Simple Passive Cashflow to Freedom with Lane Kawaoka

Evan Holladay: Welcome back to another episode of Monumental. I'm your host, Evan Holladay and today's guest comes all the way to us from Hawaii. Today's guest is Lane Kawaoka, Lane is the co-owner at MFPE Investments where they own and control over 2,100 units and where he is responsible for finding investment opportunities, analysis and marketing. Lane works as an engineer full-time and has real world experience in working as a project manager for over $230 million dollars of capital construction projects in both the public and private sector. Working as a high paid professional in corporate America and frustrated by the traditional wealth building dogma, Lane was compelled to inspire and mentor other professionals via his top rated podcast at simplepassivecashflow.com. In today's episode, we talk about how he went from being brainwashed into "the American dream" of getting a corporate job and getting a house to owning a whole portfolio of turnkey rentals granted all over the country, he was in Seattle. It's a crazy story, and now he owns and invests in over 2,100 units of multi-family and different types of housing. We'll also talk about how he built a massive group of like-minded investors and why he educates others on gaining simple passive cash flow. If you're listening right now, I just want to thank you for listening to Monumental and also everyone out there that has left us reviews on iTunes, that really means a lot to us and that really helps spread the word about Monumental. We appreciate all of the love and support. With that, let's jump right into the show.

Lane, great to have you on the show.

Lane Kawaoka: Thanks for having me, Evan.

Evan Holladay: How are you doing today?

Lane Kawaoka: Sun is out and guns are out because it's sunny every day in Hawaii.

Evan Holladay: I love it. We'll have to dive into Hawaii a little bit, but let's first jump right into getting into your background and before you got started investing in real estate.

Lane Kawaoka: It's a boring story. I went to school, parents always told me to go study hard, get a good job, so I went to University of Washington for engineering school. I was still brainwashed at that stage and I went to work as a construction manager my first few years, I was saving up all my money to go buy a primary residence because that's what I was told to do, get on that escalator of wealth building and buying your own primary residence. Because I was a construction manager and we traveled all the time for work, I was never home so I would leave work on like a Sunday, catch a flight, come back Friday evening so I was only home at that place for one day a week. I decided one day, "Let me try to rent this thing out." I called up an old landlord and I was like, "I don't know what a property manager does, but can you run this thing for me?" That's what she did and that was the start of the madness.

Evan Holladay: Then from there was there something that led into you falling in love with real estate?

Lane Kawaoka: It was just straight money, I bought a $360 thousand dollar class A property in Seattle, this was back in 2009. The rent for that was $2,200 a month, definitely not the kind of rental you want because it didn't even meet the 1% rent to value rule. The mortgage was $1,600 a month so as far as I was concerned as a young 22 year old kid, it was $2,200 minus the mortgage and paying the property manager and I had a few hundred bucks of cash flow there, and I was like, "I've got to keep doing this again and again. This is just beer money." About the same time, I didn't like my job. I had some pretty bad bosses that treated us like dirt, the whole combination of that was my ticket out of the day job. That was where the motivation came and then I started binging on all the podcasts and books and finally read that Rich Dad, Poor Dad book which I thought of anyway. I was slowly building one rental after another, that was the next step.

Evan Holladay: That's funny you say that, I feel like most people I talk to or have on the podcast say that it was because of Rich Dad, Poor Dad that they got into real estate but you beat it to the punch, you got into real estate and then read the book, but that helped you even further open up your eyes to say real estate has got something going on.

Lane Kawaoka: I knew of that book because the guy was from Hawaii and everybody talks about the same stuff, if someone is from Hawaii then everybody in Hawaii knows about it. I didn't really read it until I was like 1 year managing my own rental and it's only one book. I guess it's the bible of not working for the man forever and all that stuff.

Evan Holladay: You're exactly right, I've had that book mentioned quite often on the podcast. You had that first rental, you had a cash flowing a few hundred dollars where you said, "I could keep doing this". How long did it take to get into your next deal?

