Real Estate Strategies And Tips With Jawad Dashti Of TooDash CRE

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If you want to succeed in real estate, it’s not enough to sit on the sidelines and learn everything. If you don’t put all of that knowledge to work, you’re not going to be able to do anything. You have to take action. Jawad Dashti the owner of TooDash CRE, likens it to playing Monopoly without knowing the rules. In this episode of Uncontested Investing, Jawad sits down with Tim Herriage to tell us how exactly this works for him. He also talks about making the “safe bet” in real estate and why you don’t have to aim to beat the bigger players all the time. Tune in and get some real, actionable tips that will get you going on real estate even through these trying times!

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Real Estate Is All About Taking Action: Real Estate Strategies And Tips WITH Jawad Dashti Of TooDash CRE

I’m with my buddy, Jawad Dashti. Jawad, thanks for coming. Tell the audience a little bit about yourself.

I’ve been in real estate for years. I don’t find myself to be that great at it but I figured that if you make as few mistakes as possible, that alone makes it work out pretty well.

You started as a plumber, correct?

Yeah. I was in construction working for all these home flippers right before the 2008 bust. Everybody was bragging about how much money they were making. I figured that if they could do it, I could because I knew all about construction.

How’d that work out for you?

I learned that knowing construction doesn’t do anything at all with real estate. It’s a numbers game. I had to get up and put in some work attitude. To me, that’s what’s paid off the best.

You’ve always been one of those people I admire in the DFW area. Every episode, we start with the Bottom Line Up Front, the BLUF. When I was in the Marine Corps, we used to brief generals. They would always say, “Don’t bury the lead. Get the most important information out and share it in case a General has to get up and leave a mortar fire or something like that.” What I’m going to do is give you two minutes to share what you think people should be thinking about in the real estate market, maybe what you think they shouldn’t be doing, what they should be doing or what you’re doing to continue to grow and also protect yourself.

The best advice that I could give is that we’re going through some different times, which seems to happen about every eight years in the economy. That’s when the most money is made and lost. The people that win the game are the ones that pay attention. I tell people to look at the economy, what’s going on and all the transitions because everything’s changing.

If you can try to determine where things are going, you need to think about 3 to 5 years ahead of the game. As you’ve seen, the office is changing and a lot of places are converting into multifamily. A lot of multifamilies are converting into multi-use. If you notice which way neighborhoods are growing and how real estate is changing and you can be a little bit ahead of the game, it’ll pay off for you.

It’s a good time. The inflation has taken off and assets are growing. I have no concern about being in the game. For the people that think that the real estate market is going to crash because of the interest rates, I still think that mortgage rates are low compared to the average. If the whole world went bust, we’re all screwed anyway. Keep playing the game. If you commit to it, put in the work and try to think a little bit ahead, you’re going to do well.

One of the things that stuck out the most to me following you on social media the last couple of years is the way you play the tax game. Where did you learn that?

I can’t give credit to any books because I don’t read books at all. It’s funny, I can read stuff on my phone all day but reading a book, I’m allergic to it. It’s going to investor meetups, watching shows like this and REI groups. Believe it or not, there’s a lot of content from shows like this. I overhear conversations. When I see people who are smarter than I talk, I try to eavesdrop on them.

I won’t hear everything that I need to know to fully understand the game but I can hear enough to hear a word like 1031 exchange or some kind of phrase like accelerated depreciation. I go home, google it and research it non-stop until I feel like I’m a master at it. I always try to tell people it’s like trying to play Monopoly without reading the rules. How do you expect to win the game when you don’t know the rules? Many people do that.

People talk trash about taxes all the time. I love taxes because I don’t have to pay them. The IRS and the government make these rules to manipulate the economy. They’re paving the way for what they want you to do and paying a tax as a penalty for not doing what they want. If you play the game, you can make a lot of money and not have to pay them anything. That’s the way to do it.

Read the rules. You own Precision Plumbing and multifamily, commercial, chicken coop and a bunch of single-family. Let’s start at the beginning, maybe on a high-level cover of how you progress from venture to venture.

With the single-family, the first deal that I got, I was winging it. Luckily, it went well for me on my first deal. I purchased a single-family deal. Luckily, it was a lipstick one and I didn’t get too big over my head on the deal. I bought it, painted it myself and slept in it for five nights while lip-sticking it. I rented it Section 8, which I didn’t know how that worked but I figured it out.

This was in 2012, a perfect time to be getting into real estate. Everything crashed. The prices didn’t come up yet. I’m getting a good rental rate. I figured out that we’ll try to do it again. I realized that an amazing deal wasn’t that easy to find. I tried to short sell but I didn’t know what it was. It’s like hearing rumors from people on ways to find properties. I bought a short-sell. It had a guarantee that it was going to look like the pictures but it did not. They said they were going to give me $5,000 if it didn’t look like the pictures but they did not.

