Episode 33: From $0 To Millions: Going In-Depth With Real Estate Investing With Tommy Tran
Do you want to make millions in real estate investing? The beautiful thing is anyone can do it, no matter what your background is or where you're from. Just look at Tommy Tran, a real estate portfolio manager at Group Twenty Six Real Estate. His story literally began in a mud hut and later on, at the age of eight, flying to the US with his single mother, who put him to a great school and graduated as top of his class. Tommy's real estate investing story started with $0 in creating a multimillion-dollar portfolio, not only for himself but also for many of his clients. In this episode, he joins host Anand Sukhadia to share some of the great lessons he learned growing up and how real estate can change your life. Walk through some of Tommy's best stories about real estate investment and why he thinks cryptocurrency is the future of wealth generation. What is more, understand the impact real estate investing has on him and his clients and how he, too, can help you.
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From $0 To Millions: Going In-Depth With Real Estate Investing With Tommy Tran
Do you want to learn how to make millions of dollars in Real Estate Investing? Our guest started with $0 in creating a multimillion-dollar portfolio, not only for himself but for also many of his clients. In this episode, we are tapping into our limitless potential to learn about how to create massive wealth with real estate investor Tommy Tran of Group 26 Real Estate. He was born in a mud hut and came to the United States around the age of eight years old. His mom came as a single mom here with five young children and Tommy grew up with a very strong work ethic. He ended up graduating top of his class at Rutgers University and then worked for the State and Federal governments, then with the US General Services administration for about two decades before taking his destiny into his own hands and becoming a real estate portfolio manager. Tommy is a partner at Group 26 Real Estate in Jersey City. To date, Tommy has transacted and created several millions of dollars in net worth for his clients and he’s going to be sharing some of that knowledge with us here. Tommy, welcome to the show. How are you?
I’m well. Thank you so much for having me.
It’s so exciting to have you on. We were in a networking group together before the pandemic. You were telling us these amazing stories of real estate deals that you were doing. You explained it in such a simple way and give such a cool concept towards investing. I wanted to get you on to share that knowledge with other people and give them access to your amazing brain. I’m excited to jump into this thing. Let’s start out with the question. What does living a limitless life mean to you?
To me, living a limitless life is the ability to live the life that you truly want versus waking up and getting through the day. My belief is it’s the ability to live the way you want to versus just living life.
How did that mindset come to you? Were you always that way or did you develop this over time?
It took some time because I used to work for the state and government. Safety was always a key in terms of making sure you have a solid job and predicted income at the end of the month. As I grew older and saw that my side hustle could make more money than my main hustle, I realized that if you’re sitting in the middle of the table and you have other people, multi-millionaires and billionaires, they can eat whatever they want. Yet we’re here happy just to eat the little things that we have. It’s like, “Why can’t we have what they have?” I’ve met people that are multi-millionaires, very close to billionaires as well. It’s not like they have some super brain or way more intelligent than us. For me, it was like that acknowledgment that I can do as much as they or I can even be better than them. That’s what helped me to think that way.
Real Estate Investment: If you make a mistake, you have to learn how to fix them. If you don’t know how to fix them, hire people that do and watch them fix things.
Let’s get into your story. I want to hear about it. Let’s start out with you growing up in a mud hut. Tell us about how you got to this place in life?
We pretty much grew up in Vietnam and I would have to say that when I was growing up in a mud hut, it wasn’t abnormal because everybody in my area grew up in a mud hut. You don’t know you’re poor until you leave that country or leave that environment when you realize, “I was so deprived.” I was working at the age of 5 or 6 with my siblings at night to hunt for shrimp or fish and whatever that we could in order for us to survive. Times were tough because I was born after the communists took over so there was a very limited amount of opportunity for people to be able to make ends meet. My mom did whatever that she could to survive. We all had to pitch in at a very early age. That experience has taught me a lot in terms of being grateful for what you have. You don’t know what not having an opportunity is like until you go to a third-world country.
I think about it all the time. I’m so grateful for my parents to make the decision. It takes so much courage for your mom, for my parents to leave a situation in a country to come to an entirely brand new world. At that time, we didn’t have social media and the news. There was only a myth about what America was back in the '70s, '60s or whatever when they came over. It takes so much, especially as a single mom. She probably came here with nothing in her pocket and with five kids just to give you guys a chance at a better life. They say Asian-Americans are probably the top 1% in terms of net worth in the United States. I believe it's because of the hard work ethic. They came from a place where there was no opportunity. They came to a place that you finally do have an opportunity and then they made it happen for their lives and their generations below them.
