a little bit before we get to his newest passion and what he’s doing for the community. Mike is a co-founder and managing director of four peaks capital. We’re going to learn about that. We’re going to learn about his business. We’re going to learn about his history before that, but he also owns, co-owns park place. We’re going to talk about the management company and we’re going to get into a nice new asset class we don’t talk about much here, mobile home investing. And we’re also going to learn about your giving back in your effort to share what you’ve brought to the, well share what you’ve been given through investing for freedom podcasts, correct Mike?

Mike Ayala: Yes, sir.
Josh McCallen: Eric, I’ll let you go.

Erik Cabral: No, I’m excited to get into all of that. Especially obviously podcasting, right? I mean, this is a, he’s got, he’s doing it right. A lot of people sort of hesitate and they’re like, I don’t know when the right time. And we spoke to

Mike back in Aspen and then pull the trigger. You got the whole setup. It’s wonderful, man. So proud and happy that you even hit the top charts right. You were like, dude, look what happened. I’m like, Holy crap, man. So happy. It’s crazy how you, now tell me how you did that. Cause there’s never an exact formula, right? It’s always, hit or miss or this, try this, try that people say different things. So it was really cool that you were able to accomplish that. We’re big geeks here at capital hacking and you know, we often call back to, with great power, comes great responsibility. And with that reference, we want to know what was that radioactive bug that bit, Mike Ayala made you into the superhuman entrepreneur that evolved over time. I mean, but to many very, very inspirational including myself.

Mike Ayala: I don’t think any of us are born special. I think we all have to find our own path, but I will say, from the time I was little, I had a pretty rough childhood and I didn’t realize it. I think sometimes we; I mean, we don’t know what we don’t know. My dad was abusive and had a lot of issues with between him and my mom. But my mom was a gem, like just an absolute gem. And so they finally separated when I was like eight years old. And from that time forward, my mom was just like constantly fighting. I mean, she was working two jobs, she was going to school. She was, it’s that typical story of the mom just grind in 24/7 for the kids. But I found myself a lot of times. And this is nothing against my mom. She was again, working two jobs and going to school. A lot of times we found ourselves alone fighting for ourselves. And that gets you thinking about ways to, not that she didn’t provide for us. But that gets us thinking about ways that we can make our own path. And you get a little bit scrappy and it took me a while to really realize that. I mean, I think it’s been in the last couple of years that I really kind of looked backwards to that and found out where this really came from. And I think it was that. So anyway, I don’t think any of us are born special. But then I kind of remember, like in junior high I started making suckers and just selling suckers at school. I was always a little bit entrepreneurial. I kind of have those types of stories. And then, you kind of fast forward. I remember wanting a truck and my parents were like, we can’t afford to help you get a truck. So I’m working at the age of like 12 years old cleaning a doctor’s office. That’s what I would do on the weekends. Yeah, crazy. Right? Like what doctor’s office lets a 12-year-old. My mom happened to work there, so she let me in. So anyway, I’ve always been a hard worker and I’ve always appreciated money in the sense that, it takes hard work. It takes commitment, it takes dedication. And so fast forwarding a little bit. I met my wife in high school and then we ended up getting married early. She was 19 years old. I was 20 when we got married. And then like we got married in May and the following may, our first son shows up. I’m working as a, so I’m a plumber by trade. A lot of people don’t know that, but I went to work for a plumbing company. I

went to it through a four-year apprenticeship program. So, starting all this off, it was like, literally you’re just grinding. You’re just making stuff happen like everybody does. And one day I just woke up and so our family, we decided early, my wife worked at a doctor’s office then. And she said her dream was always to be a stay at home. That was her, that was like her life goal. And you fast forward, I got a 19-year-old who will be 20 here in a couple of days, an 18-year-old and a 16- year-old. And that’s like her proudest accomplishment. She’s been able to be home. We just have the best kids. We have the best family unit, but we did that with intention. My wife said from the beginning, she said, I don’t want to work 24/7. I want to be a stay at home mom. So early on we decided we weren’t going to live off of her income. Well fast forward, I’m working. We had some, two things that kind of led me down the entrepreneurialship road. My oldest son, when he was born, he had some health problems. And so we were having to go to Salt Lake, which was three and a half hours away. I was having to take time off work. He had to have surgery, took a year to really get through this. But when he was two months old, we were at the hospital for like month and a half basically. And that was my first time realizing like when you don’t work, you don’t eat. If you’ve got only one stream of income and people are realizing this right now, basically I am saying for a long time, like if that one stream of income dries up, that’s all you got. And the one thing I would like to say really quick, it’s never too late, no matter, we’re in winter now, but it’s not too late. You can change your mindset. That’s why I appreciate what you guys are doing because it doesn’t matter whether we’re at the top or at the bottom. I love what David Osborne says every day that you’re in a boom you’re one day closer to a bust. And every day you’re in a bust you’re one day closer to a boom. So now’s the time to be doubling down and listening to the Capitol hacking show and figuring out what you need to do next, but back to the punchline here, if you will. So that was my first experience realizing that if I don’t work, I don’t eat. Fast forward I’m still working for the same company. Now, my wife’s pregnant with my third child. I’m working out of town 90 hours a week, literally living in a casino, running a casino remodel. Missed like a big portion of my daughter’s pregnancy, my wife’s pregnancy with my daughter. And I just woke up one day and I’m like, this is not what we signed up for. Like working out of town, 90 hours a week. I’d literally leave Sunday, drive home, wash my clothes, turn around and go back to work three o’clock the next morning and be gone for a week. I’m like, this is not what I signed up for. And so we took the leap. We started our first plumbing and heating company, which turned into a construction company. I’ll give you the 32nd big picture from there. Realized even three years into that we were spinning off a ton of capital, but I realized in my mind at that point in time, I was going to be 65 years old and I was still going to be working in this plumbing and heating and construction company. So I went to, I was doing

