What Does A Top Real Estate Attorney See Opportunity in 2023? • Donald Hyun Kiolbassa

Donald Hyun Kiolbassa is an Illinois licensed Attorney and CPA with a focus on Real Estate Law and Estate Planning talks about his newest book and why he wrote it. Donald explains how he got involved in real estate and law. Donald also discusses why he sees the primary residence as an asset and not a liability. Next, Donald talks about where is the opportunity in 2023 and where the realtors should focus on in order to keep their business rolling. Donald and D.J. discuss long-term care insurance and how it can effect the generational wealth. Last, Donald discusses the importance of the agent knowing what they’re selling in and out. Please check out Donald’s book “Discover Your Dragon” here. If you’d prefer to watch this interview, click here to view on YouTube! Donald Hyun Kiolbassa can be reached here. This episode is brought to you by Real Geeks and FollowUpBoss . Transcript D.J. Paris 0:00 What is a top real estate attorney telling every realtor he knows what to do this year to stay productive? Or we’re going to talk about that today. Stay tuned. This episode of Keeping it real is brought to you by real geeks. How many homes are you going to sell this year? Do you have the right tools? Is your website turning soft leads and interested buyers? Are you spending money on leads that aren’t converting? Well real geeks is your solution. Find out why agents across the country choose real geeks as their technology partner. Real geeks was created by an agent for agents. They pride themselves on delivering a sales and marketing solutions so that you can easily generate more business. There agent websites are fast and built for lead conversion with a smooth search experience for your visitors. Real geeks also includes an easy to use agent CRM. So once a lead signs up on your website, you can track their interest and have great follow up conversations. Real geeks is loaded with a ton of marketing tools to nurture your leads and increase brand awareness visit real geeks.com forward slash keeping it real pod and find out why Realtors come to real geeks to generate more business again, visit real geeks.com forward slash keeping it real pod. And now on to our show. Hello, and welcome to another episode of Keeping it real, the largest podcast made by real estate agents and for real estate agents. My name is DJ Paris. I am your guide and host through the show and in just a moment, we’re going to be speaking with top real estate attorney Donald kielbasa. But before we get to Don, just a couple of quick reminders. Number one, please support our sponsors. We love our sponsors. They’re the reason we can keep doing the show. And we appreciate if you check out their products and services and consider supporting them because they support us. But even if you aren’t able to support our sponsors, and we hope that you do, please tell a friend about the show. That’s the other way that you can help us get in front of more Realtors is tell someone else in your office about this podcast we all we focus on is helping you by talking to top producers who say this is exactly what I’m doing right now to grow my business and let someone else in your office somebody who’s struggling and all a lot of us are struggling right now. Right? It’s a tough time in the market. So please share the love let other people know about this podcast. We appreciate it. But enough about that let’s get to the main event my conversation with Attorney Donald kielbasa. Right today on the show we have best selling author, champion athlete and real estate attorney Donald Yun kielbasa. Let me tell you more about Donald. Now Donald is an Illinois licensed attorney and CPA with a focus in real estate law and estate planning. Now over the past 14 years as an attorney, Donald has managed over 8000 commercial and residential real estate transactions. Prior to becoming an attorney, Donald worked as a CPA with big four accounting firm KPMG. And he’s also the author of two books discover your dragon and Tao of the side hustle, which is his newest book, when he’s not practicing law Donald is was a gold medalist for the 2008 United States Wushu Team, wushu translates to Chinese martial arts. Now after winning gold, he caught the attention of Warner Brothers games, and is the martial arts motion capture model in some of the biggest action video games in history, including Mortal Kombat where he was scorpion and sub zero, and also the game injustice where he played Batman and flash. So please, everyone go pick up Donald’s newest bestseller, The Tao of the side hustle, which is on Amazon, we have a link to that in our show notes. And if you’re a realtor here in the Chicagoland area. Donald would love to talk to you and work with your clients, you can visit his real estate website at Chicago real estate at t y. So, Chicago real estate AT T y.com. Donald, welcome to the show. Donald Hyun Kiolbassa 4:26 Hey, thank you so much for having me. I appreciate the opportunity. D.J. Paris 4:29 Super excited to have you I and I I was very excited over the break to read Tao of the side hustle and actually before we get into any of your story, I normally start with your story but this because this book is so new and it’s just crushing it in the Amazon charts, you know, so that our audience doesn’t have to wait 20 minutes for us to finally get to talk about the book. Tell us what the tell us what the book is, who it’s for, and and why you wrote it. Donald Hyun Kiolbassa 4:55 So ultimately, if you look at if you look at a man come from a macro perspective, people hold wealth in three places, they hold their wealth in real estate retirement plans and small businesses. So the biggest part problem with people when they’re starting small businesses is that first step. So I wanted to create kind of is a modern day Art of War, where we walk, we guide the reader through a side hustle, you know, tell the side how so we go from side hustle to stabilize to scale. Right. And it’s basically a blend of Buddhism, martial arts and business to help the reader, you know, start dipping their toe in entrepreneurship. Yeah, I D.J. Paris 5:40 love it. who’s best suited to for this book to make an impact on who’s the who needs to read this? Donald Hyun Kiolbassa 5:46 You know, that’s a good question. Why, you know, whenever you’re creating a product for distribution, like you’re always supposed to have an intended target audience, right? Historically, I would tell you, people who have that entrepreneurial itch, right, that would be the historical answer. Today, I think that definition has broadened significantly. If you go all the way back to Adam Smith, wealth nation, so I’m a big Adam Smith guy, right? Sure. You know, there’s three ways to make money, there is salary, you have a job, there is profit, you have a business, and then there is rent, you have an appreciable property that you’re able to, you know, collect passive income in some way, shape or form. It’s so so it’s like, 123. Right. Now, historically, I would tell you, like, Oh, those who have an entrepreneurial itch, right, unfortunately, you