George McCleary: 0:00

We got Dustin Miller. He's half naked. He's muscle bound. He's ready. He's ready to go.

Dustin Miller: 0:04

Let's get it. Okay. Oh my...ahhh... I'm still to get control of my breathing.

George McCleary: 0:17

Welcome to frozen millionaires, the show where we submerge successful people in ice cold water, then sit them down to talk about how they've achieved success. I'm your host, George McCleary. And I have a pension for ambition for entrepreneurship. And for watching my friends suffer in cold water. No tech CEOs or Wall Street Titans here. These are the Self Made Millionaires next door, and they're fresh out of the cold plunge telling their stories. What's up friends, and welcome to the first episode of frozen millionaires. That was Dustin Miller doing the cold plunge into 40 degree water. And as soon as he got in and started losing his mind, I knew I had something here. Dustin is a real estate developer here in Portland, Oregon and we're gonna be talking about real estate development, his business model how he's risen to success, and what's next for him. Portland has had a lot of challenges lately, but Dustin is building infill new construction in the city and absolutely crushing it. If you follow Dustin online, you know that this guy is full of energy. It's a candid raw conversation with a lot of great info and I know you're gonna love it.

Dustin Miller: 1:20

So yeah, Dustin Miller, been in Portland my whole life. So I've seen this city, you know, come up and go down. I've seen a lot change around here. I've seen this city develop. But I am a builder, developer and a real estate agent, so I kind of hold all these and then essentially project their property management, as well. So kind of have a big funnel of all of these things I put into, you know, into my bucket. So...

George McCleary: 1:48

You're managing all your own stuff?

Dustin Miller: 1:49

Yeah, right now doing all of our own stuff.

George McCleary: 1:52

That is a lot of hats. Normally, you just get a broker or a builder or a developer or a property manager. How many hats' that, four?

Dustin Miller: 1:59

It's four! Yeah, that is four but we have a team, you know, and so I would say I don't, you know, I have my lane and everything. And then you know, I have a partner and people underneath me and stuff that handle some of the property management stuff that I'm not good at.

George McCleary: 2:12

Right.

Dustin Miller: 2:12

But yeah, our Yeah, we're doing a lot of development here in Portland, a lot of new construction, really focused on the inner city, core areas that are that are extremely hot and walkable. And we basically go into lots and you know, find ways to add value. So we're just looking at looking at all these like desirable areas. And then we find you know lots where it can be listed or could be from a wholesaler. And then we see how we can add value. And of course, it's always just like looking at a property and saying, like but a unit here I could put two units here I could build a little like cottage here and and then we execute.

George McCleary: 2:52

And so what you're describing is part of the residential infill plan and this is like a density play by the City of Portland to let's add more density more units to mainly like the urban core. That's what we're talking about. Right?

Dustin Miller: 3:05

Yeah, right. We're mainly doing a lot of that, like with the residential infill project, mill, middle housing, land division, cottage clusters, like the City of Portland, has completely opened up what you can do on these lots dramatically over the last like two to three years. And they've just opened up this middle housing land division, which is extremely like...

George McCleary: 3:33

Describe that if you don't mind for those of us who are not acquainted, because I generally know what it is, you know, I mean, it's building backyard ADUs, it's attached ADUs, it's basement stuff, but you're building detached structures in backyards, essentially, is that right?

Dustin Miller: 3:45

Yeah, yeah, exactly, building detached structures. So the middle housing like, the're all of this stuff goes together. And it's pretty complicated because there's a bunch of different lanes that you can follow. There's the residential infill project, there's the cottage clusters, middle housing land division, and you can do, you know, you put your ADUs or two ADUs behind the house, that's one thing that they allowed you to do that was maybe two years ago where you went from being able to build one detached ADU to two now or a little combination of whatever it could be for four units on a lot. So since then, they've opened up the cottage cluster, and so you're able to build a bunch of cottages and the cottages gives you a little bit more freedom on the size so you can build larger units, you're not limited to the 800 square feet, and you can also now divide these the middle housing land division is an expedited land division that you can do on this so once you have your four units, or however many units you want to put on to a lot now you can actually go through and carve up that lot exactly how you want, like...

George McCleary: 4:50

So that you own, so that a person who buys that owns both the sticks and bricks of the house plus the land underneath it? but it's just a smaller little...

Dustin Miller: 4:59

Yeah, you just carve out a little corner, you know, with your setbacks and stuff and in that lot, and that is a fee simple lot, which is a lot different from what we were doing two years ago. And even a lot of the projects I'm doing now still bleed over into this condo...

George McCleary: 5:15

...where essentially you have one lot and Condo, I see,

Dustin Miller: 5:15

...convertion. then but individually plotted like little houses Right!

George McCleary: 5:21

that like where it's just the sticks and bricks are what you buy similar to like the interior walls of a condo.

Dustin Miller: 5:26

Yeah, yeah, exactly. So now you're now you're actually able to go fee simple, and you don't have to go through all this con con condo stuff. And I think it adds a lot of value. I think there's a lot of people trying to determine what is the value difference between a condo and a fee simple a lot.

George McCleary: 5:43

Oh there's a huge difference, because then because in the condo, you know, you have to share everything that's outside your doorstep. Whereas in a fee simple lot, you own at least some dirt like..

Dustin Miller: 5:52

Yeah!

George McCleary: 5:52

...you can be barbecuing on your land, it's your stuff, you own it down, like the air rights that down to the center of the Earth,

Dustin Miller: 5:58

Right, all the way through. And people just love it. And people hate condos.

George McCleary: 6:01

Yeah, no no.

Dustin Miller: 6:02

They hate condos, they hate the HOAs, ah they, I know why like I've dealt with a few of them.

George McCleary: 6:08

You know, a group of crows is called a

Dustin Miller: 6:08

And they're awful. Anytime you have

George McCleary: 6:08

Naturally. somebody, that you're just regular neighbors that are in murderer. And a group of Karen's is called an HOA, charge of making your life hell because they want to they do and they suck. Nobody likes him.

Dustin Miller: 6:23

Hey! Yeah, I've gone through that this flooding home I have in the HOA there's the freaking nightmare.

George McCleary: 6:30

Oh, man, I guess that's another story. So the middle housing land division are you able to get units of sufficient size like by abiding by the other setbacks, the same as if like five feet on each side, like a normal house?

Dustin Miller: 6:41

Yeah, the setbacks are the same, and then the spacing in between the house is the same. They'll allow you to go up against like an alley lot line now, which is all the way up against the alley now.

George McCleary: 6:51

All the way up against it. Ok. No 10 foot setback like the normally...

Dustin Miller: 6:54

Right, there's a five foot in the back and now you can go all the way up against it. You have to have one thing that they opened up is the average is they have a 1400 foot maximum, so, but you can have a mixture of these, like, oh, you go low, if you want to 600 feet or 400 feet, if you wanted. The 800 foot we'll give you a two bedroom, but it gives you...