Luckily, a buddy of mine had quit his job to start his business in automotive. He was still a little slow like, “I can help you paint and stuff.” It’s not like he knew anything more about construction than I. I had already been in it. It gave me the motivation to know I wasn’t doing it alone. He and I painted this house, replaced faucets and rented it out. That did well.

On my third one, I went to big construction, which I thought was big at the time. It had some sheetrock holes. Every friend that I knew walked into the house and was like, “You shouldn’t have bought this house.” When it worked out, that’s when I learned that the more I hear that, the more money I make. After I had done my fourth house, the housing market changed. You went from being able to buy any house in Dallas for $30,000. They were skyrocketing because the market was coming right. I didn’t know that. I had just got into the market.

I started looking around. I’m like, “Where can I still make the same money without having to fight over houses and still get the same returns?” At the time, I didn’t even understand equity, only cashflow. I didn’t know what cap rates were or cash-on-cash returns. I hadn’t figured any of that out yet. I merely knew that if I paid for a house, how fast did I want my money back? My goal at the time was 3 to 5 years. That’s the total purchase price in 3 to 5 years.

I looked and saw condos. You could buy condos over here, which was not the best area. I was buying them from wholesalers. I didn’t know what a wholesaler was. I didn’t even know I was buying them from wholesalers. I was buying them at the time for $5,000 to $10,000 apiece and renting them out for $900 a month. That’s an amazing return. I didn’t even know that was an amazing return. I was like, “This works for me.”

I bought ten of those, which took time because I’m doing all the rehab myself. I’d buy 1 or 2, paint them, lease them out and all that. Two years go by and the next thing I know, these condos shoot from $5,000 to $70,000 apiece because people found out that there wasn’t affordable housing in Dallas and they started buying them all up. I found some apartments near the Cowboys Stadium, a great area and terrible housing all around it. The Cowboy Stadium, for those that don’t know, was a mobile home park that got scrapped. It wasn’t the best area but the location was great.

At the time, I could buy these for $16,000 a door. Now they’re trading at $150,000 a door. That was 2016. I didn’t know about 1031 exchanges. I wasn’t leveraging and getting loans at the time yet. I sold four houses, took a huge tax hit and used that money to buy the apartments. I put $7,500 per door into them with a total of $24,000 a door and then sold it for $100,000 a door during COVID.

I wanted to replicate that. Multifamily is way too hot. When I first bought my apartments, it wasn’t cool. You were considered a slumlord and a lower-end investor to buy apartments at that time. Now, it’s the hottest thing you could do. During COVID, when everybody was saying, “Don’t get into commercial. It’s failing,” I tried to scalp the bottom and try to buy while everybody was panicking. I purchased 23 commercial properties during COVID. I’m winging it, which is working out. It’s educated winging it. I’m doing my research. I don’t know 100% what I’m doing but it’s working out very well.

Jawad, we’ve got a lot to talk about. The first house you bought, you put it in Section 8. Did you get a big inheritance to pay for that house? How did you buy it?

In 2010, I was poor. I always had to worry about what I was going to eat and how I was going to eat it. By 2014, my plumbing company had been doing well and I’d saved up $250,000. I went to switch banks and went to Chase Bank. A banker there was like, “What are you doing with this money? Do you not understand how inflation works?” I was like, “I don’t even know what that means.”

He explained inflation and how my money is losing money by sitting there in a savings account. He didn’t tell it to me out of his good heart. He was trying to sell me some bonds. He told me what I needed to know. In the end, he was like, “Are you going to buy some bonds?” I was like, “No. I’m going to go buy some real estate.” Luckily, I was able to comprehend that real estate could beat that inflation market.

Years later, when you go buy 23 commercial properties in a year, are you still paying all cash? Are you using leverage? How’s your capital stack changed?

It depends. You know how it is, money is always moving. I’ve got seven figures in my account and that’s not typical. It’s always up and down. I remember there have been times when I hit below six figures and freaked out but that’s because you want to always keep your money working. If I’ve got excess money, I’ll purchase a property, rehab it and then leverage it out. I’d go find some long-term debt. If I’m short on capital, I’ll use a hard money lender, rehab it, rent it out and then get the long-term debt.

Here we are years later. You’ve done a lot of transactions. You still use a private lender/hard money from time to time.

