Ready For Takeoff: Launching Your Real Estate Career With Naval Aviator, Doug Spence

March 8, 2023




CWS 239 | Real Estate   Real estate is not just a transaction, it’s an opportunity to build lasting relationships and create wealth for yourself and your community. For today’s episode, Naval Aviator Doug Spence introduces us to the world of real estate. He takes us through his journey, from how he got interested in real estate to his first steps as an investor. He’ll share tips on how to build a strong network, find the right mentors, and identify opportunities in the market. Doug also provides valuable advice on how to manage risks and make informed decisions, drawing on his experience as a naval aviator. Whether you’re just starting out in real estate or looking to take your investing to the next level, you won’t want to miss this episode. Join us as we dive into the world of real estate with Doug Spence and learn how to get started on your own path to success.

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Ready For Takeoff: Launching Your Real Estate Career With Naval Aviator, Doug Spence”

Joining me is Doug Spence. Doug is an active-duty Naval Officer and Founder of Honor and Equity, which is a real estate resource for Military veterans and their families. Doug personally owns real estate in multiple states, is an LP investor on four syndications, and is a co-GP of an RV park syndication. Doug, which I found out earlier, also lives in San Diego. He is another California person on the show, which I always love.

Welcome, Doug. I’m glad to have you here. Thanks for having me. I’m happy to be here. How did you get started in real estate? I bought my first property back in 2016. It was a primary residence. I was living in Pensacola, Florida at that time. I was stationed there. I started listening to BiggerPockets. My real estate analysis was very beginner at that time. I was renting a house for $1,500. I did the math and realized I could buy a house in the same neighborhood that was bigger and newer and my mortgage would be $1,100 a month. Based on that simple math, I was like, “It makes sense to buy,” so I did. It ended up working out well. I still own that property. I rent it out for much more than the mortgage payment. BiggerPockets was the first thing you mentioned. I know a lot of people are familiar with BiggerPockets, listen to their podcasts, and dive into their forums. One thing that I hear a lot is it’s overwhelming. There are so many options and so much to do. How did you block out all the noise, focus, and try to learn as much without getting lost in all the information? Once you get into the real estate and entrepreneurship world, you realize there’s so much opportunity out there, especially once you join a mastermind group. There are so many ways to make money in real estate that it’s easy to get distracted and chase lots of different opportunities. It’s being clear about your personal goals. If you have a spouse, then it is making sure you have a clear idea of what your joint goals are. You then back everything up from there to a strategy that suits your risk tolerance, your long-term goals, your access to capital, your experience, and all that. It’s starting with the end in mind. Having a mentor and being in a mastermind group is a great way to bounce ideas off of people and leverage the experience and wisdom of other people as well. You purchased your home because you realized, “I am paying way more to rent.” When you were doing your initial information gathering on BiggerPockets, what were some initial areas that you had looked at other than purchasing your home when you were looking at, “How do I get started?” It could be asset classes or ways to invest in real estate. I was wanting to keep it simple. I knew from the beginning because I’m in the military that I’d be moving. We move roughly every 2 to 3 years, so I knew I’d have to be comfortable from the beginning with out-of-state investing, having property managers, and all that concept because I knew I wasn’t going to be in the same place forever. Some people have an advantage when they invest where they live. They build a network there and grow their portfolio there. I wouldn’t have that advantage necessarily. David Greene’s book, Long-Distance Real Estate Investing, was one of the first real estate books I read. It was hugely impactful for me. It helped me overcome the mental hurdle that a lot of people have.
CWS 239 | Real Estate

Long-Distance Real Estate Investing: How to Buy, Rehab, and Manage Out-of-State Rental Properties by David Greene