George McCleary: 7:17

1400 feet is pretty big.

Dustin Miller: 7:18

...roughly two bedroom. This is not quite enough space, so now we're able to build like kind of like the 900 to a thousand square feet gives you a really generous two bedroom, two bath and that is ultimately the way that people are living now.

George McCleary: 7:32

Uhm.

Dustin Miller: 7:32

So they're, you know, we don't have the average household used to be three people and now it's two.

George McCleary: 7:38

Uhm.

Dustin Miller: 7:38

So people are living in smaller households and that that cottage fits the normal like the newer like family,

George McCleary: 7:46

Yeah!

Dustin Miller: 7:46

have one or two,

George McCleary: 7:47

Love it!

Dustin Miller: 7:47

...which is what it is. Yeah!

George McCleary: 7:48

So then, are you able to do this on lots of a standard like 50 by 100 and able to get like units of adequate size that you're able to make a pencil because if you're going to be doing it in a place that actually makes it make sense to do this, I mean, the urban core typically, the lots are 5000 square feet, so you've got a house up front of you know, how many square feet but then you're you're essentially building in the backyard. Are you able to get two back there or four? Is it, can get, do the lots have to be bigger, they have to be corner lots? How do you, how do you do that calculus?

Dustin Miller: 8:17

Yeah, it's really, it's really funny because the residential infill project, the rip one, rip two where you get to build the two ADUs, you could build two ADUs in the backyard but on our typical 50 by 100 lot, which is a super standard here in Portland, which is most of like we've we've we've identified all the oversize lots and how many 50 by 100 lots, it's this huge amount of 50 by 100. So being able to work with the 50 by 100 is really critical in this business of trying to find something that works and like I was saying the rip, where you can build your two ADUs had this calculation in there where you are limited to lot coverage ratio, and it was the matrix was 15%. So your ADUs could only cover 15% of that lot which was 50% of a 5000 square foot lot is 750. So, so that limits your, say your double stacking these you know, now that's bringing your your little cottage or ADU down to 750 and is not that doesn't that's a really crappy little structure.

George McCleary: 9:21

Right, Right!

Dustin Miller: 9:22

Now the cottage cluster you can go larger and so we're getting up to like the nine hundreds and lane two of those on a 50 by 100 lat and keeping the existing house and I think that's the key to so because in this plan that what's so valuable is you're able to keep the existing house and that house essentially lot for the most part maintains its value. So if you're in Woodstock and you got a little cottage or something like that it's not going to sell less than $500,000 if it's if it's done up regardless of if it has a backyard or if it has a small six foot backyard. Like, you'll lose just a little bit of value, but essentially you're getting that land in the back almost for free. So we're able to build, to answer your question, we're able to build to 900 square foot, two bedroom, two bath cottages in the back of a 50 by 100. So what we look for are just the well position lots so or When a house is well positioned on the lot uhm...

George McCleary: 10:22

to afford you more backyard so the lot, the house can't be like right smack dab in the middle of that 50 by 100, it's gotta be more set towards the front in order to actually have that room in the back.

Dustin Miller: 10:32

10,000, and then that house is well positioned in the very like front corner. And then you have like so for instance, we have one on 24th and Alberta super walkable, just really cool little area and found this house has 600 I think it paid 625 for it 640 ish, right right around there, peeling that lot off. And that house, the existing structure, putting just a little bit of work into it, maybe like 30, 40 grand, and then reselling for 600. So I'm getting and I'm going to put four cottages around the back of it so I essentially found land, inner Portland walkable area where I'm getting the dirt for almost free and building for houses, free

George McCleary: 11:20

You mentioned that you're getting like the dirt. dirt and the dirt for free. So when these properties are marketed at this point, anyway, the realtors are essentially just marketing them as like it's a house, it's a backyard the development play, you know, could be there, it could be not, it's up to you to find out but the realtors these days are essentially just pricing them just like

Dustin Miller: 11:39

and I don't know if they're, it's really sad these realtors are fucking stupid, I'm really pissed off of a lot of people. But these damn Realtors,

George McCleary: 11:48

You won't be the first person to say that.

Dustin Miller: 11:48

you're like, you're you're marketing a house,

George McCleary: 11:49

After you're under contract. you're supposed to be like a professional, and it ticks me off when these realtors are doing their clients such an in depth justice because they mark it and they'll they'll say it'll be a 10,000 square foot lot and they'll say, Oh, you can build an adu on the back. You know, you're like, you dumb fuck. Like, you should at least know what the fuck you're doing in the back, what can be done here. And I will call him out. I'm just like, David, you should be ashamed of yourself.

Dustin Miller: 12:14

David, you should be ashamed of yourself. Do you have any idea where you could do to this lot? You know, it doesn't get me anywhere.

George McCleary: 12:25

See that's just the thing, they really don't, they absolutely don't know. Because they're like, you know, they don't learn that in real estate school. They're not developers. And that's like, that's the angle.

Dustin Miller: 12:34

But that's our job is like, of an agent. I'm a realtor, I only do my I only do real estate like for myself.

George McCleary: 12:41

And I'm an agent, too. I'm a principal broker. And so yeah, it's a...

Dustin Miller: 12:46

but they don't do their job, like their job, like your job, you get a contract. I mean, everything's done digitally. Like, I would say, the realtors job is pretty easy these days. But you should be doing some due diligence on like what to do to these and add that value but the problem is, none of them are, it's very rare. So...

George McCleary: 13:03

I believe it.

Dustin Miller: 13:03

Yeah.

George McCleary: 13:04

So then, so then so you've got a ton of options, a ton of place you can do. What do you I mean, what do you think is best, at least for you at this point? And how do you how do you make money on it?

Dustin Miller: 13:15

Yeah, so the easy thing is to the place to find the well positioned house on the oversize lots in the in the prime core areas,

George McCleary: 13:24

Right.

Dustin Miller: 13:24

the more more desirable areas. If you're trying to, I actually do what this is supposed to result in, which is more affordable housing, then you know, you could do it closer out towards the 82nd stuff but but a lot of

George McCleary: 13:39

but it makes it tougher to pencil essentially what we're doing, and like the shitty areas right.

Dustin Miller: 13:44

So since our idea is bringing in, we're bringing in affordable housing into these like high demanding like areas and stuff. So finding the well position house and then and then we do a rehab to the house, a lot of times we're doing a rehab to the house. And we'll find an old craftsman that needs a full rehab, and we'll go through it, will convert the basement into a in-law suite and which is essentially the second unit but not technically permitted. So we have two units and a full blown old craftsman beautiful home that's 100% restored 100 year old, like, you know, house, it's beautiful and restored.

George McCleary: 14:20

Is there like a rule of thumb, 'cause 'cause you mentioned before, like you buy it for, I can't remember like 650s but then after you've chopped off the backyard and cut it up into those into those different lots. Essentially what you've got is the house minus the backyard, but you've renovated it a little bit, but at the end of the day, renovated house minus a backyard, you've lost somewhere on the order of like 50 grand or something.