consulting with a coaching company and they basically said, if your job or your business is not helping you achieve your personal goals, then you really just own a job. And that hit me like ton of bricks because even though I had left the nine to five, if you will, or in this case, the 3:00 AM to 5:00 PM. I still looked forward to the age of 65 and realized if I didn’t start creating some passive, additional streams of income, I could find myself 65 years old in the same boat, even though I had made good money was working hard, had my own business. And so that kind of led me down the road of real estate investing.

Josh McCallen: Okay. What age were you again when you did that? Mike Ayala: 24. When I started the company.

Josh McCallen: You start your company at 24, you own a job. It sounds like you build it pretty successfully. And when do you have the next epiphany about passive income? How old were you then? Same year.

Mike Ayala: No, it was probably, a year and a half, two years in, so I was 26 years old. I’ve always, I think one of my superpowers is knowing what I don’t know. I think if we’re honest with ourselves and we just set the ego down I think that’s been one of the keys to my success, from the beginning I’ve always asked for help. I’m not scared to ask for help because I know in order to be successful, I’ve got to learn more. In order to earn more you have to learn more. And so this consulting company, we’re like, how do we take, our company was doing well. Every single year, we were double growth firm from 2004 to 2005, doubled, 2005, 2006, doubled. All the way to 2009 we were on the Inc fastest growing companies in America.

Josh McCallen: As a plumbing construction company?
Mike Ayala: Yeah.
Josh McCallen: That’s unbelievable. Really that’s incredible. Congratulations.

Mike Ayala: But we were moving so fast, without getting outside help. I would have imploded. And so that’s kind of the key. So we hired this company called business development resource, which I’m circling back now and another business venture and actually involving them in something we’re getting ready to launch, but that’s when we went to this coaching thing, that’s when they said, the whole entire first day of the annual business planning was about building what do you

want personally. Because if that business isn’t helping you achieve your personal goals, you just own a job.

Erik Cabral: Yeah. So obviously being in construction, especially since the age of 15 do you remember any instance or anyone instrumental to taking that leap? Because going from the mindset of taking hammer to nail or doing something, getting your hands very dirty to an investor’s mindset and cash flow, like, do you remember the aha moment for you?

Mike Ayala: Yeah, I remember. So really, I think step, sometimes we have to just go with gravity. My boss at the time was also, he was wanting to sell, and he had sold his company once to a big conglomerate firm and then had to take it back. And so he actually came to a group of four of us when all this was happening. And he said, Hey, I want to sell you guys the company. It wasn’t all the employees. There was a group of four of us. And so we started going through this process of like looking at buying this company. And it was actually a killer deal. I think back, he just wanted out. But going through that process, there was going to be four bosses. And I remember thinking to myself, man, anything with two heads is a monster. Anything with four heads is going to be really bad. And I’m a proponent of partners by the way, I’ve partnered in almost everything I’ve done since then. But that kind of led us. Our hand was almost forced because it was like, okay, well, if we don’t buy into this company, then we’re going to be employees working for the people that we’ve been working side by side with. And so then that’s when I took the leap and I actually started that company with a partner. So I think sometimes when I say don’t go against gravity sometimes like the universe or God or whatever you want to call it is like taking you down a certain path. And I think we just have to learn to just not resist that. I didn’t have an intention at that point in time, I’ve been asked a lot lately, like, did you want to start a plumbing business? Was that your dream? I’m like, who wants to start a plumbing company? Like nobody wants to start a plumbing company. And so just don’t fight gravity is my point, but then fast forwarding a little bit. There’s two things that really rich dad poor dad, which you said it. As I said before, knowing what you don’t know. I found a little purple book and that just blew my mind. And then I immediately dove into cashflow quadrant, which is probably one of my favorite three books. But then the next thing for me was we had gone to Sacramento, California, and we were coming back and I had a cousin who had invested in a duplex and he was living in one side and I thought, man, this is really interesting. And I had a tax problem at that point in time because the business was spinning off a ton of

cash. And my CPA at that point in time, he told me, you might want to look at investing in some real estate, buy a commercial building to put your plumbing

company in. These little seeds are just getting planted everywhere. And the rich dad poor dad. My CPA is telling me this. So on the way back from Sacramento, I stop at Barnes and Noble. And on you ever had a book just like jump off the table? God, it’s like on the sale table, right? And it’s Dolf de Roos it’s “the real estate investors college” it’s called. You can still buy it in CD form for like $250 on Amazon. It’s a 16 series CD series. And so I put it in we’re in Reno, Nevada where I lived was about five and a half hours. I’m driving and I just like, I literally wanted to drop my family off when I got to Elko Nevada and just keep driving. This was amazing.