The idea of buying a property that you’ve never been to or a property in a place you’ve never been to is scary to a lot of people. That book helped me overcome that ceiling or that mental obstacle. That was hugely impactful. It helped me become comfortable buying out of state. My 2nd, 3rd, and 4th property purchases were all out of state and properties that I had never been to before. That is something you hear a lot from people. For example, we live in California. A lot of people I know want to start their real estate journey. They look around and think, “California’s not where I’m going to be able to get in.” They then think of out-of-state if they want to go the rental route, long-term, short-term, or whatever it is. There’s that, “I haven’t been to the area. I have no idea what the market rate is, what makes sense, or what area within an area is a good place, across the street isn’t a great neighborhood,” or whatever it might be. I love that book recommendation. I even had that issue where it was, “Do I want to invest in a city I’ve never been to and a house I’ve seen only in a picture?” Let’s talk about that. You had your home you bought in Pensacola. What was your next investment? I heard someone on the BiggerPockets’ Money Podcast talking about turnkey real estate investing. Stuart Grazer was his name. He was also in Naval aviation like I am. There was already that trust. I was like, “This guy’s also in the Navy in Naval aviation.” I reached out to him on BiggerPockets on the forum. I was like, “I listened to your podcast and liked everything. Can we talk more? I want to get into real estate investing.” We chatted, and then not long after that, he was like, “We have a property available for purchasing in Milwaukee.” I pulled the trigger on that and bought that first property. I bought another one from them only 4 or 5 months later. After that, I helped them out by referring a lot of people to them. Their waitlist grew from a year and a half to two years long. I shot myself in the foot in a sense because I had to wait. It was another year and a half until I bought the third one. By that time, I had caught the bug and I was like, “I want to do more than turnkey,” which got me into doing the out-of-state BRRRRs and all that. The turnkey model was a great way to dip my toe in real estate investing where it’s not a primary residence. You’re also not having to put an entire team together to run the rehab and all that kind of stuff, which is complicated. It was a good way to buy a dedicated investment property. It was the next logical step.
CWS 239 | Real Estate

Real Estate: The turnkey model was a great way to dip my toe in real estate investing where it’s not a primary residence, but you’re also not having to put an entire team together to run the rehab and all that kind of stuff.