Dustin Miller: 14:43

Sure.

George McCleary: 14:43

So essentially, you're getting those lots, you know not with all not subdivided just yet, but you're getting the for like 50k basically.

Dustin Miller: 14:51

Sure, yeah.

George McCleary: 14:52

So that's a heck of a discount.

Dustin Miller: 14:54

In Portland, yeah,

George McCleary: 14:55

Right. In Portland, yeah.

Dustin Miller: 14:55

which we used to pay I mean, what were the skinny A lot where I can build a five to $600,000 house lot would go for we could build a 1500 square foot house under and sell it would go for you know 150 to 200,000. And now prime area would go for like$150 to $200,000 like back in the day, three years ago, something right? we're able to get into these lots for you know, 25, $50,000 after development and everything you're we're usually coming into these things around like 50 grand per lot, spend $200,000 to build an ADU. Now we're 250 into, you know, these ADUs. And then they can be worth anywhere from 400 on the low end to 600 on the high end. So that's the game plan and then you times those numbers by two to four. And it's a freakin homerun a slam dunk.

George McCleary: 15:46

That sounds amazing! So, but a lot of it, but it's a lot of that profit comes by way of you we talked earlier about the several hats that you wear, because

Dustin Miller: 15:54

Yeah.

George McCleary: 15:54

because you are a GC you are running the frame or the electrician you are you're the you're the boots on the ground running running the show. Do I have that right?

Dustin Miller: 16:03

Yeah, I would say about a little less than half of the projects are done with my general contracting crew and my team Skyline homes. So but we have been, we serve out to other GCS just so we can keep this going. So and, you know, I think we have about 438, you know, units in different various stages of progress right now,

George McCleary: 16:29

Right now you like little 38 little units going?

Dustin Miller: 16:33

Like some of them are, some of them are like in development, but their owned, they're in planning and stuff like that. There's like 38 that are in development, and then some of them are for sale. So just different various stages, I'd say we have probably like 14 active like, construction cottages right now. Yeah, so...

George McCleary: 16:52

Yeah. So I guess, once you, I guess. So that's a matter of scale, essentially, because it was probably like you and your crew at first, but then as you scaled up, you're like, alright, you know, I can't be run, I can't GC these things myself every single time if I want to do the 38 of them at a time. So I do need to get other GCs involved. So,

Dustin Miller: 17:09

Yeah.

George McCleary: 17:09

talk to me a little bit about how you kind of arrived at the decision to you know, go beyond your own crew and your own little group of subs that you were working with, and saying, like, "Hey, let's go bigger. Let's scale because, you know, there's a real opportunity here."

Dustin Miller: 17:21

Yeah, that's, it's really tough. My partner and I, like, go back and forth on this often, but we,

George McCleary: 17:27

That's Jason, Jason your, ok.

Dustin Miller: 17:30

Jason Sue, right. So we, we go back and forth often. And hey, do we want to do this, we want to manage all this and so much to do it yourself. This is a full business. I mean, it's a full on business, you have all the invoices, a substantial amount of invoices, and costs that you need to pay and keep, keep straight and all that. But you have so much more control. So and things happen and what I've noticed is we're faster, so we can get these things pumped out, and like we're hitting them in five months, where we just hired a general contractor, you built six of them for us and it's we're coming up on 10 to 12 months. Yeah, yeah, yeah, right, right.

George McCleary: 18:04

So you go grind, grind into key in five months, or a what is it? That's quick, I love it!

Dustin Miller: 18:10

That's our fastest one. Like there's small but there's there was two of them. And we pushed it we like really pushed it, Jason did actually.

George McCleary: 18:17

I've had a lot of flips take like twice, as twice that length of time.

Dustin Miller: 18:21

Oh yeah, I've got I've got a ton of them that taken that long. Yeah, that, I'm speaking of our most successful, like build, but on average, we can get them done. We used to be like 12 months for new construction nine, nine months or so. And now Now we're kind of saying we feel comfortable getting them done, like budgeting like six to seven months, you know, for and then two months for sales.

George McCleary: 18:42

That's great!

Dustin Miller: 18:43

Right.

George McCleary: 18:43

And so are you, are you the Realtor on all the sales as well and picking up the all those calls and everything?

Dustin Miller: 18:48

Um, well, I have been in the past. But recently, I brought on a you know, we're just building our team. And so I brought on a co agent for me that like works underneath me and I have a deal with him where he does all my work and we split it 50/50. So I pay him he does all the work, he doesn't have to go work for it. And then I don't have to do much.

George McCleary: 19:11

50/50! Unlike deals that I've just just put into his lap in this day and age. There's a lot of realtors that are really hurting right now. There's a lot there's not just not a lot of sales, not a lot of inventory. So 50/50 I mean, I think I think that's a great deal for him and a great deal for you because it means that he's essentially doing all the work.

Dustin Miller: 19:28

Yeah, he's doing it better than me, I'm sure, 100%.

George McCleary: 19:31

Because I do the same, I do the same thing on all my projects, you know, I'm the realtor on it. And you know, I don't I'm my own principal broker, I get to keep everything if I'm representing the buyer, or if I sell my own stuff, I don't know any money to anybody, and I love it.

Dustin Miller: 19:45

Yeah. True.

George McCleary: 19:45

And so, of course, they're gonna try and So you and so you scale up and you're growing

Dustin Miller: 19:45

Yeah.

George McCleary: 19:45

However, I'm on the I'm on the phone with people as they call and ask me something that's clearly on the push the narrative like our everything's all fucked up in listing and I just want to tell all of them to fuck off. And I and you're growing bigger and everything and so, but I have can't do it because you know, but that's just part of being an agent. so, but I'll take you back, I guess it was a couple of months Portland and everything. And you know, it's because of, you know, confirmation bias and the liberal politicians. But, so, ago, there was like a bullet hole in your office, I saw your story on Instagram and you said like, I can't believe this, I'm so tired of this shit Portland's like, you know, you need to get your crime under control. FoxNews got a hold of it, you go nonetheless, you still had to contend with that. And you and I shared our opinions about all that at the time. But and yet, on the show. And so, you know, when we all have like our mixed you're still doing a ton of business and doing doing well in Portland. I guess my question is, like, are you optimistic for the future? Because no one's going to buy these houses, feelings about you know, conservative or and liberal these, you know, 38 projects, no one's gonna buy them. Nobody. Nobody wants to live here. But clearly, you know, you're like, you're still doing you're still digging in and you're charging media for that matter. forward. Where the, what are your thoughts on that?

Dustin Miller: 21:07

Oh, man, yeah, that's a, that's a tough one I got I got a lot of heat, obviously, that video from both sides, and maybe wasn't the best thing to go on. Because I don't, I despise when, you know, news channels are trying to push a narrative, right?

George McCleary: 21:21

Totally.