It was an extreme struggle to get to this point and to be honest with you, I don't think I would ever live to this age because of the environment that we had to go through. We were in an area that was predominantly very low. I would say working-class, very poverty-stricken and fights, violence, as well as drugs were a part of life. Very few people grew up and made it to this point. I was very fortunate that she always instilled education as the key to be able to get out of your situation. My mom was not educated in the normal traditional sense. She had second or third-grade education but she always pushed for all of her kids to at least go through college and get educated. That helped us a lot in terms of many of us now. I would say out of the kids that she brought over, 4 out of 5 became college-educated. That led us to a better life as a result of that.
Bring us through now that you went to college. You graduated top of your class. Rutgers is a big school. How did you accomplish that feat?
My major was psychology, it was something that I was very passionate about learning and so I did very well in school. I've always done well in school, not to boast or anything, but it came very easily to me. My mom didn't have set guidance like, "This is the major that you need to go to." She just said, "Study what you like and go and then finish whatever you started." I went to learning about psychology and understanding myself and other people as well as just understanding emotions and motivations and stuff like that. When I graduated college, many people came to me and was like, "You're going to starve. You're not going to be able to find a job."
At first, it was like, “That’s funny,” then ten people say it to you. You’re like, “I’m not going to be able to find a job," that fear started setting in. What I learned from that experience is that it’s not what degree you have. It’s what hustle is inside of you. Immediately before college, I started sending out my application. I started getting working jobs. I took whatever jobs that were available. Ultimately, I landed up working for DYFS, which is the Division of Youth & Family Services as a child abuse investigator or caseworker. During that time, I never thought how that experience would translate or help me in my transition.
If you can deal with grumpy grandmas about to hit you with a pot and pan, you can deal with tough negotiation. You can deal with tenant issues. You can deal with a variety of issues. What they taught me most was how to handle crisis management and so that was key. I didn’t understand that going through that process. Ultimately, what helped me to polish up was when I got the job with the federal government. With the federal government, I was a customer service director and my job was to help the Department of Defense as well as other federal agencies to be able to acquire resources, whether it’s weapon systems, car or whatever the case may be for them to be able to fulfill their mission.
That helped me to polish up on my verbal as well as written communication. I was bringing in about $150 million to $200 million of new money to the GSA. We didn't even blink an eye when it came to the acquisition of $1 million or $2 million because that was part of what we do. I got a very high sales type of person in terms of the acquisition. That helped me to transition into real estate because we're dealing with $500 million to multi-million dollar deals. I'm very accustomed and used to dealing with high net individuals as well as that type of negotiation.
It makes a lot of sense because for real estate investing, there’s a little bit of fear involved in that. What if I make the wrong decision? There’s a lot of money on the line. I get into debt and then the market crashes. When you come in from that perspective of $100 million is a normal deal for me. I’m going to downgrade to a couple of million dollars in real estate. It’s like we’re playing with pennies. In investing, you can invest $5 or $5 million, but it’s just the number of zeros. If you’re not overwhelmed by those numbers, then the bigger pond you play in, the bigger the returns.
I was definitely going into real estate. I was investing in real estate at the age of 24. Buying, selling real estate was something that I became very accustomed to. Then working for the GSA also help me to not be nervous about buying multi-million dollar acquisitions.
Why real estate? Why did you decide that at the time you were right out of college?
After graduating college with a psychology degree, I knew that I was working for the state. I was making $50,000 at the time. My current wife, at the time was my girlfriend, she was studying to be a pharmacist. Something in me was like, “I’m not going to be outdone.” It’s a healthy competition. She was at Barnes & Noble studying for her pharmacy degree. I'm sitting here. Why don't I pick up a book and learn something? I started coincidentally picking up a real estate book and a few of them. I started reading into it and started loving it. A couple of the books that always stood out in my mind was the Cashflow Quadrant by Robert Kiyosaki, as well as The Millionaire Next Door. They taught me how to be able to think in terms of having money or make money for me versus me working for that money.
I know that with my current situation, although I had a steady paycheck, I was not going to be wealthy if I continue at this rate. I looked at the time at my manager who was the head of that entire office. He was maybe perhaps 60 years old. He was pulling at about $90,000. With state public employees, you can see their salary. I’m like, "If I stay here another 30 years, this is what I can expect." I knew that I wasn’t going to be wealthy working for the state so I better figure out an alternative. The Millionaire Next Door talked about firefighters, as well as police officers, investing in real estate on the side. I gave that a try and then went from single-family to multifamily and started building up. Little do I know within the next ten years, all my friends and family started to come to me as a result of that success.
Were you rolling one deal into the next? What was your strategy at the time? Was it buy and hold, rent or the quick flips or was it a combination of everything?