Josh McCallen: Was it on the car speakers the whole time? The kids are all just let you while they’re little, but your wife’s listening. What was your wife saying the whole time?

Mike Ayala: Like, as soon as you hit the gas, she’s out.
Josh McCallen: My wife. Cause I’ve done that a few times, but sorry, go ahead.

Interrupted you.

Mike Ayala: Yeah, so I mean that CD series was amazing. I got my head spinning and then probably I don’t know the exact timeline, but three or four months later, I find myself in this three-day profit lunch and this was the question they asked if money and time wasn’t an issue, what would your life look like? Where would you be? And there was all the normal stuff. I’d have a Lake house, I’d have a mountain house, beach house, blah, blah, blah. But then my wife and I said, we would buy two income producing properties a year for 10 years. That was like our big Beehag at that point in time when it came to real estate, I had listened to Dolf de Roos. I’d been getting brainwashed by Robert Kiyosaki. And I know that like I want some passive income. And so that was like my big, hairy, audacious goal is Jim Collins would say, and so we set that goal of getting two income producing properties a year for 10 years. And it’s crazy. And I talk about this a lot. It took me a long time to realize that this is actually scientific, the reticular activator. I just thought it was like, when you actually just change your thinking and start where focus goes, energy flows, that kind of stuff. But by just changing my thought process and knowing that I wanted that passive income, two deals like, again, don’t fight gravity. So many times people are like, Hey, how do I find a deal? And I even heard Dolf de Roos, this was his formula analyze a hundred deals to get 10 under contract, to really negotiate three and to get one across the finish line. I never really had to do that because I would just always, I mean now we’re doing it because we’re buying in bulk and it’s a whole different business model. But back then deals

were just coming to me. You set your intentions and I know this sounds woo woo, but you set your intentions and you just start putting out to the universe. Your reticular activator starts saying, Oh, I want a yellow Ferrari. Well, I don’t want a yellow Ferrari. I want a yellow Ferrari. And pretty soon you see yellow Ferrari everywhere. And so two deals fell in my lap within the course of like four weeks. Seller carry people needed out of it left and right. One of my mentors always says the three d’s; death, divorce and don’t want them. And these were those situations. One of them was a divorce situation and one of them was a don’t want them situation. So I got seller carry financing on my two single family rentals. And then in, I almost said year two, but I don’t even think it was actually year two. So we hit our first-year goal. And then all of a sudden, this 72-space mobile home park falls in my lap.

Josh McCallen: That’s how it all starts.

Mike Ayala: This is how it started. And we can talk about this later. I’ll stop after this, but this deal came out of nowhere. And I was scared to death because two income producing properties a year for 10 years. I wanted 20 spaces. I wanted 20 doors. And pretty soon before year two’s even up, I’ve got 72 space mobile home park and two single families. And that just kind of opened my eyes.

Josh McCallen: So let’s talk, let’s probe right at the end there, you’ve talked about how you had a goal, two income producing properties for multiple year, 10 years each year. So then all of a sudden, a mobile home park shows up. It’s outside the, it’s an outlier. It doesn’t make any sense to your goal. This is just a life question because since then you’ve built other businesses and been very successful. So how do you deal with goals? I’m going to back up, let’s go high level. You had a goal; an outlier shows up. Do you feel, how do you evaluate when it’s right to make a shift compared to when you’re following the rabbit down a rabbit hole?

Mike Ayala: So I talk about this a lot on anything I do really, but I’ve got a simple five-part formula me that my wife and I have followed for years. It’s what do you really want? Why do you want it? What are you going to do to get it? Measure results and adjust.

Josh McCallen: And adjust. Okay, so adjust is part of the plan.

Mike Ayala: Adjust is part of the plan. This is a great example. I just did a video of this the other day. I’m walking through my office and literally seven weeks ago, before we were really locked down and all that, I tell my team, I’m like, go work

from home. Let’s just get the virtual thing up and running because of COVID-19 and everything. And they’re looking at me like, I’m crazy. They’re like it’s not a big deal, like whatever. And so I send them home and then my wife and I go on vacation the next week and the literally the week we get back, we’re locked down in our, so I’m walking through our office last week and I’m recording a video and I’m like, this is why the adjust part is so important. Because sometimes forces outside come in and just knock your feet right out from underneath of you. And if you’re so focused on that 2020 goal that you can’t adjust, you’re going to find yourself in a really bad emotional state. So sometimes outside forces dictate we need to adjust. But the first question is, what do you really want? And then the second question is why do you want it? And sometimes what you really want changes and it’s your goal. Like, it’s your life goal. If you’re not flexible enough to say, you know what, what I thought I really wanted, isn’t what I want. I’m going to move on. I think you’re going to find yourself frustrated a lot of times in life.