Dustin Miller: 21:22

I just despise that. It was kind of a whim of like, a, this this happened, a video kind of went a little viral, and they got a hold of it. And I decided to spoke and just say what's on my mind, because nobody wants me to say these things. But the thing is, it's fucking true.

George McCleary: 21:37

It is!

Dustin Miller: 21:37

Okay, they're running around with machetes, there are people shitting on my damn like, doorstep several times always happens, people shooting out my damn window. And it's, it's bullshit. It wasn't like this, like 10 years ago. And I don't feel like there's anything wrong same. Damn it like this has to stop. And I don't believe it's just me. But people around here are fed up with it. And I think we are starting to see things slowly change.

George McCleary: 22:04

Yeah, we are fed up with it. And I couldn't agree. And I think you handled it perfectly. I remember on the group thread that Dustin and I are both on. A lot of people are saying like, hey, you know, don't do it. Vox is gonna push that narrative. Don't be a part of that. It's going to be divisive. You're going to be used as a tool of oppression. And I remember thinking to myself, Nah, man, this guy has a voice that needs to be heard on this. And if this is the only microphone that's being handed to him, and he should take it. And I'm really and I applaud you for actually going out there and doing it because I saw the interview. And yeah, I mean, they were kind of nudging you towards you know, this and that. But really, I thought you were well spoken. I thought it worked out fine. Go check out the clip, and I'm sure, it's somewhere on YouTube.

Dustin Miller: 22:44

I took it off my Instagram but

George McCleary: 22:46

You did?

Dustin Miller: 22:47

I did, but there's parts of the video that are on my Instagram. So you can you could check it out. But yeah.

George McCleary: 22:52

But anyway, but like uhm, so personally, I think that Portland long term is going to be okay, along with all the West Coast cities. I think it's going to take I think it's going to take some time. And I'll tell this to anybody who listens, you know, none of these cities can afford to continue to decline

Dustin Miller: 23:10

Sure.

George McCleary: 23:10

because the economy, you know, the where the rubber hits the road is the economy and the economy, you know, the tax base just depends on it. So, cities are not going to let this let this just continue to happen and decline. And before I switched on the microphones, you and I were talking about how things are actually happening and how, just just last night, you know, I made that Tiktok about kicking out those druggies out there were smoking fentanyl in front of my house. And lo and behold, it's gone viral in the comment section is a big dumpster fire of Trumpers versus left wing dingbat. And the whole thing is wild, but nonetheless I am I am bullish about Portland actually being a being able to come back be on the upswing. It's you know, we got the beach, we got the mountains, there's too much good stuff around here to let it fall. So, so yeah. So, I guess, are you are you pulling back at all from Portland?

Dustin Miller: 24:05

So I think, you know, we have some goals and personal goals. And I think in my life, I need to experience more of the world. So I think eventually we'll we'll be finding another place to go and, and or to invest this middle housing thing is, is actually just on the cusp of taking off nationally. So it's been implemented in other cities. And as cities get more dense, they they're going to implement this. So Jason, I have kind of more of a national plan to to spread out and take advantage of cities and stuff across the states the start to implement this, because we know what we're doing and we're going to jump into it so but back to Portland. This city is fucking amazing. It's beautiful. And what I saw this come into like, you know what, 15 years ago, 10 years ago, Portland started to be a really cool place like really, we had people flooding in from all over the place. It was just the mecca of like, you know, people were transplanting to Portland. because it was so cool. Well, most of that has not changed, like our downtime is a dumpster. But yeah, yeah,

George McCleary: 25:04

True. we have the beach, we have the mountains. I've traveled around a lot in the last year. And you come back here and you're like, Oh, this is fucking beautiful. Like you get to some of these lakes in the Cascades and stuff. There's not there's not much like it anywhere else on earth. Like, this is a really, really beautiful place. And we have like, we're somewhat affordable. We need to get back to... at least in comparison to other markets on the West Coast.

Dustin Miller: 25:29

Sure, we're on the West Coast, right? And I always look at is like, okay, we're in between Seattle and LA, San Francisco. And like, those, those just keep like pumping up, right? If there's no stopping Seattle, right, and like, we're just going to be its little brother for a long time, it will kind of ride those coattails. I think for quite a while.

George McCleary: 25:47

I'm totally okay with that, by the way. We've been like the less Seattle's little redheaded stepchild for the longest time, and I am totally okay, being junior to them. They have a much bigger economy. They've got you know, fortune 500 companies and everything, and no state and no state income tax in Washington. So they have like a few legs up and everything. And sooner or later, I really do have the feeling that you know, Portland and Oregon as a whole are going to understand that the soak, the rich tactics are just not going to hold up long term. And that when you implement these tax increases, it has a ripple effect that drives up business and lowers economic growth.

Dustin Miller: 26:26

Yeah.

George McCleary: 26:26

And people in charge and the voters I in my heart of hearts, I really do believe that they are eventually going to catch on. But we happen to be at a little bit of a low point. And I think, but I think that we that this low point, you know, hopefully I'll listen to this in five years and say,"Hey, listen to me."

Dustin Miller: 26:41

Yeah.

George McCleary: 26:42

I think that this low point, this kind of rock bottom was kind of what it needed in order to make the term because I'm starting to see like the winds of change happening. Like Chloe Eudaly getting her ass kicked

Dustin Miller: 26:50

Yeah. out of there and Rene Gonzalez getting elected. Yeah.

George McCleary: 26:55

There's plenty of things that are happening that are that are pointing in the right direction. So I'm

Dustin Miller: 27:00

Yeah, physically, we can't stand for it. I mean, optimistic. right, because our budgets based off of like an influx of people coming in. And when we have the people exiting, like we're completely screwed, like, so people are starting to make some changes. I think everybody's fed up around here. And we're, we're starting to see it. So I'm on the line with you as well. That I am very bullish, but it's tough right now, because I'm trying to raise capital and we have people from out of state, they're like Portland.

George McCleary: 27:25

Yeah.

Dustin Miller: 27:26

Like, are you kidding? Like how about somewhere else?

George McCleary: 27:28

Oh yeah.

Dustin Miller: 27:28

Like, why don't we go build somewhere else? You

George McCleary: 27:30

No, that's literally what people telling know. me. I've been wasting money on syndication. They're, they're saying the same thing. They're like, "hey, you know, love you, love your model. This is great. Let me know when you're not doing something in Portland and like, count me in."

Dustin Miller: 27:45

Yeah.

George McCleary: 27:45

And I can't tell you the number of times that people will do that. And then, but then there's people that get it. They say they realize that, you know what, we're building this class A they're, you know, you know, mission focused investors that you know, say like, see, like solar panels and installation, say like, okay, looks like you're actually doing a good thing. It's going to jive with what people who live in the Northwest are actually going to be doing. So they'll come in, but oftentimes, you know, they'll be like, okay, well, Portland's down in the dumps right now, why am I why would I invest? So but you mentioned before, like casting a nationwide net on like the ADU play. And so in Portland, and we also talked earlier about agents, not essentially pricing, what is like a prime lot for these development plays?