Lane Kawaoka: I was making like $80 grand a year as an engineer and the cool thing at the time because I was single and I was living on the company dime the whole time, living in motels, I didn't have any living expenses. Maybe some weeks where I would make it a game, where I would spend like $100 the week just on Saturday night. It was weird like that, nevertheless I was able to save like $30, $40, $50 grand a year, something like that. In a matter of years, I was able to go buy another property, this time a duplex in West Seattle not as nice place, because I was aware that you don't buy A class rentals, you go for more cash flow. I was like, "I don't want to go to South Seattle and get shot, I'm going to buy a B class rental with very light rehab, like $5 grand of rehab. I knew where I was going but I still wanted to ease into it. I picked up that rental duplex a few years later and then 2012 happened, and that was the time when the market was coming back up and I was like, "I can't cash flow?" [Laughs]. A lot of California investors or Seattle investors realized this, that you're just not going to be able to find cash flow in primary markets, you've got to go to the secondary and tertiary markets. I had heard about this turnkey rental thing about buying out of state, slate on scene and I followed a bunch of steps that I read about and I met a few people that helped me and that's why I like to help out the guys getting those turnkey rentals or just the first out of state rental. It's daunting, but I do remember talking to a couple people and one guy was a cop, I don't know who it was but he was like, "It's easy, if I can do it, you can do it." I was like, "Alright, I'm going to do it. I'm going to buy this $70 thousand dollar Birmingham property" and it worked like magic. $875 every month, then I sold those two Seattle properties and did a 1031 exchange for 9 properties out of state and that's how I built into the whole digits pretty quickly.

Evan Holladay: That's an interesting story going from two class A properties in Seattle in your backyard to realizing that there's better cash flow in maybe class B or class C investments and also turnkey investments, looking out of state and 1031 exchanging using that equity from the sale and putting that right into multiple what, 10+ units?

Lane Kawaoka: Yeah. I think looking back I was drinking the turnkey rental Kool-Aid back then. You can get 10 Fannie Mae, Fannie Freddie loans in your name, then you get 10 in your spouse's name, now you reeling with 20. Then I got 5 in Atlanta, 4 in Birmingham, one in Indianapolis and I was going to go get some more in Indianapolis but then I realized quickly this is kind of a pain in the butt. With 10, 11 rentals at the time I was getting an eviction or two every year and some big thing that happened every quarter which is not that bad, three property managers and I was doing this all remotely. I realized that I was just getting cash flow like $3,000 dollars a month. No shabby thing, but that wasn't going to replace my engineering salary. Then I realized I'm going to get 30 of these so if you just do the math, you do $10 thousand dollars passive a month, I'm going to have almost 6 evictions every year and definitely a big catastrophe happening every few weeks. This was not the way to go so I started to look into apartment buildings which is the logical progression back in 2015 and '16.

Evan Holladay: Looking back, would you do it differently or still go down the same path where you learned as you went?

Lane Kawaoka: If I would have done it differently, I might have just bought a few three to five out of state rentals and then gone into the big stuff. Everybody's situation is different and I talked to so many people, I try to help them along because it's mostly a combination of how much net worth you have and how much money you're able to put away in the bank. If you're a doctor or a lawyer, a lot of these guys will be able to put away $50-$100 grand a year in savings. It's a no-brainer where they should probably just skip over the whole single family home thing although a lot of guys that work with me, they like to take, "Lane, let's go get one, teach me how to get one" so they at least understand it. It's funny, I pay professionals for a glutton for punishment, this is why there are such high paid professions because they always like to do it the hard way, the "right" way, I don't know.

Evan Holladay: They want to learn themselves.