Josh McCallen: You know, you set a goal and there’s, this whole thing never quit. I would say that I don’t, what you just answered was very wise and prudent, and nobody’s going to disagree with you what you just said. But honestly, I’m not sure how to answer it like a scientific way. Like, you know it’s time to shift goals because going back to that situation of the trailer park or the mobile home park, and you shifted, and you were going to learn that you became a mogul in mobile home parks. You could have chosen the other way, you could have said, no, thank you. I’m going to stick with my original plan. And you may be on a different success trajectory right now. Honestly, in that situation, that probably was not the wrong answer. But did you ever feel, and you said it, that this is a danger. Did you feel like you betrayed your first goal? I know I’ve gone through this Eric, have you gone through this? You’ve set business goals and then they change, and you wonder whether you should have stuck with the first and did you do the right thing?

Erik Cabral: Sort of questioning your decision and as the path goes, it’s like a point of no return. You don’t want to have regrets. Is that what you’re saying.

Josh McCallen: You don’t want to have regrets. Clearly, this guy made a great choice. Not that he couldn’t have done great on the other path, but we are about to get into it.

Erik Cabral: That is what you said though. You pointed it out. I mean, Mike succeeds. He perseveres, he always figures out the solution. And in the short amount of time that I’ve known him, he’s that type of guy, right. He’s a DIY guy

and he figures it out. So no matter what path he took, whether he was going to stick with single families, he would have crushed that as well. But now, but you’re so diverse. So speaking of that pivoting and adjusting and tweaking your goals, your portfolio is super diverse and, mobile home, single families, commercial buildings, land holding. So how did it get to that point? Like, how did you start to just say, you know what, I embrace it all, bring it.

Mike Ayala: Sometimes I think we think that, I think a lot of times, even the more business minded we are and the more entrepreneurial we are and the more we hire consultants, the more we think that the outcomes determine the strategy. I kind of think that actions determine the strategy, which gets you to your outcome. So I’m a take action guy. So when this mobile home park deal falls in my lap, I’m like,
okay, I don’t think I actually processed this this way then. But I think this was the, I think this is kind of the answer to all that. So what was my real goal? My real goal was passive income. My lack of understanding, because I was so young and inexperienced in real estate, I said, okay, the way for me to get to retirement with passive income through real estate is by buying two income producing properties a year for 10 years. But what the goal was actually passive income, right? That’s what the real goal was. And so sometimes I think we just have to keep the goal in mind, but maybe change the strategy or the action in order to get there. The mobile home park deal falls in my lap. And this goes back to what I said before, knowing what you don’t know. So I immediately, I was like, in fairness, I had done a lot of work in this mobile home park as a plumbing and [23:06 inaudible].

Josh McCallen: Okay. So you actually knew it. I get it. So that’s how you found the deal probably.

Mike Ayala: Yeah. And the lady that owned it was a, she was a mortgage banker out of Las Vegas. And she had invested in this park and she had a deal, some kind of investment in Vegas that was going South and she needed cash quick. So quick story on the mobile home park it was listed, she was trying to sell it before she got in trouble. She had it listed at like 1.2 million, just if somebody would pay her, then she would take it right. When this all happened. She had a first position note on the mobile home park for $390,000, from a private investor out of Phoenix, Arizona. I still do private loans and stuff with him to this day. She wanted $80,000 cash down. And basically the first that note was assumable. So she just needed $80,000 cash. And she was out, she was in trouble and she needed the money like yesterday. So this is another example of don’t want them, right. She needed out of it for a specific reason. I’m scared, man. I’m like, but in my mind, this 72-space mobile home park just went from 1.2 million to 390,000 plus $80,000 right.

$470,000. So I go to my mentor, this is what I was talking about. Just, not being scared. And I go to one of my mentors and I’m like, Hey, I got this deal. And I just show him the deal. And he’s like, buy this thing. He is like, you’re lucky. This is literally what he said to me. You’re lucky, we’re friends. I would steal this from you. I’m like, well, okay but I’m scared. Like I’ve never owned a mobile home park. I only have two investment properties and he’s like, just buy it. I’ll help you through it If you got any problems. He owned a mobile home parks, dealing with single family owned, the same thing. So I’m still sitting there and he’s like, what’s a matter. I’m like, I don’t have $80,000 for this down payment. The two things that concerned me, she needed to close in 15 days, like who closes on a mobile home park in 15 days? So that was one concern. And then the other concern was I didn’t have the $80,000. And so he literally looked at me. Our business was growing so fast and it was very profitable, but it was very capital intense. So we didn’t have a lot of cash. So he looks at me and he says to me, listen, go to Stewart title. If they can get through a preliminary title search and as long as the preliminary title search is clean, close. I’ll give you the $80,000 in a second position at 9% interest. And if anything goes wrong, I’ll take the property from you. I will take out the first position. So it’s like, I mean, there was no risk in this. Right.