I didn’t know what was going to work. All I knew was the market rent at the time. Now we have a lot more information from Zillow and Realtor.com. There are a lot of ways for an investor to be able to do a lot of homework on a property. When I started, it wasn’t always like that. What I did was I purchased a property and looking back, I wish somebody would say, “Don’t get that property,“ but that property taught me so much. We bought a two-family in New Brunswick. If you're familiar with New Brunswick, they have homes that are a lot older. You're talking about those doors with the funny knobs that you can't go to Home Depot and get replaced because they have this little intricate hole. In that property, everything that could go wrong went wrong.
As a result, I had to learn how to fix a lot of these things or hire people to learn how to fix them. What I did was I would watch them and see how they fix things. I even pay them just to see how it's done. That knowledge is very key because later on when a person tries to tell me that this is the way to do it and whatnot, I already know how to do it. A lot of the work, I know how to do with my hands because I became so handy as a result of fixing a lot of the issues that I had with that property. Once you own a property like that, you learn to fix a lot of things and then as a result, we took the profit that we've made and then purchased other property.
At the time, I was very familiar with Central Jersey and I thought 10% or 12% cash-on-cash return was amazing. When I went over to Jersey City, the cash-on-cash return was even higher than that. At the time it was 16% and your overall return was maybe 25%. I know that these numbers sound out there but it is still happening now. To a savvy investor, that’s the type of margins that we go for. When I came over to Jersey City, the profits were huge. We are talking about doubling your returns in a few months. I was not alone because there were other investors that I knew. When we're talking about doubling your money, it’s like $250,000, $300,000, $400,000. I’ve seen even $1 million made in a matter of a year. It’s hard work but those types of opportunities didn’t exist anywhere. I was very fortunate that Jersey City was on its way up and I jumped into it hard and it worked out well.
I remember you were saying that you were following where the developers were putting their money into and then buying around that area. I know you had a couple of deals over on Merritt Boulevard. Can you tell us a little bit of that story?
My in-laws lived in Downtown Jersey state before it was hot and cool. During that time, we’re expecting our child so we wanted to get a property that was close to my in-laws for help with the baby. That’s when I started doing homework around Jersey City. I quickly realized that when you’re dealing with Jersey City, as well as the city environment, you have to understand the valuation of land as well as air rights. What happened was that I bought a property. At the time, it was undervalued and underappreciated but it was only 2.5 blocks away from Grove Street the PATH station. I think we picked it up for $245,000 and it was low. Later on, we had multiple developers wishing to buy our property for over $1 million. We bought a few more after that acquisition because once you realize and find out that the land is worth a lot more, especially in a city. Sometimes it’s not the house. It’s what the air rights are for those houses. We are hoping to close but we have to see.
Tell us a little bit about the benefits that you get from investing in real estate versus other asset classes, whether you’re investing in stock markets, precious metals or anything like that. I know there are a lot of great tax advantages of real estate.
Real Estate Investment: In real estate, it’s very important that you put down as much as possible and whatever you're comfortable with. If there’s a pandemic or anything of that sort, you can weather the storm.
There are tax advantages but if you’re a guy like me who likes hard assets, real estate is a great investment vehicle because it can never go down to zero, especially property that is in a more prime location by jobs and commerce. I’ve always loved real estate because of that because I know where my money is hiding. I know where it is versus sometimes stocks and whatnot. A billionaire decides to sell that stock then you’re left holding the bag for a very long time. I love real estate because you could grow your money, the tenants pay down your debt, your principal and then you make money as a result of it.
Jersey City right now, a lot of people say it’s too overinflated. You can’t make any money. What would you say to people if you were to tell them about how to look for good deals.
I saw a property that was near my brownstone project. They had bought it for $300,000 and sold it for close to $800,000. There is evidence and proof that there are people that are making a lot of money regardless of whatever the market is. The cream always rises to the top. Sometimes when I tell people that brownstone project that I’m working on, I picked it up for $260,000. Most people will be like, “How is that possible?” It’s possible because there are people doing it. You leverage cash as a vehicle to be able to get it at a low price. You have to come in there with the knowledge or understanding that you’re going to have to put in some sweat equity, but when you release that property, you might 2X or 3X that property as a result of your effort.
Have you heard of the BRRR method, Buy, Renovate, Refinance and Repeat. It’s called a BRRR method. They’re teaching a lot of newbie investors to go in that path because they want that machine to continue, but after looking at it. The investor is not making a lot but more so the person that’s lending them the money, which is the hard money lenders, you’re hearing about them. They’re the ones making the most. It’s not a coincidence that they used to be investors themselves, then they realize, “Most of the money or wealth is being made by the lender. Why don’t I be the hard lender?” One of the key things is that the investor goes out and finds the best deal.