Lane Kawaoka: Right, and I think if you're going to do it you got to have a certain net worth level, too. If you've got to be a passive and you're putting $50 grand to each deal, there's no way you can do it if your net worth is $200-$400 thousand dollars. You don't have enough money, no syndicator should take your money if you're - I don't want to say broke, but not even close to being a credited status. Then if you want to be an operator, a lot of the deals these days you need to put down hard money and that's 100 G's plus or minus 50 or 100 right there and that's not chump change. I think you should do it the [Inaudible 12:53] way and slowly built up there the portfolio with cash flow first, then once you get good at it then take some swings, especially when you're bringing other people's money.

Evan Holladay: Your advice to others that are getting into it now is everybody's situation is different but learn the business with some smaller rentals, get your cash flow up and then work your way up to larger multi-family units and then potentially get into it. If you want to keep going, take that next step like you did and get into the larger multi-family.

Lane Kawaoka: It's so clearly and elegantly you said that, people hear only what they want to say. I made a graph that says, "If your net worth is this and you're able to save this much money and you're below this line, this is what you should do." It's a combination of those two factors and I made this graph with all this stuff because people just don't get it and will be like, "I'm the one, 10X, yeah." That's what most people think, or at least the ones that call me, I guess. I don't know, maybe I just attract that kind of person [laughs]

Evan Holladay: [Laughs] I think it's the 10X license plate behind you I see. It's funny, that's a good point. People need to realize their financial situation maybe should in some ways dictate where they should be looking for deals. I don't think that should limit where they look, but they should also know that if they're going to get into bigger deals, they need partners that have done it before or have the net worth.

Lane Kawaoka: When I look to invest with somebody, #1 I like to work with professionals. #1 reason why they're proven, they're pre-selected people, they're not some... I'm not saying money isn't everything, but if you haven't really worked at building a career, I'm not saying that college is anything either but it shows that you at least spent some time trying to work towards something. #2, there's some technical expertise, working with professionals they have some sort of, whether they're engineer or accountant, even a doctor or dentist is not really a kind of technical skill that carries over but maybe they're good at business or at least they have the ability to grind at it. #3, I don't like working with people that have to worry about putting food on the table because when times get tough, I should hope they're going to put me the limit partner on the side, they should take their family. It's nice that they have a W2 day job coming in or at least they came from a W2 job and transitioned over slowly. That's just what I look for when I look for a sponsor to go on with.

Evan Holladay: What was your path into getting into multi-family?

Lane Kawaoka: I went and joined a mentoring group. I think I was at my late 30's at the time and I was like, "I'm going to be doing this for quite a while and I guess I'm pretty good at this, I'm going to keep continuing the progression so I'm going to get the mentorship." First time I paid money for mentorship program because first it was always YouTube and Google and podcasts.

Evan Holladay: What made you want to pay for it?

Lane Kawaoka: I think I saw the value in terms of multi-family is a team sport, you literally need other people to go sign on your debt to get the deal done. You're not going to do that sitting at home playing on forums or Facebook groups, it's just not going to happen. Part of it was I wanted to get to that next level and I saw it as a place I need to push, and the saying "pay to play" is very true to do this. That's what I did and I spent probably about a year to 18 months doing everything that they tell you to do, go look for deals, [Inaudible 17:22] people, talk to the broker, analyze all these deals. I must have analyzed like 150 deals in that time and it was a complete waste of time because none of those made sense. This is back in 2016 and I realized I didn't like to do the acquisition side. I didn't like to butter up brokers, I didn't like to take Dallas Mavericks game because it was hard, I was living at Seattle at the time. Now when I live in Hawaii that's impossible. A year into it banging my head against the wall me and my partner were like, "We're not getting anywhere because we're just a couple of Joe's with 20 something properties, single family home type, residential." We weren't getting anywhere and were like, "We got some cash, we got to go onto a deal as a passive because we got to do something. Maybe putting this on the resume will look cooler and people will give us deals." That's what we did.

Evan Holladay: It gives you experience from the investor's side of a deal.

Lane Kawaoka: Kind of, you're getting the outside of the curtain look of it.

Evan Holladay: But you see how they treat the investors, right?