Josh McCallen: No barrier.

Mike Ayala: And so back to the thing of adjusting the goals and everything else, this was one of those deals. Like don’t fight gravity, right. Because this is one of those deals like if I had actually said, Oh, I’m so goal oriented. No, my goal is two income producing properties a year, two single family properties a year for 10 years, what would have I missed?

Josh McCallen: Oh my goodness.

Erik Cabral: Or even if you suffered from analysis by paralysis and said, you know what, I need more time, give me two months or, and then it would have gone somewhere else or just would have faded. And I’m curious what your mentor though, he sounds like a really good guy that didn’t take advantage of the situation. How involved was he in helping you and, with equity or was he just, you know, paper? Was he just the loan on it?

Mike Ayala: Just the loan. He literally came in at a second position.
Josh McCallen: Was he a mentor that you paid for or was it just a friend?

Mike Ayala: No, just a friend. He’s probably 85 now, still around. I’m actually trying, if we ever get unquarantined, I’m going to try to go up to Nevada and record like a 10-hour podcast. Cause this guy is like gold.

Josh McCallen: Just do a series.

Erik Cabral: Great idea. That’s a good idea. It’s really cool to think like in his mindset, he’s like, this is going to be a huge learning process for Mike. Cause that’s really, if you walked away from that opportunity, that was, that’s school right there.

Josh McCallen: Mike, we would like to talk a little bit about the capital hacking strategies here. So you are full of them. You’re full of it, buddy. You’re full of it. So capital hacking is where we kind of demystify the fact that you capitalized and created capital by basically your human ingenuity, really your human capital and your willingness to learn. That’s like your greatest gift and lack of fear. You may have some fear, but you overcome it. So let’s go through your businesses. Okay. So let’s make a shift. Let’s get the content of there’s so many listeners listening now saying, okay. But Mike seems awesome. What does he do today? And did those early beginnings with mobile home parks is that we’re four peaks capital group came from and park place management. Was it from that capital group? I mean that Genesis.

Mike Ayala: So, two things. I sold that first business in 2014, the plumbing and heating company, actually to my partner, he bought me out and we had bought a lot of real estate together. And so we did a, by the way, this is gold. If anybody’s never heard this. We are, through the course of that, so we had bought real estate together in LLCs and we had the plumbing and heating company and a construction company and all this stuff that we built. And so we did a 355-stock exchange. This is the gold that I was saying. So if you guys, you never heard of that.

Josh McCallen: Never heard of it.

Mike Ayala: If you have, I’m not sure if it’s even still around. But if you ever have a situation where you’ve got equal stock in two different companies with the same partnerships that you can transfer that stock one time with no tax consequence. So like for instance, he took the plumbing and heating company. I took the real estate and I got an employment contract. So more complicated than that. But so anyway, in 2014, I sold that. And then I was kind of like, well, what’s next? That was the

best and worst day of my life because I’m 34 years old. I retired. And then all of a sudden, I’ve realized that my entire value, everything that I had created was tied up in that business. I was that business. That business was me. And so then I went on this journey of, okay, what’s next? And so I found the real estate guys, which I think is…

Josh McCallen: Oh, that’s our connection. Well, actually we have two great mentorship connections. So yeah, real estate guys radio, by the way, we give more endorsements to the real estate guys, radio group, their events, and we get paid nothing, but that’s okay because we love Robert Helms and Russ Gray. So yes. Tell us, cause I look at pictures of you speaking and giving testimonials, I’m looking at your website. Sorry, that was another epiphany for you. You sold your operating business. And now what? So let me uninterrupt you again.

Mike Ayala: I had no idea what is syndicating, well, that’s not completely true. My first customer, when I started plumb line in 2004.

Josh McCallen: Great brand name, plumb line, are you kidding me? Your business was called plumb line.

Erik Cabral: For those of you not in construction, the plumbing is business, right. But plumb line is when you drop a string with a weight at the end to see what our wall is Plumb. I love you, man.

Mike Ayala: You guys got to ask me later about how we got that name. Not in the interview.

Erik Cabral: Definitely not allowed to talk about that. Josh McCallen: Everybody’s listening. Just close your ears.

Mike Ayala: You can find us later and I’ll tell you the story. Yeah, so I had a client who had syndicated a whole bunch of commercial real estate over the years in Las Vegas. And he bought a ranch up in Elko. And so I was literally replumbing his ranch house, my first customer, when we started plumbing. So he had always talked about syndicating and I was like, what the heck is syndicating never really paid much attention. So when I sold my business, I had met with him and he’s like, you really need with all the real estate you’ve done and your love for real estate, you really need to look at syndicating. I’m like, okay, sounds great. Well then all of a sudden, I had been talking to a buddy of mine who actually works with us. Now