  A couple of things that are so interesting about that is you found someone in the space. You mentioned mentorship has been and is a huge part of getting into anything and any industry at all. You heard his podcast and emailed him. I talk about this. People reading are probably like, “Here she goes.” It’s so important to not have fear about emailing someone, on LinkedIn and messaging them, or going to their website and contacting them. I don’t know about you, but I found most people in this space to be super open to helping and having a 10, 15, or 20-minute conversation. What that shows is, one, you built that trust. You’re in a similar industry. You’re like, “Naval aviation.” There was that built trust. When he brought you that deal, I’m curious. What was your due diligence process when he brought you that deal from Milwaukee? I was looking at the numbers and it made sense. I was still pretty new when it came to all that. He helped and walked me through the process. I put a lot of faith into my analysis of people. I was pretty new when it came to real estate, so it was more like, “I can trust this person based on reference.” I got a couple of references as well from people that had invested with him before. It was trusting the people, which has been a theme throughout my real estate journey. It’s so much more important vetting the people than it is the deal itself. The deal has to make sense in a market that makes sense, but if you do it with the wrong people, it can go bad. It illustrates the importance of vetting the people and the team. The integrity and character of those people are, for me, much more important than what the return is and all that stuff. It’s important, but it’s not as important as the team. It comes down to nothing being guaranteed. What you can control is vetting the people. I’m on the same train of thought. I asked you that question because I had a feeling that you were going to say that. You were like, “I looked at the numbers. They made sense,” but at the end of the day, it was your trust in this sponsor who brought you this deal that they weren’t going to screw you over and walk away and you be left hanging with a property that made no sense. I love that. When you’re investing in a fund or working with anyone in any industry or any business, the people are number one to the product and the product has to make sense. I always think, “If worst-case happens, is this sponsor,” if you’re investing in a fund, “Going to try to hide the truth or are they going to come forward to their investors and say, “This is where we’re at. This is the situation.” Maybe you have a way of defining that or finally feeling that out in a sponsor or people you work with. That’s something, for me, that I go off of my gut feeling with people a lot. A good question to ask a sponsor or anyone that you’re looking to work with is asking them for a time when they did a deal that didn’t go as planned, what happened, and how did they handle it. How do they handle adversity? Ideally, it’s something where they’re handling other people’s money or something like that. Get that reference. Ask to talk to people that have worked with them. Usually, they will be honest about their experience as well. That’s important. To illustrate a point with that turnkey company and those guys, in one of the properties I bought from them, there was some issue with the roof. The property management company was like, “Here’s an issue. The roofer recommends a new roof. It’s $8,000. Let us know what you want us to do.” I was like, “Oh my gosh.” I emailed the guys and was like, “What do you guys recommend?” They were like, “Don’t worry about it. We’ll take care of it,” or it was something like that. I didn’t have to buy a new roof. It was probably not even that long after I bought the property. It was within a year or so. I was like, “That’s good.” They didn’t have to do that. That’s above and beyond for sure, especially at a year. By that time, the transaction is already complete. They could have easily and it would have been justified if they said, “Sorry. We’re not responsible for that.” Would I have referred more people to them? Definitely not. It goes back to the integrity and character of the people that you work with. Make sure you’re vetting them as people more so than the deals themselves. The integrity and character of people that you work with is very important. Make sure you're vetting them as people more so than the deals themselves. Click To Tweet Jumping to a topic that might go hand in hand with what we’re talking about, while you were doing all of this, you were still working, correct? Yeah, I am still working. I mentioned this earlier before we started. We have a lot of people who are reading that may quit their job and go full-blown real estate investing where that’s all they do all day every day. We also have a good amount of people who are trying to do exactly that. They’re working in their full-time jobs. They may or may not have a mortgage, kids, wife, and other responsibilities. How did you balance all that and still progress things forward? Did you set goals? How did that work?  It was a lot easier before we had our son. He’s about nine and a half months old now in 2023. He’s great. I don’t have as much free time and I’m not as well-rested as I used to be. It’s been better since the first few months. I’ve always been an early riser, so I wake up early. I wake up at 4:30 AM Pacific Time and work on stuff, read, journal, etc. I was able to spend even more time before we had our son before work, after work, and on the weekends, whether it was connecting calls with people, analyzing deals, or whatever. Since I don’t have as much time, I have to be careful how I spend my time and make sure I’m doing the things that only I can do. Other stuff, I can outsource. If it’s a $10 or a $15-an-hour task, I try to outsource that as best as possible to someone else and try to limit what I’m doing to the $300-an-hour task, $500, or whatever. I’m like, “What’s the stuff that only I can do?” I can’t hire someone on Upwork to be a podcast guest for me, but I can hire someone on Upwork to edit videos for me, which is what I was looking for and talking to someone for. That’s an example of if you’re a full-time W-2 person like I am, you have to be comfortable delegating and prioritizing your time. This is something I am not perfect at but is something I work towards. It’s fitting real estate and business around family and not the other way around. It’s making sure that family is first and everything fits around that. That’s another thing that was a challenging transition for me after our son was born. It’s gotten better. I have to accept that I’m not able to spend as much time doing real estate stuff. That’s fine. That’s not the most important thing, but it’s a transition for sure.
CWS 239 | Real Estate

Real Estate: If you’re a full-time W2 person, you have to be comfortable delegating and prioritizing your time.