Yes. People talk about private money. I find private money to be a pain in the butt because it’s too personal. They want too many details. They’re going to walk the property account. That’s too hard. I can’t scale that way. I don’t want to have to write a thesis every time I want to buy a property. I don’t have an exact system on how I do each one but yes, I like to leverage it out.

You’re managing your business. If you’ve got too much cash, you spend the cash. I find that most of my clients are that way. Condos. I remember I owned property at 8110 Skillman Unit 2003. Windtree Condos. I was in the lawsuit with the board and Fidel Jenkins. I was on the board at that time. I was the one that had to go to all the depositions on your behalf.

That soured me on condos so bad but I bought that for $5,000. It was because I’m sitting there and the guy goes, “Make me an offer.” I thought, “I’m going to give you an offer but I don’t want it. $5,000.” He’s like, “It’s yours.” I’m like, “What?” It was a great cashflow property but I had such a bad experience on the board. I formed a good relationship with Auction.com. I was like, “I’ll auction this thing. I’m done.” It did sell for $15,000 or $20,000 a couple of years later.

I bought those for $5,000 apiece. I had one guy that tried to sell me 50, 60 or 70 units for $5,000 apiece at one time. I didn’t have the capital. I didn’t understand leverage at that time. That would have been great.

You had to be brave to go into that condo market. I’ve been doing it for many years and it still bugged me. Other than the price, was it purely a return calculus? Was it you were looking for affordable housing? What pulled you towards those condos?

A little bit of everything. I’ve always tried to buy the most affordable property. Part of my business plan on any of the housing stuff, not the commercial, is the cheapest properties are always going to be the cheapest property. If I go buy a house in a not desirable area for $20,000, even if inflation drops up to $150,000, it’s still going to be the cheapest area. It gets 10% harder to lease during a great economy like what we have, despite what people say this is a great economy. During a bad economy, they lease 1,000 times easier. All the beautiful areas like Frisco and things like that, that’s where people get foreclosed on and downsize. It’s the safest bet.

You said relatively low-interest rates. What made you say that?

I’ve grown up knowing a lot of doctors and people. Before I was even in real estate, I remember when they went down to 6%-something. Doctors were freaking out like, “I was happy to pay $15,000 for my house.” I understand when people say history always repeats itself. I’m real big on going back like yourself and looking at graphs and analytics. I go back 50 years. We’ll try to see what it was.

On interest rates, I go back. Rates have been low like we had them where they’re at 3%. They’ve been as high as 18%. If you look at the average throughout time, the average is about 7% throughout the past 50 or 70 years or something like that. I don’t care what people say about interest rates. I’m not even going to think about it until we hit that number or if it’ll even cross my mind if I’m concerned.

I’ve been reading a lot of articles where it’s like, “Days on the market, up 50%. Days on the market, up 100%.” You read into it, it’s like, “It went from 3% to 6%.”

The average is 60 days and 6% is still low. That’s still 90% better.

It’s 10% of the average. As we transition or turn a corner, you’re not looking at it but where are you going to be focused? Is it multifamily, commercial or land development? Are you about to sell everything, go back and raise chickens? What are we doing here?

A little bit of all of it. I am trying to pick up some liquidity because I do think that there are going to be opportunities to be bought. I’ve never been one to play in the stock market but I am going to try to scalp some of that stuff while it’s low. I’ve been doing a lot of land plays and that’s been working out for me. I still don’t understand land that well but I understand what land is worth. If you buy it cheap enough, you can make a lot of money.

You talked about cashflow being real estate rich and cash poor. What’s your land cashflow strategy?

I’ve tried to determine a lot of them and came out that there isn’t a good one. RV parks are the best that I’ve seen anybody do. I don’t know that you’d even call that a land strategy. Maybe if you were buying the next place after Prosper and you knew you’re going to have to hold it for ten years but you’re going to make a whole bunch of equity, that would be a good play.

What I’ve been doing is places that are already hot, that’s how I got my ranch. I was calling around anybody who had over 20 acres. I called a guy who had 106 acres. I said, “Would you sell your ranch?” He said, “Yes.” I said, “How much?” He said, “I won’t take a penny less than $3,000 an acre.” I pulled the comps and the cheapest I’ve seen was $12,000 an acre.

The going rate at the time was about $18,000. I bought it, did some infrastructure and stuff and sold off the back acreage. By the time I was selling it, it started going for $50,000 an acre out there. I had millions in equity. Selling off a little bit of the back gave me my whole land, house and shop for free. I learned there’s some money to make there. It does take time and does hold up capital.

Free land is another thing we got to talk about. Read the rules. You seem to be one of those when you hear something, you go out, research it and read it. Any resources, tips or tricks you can offer?