he runs our property management and construction company. His name is Tyler Gunter. I had talked to him; we had worked together back in the day in Nevada. And so I was talking to him about syndication. He sent me a link to the secrets of successful syndication, real estate guys. And I was like, what the heck is this? And I looked at this link and I told my wife, I’m like, Hey, there’s this course coming up in Phoenix, Arizona, it’s next week. I’m like, I’m going to go to it. And she’s like, not without me. And I was like, okay, well come. So we fly to Phoenix. We go through the two-day syndication course, which if you have any desire to raise capital at all, what an amazing course. I didn’t know anything about syndicating. So I go to that and I’m like, oh man, this is next level for me. This is what I need to do. Rather than, the way that I’d done it. Which I had done well and built a great portfolio, but I’m like, man, we could 10 X this thing. And with our knowledge and experience, build a true investment business and provide more jobs and take other people that want to invest in real estate and want the benefits of investing in real estate. You can take their capital and pool it. I was so hooked. They said, Hey, if you want no pressure, but as soon as the show is over, not the show, the conference, we’ll talk about our mastermind. So I stay and they’ve got a high-level inner circle. I joined it immediately.

Josh McCallen: Did you? Look at you man of action.

Mike Ayala: My superpower is I know what I don’t know. And I’m like, these guys are smarter than me. So yeah, my wife, she was like, you got to do this, and this is those things about adjusting goals again. So after I had sold my first company, I bought a division back from that company. It was a high-end cabinet and remodeling division that we had built out, but he was overloaded and couldn’t run all the divisions. And so I bought that back, which I had wished I had never done because it’s like it was a waste of time. And then literally a year after I’d bought this back, I find the real estate guys. And then all of a sudden, I’m like, this is a big commitment. Getting into syndicating is a big commitment. This is no longer passive investing. You’re now running a real estate investment business and you need to treat it that way. And I realized that, looking back to the first business and how I had built that out, we got to over a hundred employees in a quick period of time. I saw that. So on the capital hacking side, you can do it passively, but if you get too far in and it’s not your career, then I just encourage you to just really, pay attention, just pay attention.

Josh McCallen: Or join a team or join as a limited partner of teams that you trust and want to work with. And that’s why you have your show because you have a great company and our show leads people to my wife’s company, accountable

equity. So yeah, there’s two ways to do syndication. Right? You can make it passive if you want to be passive.

Mike Ayala: Sure, sure. I think I was thinking from the op…

Josh McCallen: You’re absolutely right. The operators, you and I are similar on this and Eric and I just did another interview of a person similar. So we’re simpatico. If you’re going to be a capital syndicator, we highly encourage those that are going to do that to move forward with a business model, not an event or a project model, but a business operation system. And it sounds like you’ve jumped, I mean, you went right into it. Did you create four peaks capital partners that Year? Like right away?

Mike Ayala: No, I met my partner, Andrew [33:33 inaudible]. He was in the mastermind.

Josh McCallen: What a great mastermind.

Josh McCallen: Yeah. So Andrew was in there. He had already started park places communities with another partner and because of a series of events, which was not a bad falling out that his partner just had some life events that he had to go a different direction. So his partner was kind of the operation side of the business and Andrew was kind of the marketing and sales and the capital raising side. And so when Andrew and I met we clicked and, we didn’t do anything for probably six months, but then we really started talking and spending some time together. And I worked with park place for probably a year really, before I became a partner. Just,

I was at a place, like I said, where I was retired. And so I helped out, I got involved, started looking under the hood. I literally didn’t get paid or become a partner for probably a year. Just kind of, Andrew and I were dating as you call it. I started just helping Andrew on the operation side. And during that time is when, for marketing purposes we had a consultant that we were working with and we still do. And they told us, Hey, you should probably consider because we have park place communities, which is a management property management company, but then we have park place construction as well. And our construction crews traveled the country, remodeling the mobile homes in the mobile home parks that we buy. That’s part of our turnaround strategy. But then this consultant that we were working with was kind of like, it comes to a point where investors don’t want to do business. This is exactly how I said it. They don’t want to do business with a landlord. Like you really need to probably get your private equity company structured. This is kind of back to that, put on your big boy business pants. So we

structured for peaks capital partners. I don’t know, probably in 2018 probably is when four peaks came around, but park place community started in 2015.