  It gets easier. I have two boys. They’re a little bit older. They’re 5 and 2 so you’ll have more time. I’m told I’ll have more time, too, so I’m looking forward to that day. Something you touched upon probably goes back to your why. It was fitting real estate around your family. It’s so easy whether you’re investing in real estate or moving into the entrepreneurial world to forget work so much. You’re trying to buy your freedom and instead, there’s a fine line. How do you maintain trying to buy more time by investing or having your own business and not giving up all these moments with your family? That’s a good subject or topic. It depends on what season of your life you’re in. I plan on staying in the Navy for twenty years. I’m at fourteen years now in 2023. My horizon is pretty long. If I was going to be leaving my W-2 in eighteen months, I’d probably be a lot more aggressive on the real estate than I am to replace my income. I’m on a pretty good trajectory by the time I retire to hit our passive income goals. I don’t need to hit the accelerator all the way to the floor. I’d rather be able to spend more time with my son and my wife because I don’t need to. It’s a different season of your life. Maybe you’re in the season of growth where you don’t have kids yet or it’s a time when you’re going to be in a transition phase soon, so you need to focus more. It depends on the season of your life you’re in. Whether it’s working to climb that corporate ladder, people lie to themselves and say, “I’m doing it for my family.” It’s like, “If you’re already making good money, does your kid need to go to that five-star resort or are they fine with a three-star resort? If you’re working going from 60 hours a week to 80 hours a week, is that what your kid needs, or is that what you want for your own ego and your own personal goals?” We have to be honest with ourselves about what our kids and our families need from us. Usually, it’s more time, not more money. It’s different for everyone and everyone’s goals. We got to be honest with ourselves about what we want. I am by no means a parenting expert. This is not a parenting show. Every parent I’ve looked at that that I see as, “You’re a great parent,” they’ve always said, “As much time as you can give them, they don’t care about anything else.” I take that to heart. Something that my husband and I focus on is fitting everything else around our family. Something else you mentioned was I like how you broke down if it’s a $15-an-hour task versus a $300-an-hour. That’s important because a lot of people get that, “To grow, scale, or continue down this path while I’m working my full-time job, I’m going to need to outsource. I can’t do it all.” It’s like, “What do I outsource?” I’ve never heard anyone define it quite like you did where it’s like, “Is this a $15 an hour task or a $300 an hour task?” When I’m thinking of my day-to-day, I’m like, “That makes it clear.” There are things that I have delegated off and there are things that I’m like, “This is what I should be working on. This moves the needle forward.” I love that you put a dollar amount to it so that people reading might think, “I have a lot of $15-an-hour tasks I should not be doing.” For your real estate investors that have a few properties and maybe they’re still working full-time or that’s where they want to be, an easy one to outsource in the beginning is the bookkeeping. In the beginning, it’s easy because you’ve got 3 or 4 transactions a month. We have six or so including the ones that are LLC-owned. That’s a lot of transactions. That’s not passive income anymore when you’re working through all those statements. I was looking at emails where it’s like, “The tenant wants to do a six-month.” I’m like, “Is the leasing fee the same amount if it’s 6 months versus 12 months?” I’m trying to weigh the benefit of, “If it’s a six-month lease, how much more are we going to charge for that?” It’s passive but it’s not really passive. Bookkeeping is a good first step to outsource. You can find bookkeepers for cheap unless you’re someone that’s like, “I love the bookkeeping and accounting aspect.” Bookkeeping and a CPA is an easy way to outsource. It’s not only the $15 an hour where it is not worth your time. You can probably find someone not only to get it off your plate but someone that’s doing it better than you were doing it. That’s another thing people don’t think about. If someone else is handling your taxes and bookkeeping, they’re probably doing way better than you could do it and it’s freeing you up to do more important things. I remember when I had my first consulting business. I decided to do my own bookkeeping. When I see other people starting, I’m like, “Outsource that.” That took up so much of my time. I probably ended up paying to have things redone that I was doing incorrectly. I’m like, “That is not my strength. Someone else can do that. That is not my area of expertise.” Be intentional, and that’s working on your business and not in your business. My two favorite business books are Traction by Gino Wickman and The Road Less Stupid by Keith Cunningham. Those are both fantastic books. They both touch on that concept. Are all your properties out of state at this point? Yes. You also moved from owning real estate into being an LP on a few syndications. How did those come about? It’s the network. The first syndication is one that was partially put together by the guys that I bought the turnkey properties from. Those were some of my first investment properties. I didn’t even know what a syndication was. They sent it out and I was like, “This sounds good. A mobile home park? I’ve never considered buying one of those before, but okay.” They explained to me what it was and I was like, “Are you guys investing in this, too, with your own personal money?” They’re like, “Yes.” I was like, “I’m in.” That was my first foray into syndications. I joined GoBundance back in October of 2021. You could throw a rock in GoBundance and hit a syndicator. It’s people that I’ve gotten to know personally before I invested with them, which is important as well. That goes to vetting the people. That’s how I got into that. I’m an LP in four. In one of those, I’m also a co-GP owner. That goes to one of my goals, which is the natural progression of the real estate investor. It’s going bigger. It’s graduating from single-family homes into bigger stuff. Know the real estate people personally before investing in them. Click To Tweet For me, as time becomes more precious, it’s like, “Where can I get the biggest time and ROI?” It’s probably not doing a BRRRR on a crappy house in Tulsa, Oklahoma anymore. It’s probably focusing on my skillset and what I’m good at. It’s to team with other people on bigger deals. That’s what I started doing more of. What I’m wanting to do moving forward is more of that. It’s going bigger, focusing on my strengths, and being on teams of people where everyone is doing what they’re best at. I’m super familiar with GoBundance. I know Chris is part of it. You landed on GoBundance. That’s the group that you’re with, but you mentioned masterminds and networking. There’s a ton out there, especially in the real estate space. In general, there are a ton of masterminds. How did you find your tribe or people and decide to go with GoBundance, for example? Have you tried other networking before that? I’m in two masterminds. The first one I joined was in April 2020. It’s a group called The War Room. It’s all Military folks, both active duty and veteran, that are involved in real estate in some capacity. They’re of different skill levels and all that. That’s the first one I joined. I’m still on that one. That one’s great. I had always heard Brandon Turner and David Greene talk about GoBundace on the BiggerPockets podcast. I looked into it and was like, “Someday, I’ll join that.”
CWS 239 | Real Estate

