How a West Point Grad Uses Whole Life Insurance to Scale Real Estate | Austin Johnson

Austin Johnson (00:00)

So I was just saving up for down payments in my high yield savings account, or I was using bonds. So how that would look, I would save up to like thirty, forty thousand dollars. I’d make a transaction, go back down to zero dollars. I’d build up again, tax the entire time, build up to that down payment, swipe the card and be at zero dollars again. That’s what really pushed me to my turning point to go seek out a financial education because it’s not taught.

Issa Hanna (00:56)

Welcome back to another episode of the Real Estate Pros Show. I’m your host, Issa Hanna, and today we have Austin Johnson here to share his knowledge with us. Austin, welcome to the show.

Austin Johnson (01:05)

Hey man, thanks for having me. Very, very cool.

Issa Hanna (01:07)

Super excited to have you. We were talking off camera earlier. We share a lot of similarities, so and already kind of hit it off good rapport. So I’m excited to get going. But for our viewers at home, can you kind of give them a look into a day-to-day in Austin’s life?

Austin Johnson (01:22)

Yeah, So jiu-jitsu is my passion. So I kind of s organize everything around there. But I wake up, do like a power hour. I’m a big fan of, having your habits kind of control or, my habits kind of dictate my day and the way I set up my life. So I do an hour there, workout, movement, et cetera, et cetera. Talk with clients for maybe three, four hours, start to wind it down, and then I go hit practice where I’m coaching or or actual participating in class, jiu-jitsu.

Issa Hanna (01:48)

I love that man. And a lot of professionals are in space. And that’s one of the similarities we share. I also train jiu-jitsu is we have to have that workout, right? You have to have that mental unwind. If you want to help people, you want to help clients, you yourself have to be in that right state of mind. and then, we’re competitive people, real estate people and jiu-jitsu kind of go hand in hand because we like that competitiveness and camaraderie. So I love that you’re so disciplined. another thing I want to tell the viewers, a West Point alum. So the discipline is instilled there right away. you can tell it projects across the screen. I want to rewind though. I want to rewind possibly even before you went to West Point, right? what made you think about real estate? What was what guided you this way?

Austin Johnson (02:37)

Yeah, I was always on a quest to build wealth. I have two main passions that I’m supporting. One is jiu-jitsu. I’m on a vision quest to give away a gym in the next five years. Truly, I go to bed every single day thinking about how I could do this in a more efficient manner. And then also the disabled community as well too. Intertwines it in my family. I want to help build wealth to, target those two communities. When I got into real estate, I was just doing traditional paths when I first started before I jumped into real estate. maxed out TSP, Roth, things like that. And then I jumped into the world of real estate all in sequence, all in effort to support those two passions like I was telling you about.

Issa Hanna (03:15)

Amazing, man. And I love that, jiu-jitsu is like the real estate rug, right? You get bit by you, but and it brings so much joy to people’s lives. You just want it out there in the masses. So the fact that you want to give out a jiu-jitsu gym, help, not just the owner of said gym, but help the community like that, is amazing. And then, you’re using real estate. as the avenue to get there, right? So it’s just like it’s one of the best pillars of wealth you can build. You identified it early and now you’re using it to just keep building this. I mean amazing. And I want I want to focus on the strength you told me I had. I want you to tell the viewers about your strength because I found that very intriguing.

Austin Johnson (03:54)

Yeah. So my niche strategy that I did, this ties into my story. I mentioned I was just doing traditional paths at first, maxed out, TSP, Roth, things like that. And then when I got into real estate, I kind of went into it in an ignorant manner. So I was just saving up for down payments in my high yield savings account, or I was using bonds. So how that would look, I would save up to like thirty, forty thousand dollars. I’d make a transaction, go back down to zero dollars. I’d build up again, tax the entire time, build up to that down payment, swipe the card and be at zero dollars again. That’s what really pushed me to my turning point to go seek out a financial education because it’s not taught. even at West Point, it’s not taught. You have to go on BiggerPockets. You have to find places like Investor Fuel to really pick out those lessons that you need learn. I stumbled across using whole life as an asset to go buy other assets. Long story short, I used to do like one property per year. Now I do like four to five properties per year. And I started a consulting business around that. So those high cash value whole life policies, that is the niche. That I bring to the table. I’m a true black belt, if you will, in terms of design with those structures.

Issa Hanna (05:36)

I love that man. Yeah. And when you figure out financially, like how the finance aspect works and you get better and better and you figure out these different products and ways to go in there, you become lethal as an investor because, like you said, you you’ve four times what you’re able to do just by getting the right capital. And in this game, that that’s what makes it go around, right? The capital. So amazing. And I love that you’re bringing the consulting. So not only coaching jiu-jitsu, trying to bring a gym. But you also want to financially coach people, the masses, on how to do this. And it brings me into another thing we talked about. You also want to bring that family office concept to the masses. So let’s shed some light on that too.