The price is generally at a discount. The investors look hard and finding a great deal is not easy. He goes and purchases this property and then he starts renovating the property. For any reason, if he defaults on the loan, guess who’s going to scoop it up? The hard money lender. If they scoop it up, it’s already undervalued that they picked it up and make a huge profit and return. When you’re a newbie investor coming into this, don’t think of this like, “How do I get rich fast?” In real estate, the truly successful ones are taking their time. Find a real estate agent that is very investor-focused to help you to grow your portfolio and your money.
Don’t be so quick to say, “How do I use other people’s money?” As a result, you could lose a lot of your credibility. You don’t know what you’re doing and you can hurt the people that you care most about. Most of the time, they’re asking friends and family and stuff like that. You jump into a situation and that could be your last transaction in real estate. It’s very easy to be get broke in this field. If you want to get into real estate, find a real estate agent that is investor-focused who understands the investment side of the house to help you to scale up, and then grow your portfolio. What they do is they teach them to put as little equity as possible, renovate, sell it quickly, take your little profit, go over to the next property and then roll it again.
As you can see, the margins are very small, to begin with, because you don't have a big amount of equity putting down. Your holding costs take a chunk of your money. A lot of people boast about it like, "I got 100 units. I have 1,000 units." It's as if they're comparing their general size or something like that. At the end of the day, it's not how many units you have. It's how much those units produce and what is the value of those units that matter. Quality versus quantity. I think you've also read the book Cashflow Quadrant to know that real estate is a liability if you don’t own it straight out.
Meaning that if you are late on your payment, the government or perhaps the mortgagee will take that property back from you. It’s a huge liability. Why would you want 1,000 units? In my mind, that’s more liability that you have to deal with versus if you own 1 or 2 investment vehicles that can produce as much as 1,000 units. Wouldn’t you rather have that? In terms of buying a quality investment, you know that when you go and resell it, there’s going to be no problem because that’s a product that everybody’s going to want versus buying something very cheap. That’s one thing that a lot of newbie investors are like, “Where can I get the cheapest house? Let me head straight to Irvington," and stuff like that. It doesn’t work that way for me because I want to buy a great product, take my time to be able to renovate, fix it, rent it, and then time will appreciate itself. Ultimately, I can sell it back for a huge profit.
You’re factoring in any slight downturns in the market when you’re going into the buying. Buying is the most important part. Buying at the right price and then making sure there’s enough value even if the market goes down.
A lot of loans are 15 to 30-year loans. The problem is that in the scheme of real estate about 10 to 15 years along the line, there’s always some type of catastrophe. The last one we had was the great recession and then now we have the pandemic. In the last recession, a lot of the tenants couldn’t pay their rent because they lost their jobs, houses depreciated significantly. People couldn’t refinance. In this pandemic situation, a lot of tenants are not paying their landlord because of federal regulation, eviction, moratorium and things of that sort. That causes a lot of problems now because landlords are not getting the help that they need.
The banks are not giving them any concessions.
I’ve had a couple of tenants asked me, “Is the bank helping you?” I said, “No, the bank has not offered any type of assistance.” The only assistance that they’re willing to do is that you forgo your payment for 5 or 6 months and you have to pay a big lump sum. That’s not assisting anybody.
If you’re not going to cashflow as it is, how are you going to come up with this big chunk of change in five months?
I’ve talked to a lot of people on Wall Street. They always teach people like, “Put as little down as possible and then buy the next property,” etc. The reason why they teach us that way is because they’re benefiting from that type of business model, the lending and borrowing. If people buy things straight-up cash, then there is no money for them to be made. It’s very important that you put down as much as possible, whatever you’re comfortable with. If there’s a pandemic or anything of that sort, you can weather the storm. There an area for example in Queens, New York, when the recession happened, it was predominantly owned by Asian or Chinese or East Asian and whatnot. Even during the recession, the market there did not go down at all because there was a lot of appreciation and equity built into those homes. People were not going to walk away. As a result, even when they got through the recession, the value of the prices of these homes still went up.
Tommy, for someone who’s getting into the real estate investing market, I know you have worked with a lot of clients. Tell us how you work with potential clients and what you do to help them realize their goals.
What I do is I meet with them to see in terms of what they want to invest in, what type of vehicle because there’s a different rate of return on investment vehicle. Whether you want something that’s slower or you want it like, “What is your risk appetite?” I customize the real estate vehicle for them because some people are like, “I don’t want to go to an area that I’m not comfortable with.” I would share with them, “If you're looking for a property downtown, this is what you can expect in terms of rate of return, Journal Square, The Heights, Greenville.” I educate them about the different vehicles that exist in Bayonne as well as Jersey City and Hudson County area, for them to come up with the desired vehicle for themselves.