Lane Kawaoka: Right, but then we realized, why would I want to take all this time and effort, come home every day, grind for a few hours after, going to my day job when my net worth was already at a place where I could just invest it and like 15% a year and I'll be totally where I want to be financially independent very soon? That's when I made that mental shift. You could say I gave up, but I was like, "Screw it, I'll keep working my day job" and my day job got easier and easier because I switched from private to more public sector jobs. People got a lot more nicer, it got better, pretty sweet gig I got now. That's what I'm up to these days, just going into deals. I don't spend my time talking to brokers, I spend my time hunting deal hunters, so if there's operators out there I'm looking for operators and I'm hunting them. I'm the deal hunter-hunter.

Evan Holladay: [Laughs] I'm writing that down because I love that term. You're hunting deal hunters.

Lane Kawaoka: I'm like the movie Solo when those guys got, I don't know what they got, they're rushing around and the other guys are just up that camp drinking beers and when the protagonist brought it back to the camp they just ambushed them, that's what I do, just wait for them.

Evan Holladay: [Laughs] that's a good way to look at that, I like that. You mentioned you don't like the acquisition side, meeting with brokers, wining and dining and certain things. What brought out to your mind your strengths and weaknesses? If you didn't like to do that, what do you like to do?

Lane Kawaoka: I don't really like real estate too much, I like the money that it makes and the lifestyle it creates and I tell this a lot to my investors. If you're able to put away $20-$50 grand a year into even stocks, you're going to be financially free and [Inaudible 20:56] a lot of these guys are like within a few years and a lot of them are under the age of 45. The same "begin with the end in mind" comes, that's why I was living in Seattle, I had a higher paid job and I was like, "Screw it, I'm going to start practicing what I preach. I'm going to move back to Hawaii, take a lower pay cut and do what I want to do now" because I wasn't. I was on track investing, it's not like I was going to go screw off. I was actively investing in good deals and I was on track, it was just a math equation.

Evan Holladay: You really enjoyed the ability that real estate brings by investing in it, it brings you the lifestyle you want and the financial freedom.

Lane Kawaoka: I think if I were to say I do like something, I do like when somebody contacts me out of the blue who I have a personal relationship with and says, "I got this deal that I'm working on, what do you think about it?" It's not like the dude with that cap behind me, that bottle 6 cap like, "I got a deal, I don't even know how to analyze it but it's a deal." No, someone who is a good operator and then they float it to me and I'm like, "This looks pretty good, I'm going to go fly up there and check it out." I think that's cool, that's like hunting. I never liked hunting, but I imagine it's sort of...

Evan Holladay: You like the art of good deals coming through and being able to work with that good operator, and being able to partner with them.

Lane Kawaoka: Right, because now I'm at the point where I invested a lot of my money in but still as the cash flow comes out and I keep making money, I still have an allowance to go and invest in more deals. I get to be a little selective, so I'm coming at it from an abundance mindset. It's fun because food is coming on the table regardless.

Evan Holladay: I saw you have the Crowdfund Aloha, is that where you're bringing in other investors to invest in these deals? How does that work?

Lane Kawaoka: I have Simple Passive Cash Flow, that was the wonky "follow me, buy these turnkey rentals" and the story has transitioned over the years to buying bigger stuff, apartments, mobile home parks, self-storage, all kinds of stuff. I realized that some people don't like the keeping it real of Simple Passive Cash Flow [laughs]. The Crowdfund Aloha is the grownup version, Evan, you show your auntie this site. "Pay no attention to this Simple Passive Cash Flow Lane character", but this Crowdfund Aloha is the grownup version with the proper... I don't know, how they make most websites these days with icons and some garbage.

Evan Holladay: Interesting, I like it. That sounds like branding to me, it's smart branding.

Lane Kawaoka: It's the same, the business in the front, party in the back.

Evan Holladay: Now you've peaked my interest. What is it that, like you said, rubs people the wrong way about Simple Passive?