Austin Johnson (06:16)

Yeah, so I feel the easiest way to understand a family office, you know what it is. It’s essentially a staff to control your wealth. This came from a really cool book called *What Would the Rockefellers Do?* And it’s really a case study between the Rockefellers and the Vanderbilts. Rockefellers are still seven generations going strong today. Vanderbilts lost everything within a few generations. Why? Because the Rockefellers had a structure to not only build wealth, but also sustain and protect their wealth. From a bird’s eye view, very simple. It’s trusts, hold holding companies. Holding companies hold different assets. A very important asset is that high cash value whole life insurance. When someone passes away, it goes back into the trust system. The output product is essentially a privatized bank. It’s a family bank that you can use to build wealth now and also protect the future. And then a family office and pair with a family constitution, which is basically the rules that guide how to control this privatized bank. And the more I do this, the more I talk with clients. I want to take principles from this family office concept and show you how you could do it on scale. You don’t have to have this is a real common fallacy. I want to, double underline. You don’t have to have a billion dollars to do this. You don’t have to have a million dollars to do this. This is just capital structure. And if you structure your capital in a correct way, you can get to your why in a more efficient manner.

Issa Hanna (07:33)

Amazing man. I mean, truly great. The honor projects to the screen, right? I said integrity before. Very honorable man, right? You you’re you wanna bring this, you wanna teach people the way, right? Because education is like you said, you went to West Point and you weren’t taught these things, right? So it’s just not out there for people to get. You do gotta learn it from somebody who’s been through it before. So who better to learn it from than a than a black belt in it, right? So

Austin Johnson (07:59)

And if I could add to that, it’s so tough to find the right people in the right locations. That’s why I jumped into this too. let’s say you go about getting a financial education, two thumbs up, that’s great. It’s even harder to find the right people in the right locations. And then on top of that, I’m not trying to jump on a soapbox, but we’re in interesting times right now. I really feel like leaders need to step up to the plate and start helping out other people. I think something everyone can agree on right now is that corporations and governments do not have our best interest in mind. who would have thought? And if you’re a leader, your numbers being called right now. I think people need to step up to the plate right now and start helping people because corporations and governments are not going to do that. I’ll step down from my stoke box, but that’s how I that’s how I come to the table.

Issa Hanna (09:18)

And if anybody could step up under that box, it’s you. you earned the right to do it with the service that you put in, man. And I’m sure a lot of our viewers are gonna agree one hundred percent with what you just said. And with that, I want to pivot into to a threat that could be something on the horizon in our game. the interest rates we talked about earlier. So give me your take on where you think interest rates are going, how it’s gonna affect the market.

Austin Johnson (09:43)

Yeah, I think I wish more people would say this, but I don’t have an opinion yet. I’m still calculating data and figuring out things, but here’s my thoughts. I think if you look historically, interest rates are still relatively okay. but I feel there’s a macro and there’s a micro perspective too. Of course, macro higher interest rates, it’s gonna be harder to get into the game. But one thing I pair this high cash value whole life with turnkey real estate. turnkey real estate works great if you’re within the right locations with the right l people. So I’ve ab I’m able to kind of shield myself from a lot of those negative impacts, higher interest rates. For me in my system, it’s really having no impact in what I’m doing right now. But if we look zoom out and look from a macro perspective, absolutely it’s harder to get into the game.

Issa Hanna (10:24)

Definitely. So you gotta run those numbers. I you guys that watch the show or listen to the show all the time, you always hear me say, if it makes dollars, it makes sense, right? So you gotta find right? So you gotta find those markets that work with the higher interest rates. And guess what? You get in with higher interest rates and if they do drop, you refi, you make more money. So I like that take, just sit back, see where it goes and crunch your numbers and you’ll be just fine. there’s always a way to make money in this game. let me ask you about a real estate nightmare. we all have one in our investing careers, right? Give me one that sticks out in your mind where you had to, something popped up, you had to get through it, you got through to the other side and now it wasn’t that so bad.

Austin Johnson (11:04)

Yeah, I have a property over in Texas. I bought it during post COVID times and I’m still the property manager over there. It’s underwater by a few, about ten, twenty thousand dollars. It’s a pain in my butt. I wish I could get it off my books, but I found good renters. I found good renters through my West Point team there and able to sustain myself for a few years, but but yeah, that’s the that’s the thorn in my butt right now. I wish I could get that one off my books. And tying this into strategy and everything, that’s why I really shifted to the turnkey route. my whole intent with investing is to be hands off. I had teach jiu-jitsu, my partner’s a surgeon. We like to buy our time back. That’s the whole purpose of this whole venture. But when I started, I didn’t go down those paths. So I had a kind of come to Jesus moment, if you will, and realize that my strategy was not in alignment with my goals. And then I shifted things to get those things in alignment.