Nowadays, people like to pull in their resources to be able to acquire property. We’ve done also group acquisitions where we’ll have a few doctors or a few lawyers. What they do is they put the money together and then they go and they buy the property straight up. We would then go into helping them to find a property that is undervalued or underappreciated. We helped them to renovate it and then rent it out. Ultimately, whenever they want to sell it, we released that position for them. I think that moving forward, especially in our area where the prices of real estate are relatively high, it’s better to do that model versus trying to do it on your own. Having a $500,000 to $1 million mortgage is tough on one individual versus if you pool your resources together. A $200,000 mortgage is very easy and obtainable.
Is there any minimum that you look for when you take on potential investors?
For me, I have to speak with the client to see the risk appetite. If they’re willing to go into places that are up and coming, then perhaps there’s a lower acquisition cost for them. I customize based on their financial situation. I deal with clients that generally have about $100,000 and up. If it’s lower than that, then what you’ll have are people stretching their limit. They’re going to feel very uncomfortable about investing in real estate at that point. If you have a $100,000 minimum on there or if you want to perhaps work with your brothers or your family, then that's something that we coach and consult with them on.
This is probably the most exciting part for me. Walk us through some of the deals that you’ve done in the past so we can understand what real estate investing can do for you in a very positive way.
I’ll share an example of how I first started and this wasn’t a home run by any chance, but it showed me the potential. Remember I mentioned that two multifamily in New Brunswick. We bought it for $275,000. We put in about perhaps $20,000 on rental costs, then we rented it out for about five years. The principal of that property went down and then we also cashflow about $1,200 to $1,300 a month for five years. We were good because that location was good for college and post-graduates. When we exited that property, we sold it for only about $300,000. However, our net was around almost $100,000 in terms of the total from cashflow as well appreciation because, during that time, the principal kept going down.
We did a 15-year mortgage versus a 30-year mortgage. That five-year has cut down on the principal. That's when I had my first taste of investing and I said, "This works out pretty good." The next one was in Jersey City, where I bought a property. This is where knowing your homework makes sense. It was one of those distressed short sales. I picked it up in the area by the train station in Jersey City for $125,000. We did about perhaps a month of renovation on it, then we rented it out and we sold it quickly for $275,000. That was when I saw that the flipping game. The first one was more like buy and hold, then I saw the flipping game.
Real Estate Investment: Crypto came into the world, and everyone thought it was absolute nonsense. Now, it is proven that it was not, and it's the wave of the future.
I went on to buy another property, which was in a Bayonne where I converted a single-family, which I picked up for $200,000, renovated it, and then converted into a two-family. Now it's valued at over $500,000. With the Jersey City property in Downtown, because of the air rights situation as I shared with you, we found out that it was the last parcel of land that was left that could be built into a skyscraper. We maximize and pooled resources in order to buy more of those properties there. It was multiple home runs at that point. It changed a lot of people's lives as a result. When we bought these properties from these owners, they bought theirs for $35,000 and we would buy them for $1 million because we knew that the long-term, as well as the air rights, will improve in that area.
Properties that are in grade areas, you’d never know the value and this is life-changing money. I know the one example where we used to meet was at Hudson Hall in Jersey City. Right across the street was this car rental place. It was a Budget Car. Can you tell us this one?
It’s one of my buddies who own it. He owns a business as a car rental place for many years. His side hustle was real estate because he's a mechanic and he owned real estate. His land was worth way more than his business. I think I looked on public records. We're talking about in the realms of $45 million. I think that ultimately got sold for, but that's on record. I don't know what the situation but he made a good penny off of that. That's always the key to go ahead of the pack and understanding what you have. It's the next level up in real estate for you to understand the analytics behind it.
This is life-changing money. You worked so hard. This guy probably worked 30, 40 years at his craft. Maybe he was doing relatively well, but not the $45 million that he sold that for. When you have the right piece of property, this additional income can change your life. It can change your generational wealth and help your kid. There are so many things that can happen when you invest in the right vehicles. You could have continued your path working for the government, making whatever you were making, and then the potential of making $90,000 as your supervisor was. You could have gone that path or you decided, “I’m going to continue working here. Whatever money I have, I’m going to diversify that and put it into another asset class which will grow so much higher.” Now, you’re in a position where you can choose how you want to spend your day rather than working for somebody else and growing their wealth.
The decision to cut the cord with the federal government was very tough because I was making six figures and that's six figures is for life. As long as I didn't kill anybody or steal any money, I was going to have six figures for life and benefits came with it as well. It didn't feel right anymore at that point because I was intoxicated with real estate. I saw that my colleagues or the people that I work with were making $600,000 in a couple of months and these are 28-years-old and 26-year-old people. I knew that they could do it and why can’t I do it? At first, I didn’t cut the cord with the Fed right away.