Dustin Miller: 28:27

Yeah.

George McCleary: 28:27

Accordingly, and so, and yet, but you're picking these up? Usually, if they're agents, you're buying them on the retail market. So you're the only guy who's kind of figured out like, at least and that in that instance, with that lot, or that one at least 38 times.

Dustin Miller: 28:41

Yeah.

George McCleary: 28:41

Like there's a that there's value to be had in that backyard. If they haven't yet caught on in Portland,

Dustin Miller: 28:48

Yeah.

George McCleary: 28:49

zero chance that they that they will have this figured out and these other municipalities that were this is going to be coming down the pike. So if it's a place like you know, like LA or San Diego or Austin or something like that,

Dustin Miller: 29:02

Yeah.

George McCleary: 29:03

there could be like a massive opportunity there.

Dustin Miller: 29:06

Yeah, yeah, right.

George McCleary: 29:06

So so so like, what's what's in the crosshairs? Is it basically the exact same thing, but just in another city?

Dustin Miller: 29:13

Following this? Yeah, following this path. So we have like really hit this hard hard like we've identified every in the prime areas, every lot that is that is yeah, set up well, for this play, and we're

George McCleary: 29:23

Here in town. marketing them at heart. So we're chasing after one of them. Your handing them the letters or like?

Dustin Miller: 29:30

Letters, we watch every like they get listed. So Do you want me to tell you why? I'll tell you why. we're on a like, and we're not competing against developers because it's a $700,000 like house, but we know that that$700,000 house is gonna stay$700,000, we're just gonna, we're stealing the backyard. But yeah, the next the next play you mentioned is actually Austin is just passed some zoning changes that's gonna implement something similar and my daughter's down in Austin. I love Austin will probably probably do some stuff out there. Um, Austin's kind of at the peak right now, but we're just following the stuff around and then taking, you know, we'll take the same like little system that we developed and, you know, like, drop it, drop it in there and get after it because it's crazy. I don't really want to come on and tell everybody like how valuable these are. But the agents don't get it. The developers don't get it. Like there's not many developers out there right now that are doing this, like, I look and they're still like building skinnies and stuff like what on earth are you doing, like, why? Okay.

George McCleary: 30:29

It's because, it's because developing and doing business in Portland is a pain in the ass.

Dustin Miller: 30:34

Very true, I know.

George McCleary: 30:36

I was, just today I was in Southeast Portland to meet an inspector because the grading wasn't satisfactory on like, I finished this project, I'm not making this up two years ago.

Dustin Miller: 30:47

Yeah.

George McCleary: 30:53

my hands like"his brain's fucking flying." They came back again today, I met the

Dustin Miller: 30:57

Right, yeah. inspector, finally I passed it. And we realized that she had been she was there two years ago, as an inspector on this thing. She's like, "oh, yeah, this one, you never quite got this one?." Like, yeah, I mean, that's a bad example of like Portland being difficult and whatnot. Because I've got once there's so much worse. Yeah.

George McCleary: 31:25

But being a developer and getting things permitted and pass through and really any West Coast City is not easy.

Dustin Miller: 31:32

Well, I've just starting to develop a little bit outside of Portland, I've done most like 90% of it all in Portland. So I have some stuff in like Clackamas County, and then you know, seaside and you know, the coast, which I'm not going to do again,

George McCleary: 31:44

Oh the coast is...yeah.

Dustin Miller: 31:44

it's really tough to get out there, it's another another story, but, but you started to see how much different is working with these other, you know, other agencies and stuff, it's so much, it's so much easier, there's something wrong with the City of Portland and the whole permitting process and starts with the ground, or like at the head, it must where they just don't give a shit about your time, or your investment or anything. They just care about what's written in front of them. And they don't they don't care. When you go other places, they actually do give a shit. And so yeah, there's there's all sorts of stuff there.

George McCleary: 32:20

Well they have discretion, then like in Portland, like, they just like, they switch off their minds, and they look at what's in front of them. And they say like, Okay, well, it needs to have this and the development code is pretty oppressive. So look down and be like, yeah, nope. Whereas, but I hear like, the fur program a lot of times, like those guys will actually, you know, have some discretion and be like, okay, So maybe that's why you you're not, you know, yup we're good.

Dustin Miller: 32:39

Oh, sure. And you're just like, why could this not happen all the way around? Like, why wouldn't the fur program just be the way that things are? You get one just completely have competition, you know, bearing inspector, and he knows what you're doing. And he, he's there bearing down here, and you're able to get into get these from the whole project, he understands how this thing has changed and evolved and all the different anomalies that come things. Well, plus, you've gotten good at it over the with developing a site. And then he's just your guy, he gets it. So but the way they have it is awful. Yeah. years. Like you've done this a bunch of times, like you know, the process you've built a ton of homes. Right. Yeah, yeah.

George McCleary: 33:20

So then, so the next level o, so the next level for you is basically doing the same thing in other cities? Is that is that the plan? What is sort of like the next the next

Dustin Miller: 33:29

Well, we just bought, like our first sight level up? that will be a 20 unit apartment complex. So that's like...

George McCleary: 33:35

Here?

Dustin Miller: 33:35

Yeah.

George McCleary: 33:36

In town? in Portland, wow!

Dustin Miller: 33:37

Right, I know. Big, big balls. Like we're actually going to stabilize the property and stabilize it and just let it sit and maybe that costs us a hundred grand to stabilize the property, put three tiny home pads in the back and rent out the existing structure while we work on all the plans and then that way, at the end when we're you know, say two years right to get through fucking Portland and planning on a big structure like that,

George McCleary: 34:03

Yeah.

Dustin Miller: 34:04

then we have the option we don't have to develop it. So if you're two years into development or whatever on a project and you get permit ready, you kind of either out to sell it or develop it and if the economy is like crap, you're not going to sell an untitled project. So but yeah, we feel really good about this like, like land costs, where it's at location we've been wanting to step up into like a larger multifamily and looking at them for quite a while and this is the law in place to do it.

George McCleary: 34:28

Is that like an RM2 Lot like, multifamily zone?

Dustin Miller: 34:31

RX?

George McCleary: 34:32

Right on. RX, oh.

Dustin Miller: 34:32

So it's, yeah, it's got the most freedom of any like multifamily. You could actually if I didn't have a residential house next to me, I could go 100 feet up. And you know, go go pretty heavy with it. So I can go, I can go 55 feet. So we'll have we'll do four storeys with a rooftop that will have like, so we're talking about SE 11th, the rooftop would have a view of downtown Portland, so pretty badass.