Issa Hanna (11:56)

Love that, dude. because that is the goal in real estate, right? You buy your time back. The one thing you can’t buy real estate could kind of purchase for you. You might stress out a little bit, but you’ll be doing it from the pool or the gym or somewhere that you like being at. So I wanted to pull that out of your answer because that is what real estate affords you is that time to spend with family and doing stuff that you that you love. And let’s look into the future now. I look you up, Austin, in five years. I know one of the goals is to give away a gym. Where am gonna see you at?

Austin Johnson (12:26)

Yeah. Well, I really want to work with more gym owners too. And that’s something that’s kind of working behind the scenes because you could take this whole life chassis that I was telling you about and you could do it in the business world too and get even more benefits, potentially more tax write-offs. There’s a bunch of different vehicles out there that carry the same chassis. So integrating more with businesses. And the more and more I do this, I really want to teach this concept and teach it to the middle class, like going back to that conversation we had where I feel we’re really at a turning point. And something you could do to protect your family is how about a 40x multiplier and the money you’ve put in the form of a tax free and probate free death benefit? What do you think that’s gonna do for future generations? I feel a lot of us we start families, our number one goal is to protect our kids, is make a better future for the generation behind us, but then you examine the strategy and it has nothing to do with those goals.

Issa Hanna (13:18)

Hundred percent. Too many people are living that paycheck to paycheck, maybe even month to month thing where they’re just, they’re going to work, they’re getting the money, they’re living their lives, or they might put some into a 401(k), the old structure, right? you’re bringing that new the old, school way, from all the way in the Rockefeller days, but you’re bringing it into this time, into the new times, which is very much needed. Because people do have to guard whatever the wealth they have. right now with the way inflation’s attacking the dollar with the way things are going, thinking for the future and protecting that money and making sure that money stays valuable and stays, you deposited that dollar 50 years from now, that dollar is worth more than not less. definitely amazing and needs to be taught to the to the masses. I want to ask your advice now, right? I have a lot of people that listen to this show. They’re just starting out. They’re new investors, new realtors. new professionals, whatever they are in our space. the most important thing in our game is your network, building these relationships, right? establishing relationships. So if you had to give these guys one strategy on where to start establishing their first relationship, what would it be?

Austin Johnson (14:24)

I’d say get clear on your values. Get clear on your values and what you’re trying to do and when, that will do that will cut through a lot of save you a lot of time as you’re finding that person that you’re trying to find, trying to find that, mentor or network. If you get clear on what you’re trying to do and when, that’s gonna cut down a lot of people that you have to talk to. So I feel getting clear there was is a good place to start.

Issa Hanna (14:45)

hundred percent and another thing I want to pull out of your answer find that mentor, right? yeah. and a good mentor in the game, right? Somebody to mold yourself after somebody that can that could teach you teach you the ropes show you mistakes that they made along the way so that you don’t make them super crucial. Everybody successful in our industry and I’m sure Austin you can attest has somebody that when they first started out helped them out even if it was just a little bit of advice. So super important to find that mentor but more important to get clear on where you want to be so that you’re not wasting time talking to this guy and that guy and this guy. You’re in your niche and you’re and you’re and you’re gonna find it. Austin, if people want to get a hold of you, got the consulting business, you teach jiu-jitsu, very personable guy. like I said, the honor projects across the screen. Where could they reach you at?

Austin Johnson (15:34)

Yeah, all my socials are @itsaustinjohnson, ITS Austin Johnson, all one word. And then my podcast is *Generational Growth with Austin Johnson*, me, and my website is Generational Growth. So you’ll find me there eventually. But yeah.

Issa Hanna (15:49)

Nice. So make sure, guys, it’s Austin Johnson dot com.

Austin Johnson (15:54)

that’s just my social handle. If you just type that in so Instagram, YouTube, et cetera, you’ll find me there.

Issa Hanna (16:00)

Perfect. So add Austin Johnson, make sure you guys go follow. Slide into the DMs if you have a question, I’m sure it’ll answer. and then go follow that podcast, right? once again, plug the podcast name again.

Austin Johnson (16:10)

Yeah, *Generational Growth with Austin Johnson*, with me, Austin Johnson.

Issa Hanna (16:13)

*Generational Growth with Austin Johnson*. Make sure you guys go like, subscribe. I’m sure that thing is a that channel is a wealth of just knowledge coming straight from the man himself, Austin Johnson. So Austin, man, thank you so much for coming on the show. It was a true honor to host you, brother.

Austin Johnson (16:30)

Thank you too. This is a really cool format. I appreciate your time, man.

Issa Hanna (16:33)

Appreciate you. And to my viewers at home, make sure to subscribe, like to Austin’s channel. And also, if you enjoyed my conversation with Austin and want to see more like it, make sure to hit like and subscribe on our channel. I talk to people every day that can bring us different knowledge on every aspect of the real estate industry. Until next time, the Real Estate Pros are out.