Lane Kawaoka: I have this conversation a lot with my investors and friends, it's crazy. People will talk about sex with their friends before they ever even talk about money, that's how taboo of a subject it is and then here we are talking about Simple Passive Cash Flow, about money so intimately and so second nature that I think it puts a lot of people off. Some people can think of some of the topics that I talk about as very controversial, so the Crowdfund Aloha is more of the PC version of it.

Evan Holladay: I would think that people that are looking into real estate would find those discussions very enlightening, if nothing else. Being able to learn from podcasts and push the needle of their spectrum of knowledge on real estate.

Lane Kawaoka: I think there's two kinds of investors out there, there's people who don't have too much money and they're open minded to that kind of edge, but I also think that people with money don't have to take chances. They're not going to take chances on me who spells a lot of words wrong because I'm an engineer [laughs]. I probably should run the spell checker a lot more than I should, but that's just how people are. A lot of times, there's a good deal and people will find reasons to not invest in a deal just to stay in their comfort zone. The other day, this guy was telling me, I was like, "[Inaudible 26:52] invest" and he was like, "I didn't like the reversing cap rate you guys use, I thought it was too high. You guys are using 7%." I was like, "The reversing cap rate is supposed to be higher, it's counter intuitive, what are you talking about?" People will sharp shoot themselves out a deal because they're afraid, and if I have to have a website that looks a little cleaner and uses proper English and spells correctly to get people out of Wall Street investments, then damn it, that's what I'm going to do. [Laughs]

Evan Holladay: Do what you got to do. I think it makes a lot of sense in the sense that everybody wants the same end result from real estate. It's the long-term wealth generation or some form of expanding their original investment. If you're a smart investor, that's what you want. The end goal is the same for everybody, but it's just a matter of how you word it or how you message it to get people on board with that same goal in mind.

Lane Kawaoka: Right, packaging is very...

Evan Holladay: I think that makes a lot of sense because I've even thought maybe you even make marketing different for different types of jobs, for people in different industries like you make a landing page for doctors, you make a landing page for dentists, you make a landing page for even more specifically like cardiologists. If you can get specific with it, I think that makes a lot of sense as far as you're targeting into their more specific needs and wants. In this case, it's better language.

Lane Kawaoka: When I try and create my lifestyle, I always want to make some kind of cool group of people where we all sort of invest with each other, sing Kumbaya where I can be myself. If you don't like me then cool, you don't have to hang out with me. That was my vision was when I started this thing out, and when I started Simple Passive Cash Flow a few years back, that was one of the coolest things. I met a lot of friends, a lot of stronger friendships than I even had when I first started it before real estate. That's been the motivation behind it all, meeting people that are like-minded and part of that is repelling people that aren't down with it. I think we're all aligned, we all want people to invest in better deals outside of Wall Street, get better returns, more conservative and how you want to do it, you do it.

Evan Holladay: Exactly. That brings up a good point, what originally got you started with Simple Passive Cash Flow and the podcast?

Lane Kawaoka: I had a couple rentals at the time and I started to buy these out of state rentals and people just thought it was the most absurd thing to do buying properties that you've never seen. How do you know if it's still there? "Well, the bank does a title report, I don't know what title is..." I was fumbling through this whole thing by myself and I realized I spent so much time and effort telling people what I was doing, and they would never do anything so I recorded it because I was always into podcasts back in the day, all these kinds of cross-fit or paleo podcasts back in 2008. I don't have kids so it was like, "I'll probably just forget a lot of this stuff, so I might as well just record it" but then six months down the road that was when a lot of the friendships started to happen. People found me and that's been the new thing.

Evan Holladay: That's what's kept you going with it today?