George McCleary: 34:57

Awesome. You might want to do 19 instead of 20. Inclusionary zoning. We were talking before about how oppressive Portland is with their zoning code. One of them is inclusionary zoning, which hopefully, will be gone at some point. But basically, it's where you have to build a number of

Dustin Miller: 35:12

Yeah. affordable units if you go above 19 units. And so it's basically

George McCleary: 35:18

So you can't build like middle market created an environment where larger apartment buildings really have difficulty penciling unless they're really, really nice apartment. apartments. So,

Dustin Miller: 35:33

19 or 50.

George McCleary: 35:35

Exactly, exactly. And plus, they have to be really expensive in order to in order for developers to get out of bed to build these things. And so, so yeah, no, well, we cut ours up. So I'm doing an apartment project, and we cut it up 12 and 12. So, we wouldn't have to do that. So you know,

Dustin Miller: 35:49

Oh yeah. think about that. But yeah, so that's the next level of some multifamily development, doing the stuff in other cities and everything. So but like, I guess that would be kind of your five year plan? What about like, what about your 10 year plan? Like uh are you gonna be, are you gonna move to Southeast Asia and be on a beach? Or like, are you, are you going or you going to go just, just keep going? No, I would say well, actually, I'll back up to my, my two year plan. 2 year plan is to a hundred doors,

George McCleary: 36:20

A hundred doors?

Dustin Miller: 36:20

A hundred doors.

George McCleary: 36:21

Love it. Heck yeah.

Dustin Miller: 36:21

between my partner and I, so I'll have a hundred doors and, and then this, that way, I can walk away and go and do whatever I want. I really love like developing and this is really fun. It's just the so rewarding. Everything you do, I'm sure I won't be doing that, but we are. We're looking at property like Costa Rica, and Austin and stuff. And so our plan is to, you know, just live life on our own damn terms. Like, I've always been so against the nine to five, and I think I'm like five years or so, you know, not having a nine to five. And I've always been against it. And even even somebody called me the other day is like, wow, worked for anybody. And he's like, Well, you do like who buys your houses? Like you rent your houses? Like you're essentially working, you're on the clock, you're putting in a lot of hours, like and so I think,

George McCleary: 37:09

We all work for somebody, whether we know it or not, you know,

Dustin Miller: 37:11

Right.

George McCleary: 37:12

whether they're a customer, the market, you know.

Dustin Miller: 37:14

so I think in two years, I plan on having that option, at least to where we can kind of have our teams go into places I could get them started up and, and all that I think this system here will be running on its own as we already have some people that could possibly, like step up into these roles and do a better job at what I'm doing. I'm sure. So

George McCleary: 37:34

I see.

Dustin Miller: 37:34

Yeah.

George McCleary: 37:35

So if you have a lot of doors so a hundred doors is an awesome goal. I love it. And so but when I talk to I want to have conversations with you know, you know, people like us, you know, guys that are you know, trying to crush it in real estate, there's there's kind of there's two ways of going about it, you've got wealth creation, and then you've got cash flow. And so if you're, you know, building, you know, a small house in someone's backyard, you got to sell the thing. So that's a cashflow play you're at you're getting ordinary income, you're paying taxes on it. And you know, continually like you know, reinvesting that reinvesting that you know using stuffed you're using some of it to go buy a boat and have fun in Lake Chelan but but there's there's basically there's wealth and there's and there's cash flow and the cash flow you know, you got that you got that covered with with your with your job with your ADUs and your builds and everything

Dustin Miller: 38:23

Yeah.

George McCleary: 38:23

but then the wealth creation and passive income that seems to be like what you're talking about with that one hundred doors is that right?

Dustin Miller: 38:31

Yeah, right.

George McCleary: 38:32

So, and so the two year plan is to increase increase your wealth and passive income to where it's kind of on autopilot and you don't have to mess with it to the degree that you have to mess with your day to day building all this stuff. Do I have that right?

Dustin Miller: 38:47

Yeah, yeah, exactly. So, and for for me, yeah we pay like our real estate I pay myself fullbore commission, I pay, we pay ourselves a development fee, pay our general contractor so you'd like cycle through you know income that way so because we have these businesses we'd be paying their selves to somebody else anyways, so that that keeps us like going and then as far as like, what's the most important like wealth and or income we haven't been taking that income we really just kind of developed like dump it back into our projects as things need cash and capital and stuff like that.

George McCleary: 39:23

I mean, pretty much all these require have some equity requirement like you can clearly you're going to be using some debt.

Dustin Miller: 39:29

Yeah, You have to have some skin in the game in order to obtain that debt. Right, right. So we, but we're creating equity like so we like we're creating equity that we we leave into it and

George McCleary: 39:41

Describe what you mean by that? Because I know what you mean by that, but the people that are unfamiliar with development, but where are you know, essentially you're creating equity by like, you know, getting a 500k asset but it's actually worth 600 And using that equity as collateral against like any dead like describe how you how you forced that equity.

Dustin Miller: 39:58

So you know, when we develop projects. So you have like a 5000 square foot lot, you rehab the existing structure, you put a we put $250,000 into this house, and we bought it for$500,000, but it's worth 900 now. So now we have like$150,000, that is equity into the house. So you take that 150. And then the back we have two ADUs and so those essentially, we are those for no, no land costs are very, very little. And they cost a 220 to build and sold them for 500. So 450, 500. So we have all this extra money. So what we've been doing is we sell off the back ADUs, and then we use that capital to dump into the existing house where we use that essentially like that equity and or pull out like some of the money as well.

George McCleary: 40:52

Is it hard money? Is it private? Like where are you getting your debt on these?

Dustin Miller: 40:56

So all across the board? So yeah, I mean, so we start off with like construction loans to basically do the whole project, and you have to put in 10 to 15% of either our own money or, or we'll go out to investors and give them a good like second position investment, you know, interest rate and even participation. So we'll give people a little, a little skin of the actual overall nut based off of how well the project does if they'll come into the project and invest in second facility.

George McCleary: 41:26

So like an interest rate plus an equity kicker on top of that, so

Dustin Miller: 41:29

Yeah.

George McCleary: 41:29

you're paying them like 10%. And plus, you know, they'll get like, you know, 10% of the back end of it.

Dustin Miller: 41:33

Yeah, so, so yeah, to walk through a regular project like that. So we take like a hard money loan, and fund the whole thing, then we'd need about, you know, say you need 15% down. So say it's a one point, you know, $3 million total construction project you need, you're gonna need about$200,000 of like a downpayment. And then you know, you wanted at least around your 100 grand or so for interest and you know, other other things that may come up. So you need about $300,000. So we'll go out and we'll we'll initially get this whole thing started with our own capital. But in order to keep going we'll we'll replace that capital that downpayment with like a second second position loan from an investor. And so we're looking for just a little bit of, you know, money to like, go grab the next one. And so we'll we'll give somebody again, like a decent high interest rate and a little preference at the end.

George McCleary: 42:24

So then when when that by the time that second position investor comes in, there's enough cushion at that point, based on the improvements that you've made to the to the property thus far. Is that right?