Josh McCallen: There’s a lot there, Eric. It’s funny how two shows that we do recently really lay this out. And I’m really glad that first of all, there’s a lot of things you’ve just brought up that we’re going to probably have you back on a different show because we, Eric and I are brainstorming a miniseries on masterminds and the value them, the pros and cons of them and you have multiple, I know of three that you’ve joined that have been powerful for your life. So I’d love to have you back on that show. So whoever’s listening now. There’s going to be another time where we have Mike here and he’s going to help us dissect being a consumer of high-end masterminds and what it’s done for him. But there’s something else that Mike just taught us. That is another thing we want to really bring to the audience. See capital hacking isn’t just about raising capital, Mike. It’s also about finding ways to maximize the power that you already have. That’s what Eric and I talk about. The human capital is technically, always more important than the financial capital. It just is. I mean, I remember one time a group of Harvard investor guys were calling me to invest with us and they talked about their cash capital as if it was the most important part of the deal. And I kept saying, I am so grateful you want to invest. Your capital is very important, and it will be treated very well, but it is dumb, and it has no talent. It is important, but you’re calling us because we have a unique specialty that creates tremendous wealth. I’m not speaking bad about your cash, but the cash comes after the human capital.
Anyway, bottom line, we didn’t do the deal because they didn’t see a balance. So back to capital hacking, you use the strategy that Eric I’ve been branding, this terminology called invest internship 2.0, I learned it from Gary V. But Mike used internship 2.0, and I’ve been thinking internship 1.0 is when you need a career and you learn skills to build a career. That’s 20-year-old people, internship 2.0 is when you want to build wealth. And this is when you join people that you trust or believe in so that you can benefit them to expand your ability for wealth building. So you are another example. And I can’t wait to have a show about internship 2.0, and we’re going to bring you back and dissect how that is a repeatable process. More people could do what you did. And I’ve only met two or three people in my life that did what you did, which is you had the financial freedom, which is what your podcast is all about, to join a successful group that you wanted to add value to for the reciprocity of building a new wealth engine for yourself. So anyway, compliments to you, man, you are like a role model for the show. So that’s where four peaks is today. What about investing for freedom? Which is Eric’s whole big passion.

Mike Ayala: Yeah. Real quick on internship 1.0 versus 2.0. I love that. That is amazing. And I’ve thought about this for years. In fact, that mentor that I was talking about earlier kind of spawned this in my thinking at one point in time, but internship 2.0 is the same as making money. And I find it interesting that we call it making money. Internship 1.0 is like go to go to work. You’re working by the hour or even to some degree self-employed business owner, you’re making money, but internship 2.0, gets over into the create money.

Josh McCallen: I like it.

Mike Ayala: So just for instance, in a simple, just a construction terminology, which I think most of us can probably [38:40 inaudible]. We go buy a piece of land for 50,000 and then put in, we bring in a contractor and he hires labor that costs $50,000. So now we’re at a hundred and then we bring in $50,000 of material. And so we’re at $150,000 and then we sell that house for $225,000. We literally just created $75,000, created.

Josh McCallen: I love that analogy. That’s a very easy way to understand it. Isn’t Eric.

Erik Cabral: There’s all these thoughts and things that are swimming around in my mind that I just want to highlight before we jettison.

Josh McCallen: Before we lose Mike, I mean, we’d been burning so much incredible burn.

Erik Cabral: I want to rhyme back about five minutes when we were talking about human capital and how Mike reminds me of those folks. And I know several people that have said this, you can literally drop me off anywhere. Just give me a license and a credit card and I’ll start it all again. Mike’s that sort of…

Josh McCallen: Yes. Mike can do that.

Erik Cabral: He can figure out, give him a seed and he’ll plant it and he’ll grow it and figure out how to nurture it and explode the thing, because that is the difference between people who put too much value into capital and having cash in the bank, as opposed to having the human capital and the resources and the mindset to build and grow. I like in what we do, and I’ll lump the three of us and also our listeners. But the 2.0 is also having the ability and the superpower to sell ideas. I’m not selling a product. I am not selling you here, take this from me. I’m

going to talk about something and you’re going to jump on board and we’re all going to do this together. And then there I’m creating value. I have just a concept. Because I think McCallen, when I first met him and even with you, Mike, it’s like, I am sold on you. I don’t care what, whatever deals you have, whatever it is I want to work with you because I like you and your ideas and the way you think, not necessarily the deal, the deal could be anything, a mobile home park, land or whatever. But yeah, that’s where I just want to highlight to people that really, really focus on being that creative. And if it doesn’t come naturally surround yourself with people that are because it will spill, and it will influence you.

Josh McCallen: That’s such a great point, Eric. That’s why we love being part of your mastermind group, pod max and all the different thought leaders you bring into spaces. I just love being around with MC and [41:06 inaudible]. Mike Ayala is going to join in, I am sure.

Erik Cabral: It’s good. He’s built it. It’s funny because here’s how I know I’ve evolved [41:13 inaudible] Mike’s show here. I’d say three, four or five years ago, if the situation, when we met Mike, cause we were talking about helping to build the podcast, just behind the, like you like to say inside baseball, Mike was interested in us, potentially helping him. And then when you launch it, I was so freaking happy for you. It didn’t matter who you use and who you went with and who was helping you build it. It’s so amazing to watch it, get built and look at it from a far and go, Holy crap that’s amazing. Now, can we work together? And let’s do some stuff because we’re all doing sort of similar things. So can you share with the audience because you’re super passionate about this new brand that you’ve launched. Can you tell people what was the inspiration? What was the middle? What was the beginning, middle, and out, what’s your future end goal with growing, investing for freedom, the podcast?