Lane Kawaoka: Yeah, there's definitely some models out there. I don't know if you've heard of Mr. Mini Mustache, personal finance blogs but I used to read all those kinds of things back in college 15 years ago or something like that. I was at FinCon last year and then Mr. Money Mustache was on stage and there were some people crying because they know this guy so well and what a huge impact he's making. His net worth is barely a million bucks, probably a half now because he's going to get divorced. He's not rich, but look at the huge impact he's making now, how much positive impact he is. I think that's something to aspire, for me, personally because I never wanted to be a guy who everybody knows. I'd rather be like a class Z celebrity, is a phrase I like to use.

Evan Holladay: I like that, class Z celebrity. Helping people out but not the front page of the tabloids.

Lane Kawaoka: Right. A few people say, "We follow this stuff out of buying a rental property out of state and now my wife doesn't have to work anymore." I was like, "I told you so."

Evan Holladay: As long as you follow what we got on the website. That's powerful, that's why I do the podcast, Monumental and the same reason you do your podcast and a lot of people do their podcast is really the impact you can have on other people. I've been doing this coming up on a year and have started to get more and more people reach out and say, "This one episode really touched me" or, "This one episode really got me thinking, now I started my own website doing this" or, "I started my blog." It's cool to hear people say that, "You inspired me to start my own podcast."

Lane Kawaoka: Everybody resonates with somebody a little bit different, too.

Evan Holladay: I think we all have our own message, we all have our own story and we all have our own way of sharing things. I think it helps, you're right, people resonate differently with different people. I think everybody should be in some form or fashion giving back what they can to others.

Lane Kawaoka: I had a conversation with my trainer just an hour ago and we were saying most guys in the NBA are broke so the motivation is to stop being broke and buy their mom a house. A few guys that are really rich when they get it just want to be the best, it's a power trip but once they get to that level it's very rare that they propel and stay at that high level for a long time. Like you said, I think there has to be a compelling why behind it and usually that compelling why is betterment of other people. I'm trying to embody it because that's what a lot of people like 20 Rock would say, and so far it's worked. I don't try to understand how things work, I just do what works.

Evan Holladay: I like it. What is your why, is it what you said, the betterment of other people?

Lane Kawaoka: I tell my guys, we had a goal seminar.

Evan Holladay: I saw a little bit of that, by the way. It was really cool.

Lane Kawaoka: I'm always like, "Think of the thing that you struggle with most in your lifetime because #1, there's probably some technical skill that you used to get out of that thing and you're probably very passionate about that." I don't want to offend anybody but for some girls who were sexually assaulted, they want to help other people like that or somebody was a geek in high school, they want to help other people not be that. For me, I see so many people drive, Hawaii is a great place to live but people drive like 2 hours every day one way just to have a decent, big house where their kids can play in the yard because the housing price here is just ridiculous. There's no middle class here, in Hawaii it's way more separated than on the US mainland, so the regular people are just trying to get by and they have good jobs, which is the problem. It's Wall Street, Wall Street is taking all the gains and the people are taking all the risks. If they just got one single family home rental, that would unlock so much, just one rental. I'm not saying they have to do it four more times, but just one. Just that piece of mind, that abundance mindset starts to set in.

Evan Holladay: I couldn't agree more. I had people reach out to me that were like, "I want to get into real estate but I don't have the time or the money." You need to make it a priority and where there's a will, there's a way. Even just doing one will unlock, even if that doesn't get them the cash flow they need to leave and most times it won't, but that'll just unlock a new part of the brain, and they'll be like, "I just created another source of income, I now have multiple streams of income."

Lane Kawaoka: You're kind of like me, like that tough love. I'm always like, "You don't do anything, we know what's going to happen. You'll get 8% a year, you're going to work for another 40 years. Look at these other guys that are doing it, they're not the smartest people in the bunch."

Evan Holladay: Exactly, that has been my motivation at times, look around you and, "If he could do it, I could definitely do it."

Lane Kawaoka: That one gets a lot of people [laughs].

Evan Holladay: It's interesting, I think there's a lot of different ways we get motivated. Just doing what you did at the beginning where you found a good mentor, you found a support system, you found like-minded people and you were constantly working at it. I think that's another thing, too. If people want to get into real estate or get into anything that they love in life, taking that shift from point A to point B, they need to be taking action daily or as often as they can towards that goal instead of just talking about it, they need to be doing.