Dustin Miller: 42:37

No, no, I mean, depends. Now, a lot of times those people are coming in at the beginning, but

George McCleary: 42:42

Oh really.

Dustin Miller: 42:42

Yeah, they'd be coming into the beginning. It just depends on how things are set up. Yeah.

George McCleary: 42:47

Okay. So you're probably giving them a decent interest rate thing, because your RealTV is gonna be you're gonna be pretty levered up.

Dustin Miller: 42:52

Off, right, right off the bat. Yeah. Although, you know, the hard money lenders we work with are pretty cautious about being in a good position. And so they're only going to be dispersing funds. And if you think about it, so you had to buy that house for $500,000, we had to put $200,000 into it. So that's as a down payment. So there's a really, really small first position on that on that house. And the rest of it is is like equity. So they're fairly well protected. And then the hard money lenders are really cautious about distributing funds to where they're not in a bad position. You know, they want to make sure there's work done.

George McCleary: 43:26

Do you ever, do you ever keep any of these things that you build? Because it sounds like the model is to build it and sell it. But if we're talking about like the wealth creation bucket, like we were talking about before. Are you ever tempted to or do you ever keep the new stuff? Or does it not really pencil all that great?

Dustin Miller: 43:41

No, the model before has been to build the 2 ADUs in the back, sell them off, and then keep the big, you know,

George McCleary: 43:48

Oh, keep the house.

Dustin Miller: 43:48

$900,000 remodel craftsman. Like that's an easy,

George McCleary: 43:53

A $900,000 rental?

Dustin Miller: 43:55

like, well, it's a duplex, there's 2 units, and they're around for a lot in prime locations, walkable, like, you know, we only go after like hot, hotter locations.

George McCleary: 44:05

So then do you get like conventional debt on that like long term debt? or

Dustin Miller: 44:09

Then we actually pay off all of our pay off all the notes of construction, and then what we do is a cash out refi on the house. And so essentially, we're not taxed on a cash out refi. So we're taking all of our profit, leaving a little bit of the equity into it, and then we're cashing out a bunch of our like money and taking that and implementing that into another one. So but it's really interesting, because you asked like, Hey, are you keeping these or selling them off? Because we have a shitload of these things that we're building and but the model is like to sell them off. Like that's the original model, because it doesn't make a lot of sense to have a four or $500,000 door like it's just it's kind of it doesn't pencil that well, right? So but we're looking at these like, there's got to be a better way like we want to hold these especially considering the now we're probably like in a low point in the market like so, we don't want to be just selling everything off right now. If anything, it would be it makes a lot more sense to hold them right now and then sell them in two years.

George McCleary: 45:07

Why do you keep the $900,000 asset as a rental but not but but not have the$500,000 asset that's in the backyard as a rental?

Dustin Miller: 45:18

It's been just because it's a little bit more, the numbers pencil, like the rents come out of that house a little bit stronger than one unit. So say it's like a$500,000 ADU in the back, like, there's no way in hell, you're gonna rent that for more than 2500 a month. And so it just doesn't cash flow at all. So even if you had a little bit of equity into it, right, or say, say you had like, you know, 25, 30% equity, your loan flow guys a little lower, but the house, were able to get to rents out of it. So say, say we're at$900,000, we have 700,000, not valued at 900,000. We have$700,000 in debt. Now that mortgage payments, like what, five $5,000, we rent the top level, or you know, these are nice, really nice three bedroom, three bath completely remodeled, walkable area, super sexy properties.

George McCleary: 46:07

Right.

Dustin Miller: 46:08

And then that rents for 35. And then the bottom level, we rent those for like 25. So it just brings a lot more money.

George McCleary: 46:13

It sounds like it's the fact that it's two units that does the heavy lifting on that.

Dustin Miller: 46:16

Yeah, yeah, exactly, right, you have two rentals, two units too.

George McCleary: 46:20

And then there's also some, some pads that you've built, as well describe, describe what what this is a tiny, tiny house pads, it's kind of like an RV pad, like, help out anybody who's unfamiliar.

Dustin Miller: 46:31

Yeah, so, it's funny, I'm always like, one, one thing about me is always going to push, push the lines, push the limits and push, push what the city says you can do versus what I think I can do and or what I want to do.

George McCleary: 46:45

Love it.

Dustin Miller: 46:46

So I like to push boundaries. But so, I don't know if I should be saying this on air but we'd like some of these houses...

George McCleary: 46:51

All seven of our listeners will completely love it, I promise.

Dustin Miller: 46:57

So when you're doing a remodel, you can go into these places, and you're already have access to your like your electrical and your plumbing and you got your sewer line opened up and stuff. And so what we've been doing is if the the house is positioned well, and it can open up enough to where, you know, we have these areas that are in the back, we, the city says that you can have one tiny home pad, like on a residential property. So that's like given and then will we do another one. And so far we haven't had like, like any problems. So it's been well over a year. So what we're doing is we run a breaker out there, like we run like a 30 amp out there to where they can plug in, they've got their own like power out there, we run a water line. There's not separately metered. So he's run a water line with a spigot that they can plug into. And then

George McCleary: 47:48

It's just like a hose bed basically? or

Dustin Miller: 47:50

Yeah, right. Like underground, like right underground and can just come up on a little hook

George McCleary: 47:54

the pipes underground, but what sticks up out of the ground is basically a hose bed basically.

Dustin Miller: 47:58

six pipes, six posts with a little hose. Yeah, little spigot

George McCleary: 48:00

Perfect! Yeah.

Dustin Miller: 48:01

So and then you run a sanitary line to but like, it's a lot to do that if you don't already have your your systems opened up, like you know, but if you're in in it doing it, it's actually the cost is pretty small to run a sanitary line out each one of them. And then yeah, we're getting like 6, 700 bucks a month off of these back units. And it's like,

George McCleary: 48:21

because people are coming up with their own tiny homes and you're not buying the tiny homes. You're just renting

Dustin Miller: 48:25

Yeah.

George McCleary: 48:26

the dirt underneath and like

Dustin Miller: 48:27

The numbers are dump pencil like buying your like not as well is that damn pad alone, like you have no cost, like you have like maybe$5000 a cost, like to get that thing set up. So and then it's

George McCleary: 48:38

when everything's all opened up. If it's not opened up, it's more than that. Right?

Dustin Miller: 48:41

Yeah, might be might be at 10 grand or so, you know, I mean, run a shovel and a backhoe, you'd be better off.

George McCleary: 48:47

I mean, that's, that's, that's, that's, I mean, that's amazing. So of course you'd want to bring to build two of them. Why not, why not three of them? I mean,

Dustin Miller: 48:55

I mean, well, they get I mean, what how when it's when the neighbors complain, like, right, what's going to happen? The neighbors are going to complain because there's too many people or something like that. So but do you keep your property up? And you know, I have a well fenced off, put up some stuff and you know, keep the neighbors happy. Be a nice guy.