Josh McCallen: Well, so two things that are really interesting and it took me a while fighting, literally fighting with our marketing guys because if I get a hundred people that listen to investing for freedom or join our Facebook community or any of that, my ideal client, if we want to talk about our avatar is an accredited investor. Just like, I mean, it’s the capital hacking space. So we don’t take investors that aren’t accredited. And the majority, like I said, if a hundred people find and listen to my show and I get on a phone call with them or anything else, 95 of them are not my ideal client in terms of they’re an accredited investor. But I’m so passionate about helping people find their freedom through passive income, through mindset mentoring.

It starts with changing the mindset. And I get so many people asking me, if I have $5,000 to invest, where should I invest it? It’s the same thing we’ve been talking about. Put it into a mastermind, put it into a course. Don’t take $5,000 and go, try to find a duplex or something. I literally had a girl last week asked me, Hey, we’ve got this eight unit that my husband’s looking at, should I buy it? I have no idea if you should buy that. Like how much money do you have? Like you need to go hire a coach, like take $5,000 and go hire a coach.

Josh McCallen: Well, you’re one of the few that’s ever, you’ve done it at a very high level. That’s why we got to do a show with you talking about it because when I would have, I am totally interrupting you, I would never have known how powerful those things were. And you can really speak to those people. But go back to your interruption. I interrupted you.

Mike Ayala: So investing for freedom, the reason why I’m so passionate about it, I’m not looking to monetize the podcast. I’m really not. I started the podcast because I find myself constantly getting hit up through DMs. Hey, can I get on a phone call with you? Hey, can I pick your brain for five minutes? Yeah, yeah, yeah, yeah. Yeah. But you only have so much time that you can do that. And so I wanted to launch the investing for freedom podcast so that I can just share whatever I want to share with the masters and if they want to listen, great. And then even the investing for freedom Facebook community, it’s a free Facebook community.

Josh McCallen: I like that.

Mike Ayala: I’ve got some amazing people in there that, I’ve got some groups that run masterminds and that kind of stuff like rock, you guys know rock from L1. I’m teaming up with some other people that do sell coaching programs and they’re going to be in there just to help. And then if you want to raise your hand and you want to join a mastermind group, go ahead, sign up with them. That’s fine. But the investing for freedom podcast, I mean, obviously the podcast is free. But the Facebook community’s free. We’re going to go live in there. I’m literally, as I’m recording podcasts, I’m asking that guest on my podcast, Hey, will you spend five more minutes and just come in.

Josh McCallen: So smart.

Mike Ayala: My Facebook community and just teach them for five minutes. So that’s where I’m so passionate about investing for freedom for that reason. Cause I

just want to share, I go back to, number one, my boss at the plumbing and heating company, he constantly taught me. We owe it to the next generation. This is the apprenticeship, the internship. We owe it to the next generation to just share everything we have with them. And he literally started an apprenticeship program that had apprentices from all of our competitors. They would all come to class and all the companies in town could send their apprentices there to get trained.

Josh McCallen: That’s pretty amazing, actually.

Mike Ayala: That was his abundance mind set. So he taught me that we have to give back. And then the guy that I keep talking about his name is Barry
[45:20 inaudible] my mentor, abundance, like, he said to me, you’re lucky you are my friend, or I’d steal this from you. But he never asked for a penny. Anytime I ever needed anything, he would sit with me for two hours and I literally remember him, I can’t tell you a thousand times looking up saying, do you want to hear this? I’m like, heck yeah, I want to hear this. Like, so that’s my investing for freedom, passion. I just want to give back, I just want to help. It’s the mindset, you’ve got to change that mindset first. You guys are nailing. It’s not about the capital. It’s never, ever, ever about the money. The money is not the problem. The mindset is the problem. Having the right team in place as the problem, finding the right deals is the problem. Getting the deals turned around is the problem. Capital’s never the problem.

Josh McCallen: Well, hey man, it’s a blessing to know you buddy. And I’m serious about some follow-up sequences if you don’t mind. And as we get into these miniseries, we need pros like you to help highlight these just like capital hacking. So just like what you’re doing, capital hacking also doesn’t have a big grand plan to monetize it. It just wants to share what we’ve been learning from our mentors.

Erik Cabral: But Mike, yeah. How can people reach you? How can people work with you?

Mike Ayala: I’m on the, if you want to look at the mobile home park side, park place communities and four peaks, you can find us at the website, www.fourpeakspartners.com. And then the investing for freedom podcast, you can find it on any of the major podcast sites. And again, we have the Facebook community, it’s free. It’s just investing for freedom on Facebook.

Erik Cabral: Awesome. And congrats on your, was it top in the top 100 or the top business…?

Mike Ayala: Top 100 business. Top 50 in investing.
Erik Cabral: Beautiful man. Yeah. Congrats. That’s awesome.

Josh McCallen: Yeah, man, let’s ride your wave. Thank you so much, Mike, it’s been great to have you on the show.
[Outro]

If you found value in this episode and you know someone who’s wanting to start or move further along in their journey toward investing for freedom, I would be forever grateful if you would share this show with them and help me get this message out to more listeners. Also, if you enjoy what you’ve heard, I would appreciate it if you’d take 30 seconds and leave me a five-star review and share this with your friends and until the next episode, cheers to moving further along in your journey of investing for freedom.