I read every news article and take them all with a grain of salt because everybody’s got their reason why they’re putting out whatever they’re putting out. I read them all. You’ll read things about electric cars, oil, the economy and interest rates. I try to determine what the bigger picture is and where it’s heading. I try to be a foot ahead of the game.

With all the IRS stuff, I watched a lot of videos like this and tried to learn all that stuff. I then put it into practice. I talk to a lot of people, “Do you know about 1031 exchanges?” Everybody said yes. I’m like, “Have you ever done one?” Everybody said no. Even people I knew that had $20 million portfolios, I’m like, “Why haven’t you done it?”

They’re like, “I don’t know anybody that’s done it.” I’m like, “That’s the same reason why I haven’t.” I was like, “Screw it. I’m just going to do it.” I did and it went well. I did a whole lot of them. During COVID, I started exchanging out all my D Class properties that were single-family that sell 2 or 3 at a time. I 1031 them into a B Class commercial property. I find that it’s a lot more relaxing.

Jawad, here’s the Money Minute. It is a segment we do every episode where for 60 seconds, you’re speaking directly to the audience. Imagine it’s the only 60 seconds of advice they’re going to get all month. This is it. This is the only thing they get to learn. Some people go back to when they were starting and speak to their younger selves.

The best advice that I could give is you got to do it. There are many people I meet that have been sitting on the sidelines learning everything about real estate, knowing more about it than myself, getting all this education and they haven’t done anything with it. That doesn’t mean jumping in blindly. You want to get out there, do your research and watch shows like these. Investopedia is a good website where you can learn a lot of terms out there.

At some point, no matter how much you know, if you don’t put all that knowledge to work, you’re not going to be able to do anything. That’s the biggest mistake that I see people make. You got to go out there and get the knowledge but put in the work. No amount of knowledge and money is going to beat that work. You have to be able to put in the effort, especially on your first deal. If this is something where you’re beginning or you’ve been doing it for a little while, that’s the most important part.

Here we go with Rapid-Fire. “Put into practice,” you said a couple of times. You educate yourself but then you act. What is it about that? How do you do it?

The biggest thing is I like to think big. I meet a lot of people who think big and then act big. Sometimes they act a lot bigger than what their wallet or mindset can handle. I don’t want to be that guy. I’ve seen a lot of people that I thought were smart and educated but failed. I research what I’m going to do. I went from $5,000 properties to $50,000 to $500,000 properties. I’m trying $1 million properties. I’m willing to take my time and I find the one that’s the safest bet.

If it’s something new and I’m not 100% educated on it, I want to know that there’s room in there for errors. I purchase a deal like that. That’s the safest bet that I can find and I go through it. Instead of trying to rush it as I do with a lot of stuff where I feel like I’ve mastered things, I take my time. I ask a lot of questions. If I have to deal with the city, I ask a lot of questions. If I have to deal with contractors, I ask a lot. I try to become as educated as I can and try to be a master at it. That way, I’m more prepared to make better decisions on the next deal.

What’s the most money you’ve ever made on one property?

Years ago, I sold my apartment complex at the Cowboys Stadium for $2.2 million. I made a $1.5 million profit on the deal. That would be the biggest deal and profit that I’ve made. The second biggest deal would be the one that I closed if you saw that.

I did see that. What’s the most you’ve ever lost on a property?

I have not lost a penny on any deal but I do not deal like a lot of people and I don’t go for quantity. I always go for the quality. A lot of people do 200 or 300 deals a year but I don’t. If you watch me on social media, you think that I do everything senselessly without thinking about it but that’s not the case. Plus, I got in a good time in the market. If I feel I’ve over-rehabbed or something like that, I don’t mind renting it out for a year and then selling it.

There was one house where I thought I was going to lose money on it. I was like, “We have nine other houses in the pipeline. We remodeled those. We’ll bring them all out.” I forgot about the house and then I did my property taxes. I was like, “I forgot to own this house.” I went and renovated the house. I sold it at the time and by then, there was enough equity. I ended up making $20,000, $50,000 or something like that.

What’s the one deal you didn’t buy that you should have?

There are a lot of those. Especially when I first got in, I wish I would have been everything that I looked at but most importantly, there’s an apartment complex in Dallas. We were at the apartments’ bottom when they were not doing well over in the Gaston area, which at the time was a little rough neighborhood. Now, it’s a very nice area. I could have bought those for $15,000 the door but they were full gut to the studs. At the time, that intimidated me. I wouldn’t want to drive that way. I reroute around the entire neighborhood.

What advice do you give if someone gets into a deal and once they realize it’s not going the way they wanted, maybe cutting bait early or being unemotional during due diligence?