know, necessity is the mother of all innovation, right? I have a feeling with given the economic climate that we’re about to face, right? I think a lot of people are going to kind of be pushed into entrepreneurial positions, not out of desire, but out of necessity. D.J. Paris 7:01 Yeah, that makes makes a lot of sense. And, I guess one fortunate part of that the sort of nature of the economy right now is technology has sort of enabled this global gig economy. And it’s really, it brought in this or expanded the ability of the average person to get involved and produce some of the side hustle services or products at a very minimal investment in a lot of cases, you know, with the technology and infrastructure already built that does a lot of the heavy lifting. So it is kind of an exciting time to consider a side hustle, because we just have a lot more resources now that that helped make it a little bit easier. Donald Hyun Kiolbassa 7:42 Yeah, the barrier of entry to side hustles have definitely changed. Like, if you think about it, everybody has like a University of Google degree. Like you can look up everything. There’s two forms of knowledge, there’s knowledge of and there’s knowledge, how knowledge is where you going to go, when you learn something, right and knowledge how is where you put in your 10,000 hours and kind of cluster of something right now, from an entrepreneur perspective, like being able to break into new areas and create new solutions for problems on like, a micro local area is, I don’t think there’s ever been a better time to do so. Yeah, I D.J. Paris 8:21 think you’re right. And with, especially with so many small businesses constantly being hit up for various services, that maybe somebody with a side hustle can do more inexpensively, can provides real value locally, as opposed to also doing it globally through places like Fiverr, and the sort of gig services, you know, TaskRabbit for people that are, you know, good with fixing and building. You know, it’s funny, I was I had a guy from TaskRabbit over who has a normal, full time job where he’s, like, an engineer and does something with construction, but he’s like a pretty decently high level guy in his salary. And he came over to swap out a door in our in our primary closet. And, and it was pretty difficult job and I said, Hey, I’m just curious, like, why do you do this on the side? He goes, he goes, if I just did this, this gig stuff, I would actually make more than in my salary, but he’s like, I just kind of like the stability of the of the thing. So he’s like, I’m just going to do this on the side. But I was like, Man, this guy, you know, he’s making an extra three $4,000 a month, just doing a couple of these gigs, you know, here and there outside of his normal business hours. Donald Hyun Kiolbassa 9:34 Yeah, you know, that’s ultimately the purpose of the side hustle, like not all businesses are meant to be scaled, right. So I like to I do like to invest in startups, startups, and side hustles. They’re not the same right? Side Hustle can become a startup. But a side hustle is not, does not have the scalability sometimes as a startup There are two different cultures, two different communities, right? The startup community, they’re really looking to, you know, 10x 20x 50x. And they’re looking for an exit or liquidity event to to, you know, for the business, right? Side Hustle is something that like, Look man, like things are getting more expensive. Like, you know, it’s funny, talking about you, you’re in real estate, you know, the Fed. And today, the Fed may may or may not raise the interest rate, I don’t know if they’re, if they’ve done it yet. But right there, there’s two types of inflation there is monetary inflation, and there’s two big money supply, and then their supply side inflation, like you’re not going to be able to fix supply side inflation with increasing the interest rates. So I don’t know if I necessarily agree with the way it’s gone. Anyway. But there those impacts are going to impact the way consumers deploy their capital right now. And I think there’s going to be a huge liquidity event where all the money is sucked out of the system. D.J. Paris 10:56 That’s interesting. Yeah, it is. It is interesting. I was also thinking too, about the recent crypto exchanges, or at least the biggest crypto Exchange, which just went under FTX, which a lot of people have probably followed by the time this came out, who knows if Sam bacon fried will actually be in prison in prison or who knows. But But and then there’s other crypto exchanges binance Is is possibly facing liquidity issues. And that’s now the biggest exchange. And I’m just curious if if those if that exchange fails to I’m curious, a lot of that crypto money comes flooding back in. And somehow it gets, you know, reinvested by people in other ways. And a side hustle is a great way to invest money, and actually, you know, make some income that’s a little bit more hopefully predictable. But before before we get too far down that rabbit hole, because I could talk about that all day. I would love to first hear your origin story. Like, how did you get involved in real estate? You were an athlete, you’re now an author as well. You know, how did you get involved in law, you are an accountant, you’re an accountant as well, you do a lot of different things. So we’d love to hear about your trajectory. So walk us through. Donald Hyun Kiolbassa 12:04 So I was like, Chicago Public School dude, like Waynetech, lean tech guy. Like, I didn’t have two nickels to rub together. So I kind of figured that. Whenever you go to war, like, let’s say you and I weren’t going to engage in combat. In the end, when you break down a war or combat, there’s these five things that you need to control, right? You got to have a skill before you get into the other one. So let’s start with skill. So I knew upfront, I had no money broke, didn’t really have any connections or anything like that. So I had to become hyper focused and dominant in a skill. So I started with accounting, because that was like, the language of business, right? Sure. So I graduated in 2001. And immediately the Enron COLLAPSE HAPPENED wiping out Arthur Andersen, I couldn’t get a job. Right? D.J. Paris 12:56 So I remember when that happened. Yes, absolutely. Donald Hyun Kiolbassa 12:59 So all the school guidance counselors, like after I spent all this money and got like my accounting degree and CPA and all that other stuff, they say, oh, you should go back to law, you know, go back to school, go to law school, right. So I went to law school. Graduated in 2006, only to enter into the 2008. Crash. Alright, perfect timing. Basically, it was kind of at that point where I lost all confidence in like the guidance counselor’s and a lot of the teachers because I found that most of us who were teaching never actually worked before. So I said, okay, if I’m gonna do this, I do really respect appreciate, like, the skills that I learned, but I’m gonna I’ve had very little confidence in, like, the business training that these people gave me. So I, I basically started to ignore everybody and started