I would work as a realtor to see if I got what it takes and I did that for 2.5 years or 3 years. I was making six figures or above what I was doing full-time. I proved to myself that this risk is worth it. A couple of deals, you’re talking about $1 million. You would have to work almost 30 years of your life in order for you to save about $1 million if you were to work for the federal government. I was like, “I’m young, I have a Master’s degree. If something were to happen, I can always come back and find a job,” but the opportunity is to make that type of wealth. It’s worth the risk.
There’s a season for every type of asset class. You can make money in real estate in any market or any downturn upturn, but in terms of your overall view on wealth creation, what do you think in the days that we’re living in now, what is the future of wealth creation look like?
We are living in some weird times. Years ago, when crypto came into the world, Bitcoin, we thought this was absolute nonsense. It has been proven that it was no-nonsense and it's the wave of the future. There are different asset class investment vehicles. I think crypto is ultimately taking the front stage at this point. It used to be real estate but crypto has gained the front stage in terms of getting a lot of people excited about the returns and the possibility. There's a huge potential in that.
Are there any particular coins that you’re looking at?
This is not financial advice but I am invested in a coin called a Safemoon. It’s relatively pretty new. The funny thing is that when you invest early in the stage with all the cryptocurrency that’s out there, even with Dogecoin. I think an executive of Goldman Sachs left because he made millions in Dogecoin and he invested early. A lot of people will say, “Is it too late for me with crypto?” In the last poll that they had, only 18% of the US population owned crypto versus stocks. I think it's 55%. When we look at that investment vehicle, it is relatively a very new investment vehicle.
Many people are not even knowledgeable about what that’s all about. Is there a danger to it? Yes, there is an absolute danger to it, but if you invest it right, I’ve seen people make 1,000 X and become instant millionaires from it. These are average people. Investing in real estate is not a get-rich-quick type of scheme. It takes a lot of hard work, analytics and whatnot. With crypto, being at the right time at the right place helps. Especially with the pandemic, there are a lot more people at home and they're willing to invest in that asset class.
That survey you’re talking about came out. The next question they asked was how many of the people who are taking the survey are thinking about getting into crypto and it was about 2/3, so that’s 66.7%. We’re very early on in that and that game. There are coins that are stable and have been around for a while and have a lot of applications. There are coins that are considered shit coins. I’m not going to name the coin that I’m talking about. I was at dinner with a good friend of mine. He was telling me about this coin that he got in the IPO. He put in $1,000. Guess what the value is now?
I have no idea. Go ahead.
The value of his $1,000 investment in two days becomes $30,000. Again, there’s so much risk involved in these things. If anyone looking to get into any of these coins that don't have a lot of application, but there's a lot of hype behind them. If you want to put in a small amount of money that you're willing to completely lose, that's fine. These are the gains that are being made by people and people are being strategic about it. They're getting in at the very ground floor and that could be an amazing strategy. We're going to go out to dinner and spend $200 on food and drinks you lose that money or you can put in a small amount of money into some of these coins and it could be life-changing stuff. I don't want to name the coin because who knows where it's going to be by the time this episode comes out. It could be zero but it’s incredible. Now, Tommy, if I gave you $1 million, factoring in the world that we live in and the diversification of how you see it playing out, what would you put that money towards and how would you break it down?
As a person that manages people’s wealth, I’m very honest about how I would handle your money because of the environment. I would probably put $500,000 perhaps in the real estate fund. It’s a more solid investment. If you buy a property that is in a good area, the candidates that are looking to rent have a significant income and stuff like that, you’re going to be okay. Most of the property that I own we’re okay because of the location, as well as the proximity to the train, etc. With crypto, we’re talking about a 1,000% or 5,000% return. It would be foolish not to at least invest some of that money into crypto to see if you can make a larger return from that.
I would probably park perhaps $300,000 to $400,000 on the side if the opportunity arises, as well as for the stock market. We don't know what the stock market is headed either. Tesla now, the last time I looked, it was below $600. If it goes perhaps $550 and you maybe $100,000 to $200,000, perhaps it might be a good time to buy it on the dip. In a few years, it will rise. In real estate, it’s not common to 2X or 1,000X. I rarely see that but when it comes to crypto and other investment vehicles, it can happen. Can you lose it all? Yes, you can lose it all but it certainly is worth the odds because you can’t go to Vegas or you go to a casino with $1,000 and win something like $100,000. The odds are so low.