I’m always unemotional during due diligence. I find that only twice I’ve ever felt like I needed property and I purposely didn’t buy it for that reason. Even if it still was a good deal, I knew I was going to make bad decisions later on over that. There’s an office right down the road in Addison for $14 million that I have the money to buy and it is a beautiful building.

I realized my ego was about 90% of wanting to buy that and I’d like to see my company name on there. I was like, “For that reason alone, I don’t even want to touch it.” If you see yourself where you’re eating on a property, dispose of it. Get yourself out because time is money. It took me a long time to learn that time is more valuable than money because you can spend a year trying to squeeze $5,000 out of a bad deal or sell it.

Take your $10,000 loss and go make $10,000 100 times during the same amount of time. I’m quick about cutting my losses. There are a lot of times when I buy a deal and I think I’m going to make a certain amount of money and then I realize it’s not going to be as much as I thought. Whether I sell it, owner finance it, rent it or slap it on the MLS, sometimes I cut my ties with it.

It’s important. I’m in a deal that’s maybe a Rock Wall historic thing. Maybe it’s time to sell it for $1 million and move on. Do you still own a plumbing company?

Yes.

Do you consider yourself an employee, self-employed, business owner or investor in that company?

An investor because I do not do anything with it. Our friends messaged me all the time, “How much is it to do this?” I’m like, “I have no idea. No clue. Here’s the phone number.”

What about the single-family business? Do you self-manage those?

I self-manage all of our properties. I have tried multiple property management companies. I have not found success with any of them. I don’t mind paying fees at all because time is valuable. I went in with the mindset that this will free up more time for me to use the dollars that I have to make millions for the hundreds that I’m paying. That did not go well because one of them, I fired the first day they started managing it.

The longest one has lasted probably 8 months but even my apartment complex went from 100% occupancy to 60% vacant within the first 5 months. Everybody in my office was like, “We need to fire them.” I was like, “Let them do their job. Maybe they’re doing some stuff or they’re going to recycle and give me better tenants.” No. It got worse to the point where I had to take over. They were telling me the reason why they can’t lease it is because my properties weren’t nice enough but I got it back to 100% occupied within 30 days.

If you had to make a decision, one of the first things people will ask me is, “How many houses do you owe?” It’s always funny because I don’t know and it’s not that I don’t know because I have so many that I don’t know. I just don’t take the time to count that.

I’m sure it goes up and down and changes every day.

For me, it’s not how many but it’s how much. What’s that net worth and cashflow look like? Which do you use? Is that how many, how much or something else?

I want to compliment you on that because you’re the only other person I’ve ever met where I only go by my balance sheet. I do that because that’s what billion-dollar companies do. I tell people, “Why are you trying to be smarter than a billion-dollar company? The owner is smarter than you who hired people that are smarter than you to come up with ways to do things.”

If that’s how they do it, I’m not going to try to beat the system. I know a lot of people who are like, “I want to own 100 doors.” What they do is they go out there and they’re like, “It’s taking too long.” They then buy a lot of junk that doesn’t cashflow, has no equity and they can’t lease it out. I’ve watched people buy bad stuff because they set a goal. My only goal is to make money. The only thing that I watch is my balance sheet and net worth. As long as it’s going up, I feel like I’m doing a good job.

Do you have any parting thoughts or parting shots?

It’s all a numbers game. Please be good at math. If you’re not, have a calculator. I have three of them on my phone. I have a mortgage calculator and a regular calculator. I have smarter people than me around me but it’s not that hard as long as you’re willing to meet great people like Tim. Network with people, get educated and most importantly, put in work.

If someone wants to connect with you, do business with you or network with you, how do they find you?

You can email me at Jake@TooDashProperties.com or find me on Facebook, Jawad Dashti. You’re going to see my business page and my personal one. If you don’t know me, please follow the business one.

Thank you for being here. It was a great show. Remember, your network is your net worth and you’ve been growing both. We’ll see you soon.

Important Links

• Jawad Dashti
• Auction.com
• Investopedia
• Jake@TooDashProperties.com
• Jawad Dashti – Facebook
• Business Page – Jawad Dashti Facebook
• Precision Plumbing

The following podcast program is furnished by RCN Capital LLC.  The information provided is for general educational purposes only and does not constitute any legal, tax, financial, investment or other professional advice. The views, thoughts, and opinions expressed of any speaker are the speaker’s own opinion and do not represent the views, thoughts, and opinions of RCN Capital LLC.   No information contained in this episode should be construed as financial, investment or legal advice from RCN or any individual, author, host or guest. You should always consult a financial advisor before investing.

• inflation
• interest rates
• Real Estate Investing
• real estate market
• wholesaling