to do tax returns, because I felt tax returns were like a stable thing that everybody needed, right? D.J. Paris 13:47 Yeah, guaranteed, guaranteed. Least everyone at least once a year is asked to either do it themselves or hire someone so it makes sense. Donald Hyun Kiolbassa 13:55 So the tax return business started was was amazing, because it was like annual reoccurring revenue and kept coming in. But then like, 2008, crash happens, and I’m doing wonderful, because everybody’s still just notwithstanding, like, the complete collapse of like the financial system, people still needed to file the tax returns. And like, remember, when you’re getting chased by a lion when two gazelles are getting chased by a lion, you don’t have to be the fastest Gazelle in the world. You just got to be faster than the other person. Right. So I, the firm that I was at most of the other attorneys just went belly under. And when that happened, I started gobbling up the other practice areas, one of them being real estate, right? I had no idea what real estate was at the time. Right. So fortunately, I was able to laminate for a side hustle at that point in time. 2009. So you know, with all my martial arts stuff I was able to you know, for I was lucky enough to participate in a major tournament, where wushu was a demo sport at the Olympics. I was able to win a gold medal. I’m not an official in the NBA. I never claimed to be but I was on the US team. This caught my attention Warner Brothers were in 2009. They purchase an intellectual property out of bankruptcy called Mortal Kombat nine, right? And I was one of the guys that they came in to do the motion capture, right? For a side hustle. All of a sudden, I started realizing, you know, the importance of making money, like having control of that, right? So I’m kind of taking away doing tax returns. And all of a sudden, the real estate market started a hockey stick, right? Yeah. And I happen to be like Forrest Gump. With the shrimp boat captain, I wasn’t so amazing. But I was just like one of the first guys who survived to participate in that market upswing, right. And I was never my core competency was always tax law, but it never really had. But real estate happened just because I happen to be standing in the right place. And it became a profit center. And today, I’m on board member of Delaware a real estate lawyer Association, I think I’ve done about 1000 transactions, something like that. And it was kind of over time that I realized that, you know, value propositions, you know, they go from, they go through stages, like, they go through a perceived through actual through evolving, you they start with, like, you have to have a perceived value, like what do you bring to the table, then you have to deliver actual value, it’s what you can do. And then you have to evolve as things change, right, as the market started to recover, are starting to realize that real estate is such an important percentage of like the American families portfolio, right? And that’s where I really started saying, Okay, this real estate thing is very important, because it’s part of the overall, like, part of everyone’s life. And that’s where I really got into it. D.J. Paris 16:37 Gotcha. And did you find that, that real estate transactions were personally really fulfilling to you, like, versus other types of law that you may have dabbled in? Donald Hyun Kiolbassa 16:48 Well, what I what I do like about real estate transactions, is I believe in becoming fabric of the community, right? Like, and the way you truly become a fabric of community is you got to shake the people’s hands that you’re, you’re serving, right. And the best way to kind of build that trust is like helping them establish their nest, right. So real estate, kind of became one of our like, lead generators, where, you know, we would meet people to do their closings, they would transfer into like, trusts in the States, and then we kind of just became their go to for everything. D.J. Paris 17:21 Yeah, imagine estate planning is like maybe the real estate transactions a nice entry point to then do the estate plan. after the fact. Does that happen a lot, where a lot of your real estate clients Donald Hyun Kiolbassa 17:33 be 100%. Like the thing is, actually, I know this is blasphemous, right, but from, from my perspective, I, Attorney CPA, I think we ought to offer a little bit of a broader value proposition and right, I believe that real estate is a subsidiary of estate planning, right? Sure. I believe there’s people who have this overall like estate plan, and you do their closing kind of as part of that overall plan. I just don’t know how you do a closing without knowing everybody’s overall plan. D.J. Paris 18:03 We were I was just having this exact conversation with a real estate journalist. Yesterday, we actually are yesterday, and we were talking about how this is the year that realtors can really start to think of themselves more as a consultant where they actually try to take a broader, broader view of the entire financial picture. And maybe that includes having conversations with the person’s accountant, with their attorney, or with their financial adviser, and really saying, Where does this home if we’re going to call this thing an asset, which is a debatable topic to a primary residence? I know it’s an asset on the day it’s sold. But is it an asset? Really, between times I don’t know, but it’s still an important piece of the financial picture, regardless of whether it’s an asset or not. And it you’re right, it’s sort of like one of those things that, you know, when I go see a doctor, they make me fill out this massive checklist of like, what’s wrong with you? What’s your history? What’s everything going on with your physical health, energy, you know, exercise, diet, etc. And all the stats, and your head and your family history because they need to be able to make a good recommendation. And you’re right, the sort of the real estate side of, of the of someone’s financial picture is often sort of isolated and segregated from everything else. And I imagine your sort of vision is to sort of integrate everything into looking at it more holistically. Do I have that right? Yeah. Donald Hyun Kiolbassa 19:29 Well, I listen, like in the end, my, my intent is the preservation of the American family. And the way you do that is by you know, ultimately, you need to make sure that they’re safe safety, and that they’re secure, financially secure, right. And I don’t I believe I do just continue to believe that homeownership and real estate investing is an important part of a diversified portfolio. D.J. Paris 19:56 I want to pause for a moment to talk about our episode. sponsor are one of my favorite companies out there follow up boss. Now after interviewing hundreds of top Realtors in the country for this podcast, do you know which CRM is used by more than any other by our guests. 