It’s like winning the lottery. Smart investors use asymmetrical return strategies. Essentially, you put most of your money in very safe assets, real estate being a tangible asset. They’ll never go down to nothing. You then put 2% of your money into crypto. The people that put 2% of their money into crypto, say you had $100,000. You put $2,000 into crypto. If you did that five years ago, that 2% would have been the majority of your growth in assets. You're taking very little risk. If you lose that $2,000 or whatever, it’s gone. You still have the $98,000, but if that $2,000 was able to increase the way that it did, you’re looking at huge returns. These are the types of strategies that people do in order to see massive spikes in their wealth creation.
I would be even more aggressive. You want to be aggressive when other people are fearful or skeptical. I think that in the crypto world, you see so many people on the sidelines just looking in. That’s the time to be aggressive versus when everybody’s in. You’re playing to ultimately play safer. Everybody's on the sideline looking in and it comes from knowing my friend. You have a friend that made $30,000 out of $1,000. I know a friend that made them over $1 million off of XRP and that sort of ripple effect of it. I've had situations where my friend was like, "Look, I had $10,000 and now it’s $100,000 “ These are people that I grew up with that I know, even family members of mine. How do you not take that into consideration? This is life-changing money for some people. You can’t go out and have these types of opportunities everywhere.
I’ll tell you a little story. Back in 2012, I was at this meetup group. It was at somebody’s house. I got into this conversation with this guy and he was telling me that the company that he worked for got bought out and he’s semi-retired. He lives a nice little life. He’s got a couple of millions in the bank, whatever. He was telling me like, “There’s this new thing called Bitcoin. I think you should look into it.” He’s explaining what it is like blockchain and decentralized. I’m like, “I don’t know what this is,” but he kept following me around the party. He was so adamant about it
He’s like, “It’s at $0.0001. Put a $100 in. I’ll come over to your house. I’ll teach you how to do it.” I thought this guy was trying to scam me. I was like, “Okay, thanks. I’ll take your number.” I never called the guy. A couple of years later, it’s at $100. I’m at this Christmas party with some of my high school friends. One of my high school friends’ husband, Ron, we’re like brothers. He told me it was at $100. He was like, “Are you a Bitcoin or not?” I’m like, “No. I had an opportunity to invest in it at $0.0001. Now it's $100. That’s crazy. I’m not going to invest now. Why would I put $100 in for a Bitcoin? That’s nuts.”
Fast forward all these years. I didn’t do it then. Fast forward to 2017, it’s hovering or anywhere from $2,500 to $5,000. I got a little bit in. That’s how you start. You don’t have to buy one whole Bitcoin, put in a little bit here or whatever it is. It became a good return from $2,500 to $50,000. That's a big jump. It's never too late as long as you're not being stupid about it and putting all your money in one basket and diversify those funds. Look at projects that have long-term applications that can change the world like XRP. That's going to be a transition from the SWIFT banking system, which why do we have to pay money to send money to somewhere else? All these fees and international fees and all that, wherein XRP happens instantaneously. You don't have to wait a couple of days or whatever and you’re saving tons of money on transactional costs. There are so many cool coins out there so many new applications. It’s an amazing time we're living in.
It is a very exciting time. It's taken the front stage and any investor that is keen on wealth creation would be foolish not to take a look at this and see that. Remember online shopping came on and we're like, "I'm scared somebody's going to hack me? The mall's not going away." Look at the malls now. My wife loves online shopping. All the little knickknacks we buy, things that we need around the house. She buys it online because it can be done faster in the next day or two days from now, the things are right in front of our house. It’s similar to that with crypto, wherein there is that sense of apprehension and fear, but then that’s where opportunity comes in. We know as an entrepreneur that that’s the time to come in and be aggressive when other people are fearful.
All you have to do is look at the big institutional investment companies. They're putting so much money into cryptocurrency. They're not putting in billions to lose billions. It's not going to go down to nothing. It's very interesting stuff. Tommy, I know we talked a little bit about this but you had a little bit of a health scare. Can you tell us a little bit about how that may be changed your perspective on things?
I was diagnosed with diabetes. I think it’s largely because of the pandemic. I was perhaps drinking sugary stuff like energy drinks and stuff like that. I don’t have any side effects and relatively, I’m not overweight or anything like that. It was never a big concern but it was mainly genetics. When I tested my glucose level, it was 5.66. It was through the roof. There’s a blood sugar test. The normal person is a 7 or 8. I’m at 13.5, which is a dangerously high level. It shows for me that I need to change because I can’t keep at this pace because I have two young kids and I don’t want them to grow up without a father and my wife to not have a husband. I’m changing my diet as well as my lifestyle and making sure that exercise is definitely more part of my daily routine. Before, it was like, “I’ll do it, I’ll get to it.” Now I’m like, “I got to do it,” which is a different mentality.