Lane Kawaoka: The cash flow is the simple part, the hard part is what do you do after? What do you do after you have a few thousand dollars and you create this mouse trap, how do you start creating your lifestyle the way you want and make something bigger than just hoard all this cash flow to yourself? That's the hard part.

Evan Holladay: You moved out to Hawaii but you still work a 9 to 5, is that right?

Lane Kawaoka: Yeah [laughs].

Evan Holladay: Do you enjoy the job? What makes you continue working there? I'm assuming you can probably leave if you wanted to.

Lane Kawaoka: The three big things when I look at people's jobs is do they like who they work with? I like who I work with. Do I like who I work for? Yeah, I like who I work for. The third one is do you like what you do? I don't like what I do, I could care less. My running joke is if I stay at home all day - which I have - I'd probably just eat junk food and never change my clothes. Look at the real world, that's why they gave them a job or Jersey Shore because if they didn't work, they wouldn't party, there'd be no spice in life. In all seriousness, there is a recession coming in the next 1 to 3 years, you need to be investing off not [Inaudible 39:46] and cash flow today. You can go after some home run swings here and there because I know you do that, you do the development stuff which I think there's definitely a place for that in your portfolio, but to me, I'm going to hedge everything a second time with the belt and suspenders of my day job. Plus I don't have kids so it's not like I do anything other than just play with my dog at home or something like that.

Evan Holladay: It seems like you're already having a massive impact with Simple Passive Cash Flow and investing in real estate, and educating others to broaden their horizons and get into real estate, and still carrying a full-time job. That's pretty impressive.

Lane Kawaoka: It can be done, it's just systems. For most people, just convince of doing that one to two hours every day, that's where people get all messed up. They feel like they have to commit and they don't end up doing anything. I work with passive investors, if you're needing to spend more than 5 hours a week doing this stuff, you're doing it wrong. If you quit your job, first of all their jobs pay pretty well, like 150 thousand or more. It's hard to replace that salary. How much time can you spend being a passive investor?

Evan Holladay: I think if you take it up to the active level then it may make sense at some point but you're right. If you're truly a passive investor then as long as you're getting a great return on your money, you like what you're doing and you like your job, it makes sense.

Lane Kawaoka: It's pretty simple. The average 40 year old has probably got a few hundred thousand dollars in his 401K or in his liquid, year one go buy a turnkey rental, year two if you're making more money go into a couple syndications and then just keep doing that for a few more years and you're financially free in five. Pretty simple to me.

Evan Holladay: What is your grand vision for your real estate investing and your website?

Lane Kawaoka: I'm still trying to get to that $10 thousand dollar passive a month. I'm coasting in there, that's my plan, I was living in Seattle getting paid more, but for me it was more about coasting there, live my life how I want to be. Not have to wear a jacket every single day. I think for me, that was part of the reason for moving away. I was living in a very affluent area in Seattle and the whole, "I'm going to get my next Tesla or Porsche"... It's hard to live, because it's constantly keeping up with the [Inaudible 43:12]. The nice thing about Hawaii is that everybody drives a Camry or whatever, a pretty modest car, a lot more family-oriented up here and I don't get caught up in the hustle and bustle which is nice. For me it's just going to work, pretty simple life, pretty easy.

Evan Holladay: You've made that life, you were able to create what you wanted and live in Hawaii again. That's pretty awesome, to be able to invest in real estate from Hawaii.

Lane Kawaoka: One thing I did recently, I stopped doing a weekly podcast. I'm just going to do one or two a month, whenever something good happens because I'm just trying to live more, do less.

Evan Holladay: Live more, do less. I like it. How far away are you from the beach?

Lane Kawaoka: I can probably get there in like 10 minutes, but I never go [laughs]

Evan Holladay: Alright. Let's jump into the Monumental Questions. What does success mean to you?