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But only if you use this special link visit follow up boss.com forward slash real that’s follow up boss.com forward slash real for your free 30 day trial. Follow up like a boss with follow up boss. And now back to our episode. Yeah. Do you look at primary residence? diff? I mean, obviously, it’s different from a revenue person or a Yeah, revenue perspective. Right. So so passive income, residual income through investments, obviously we understand there’s tax benefits, there’s there’s obviously cashflow benefits. Do you look how do you encourage clients to think of their primary residence? Is it an investment? Is it an asset? And this these are very debatable topics? But I think it’s important because I think there’s a there a lot of realtors that could really benefit from hearing some language from an attorney about how to how to have those conversations because personally, I I would love to look at my primary residence as an investment if it goes up. But I don’t have much control over that. That’s not the reason I bought it as much as I would love for it to double in value probably won’t. But but it is a huge chunk of you know, the money that I’ve had put into that home. So curious on how you think about primary homes versus obviously versus you know, buying, you know, a multifamily and renting it out. Donald Hyun Kiolbassa 22:20 Okay, so, Attorney CPA perspective, primary residence is absolutely an asset. I strongly disagree with the argument that it’s a liability. I respect and understand where the other where the argument comes from, you know, the the old school adage, like your primary residence is just a liability. I just I think it’s incorrect. I believe it’s a it’s an asset, especially when you start looking at things generationally, right. Like when you start looking at these generationally primary residence. You It’s like incurring an unrealized gain to all the CPAs out there, like we’re building up this store of value. Whereas if you’re renting, you’re not building that store of value. Now, it’s always possible that you overextend. I’m a big fan of Albert Einstein, and I love this little equation equal equals MC square. So n equals MC squared essentially means is energy equals mass times the speed of life squared, right? The thing I love about that equation is it proves to us that energy and mass are equivalent, because if you divide see, it’s an algebra, divided c squared by both sides, it shows that they can equal each other, they become much, right? They are relative to each other as money is a relative thing. The money that you make is only relative to the money you spend. So if you overspend relative, then yes, it becomes a liability, right? Like, if you don’t do that, and you are like normal, like it’s an asset, especially when you think and think generationally. D.J. Paris 24:03 Well, thank you for closing the door on that, that I love that you you shut the door with some authority on that particular argument, whether primary residence and asset and you explained it very, very well. And I think that’s important. And, and historically, home prices over time generationally have historically risen, right, so we can look at historical data and say, well, we can’t you know, obviously, we can’t project that your home is going to be worth more than it is today because that would be you know, no one has the oracle at Delphi to or crystal ball but, but we can assume based on historical data that it’s likely that if trends continue that you may be here in 20 3040 years, which in case does improve the quality of that asset from you know, from a numbers perspective. So I, I am I will tell you this, I am scared about 2023 Now, there’s always opportunity when there’s fear But I think there’s I’m speaking not so much for me because truthfully, I’m not a practicing agent, I have my license, I don’t use it. I sit here at a desk all day and, and try to recruit people to join our company. But we have about 700 agents here. And they a lot of them are nervous. And a lot of my friends outside of our company who are agents are nervous about 2023. Why? Pretty obvious reasons. Of course, everyone knows we have a higher interest rate environment than we did two years ago, although I don’t think it’s that high. But it certainly in comparison to the last few years, it’s still a big bigger pill to swallow than it was double rates. You know, it was kind of where we’re at low inventory, and then dropping home prices. So curious on where’s the opportunity in 2023? What should Realtors be focused on? And what as an attorney? Do you suggest that agents start to think about to really keep their business rolling next year so that it’s not as bumpy as, as maybe the news is suggesting it might be? Donald Hyun Kiolbassa 25:58 Well, it’s gonna be bumpy, it’s definitely gonna be bumpy. It’s just finding the opportunity within that bumpiness. Right. Like, from my perspective, all ships float and high tides, right? You have when times are good, everybody is like, amazing. Like, one of the things that I tell people is I’m like an all terrain vehicle. Like I work in rain, sleet, snow, sunshine, so many of these single silo like attorneys, that’s, that’s all they do. Like they don’t work when times get when there’s a hurricane, right? So, from my perspective, you have to kind of approach your business like that, like, are you prepared for the ups and the downs, we’re in a cyclical business? So if you want to survive in a cyclical business, you’d have to be able to work in both cycles, right? So from my perspective, it’s identifying the, like, the things that people are really going to need, right? Let’s start with the supply side, there’s unlimited amount of inventory out there, right. I believe, as you see the baby boomer the silver tsunami coming, you’re gonna see these guys, they’re going to have to redeploy their assets, right? D.J. Paris 27:09 Huge amount of assets to I mean, trillions of dollars are going to flood in. Donald Hyun Kiolbassa 27:14 Yeah, so 25 trillion is going to exchange hands right now is the homes are a special asset, right? Because like, they need to figure out a way to either downsize if they’re going to pass away, and with the long term living, you know, kids are all gone. And they’re gonna have to figure out to do it. And most of those homes don’t have mortgages on them. Right? So they’re not worried about trading from three to seven or three to six or whatever. Incidentally, I haven’t I haven’t I have an ongoing, that with a couple of people have the date, I think it’s going to drop down to five, offline, I’ll enter to about with you, right, that way. I’d love that. Anyway, um, what? You know, you’re gonna have a lot of the baby boomer population population, that they have a bleeding neck, and let me restate, they don’t have a bleeding neck, they have six shotguns pointed to the back of their head, that they’re going to have to figure out what to do with that land. Right? Now. You have, you’re gonna have a motivated seller who’s gonna have to figure out what to do with that supply. Right, right. Then let’s talk about like, purchasing. Right? Number one, if the consumer doesn’t come in and buy these assets, right, you’re gonna have foreign money flooding, you know, you’re there’s so much turbulence, globalization, I just wrote an article for