Thank you for sharing that. I know it’s vulnerable to talk about it, but all the decisions that we make every single day do add up. You’re such a healthy guy. Just like looking at you, you have a lot of energy. You’re always in a good mood. I would have never guessed for the people out there that are in relatively good health, there are so many things that we need to look out for. Genetics is a big factor when it comes to any degenerative disease and things like that. I’m so glad that, first of all, you were able to find out through the blood work that you did. Now you’re like course-correcting. That’s definitely a scary thing to find out.
I’m very blessed to know that. We’re not on this earth for a long period of time. Maybe 60 to 80 years the most. We have to make the most out of it. Live the life that you want to like that limitless life that you had mentioned because, by the time you're ready to go, you don't want to leave stones unturned. You want to live life and put in as much effort as you can.
I plan on living to 150 by then.
I hope so but I don’t want to live that long.
It’s all about the quality of life. We don’t want to be old and frail and not be able to do anything.
It’s not how many years you live. It’s how you live and the impact that you leave behind that matters.
Thank you so much for coming on. This was so enlightening to pick your brain a little bit. Let me ask you a question. Tell me, why do you think you came to earth here as Tommy Tran? What did you want to experience?
I know that a lot of people say that you create wealth and you can’t take it with you. Why bother? That’s the mentality of a lot of people. It's that poverty-stricken mentality. Why bother? Why try it all? For me, I've talked to people that are extremely wealthy. I say, "Why do you do what you do?" They're like, "Legacy, brother. The legacy that I want to leave this earth to know that my children get a little bit ahead further than I did, that my ceiling is their ground floor. Also to be able to help the people who are around me and help to better their life."
It doesn’t always have to be money per se but money does help in tough situations. I’ve seen people that have passed away. One of my fraternity brother or my little brother passed away. He was about to be a dentist. He had brain cancer and he passed away. I remember when he passed away, over 1,000 people came and he was 27, 28 at the time or something like that. He impacted so many people and people flew all around the country to be there for him on that day. I want to say, it’s how you live your life. If you only care about yourself, then when you pass, you don’t leave any legacy, you don’t leave anything behind, but if you live the life that’s fruitful that you care about other people, even when you pass, they will remember your name. That’s the type of life that I want. If and when I go, people still remember my name or whatever good deeds that I left here.
Real Estate Investment: You want to be aggressive when other people are fearful or skeptical. In the crypto world, you see so many people on the sideline just looking in. That’s the time to be aggressive.
You’re having a huge impact on this world and in Jersey City, your family and the people that are around you. You’re such a great inspiration. You’re always in a great mood. It's a pleasure to call you my friend. What does God or spirituality mean to you? What role does it play in your life?
God is important to me. I pray a lot. Since the pandemic, I can’t go to church. This is so weird that we can’t even go to church. God is extremely important to me in terms of making very difficult decisions, as well as my overall daily life, to appreciate and thank Him for what He has given me. I don’t know how some people live without God or having a sense that there is a higher spiritual being. I can't live that way. I think that men or people, in general, are weaker without faith. When there is a storm or challenges that come, they're easily succumbed by that versus a man with faith. He will surpass those challenges. That’s how I feel about God, having someone or higher being behind your back to help you through it. As an entrepreneur, you need that. You need to have that sense that there’s a higher being that’s pulling for you, that is helping you through those challenges. If not, there are many sleepless nights. It would be very difficult to be entrepreneurial without it.
That resonates on so many levels. Tom, thanks so much for coming on. How can we learn more about you?
I am on Zillow. I’m also on Facebook. I’m very active on Facebook, Tommy Tran. You can find me on Facebook. I am very open to meeting new people and whatnot and having that community where we care and love each other, and help each other grow. I’m all about that. Contact me on social media.
If you’re looking to make some money in real estate, absolutely hit Tommy up. He’s the man to talk to.
We’ll help you grow your money.
Thank you.
Important links:
@InvestingTommy - Instagram
Zillow – Tommy Tran
Tommy Tran - Facebook
About Tommy Tran
Tommy was literally born in a mud hut and came to the USA around the age of 8 years old. His mom came as a single mom to the USA with 5 young children and grew up with a very strong work ethic. Tommy ended up graduating top of his class Rutgers University and then worked for the State and Federal governments, and then with the US General Services administration for about two decades before taking his destiny into his own hands and becoming a real estate portfolio manager. Tommy is a partner at Group 26 Real Estate in Jersey City. To date, Tommy transacted and created several millions of dollars in net worth for his clients, and he's going to be sharing some of that knowledge with us today.