Real Estate: The double-edged sword of being in a group-like Abundance is that: it’s great because you’re in a bigger room. There’s a lot of opportunity. There’s a lot of people where you can ask questions and leverage their experience in different areas. But there’s also “comparison is the thief of joy.”

  Someday came faster than I thought it would as far as the net worth requirements. I joined in October 2021. I had a big-time Impostor syndrome being in there, but I feel more at home with it now than I did in the beginning. I say more at home. It’s been great the entire time, but I felt like an Impostor for the first six months or so because there are high-level people all around. You’re like, “I don’t belong in here.” Do you think, to a sense, that a lot of people in the room feel that? 100%. I imagine all of them feel it at some point. There’s always someone bigger or that feels bigger. Even when you hit that next level where you’re going from using your own money to other people’s money to a bigger fund, I feel like you always feel like, “I’m still small compared to the multibillion-dollar fund.” I’m sure they have their people, but I feel like everyone in those rooms feels like that to an extent in their own way. That’s the double-edged sword of being in a group GoBundance. It’s great because you’re in a bigger room. There are a lot of opportunities. There are a lot of people with whom you can ask questions and leverage their experience in different areas. Comparison is the thief of joy. That’s where another great book is, The Gap and the Gain, which is a fantastic one to read. I read it twice in 2022. The second time was because I felt like I needed to read it again. That’s a good book. It’s a good way to keep yourself in the right head space.
CWS 239 | Real Estate

The Gap and The Gain: The High Achievers’ Guide to Happiness, Confidence, and Success by Dan Sullivan, Dr. Benjamin Hardy