the State Bar, I’m shocked, it got picked up so quickly. But it was like, it’s about the collapse of globalization, I think you’re gonna see money start coming in here from other places. And, you know, listen, all the house hacking is really cool. But when you have a couple of kids, good luck doing that, you’re gonna have to find your own house to raise your family, right, your garage, would you raise your kids in their basement? Right? So you’re the supply side is going to be the baby boomers in the demand side is going to be foreign money and millennials who are are being forced kind of to, you know, as their families expand, right, now there is a segment of the population that their velocity is going to decrease dramatically, right? And that percentage of the population, they’re attracted to 3% interest rates, and they don’t want to trade out, right, I get it, right. Listen, the pie is gonna get smaller, and you really are gonna have to demonstrate and show everybody what your value proposition is. From my perspective, this is really gonna come down to who are real real estate people and who are marketers, right? A lot of people in sales that they’re great salesmen, right? Sure. If you were to go back 2030 years into the real estate market before people the sales thing like the top of the funnel, you know, everybody became great marketers, right? The real estate was a pool business. What a pool business means is you get pulled in a transaction, you have a special skill that gets you pulled in, right? You guys were never intended to be in a push business and became a push business because your commissions were so lucrative that it pushed into marketing people, right? But This is gonna force the vendors to become hyper specialized in what they do, they really got to know what they’re doing. And the consumer is canceled. goddang smart, right? That if you don’t know what they’re doing, you’re doing, they’re going to know really quick. So you really got to get back down to that core of like, man, you know what you’re doing? D.J. Paris 30:22 Right. So this is the year to really hone those or sharpen those sticks, those skill set sticks or tools in the arsenal to know more than, you know, the average consumer who wants a month checks their Zestimate. And to see what their home values worth, which, of course, they don’t need you to do, because they can just pull that up. Now, whether that number is accurate or not, is irrelevant. But that’s what they’re going to do. So you need to be able to bring value in between transactions, right? So person, what buys and sells every, what, seven years, or whatever, the status. So here’s a here’s a great question. So I don’t know if it’s a great question. I shouldn’t say my own questions are great. But here’s a question that I think would be of great value to our audience, which is, and you’re not, you’re not a practicing broker, but you work with realtors, and you work with homeowners, not a practicing. Doctor, don’t do everything else. Donald Hyun Kiolbassa 31:15 But the broker is very important to me, I like listen, you know, it’s very hard to break this shell, right. But I will be vulnerable to tell you the importance of the broker. Right? And I want my perspective. My sole agenda is the preservation, the American wealth ecosystem for a family brand. And most people have less than $1,000 in their bank account, like at least like I think it’s like 78 or 80%, something like that have less than 1000 hours. D.J. Paris 31:50 That is that is horribly depressing. Unfortunately, true. Donald Hyun Kiolbassa 31:55 So many people land do you do read all these articles JP Morgan and about a billion dollars in land, you know, this REIT bought a billion dollars, Blackstone bought 50 billion. Do you know why they do that? D.J. Paris 32:08 You know, I actually don’t know why they do. Because it’s a good idea. Donald Hyun Kiolbassa 32:11 It works. D.J. Paris 32:14 Right? The church does a similar thing to they buy a lot of land. Donald Hyun Kiolbassa 32:18 If you buy it, I’ll be more aggressive. You’re dancing, and you’re saying, oh, like you know, it might not go it’s gonna go up. It’s a store of value. Right? D.J. Paris 32:28 I used to have a I had a friend who was an attorney who’s worked for the Catholic Church and her job, no joke in the US. And I’m sure they have these positions all over the world was to buy land where they could put schools Catholic schools Catholic education, which, of course has its own business and a huge business. But the big thing was not we want to we don’t want to rent space. We want to buy the land, put the school on it. And it’s and this is this was her full time job, just finding land for schools. Donald Hyun Kiolbassa 32:59 So the reason why they do that is the isn’t worse, it’s a really good idea, right? Like, especially American dirt and American dirt American brick and mortar is amazing, right? Like, this morning, what are the important things that you’ve done? And I asked you, what did you do when you first D.J. Paris 33:18 I went to the gym? I’d say that’s for me. That’s it. That’s probably the most important thing I did you do after you went to the gym? Came back started. started thinking about recruiting more realtors. You take a shower? I took a shower this morning. Yes. Okay, so what do you need to take shower? What do i Why did I take a shower? What do I need? I need to take a shower. So you need water and electricity? Well, you don’t need electricity, but I use electricity. Donald Hyun Kiolbassa 33:46 You need water? Right? So we live in one of the biggest areas of fresh water. So before I was you know, I worked at a law firm called yield shine. It’s like number three in all of Asia in Seoul, South Korea, right. I thought it was a big shot, right? Anyway, I met this big big shot law firm, right? And I go to get my place my little studio right? And I find out how expensive it was. I was like, Whoa, but that’s how much it costs for this like studio. That’s crazy. It turns out if you sold South Korea, you could buy France a times that’s how expensive that land is. Right? One of the cool interesting things about South Korea, we got a river that goes right through the soul and stuff like that. Surrounded by ocean, right? And you can’t drink ocean water or Beynon. Right? So all of a sudden water becomes scarcity. So like for someone like me, I recognize like the irrelevant the relative importance of water right where people hear you take an hour long shower, and no one cares, right? But this is in the world like it’s it becomes a really big deal. So I guess what I’m trying to say is like, we ultimately the land that you purchase needs to have a value or reason why people like it right? Our soil is very abundant and natural. sources which allows you to up an acorn son grows, right? And we have water. So like, you know, so long as the resource resources remain consistent, like in theory, as long as the value of commodity goes up, so the value of land relative the value of the commodity, right? Sure. Really. It’s a good investment as when people come back home D.J. Paris 35:22 this stuff. Yeah, it makes