Lane Kawaoka: I would say success is choosing. If you're thinking of life as a board game, define the rules of the game first before you start playing and that's where I found myself before I moved back home to Hawaii. I just try to keep going. This was another pivot point happened when I was more of an active multi-family investor. I was just following that logic of progression and I got in touch with my why, did some goal seminars here and there and figured out what I really wanted and defined the rules of my game. The whole point is if you don't define the rules of the game, you never win. To use another analogy, everybody gets off the bus or the train at some point, only the weirdos are standing at the end of the line that never get off. At some point, you just call it, you're good.

Evan Holladay: I like it. Do you have a morning ritual or a daily habit that contributes to a successful or good day?

Lane Kawaoka: No, I don't. I wake up and I'm like 4, 5 hours behind you guys and I've got like 50 emails I have to go through.

Evan Holladay: [Inaudible 45:52] as soon as you wake up.

Lane Kawaoka: Yeah, I'm still working on that. Of course, I'd love to just wake up and meditate and then work out but that's not happening with a day job I got to get going. I'm working on that. Awareness is the first step.

Evan Holladay: Exactly. What is your favorite book or book you're currently reading?

Lane Kawaoka: I read Tom Wheelright's Tax Free Wealth, that was neat recently. I don't really read too much books, I probably should. I'm not a really big book person, I read slow.

Evan Holladay: At least you read Rich Dad, Poor Dad.

Lane Kawaoka: If I give you one for The Millionaire Investor, that's pretty much the only book I think you should read. The rest is just go out and get it done, go and do it, learn.

Evan Holladay: Millionaire Investor?

Lane Kawaoka: Yeah, by Gary Keller.

Evan Holladay: I've read that book.

Lane Kawaoka: I'm in this other mastermind. A lot of people read books and they don't really go anywhere, that's just my observation from that part. I think if you're going to read a book, there definitely has to be an action plan behind it. If not, it was just show, is the term.

Evan Holladay: I'm actually going through that same thought process myself right now because I'm reading this Dean Graziosi, Millionaire Success Habits right now and I've taken it to heart exactly what you're saying. I even find myself victim of that sometimes where I read a book and I'm like, "That book was so great" and then I'm already busy reading the next book that I forget to implement what I learn from the first book. I've taken that to heart, even just today I think I have like 12 pages of notes with things that I'm taking what he says and applying it directly to my life now of things that I want to implement or things that I'm going to change.

Lane Kawaoka: When I do read something, I don't write notes, I write action items and habit changes.

Evan Holladay: I agree.

Lane Kawaoka: People always use this example of the really successful guy, he'll go to a seminar for 15 minutes, get one action item and he'll leave, and he'll say it's good as opposed to staying the whole 3, 4 days. What point is that to feel good about yourself and read a book if nothing will change? That's just the way I justify for not reading books.

Evan Holladay: [Laughs] either way you look at it, but I think that's a good point. Everybody listening, make sure you are actually taking action from what you're reading and don't just passively read. Alright, in closing, Lane, is there a way people can reach out to you or follow you?

Lane Kawaoka: If you guys are just starting out or more of a passive investor, my investing blog and podcast is Simple Passive Cash Flow, website is simplepassivecashflow.com and email is lane@simplepassivecashflow.com, coincidentally. Nice chatting with you, Evan.

Evan Holladay: Likewise, this was great, Lane. Thank you.

Alright, what did you guys think of today's show with Lane? I really had a blast sitting down with Lane and learning his story of how he went from the brainwashed corporate American job, buying the house to now owning and investing in over 2,100 units and it shows that really anybody can get into real estate or make whatever their passion is come true. Real estate can be a vehicle to make that happen. If you enjoyed today's episode, please give us a shout out on social media, let your friends know you're listening, send us a message if you've enjoyed it, let us know what specifically you're enjoying and with that, have a Monumental day.