It’s easy to compare yourself to other people, especially in a group like that. Another thing I’ve learned in GoBundance is no matter the net worth or anything, everyone has their struggles. Everyone is battling something. Everyone has their own obstacles they need to overcome. Some are money-related, and some aren’t. There are folks in there that are worth 8 or 9 figures but don’t have a relationship with their daughters or sons. That goes back to what I was talking about before where you can chase money, but you can’t get that time back with family. It’s about finding that balance. GoBundance has been a good place to share with other guys the struggles and different challenges and be open about different things like that. People join for money reasons, net worth, and all that stuff. People stay for authentic relationships. I mentioned this in your intro, honor and equity. How did that come about?  In that first mastermind group that I joined, The War Room, there was a post with the guy that I bought that first property from, the turnkey one. He challenged people to start their own thought leadership platform to share their journey and all that, so I did. I started using it as a way to document my journey, share what I’ve learned, etc. I started writing articles and blogs. Those are still on the website, but my mom was the only one that read them. We started getting into Instagram and doing more Reels. People want twenty-second video clips more than they’ll read an 800-word article or a 1,000-word article. It started as a way to document my journey, and then it’s evolved into a way for me to help military members, veterans, and their family members grow their own portfolios. A lot of my free time is spent mentoring them one-on-one for free. I’m helping them grow their portfolio and sharing what I’ve learned over the last few years, whether it is doing BRRRRs or flips out of state, putting teams together, and doing syndication stuff. I’m helping them out however I can. That’s my way of giving back. In the real estate community, a lot of people help each other out. I was helped out, so I got to help other people out. It’s very rewarding to do so, especially for fellow military folks. In a real estate community, people help each other out. Click To Tweet There have been people that I have met because someone made an introduction. As with anything, knowing someone that was referred to you because they trusted you, that connection helps build your confidence as an investor. How can you pay that forward? I love what you’re doing. That’s cool. Thank you. It has been a lot of fun meeting people. I’m a real junkie when it comes to chatting about real estate with people anyway, so it scratches that itch. A lot of the stuff they’re going through is stuff that I was doing myself a couple of years ago, so it’s still very fresh for me. My superpower is connecting people, so it’s easy for me to be like, “You need to talk to this guy. Talk to this lender,” or whatever. It’s such an easy way to provide massive value to people by connecting them or sending an email. It’s so easy, but you can make such a big impact on people. We always like to ask this question. If you were going to give one action tip for someone who was starting their real estate investing journey in this economic climate, what would your advice be? First off, be very clear about what you want and where you want to be. Once you identify that, find someone that is already doing or has already done what you want to do. Find a way to provide value to them without expecting anything in return and they will reciprocate. You’ll be able to learn from that individual. That’s a good way to get into it. I wish I was lying when I said that none of our guests have probably met each other, but that one comes up a lot. It’s finding someone who’s done what you’re looking to do and finding a way to provide value to them without expecting anything in return. That last part is key. With zero expectations, you’re like, “What can I do for you?” You and I both agree. This industry is super kind and super willing to help. If you do that and it’s not someone that you connect with the first time, reach out to multiple people. Don’t find one person. Find multiple people who you might resonate with. You might hit four different people, but one of them you click with. It’s finding that one person that you click with, like you. The guy who got you your second investment property changed your trajectory. That’s awesome. I could see someone asking, “How do I find that person?” The two best ways would be to go to in-person meetups, wherever you live, and then join a mastermind group. One of the biggest accelerators of my growth, if not the biggest accelerator, has been mastermind groups because you’re surrounding yourself with like-minded people. Those are people that have already done what you want to do, people that will hold you accountable, and people you can ask questions to and give advice to. One of the biggest accelerators of growth are mastermind groups because you're surrounding yourself with like-minded people. Click To Tweet A lot of times, in this space, it’s easy to get blinded by your own problem that you’re in. The solution is incredibly simple, but you can’t see it. You ask your group and they’re like, “Have you thought about this?” You’re like, “That makes sense.” If you’re trying to do it by yourself, it’s not going to work. Be in a mastermind group even if you have to pay money to be in it. Some of them are more expensive than others, but it’s hugely valuable. I agree. If readers want to reach out to you, learn more about you, or connect with you, how can they do so? How can they find you? We’re on Instagram @HonorAndEquity. We’re on Twitter as well, but we’re most active on Instagram. My email address is Doug@HonorAndEquity.com. We also have our website, HonorAndEquity.com. I love that, and I love that you gave out your email because I always do that. I don’t know if it’s industry-specific, but I feel like a lot of people in the industry go straight to their personal email or their work email. Thank you, Doug, for joining us. Thank you, everyone, for tuning in to this episode. If you enjoyed the show, share it with a friend or subscribe and leave us a review. Until next time. Thanks. Have a good one.  

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About Doug Spence

CWS 239 | Real EstateDoug Spence is an active-duty Naval Officer and founder of Honor and Equity, a real estate resource for military members, veterans, and their families. He lives in San Diego with his wife Cait and son Calvin. Doug started Honor and Equity to share his real estate journey, and help other military military members and veterans grow their portfolio. Doug personally owns real estate in multiple states, is an LP investor on 4 syndications, and is currently a co-GP on an RV park syndication.

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