it makes perfect, perfect sense. So Realtors right now are thinking, Okay, I’ve got a lot of my clientele refinanced or purchased in the last couple of years when the interest rates were low. And obviously a lot didn’t. But the ones that did, you know, I, what do I say? First of all, do we say anything to the person who’s at a 3% rate right now? Who is feeling like, oh, I can’t move because then if I move, I’m going to a six and a half percent, right. What are what are we saying to those? What do you suggest we say to those people? If anything at all right now? So Donald Hyun Kiolbassa 36:06 do you have your handy dandy computer there? I do. And you look up JP Morgan Chase buys a billion dollar of single family homes. Yeah, looking it up right now? Yeah. D.J. Paris 36:23 Got it. Yep. Single Family rentals, a billion dollars earlier this November? Donald Hyun Kiolbassa 36:27 Yeah. You want to know what date is that? D.J. Paris 36:31 So the news articles November 16. Donald Hyun Kiolbassa 36:33 Okay, would you agree November 16? That’s like a month ago, right? Like, the rates are in the sixes and sevens? Yeah. Do you want to know why they’re buying that they’re doing that? D.J. Paris 36:45 I want to know why Jamie diamond does anything. So yes. Tell me Donald Hyun Kiolbassa 36:49 a really good idea. Because he’s D.J. Paris 36:51 a really smart guy. Donald Hyun Kiolbassa 36:53 They saw the interest rates go up, and they eliminated all the competition. Yeah, right. Interest rates went up, they eliminated the competition, they go in and acquire, do the acquisition. So like, the first of all, I do think the mortgage interest rates are gonna go down. Right? Let me open with that. Right. So with that said, I do believe that it is probably not a smart idea, to wait until they go down to buy. Because the second day go down, you’re gonna have this huge board of competition come in, and they’re gonna bid up the prices again, D.J. Paris 37:34 which is what happened when in 3% rates, same exact things happen? Yeah. Donald Hyun Kiolbassa 37:38 100%. Like, what you want to do is you want to try to go in there where there’s mild to medium competition, exactly what JPMorgan Chase is doing to you. Right? It’s hilarious, right? Your own bank priced you out. And now that D.J. Paris 37:51 it’s my own bank, that’s funny. Your own Donald Hyun Kiolbassa 37:53 bank priced you out so they can buy your land. It’s hilarious, right? Like, you know, you really got to be conscious of like, when that rate goes down, everybody’s gonna flood in. Now, you got to make that decision. But if I was a broker, if I was in your business, right, this is a dialogue that I would be having with my people. Hey, forget about the industry. Put that to the side for a second. Tell me about your needs. Are you in a one bedroom condo with one kid? And you’re about to have a second kid? Right? Yes. This ain’t gonna work. Right? Let’s go find you something that’s within your budget that meets the needs of your family. Hey, are you is your parents 65? How are they doing? Do you think that they’re going to be in a nursing home? Do they have long term coverage? If they don’t? Like you need to have these things in mind for them? Right? D.J. Paris 38:44 Can we just do a public service announcement and break for just a moment? Can we talk about long term care and not get into the weeds about it? But I know you’ve been you’ve been beat you beat the drum on long term care insurance. And I’m so grateful for you to do this. Because there are so many people, so everyone listening, if your parents are elderly, can you just give the quick little 32nd on why everybody’s parents need to have long term care. Donald Hyun Kiolbassa 39:07 Okay, so most people don’t have long term care, which is insane. But what long term care means is if your parents are unable to function on their own, and they have to go like they get dementia, they gotta go to assisted living nursing home or something like that. Those places are really expensive. Right? So you need to have an insurance policy to cover the cost of that. Now, assuming that you don’t have that because most of you have it, right. The only way to afford that is let’s say they got a pension of 4000. Right. And let’s say you find them a nursing home that 6000 The nursing home will allow them to come in take the 4000 a month, right. And the gap the Delta they will normally get covered under Medicaid through Illinois. Now Medicaid is is provided by the state but funded by the Feds right? Now the catch of getting that free Medicaid is if your parents own a house free and clear which most baby boomers do, they paid it off, right? The state can turn around and attach a lien against the equity with a five year look back, they can go back five years, to any money that they paid on your parents behalf to live in their right. So they can essentially lose the asset that they were that they built. So if anybody’s out there thinking generational wealth, gotta have that in the back of your head. D.J. Paris 40:36 Yeah, just ask ask your parents if they have long term care insurance talk to talk to a financial advisor get that done? Because it will I don’t even remember what the average cost is for facility care these days. But I want to say for a year a lot 1000 Yeah, it’s a lot. It’s 10s and 10s. of 1000s of dollars. Okay, anyway, back to back to our regularly scheduled program. But but this really ties in long term care, because you were talking about generational wealth, and nothing wipes out generational wealth faster than then managed care for elderly people. So, so I’m glad we were able to do our public service announcement of the year. But let’s talk about okay, so so back to being being a realtor. So I’m thinking about our audience, we’re realtors, we’re worried about 2023 interest rates are up, which means the average consumer thinks they’re not getting a deal right now, right? They’re not getting a deal. You said, don’t wait for it to don’t try to time the market don’t wait for the interest rates to come down. Why not? Donald Hyun Kiolbassa 41:39 Because when they do come down, what’s going to happen is every single person who’s waiting on the sidelines, they’re going to jump in all at the same time. Like if I was a relative So here let’s talk damage control. If you’re a realtor, you got to right size your business right now. If you know your if you believe that your top line revenue is going to decrease 20% You got to go line item by line item and you got to decrease your expenses. 20% Real simple. Okay. Right size your company if you’re if you’re carrying too much fat right now, you’re starting to carve a fan out, right. So that’s step one, do that first. That’s something you should be doing right now. Right? Yeah. Step two, once you’ve right size your company, I would turn my attention to just educating your client on like, like real realist, no, I would turn to listening to your client on what their needs are. If you know that they’re going to have a need to like, you know, move, then step three, talk to them about the difference between the interest rate and like competition, because petition comes flooding in. Did I think it’s gonna be a big wave? D.J. Paris 42:48 People get priced out? Yeah, it’s, let’s, let’s all remember what happened with the, with the sub 4% rates in the last couple of years. Remember, you know, if we had listings, it was feast or famine, right? If you had listings, you were feasting. And if you were working with buyers, it was tough. You were submitting offers sight unseen, you were getting, you know, 30 Plus offers, trying to get yours noticed. And it is remember how hard that was to start a thread that perfect needle? You know, it was it was difficult back then. So I think I think you bring up a good point. And maybe if if looking at the math, maybe the metrics are such that you would have overpaid two years ago, despite the fact that you were in a lower interest rate environment. And maybe now even though higher interest rates, lower pricing, maybe it actually evens out more than the consumer might think. Donald Hyun Kiolbassa 43:41 100% Yeah, if you get if you get a lowered lower. My father paid for his house, he paid 55,000 for his house, but it was like a 10% interest rate. So it’s not a lot, right. So if you get a discount on the retail price it oftentimes it ends up equaling out, I but the one thing I will say to everybody is, let’s be honest, guys, the last two years was probably the greatest rush of real estate velocity. And we’ll probably never see that again. Right? The rates are never going to get that low. You’re never going to see that again. Right. Right now you got to turn your attention to right sizing or operations and providing that value to the consumer and the consumers hypercritical right now. D.J. Paris 44:22 And like you said at the very beginning, they have access to everything now. So you know, we all have access to everything. It’s in our pockets. It’s we walk around with, you know, this basically magical device that tells us anything we want to know at anytime for free, essentially. And so as an agent, so a couple things I got from what you were saying number one, a lot of agents are going to be exiting the business who work true full all in agents, the part timers, the onesie twosies they’re going to start to slowly exit the business or just become less relevant. So we’re probably going to see some sort of exit As for agents, which is a great thing for agents that are looking to scale up and grow their business, because there is going to be less competition, a lot of the maybe poor quality agents will be leaving the industry, the the stronger agents, the really savvy, value added agents will continue to thrive. But in order to get there, you have to do the heavy lifting, which is what you were talking about is sharpening the tools. This is the year 2023, where you really want to be, be better no more. What do you recommend for agents to study as far as like a daily practice? And again, I know you’re not a practicing agent, per se, but what do you wish agents knew from? From an attorney’s perspective? What do you wish agents were better at? Donald Hyun Kiolbassa 45:46 You know, I always believe in marketing, like, how you consume, right? Like you should market to people the way you consumers, like a consumer, right? How is it like, as a consumer, right? My family, when we first got here from Korea, we got heavily involved in real estate because we were in the restaurant business we sold we’re number one, number one in the state and used restaurant, we had like, 200,000 square feet. Like, you know, restaurant stuff, right? So we would we needed to buy the locations to house the equipment, right. And one of the things that I think we found important from people is like, you really have to know the assets that you’re selling, you’re helping someone buy, right. The thing if you’re in the condo business, right? Dude, you really got to know that ancient way before you get your environment. Right. If you’re if you don’t have if you have no idea of the financial health of that Hoa, like you’re just hoping that the attorney catches it on the 22.1. Like, that’s what you’re doing. It’s crazy to me, like you really got to know these things here. I’ll tell I’ll give you an example from an attorney’s perspective. In 16 years, I’ve probably done 1000 transactions. When ever I catch something on the 22.1. Read the 20.1 is a financial snapshot which shows capital upcoming, unexpected or expected capital expenditures. Whenever I catch something and I tell the buyer, this is what immediately happens. I press send on the email said what are they saying? Hey, Don, thanks for catching that thing. Why in the hell did my realtor not tell me about that? Yeah. Right. 100 times 100 out of 100. That’s what happens, right? Like, if you’re gonna go into a building, you got to know what’s going on. But the building, right? So that’s if you’re in the condo business, if you’re in like the single family home business, you got to kind of have some sort of idea of the neighborhood, you’re putting people in, right? You got to say, like, I know, there’s restrictions on what you can disclose, right? But you got to talk to your client, and let them understand like, Hey, this is you know, wonderful school systems, communities and this man, and they got to know what’s going on. Like, whenever I like, for me personally, whenever I do like investing, I like when I invest in, let’s take single family homes, for example. I believe that you have to control one of three things to be a real estate investor, you got to control the dirt, the tenant of money, one of those dirt tenant money. So I like tenant control. Tenant control is the coolest to me, right? So what I like to do is I like to buy single family homes in the best school districts, and I am the cheapest rent in the best school districts. That’s my model. Right? D.J. Paris 48:44 I love that because that’s what every parent, not every parent but But parents want to live in the school districts not every parent in the best school district. Every parent can afford that. So you want to make the affordable option for people to enter that that education space. Yeah. Donald Hyun Kiolbassa 48:59 100% I want to be the most affordable in the best school. That’s my value proposition because that’s the product that I offer right now like to me like I really know what the product that I’m buying. Right? Like surgically, right. And it can be like when your broker the client, the customer sees that you’re walking away with a big commission check, right? And they see the inspector getting paid six farebox they they see the attorney getting paid six 700 bucks, right? If, like the inspection, I get it, if there’s something that you couldn’t have found, totally get it right. But if they find out that there’s an atomic bomb there, right 999 times out of 1000 They’re mad at me, bro. They call me and they’re like, Dude, what the hell happened? How come? Nobody knew about this, right? There’s an outcome. There’s, of course we got a great deal. There’s a $70,000 special assessment coming up? Sure. Right, you know, I mean, yeah, of course, we got a great deal. This is this is going to be a deconversion. Right? Like, you know, stuff like that. D.J. Paris 50:14 So, so realizing that realtors are highly compensated for, you know the transaction and not taking that responsibility lightly and really providing over providing value or providing more value than would be expected so that the consumer never calls the attorney who got paid the six or $700 it goes, How come you caught this in my my agent who just got 10 grand didn’t catch it. Donald Hyun Kiolbassa 50:42 Like I actually think, you know, given like your vet your role and in the transaction, top of the funnel, defending value, I don’t think you’re unfairly compensated right. But I don’t think it’s an unfair compensation. But you have to, like, if you don’t know the product that you’re selling, like really know it. And the client finds out that you’re highly compensated, and you don’t know what you’re selling, they get mad. D.J. Paris 51:12 Yeah, I’ve had this fantasy in, and I don’t know if it probably will never come true. But I want I would love real estate to move away from for realtors, how they’re compensated to move away from transaction to work to more sort of a, like a financial advisory model where it’s, you know, assets under management fee based model, you know, you get a percentage. I don’t know if it’ll ever happen. I don’t know if it’s possible, but boy, that would that would really change the game, I think. Donald Hyun Kiolbassa 51:41 I don’t know if that. I actually, you know, I respect the counter argument. But I actually think What the I don’t think they’re unfairly compensated, right, I think what they do is legit, and here’s why. Ultimately, their job is to defend the value. Yeah, that’s ultimately their job, right to defend value. And if you do defend the value, it’s worth it. Right? You know, it’s worth it. But if you don’t defend the value, then it really becomes a problem. Right? And that’s the thing, you really are going to have to know like, I recently I did a wholesale deal, where, you know, they flipped the contract. And it was a big number. Right? Huge number. The sellers got so angry at the listing that they’d have to of course, they were like, how the hell do you get this number wrong? Right? And sorry about that. They’re like, how the hell did you get this number wrong? Right, your entire reason you’re here is to value this, right. So like, if you stand by that, like, it makes sense, because it’s your that is the most important thing was the value of the home. Right? Yeah. So I actually think the the number is fair, but the but you really have to know that you just can’t be a guy or gal who switched careers. You’re really good at marketing has a great network, don’t know the product and sells it. That’s what it got to get a little scary. D.J. Paris 53:20 Yeah, so sharpen your tools, learn, learn the inventory, learn the market, learn what to look for, you know, with with respect to closings, especially condo, you were saying HOA stuff? Yeah, boy. It because all of us, you know, consumers when we’re buying something. I, I, as long as I’ve been in this industry, I’ve always thought because I’m not a practicing agent. I’m gonna be thought, doesn’t everybody just want to know, is this a good idea? That’s really kind of what we all want. Like, should I buy that? Should I not buy that? And I really think realtors say I’ll help you by that. But I really what I want a realtor to do is say you should buy that or you shouldn’t. And in order to make that distinction or that recommendation, you really do have to have some pretty sharp tools in your sharp arrows in your quiver. But this is the year to develop that because if you can become the person that gives advice, and again, depending on what state you live in, you have to obviously you want to be compliant, make sure you’re not running afoul of compliance rules, but whatever is allowed, I think the real value is in the advice. Obviously pricing advice should I buy this? Should I sell as well? How should I do it? I just I love having people giving me advice in my life, my service providers. That’s really what I want for my accountant, my attorney, my financial advisor, my trainer, I want them telling me you should do this Donald Hyun Kiolbassa 54:47 100% I think that’s the direction everything’s gonna go. And I think if you do that, market goes up, market goes down. You’ll there will always be people who need help. And if they know that you can help them And whether it’s an up or down market that you can help, you’re going to be fine. D.J. Paris 55:03 Well, I could talk to Don all day to all day and we certainly would love to have him back on future episodes. But for now we’re going to encourage every single person who is listening or watching right now I want you to go to Amazon. I want you to check out his book, The Tao of the side hustle, Donald. He on kielbasa I, we’re gonna promote the heck out of it. I’m gonna read it over the holiday break. By the time this is published, I will have already read it. You’re good friends with one of my other podcast friends, Lawrence Dunning. He’s like, it’s the greatest book ever. You gotta read this. And Donald was nice enough to send me a copy. So I want everybody to go and to Amazon, pick up this book. And let’s make 2023 as smooth as possible. We know there’s going to be there’s going to be a lot of dips and bumps, but let’s do what we can and let’s sharpen our skills. And yeah, let’s all have a great 2023 So Donald, thank you on behalf of our audience for everyone listening and watching really appreciate Donald spending his time he is an attorney, he bills by the hour, he is too busy to do this, and yet he did it anyway. And so we really want to support him. So also if you are a Chicago based agent, and you’re looking to work with a real estate attorney, also who by the way is a champion athlete and best selling author and a CPA and really just a wonderful human being you really should have done in your in your arsenal of attorneys to recommend to clients he would love to work with you can visit his website Chicago real estate att y.com link to that in the show notes, check out his his legal team. They can do everything from estate planning to real estate to a bunch of other specialties as well. They’re awesome. But let’s pick up the book Tao of side hustle the Tao the side hustle on amazon link in the show notes on behalf of Donald and myself to our audience who want to say thank you. We exist to help you through this tough year. We know it’s going to be a tough year. That’s okay. big deep breath in and out. We are going to provide you content and strategies and suggestions to help you get through this year. Please tell a friend that’s the only thing we ask support our sponsors. Check out Donald’s book and tell a friend that one other agent that could benefit from hearing this great interview with Donald and send this over to them it might be just what they need to help their business in 2023. Donald, thank you so much for being on the show and we will see everybody on the next episode. Donald Hyun Kiolbassa 57:30 I appreciate you all go help people and I promise you everything would be fine.