George McCleary: 49:12

I mean, a lot of this stuff is complaint based. And it's and you said earlier, you have a property management background. And so if you're running a tight ship,

Dustin Miller: 49:19

Yeah.

George McCleary: 49:20

and yeah, then it shouldn't then it should it should be just fine. And to date you haven't had any complaints which you shouldn't because the city is trying to get this exact That, exactly, right. Like look at look at the overall goal of thing. what they're trying to do. They're trying to provide more affordable housing like Why on earth would they like crack on crack down on you, there's not a tiny home police patrol that like run runs around and you know, checks off who has a tiny home and who does it and in fact, I have a couple of their properties that I've spotted that I know are doing the same thing. They put the two tiny homes they're much more visible than I am and I just keep an eye on those and like it when I see one of those go, I may like pump the brakes a little bit but it's a really good like if you're trying to get things to work and a property to cashflow, like that's kind of my biggest asset that I bring to the table on this partnership is I just look at everything. And I'm like, whoa, put a unit here and a unit there and tiny home pad there and house over here. And I can just visualize this lot, and all the different ways that we can make money out of it. And so if you have that good setup and a driveway, especially like these little garages in Portland, that are just falling down and stuff, they're built on a little slab, like and they probably have power going out there anyways, like get rid of that garage, put a little tiny home pad there. Totally.

Dustin Miller: 50:34

Because converting the garages don't it doesn't work that well.

George McCleary: 50:37

I've heard that.

Dustin Miller: 50:38

It's a lot more work. You really, you have a little garage and and that's another thing you'll put on the listing is like you gonna convert the garage into an ADU. It's like you fucking retard, you have no idea, like how hard that is, sure, you could just say that it's, I shouldn't say retard.

George McCleary: 50:57

I don't have the software to play things just yet. So yeah.

Dustin Miller: 51:00

so but that's not the play, but a tiny home pad is that's a that's an easy win right there.

George McCleary: 51:05

Yeah.

Dustin Miller: 51:06

so...

George McCleary: 51:06

I love it. You mentioned your you mentioned your partner a couple of times, Jason. So if you're going to scale up, if you're going to be you know, to level up in this game, you need to have you know, employees partnerships, you know, you gotta go You gotta you got to have people. When you're partnering with somebody, you know, that means, you know, you're both kind of sharing any action or anything. And so you got a lot of hats. You're currently clearly doing a ton of work. You know, how did you choose Jason as a partner? What does he do? And what sort of value do you guys bring to each

Dustin Miller: 51:35

Yeah, man, I love that guy. Like, he's just other? freaking a rockstar. And yeah, I'll tell you backdrop of Jason. Jason actually worked at Nike, senior level finance guy doing making a really solid W2. And we've partnered up when I first got into this business, I was doing little side jobs just to try to stay afloat and stuff is as I had a couple first couple flips didn't go well. And so...

George McCleary: 52:02

Didn't mean to happen.

Dustin Miller: 52:03

I'm doing like, yeah,

George McCleary: 52:04

Raise your money, raise your hand if you've lost money on a flip.

Dustin Miller: 52:06

Yeah, right, yeah, yikes. So anyways, I was he had a little kitchen leak, and my wife works in IKEA as well and connected us and was like, oh, he needs some help do some flooring, countertops and stuff wants to do like little remodel.

George McCleary: 52:21

You went to go fix his sink.

Dustin Miller: 52:22

Yeah.

George McCleary: 52:23

That's how you guys got partnered up. That's amazing. I never knew that.

Dustin Miller: 52:27

Just started talking about real estate. And at that time, I'm just like, oh, I got this big vision of what I want to do and I'm like I want to take over the world is like got by you know, first wholesale deal and a couple deals.

George McCleary: 52:37

So, you're under a sink water spraying in your face, you got a wrench be like I'm gonna take over the world. I've got this great plan.

Dustin Miller: 52:43

Yeah, what,

George McCleary: 52:44

And he's like this guy, I should I should give this guy tons of money we should do, we should do something with this guy.

Dustin Miller: 52:50

What ah, yeah, what color countertops would you like sir?

George McCleary: 52:53

Exactly.

Dustin Miller: 52:54

So I help him out. Like it was kind of as a favor, like, that wasn't my main main jam, but we started talking about rentals and properties and I opened up the opportunity to invest in a project and like, hey, want to buy this and we

George McCleary: 53:07

Oh, cool.

Dustin Miller: 53:07

Yeah and we just, you know, we're shooting the tried a couple. We had a couple of like coffee sessions at at the Starbucks down here. Starbucks and stuff. I remember our first like, meeting was just shit about like, ideas and all this. And so basically, I had down here on 23rd him invest in one of the projects and then at the end,

George McCleary: 53:17

Oh, I know it. we're like, well, why don't we just rent this out? I was like, So he's uh, so he can kind of came in as like Okay, fine. Like, you know, let's rent this out. I was like, well, you can finance it I don't have a W2 right now. an equity partner essentially. Oh, essentially at first

Dustin Miller: 53:38

Yeah.

George McCleary: 53:38

And then when you decided to keep it you guys were in bed together as equity partners on a rental.

Dustin Miller: 53:43

Right? Exactly.

George McCleary: 53:44

Got it.

Dustin Miller: 53:44

And then, you know, did it again and again, or did another one bought another one and then we had this idea of like, hey, could we do this together? Because I'm crazy. Like I'm like, I'm that's I pushed the boundaries

George McCleary: 53:59

I'm not gonna push back on that.

Dustin Miller: 54:01

I got all these crazy ideas and stuff, but it's like, I know my weaknesses. It's hard for me to implement stuff and get into the weeds.

George McCleary: 54:09

So he's more like your integrator, like you're kind of grinding force.

Dustin Miller: 54:12

Yeah, yeah.

George McCleary: 54:12

Got it.

Dustin Miller: 54:13

A really really good integrator and can deal with my shit. Well, he's really good at dealing with my stuff. And he,

George McCleary: 54:19

Those are the best partners. To date, I only have one that's worked and I'm married to her.

Dustin Miller: 54:25

Right? Yeah, same same. That's my other like, good. implementer.

George McCleary: 54:29

Exactly. Yeah.

Dustin Miller: 54:30

Yeah, just an all star deals with all this stuff. Like really well, and he, yeah, we had this goal of like, hey, let's let's eventually full time this like I remember sitting down at another coffee restaurant was what we do we meet up in the evenings, because he's working, I'm working, just starting the family.

George McCleary: 54:49

He's a full time Nike guy at this point.

Dustin Miller: 54:50

Yeah, yeah. And we both have kids that are about the same age we do as well, but we're trying to raise like young families and so I put the kids down to bed and Jason, I would

George McCleary: 54:57

Dude. grind for, like, three, four times a week, we're either being

Dustin Miller: 55:01

We do that for quite a while. at coffee shops, and we're just grinding the evening till you know, 11, 12 o'clock at night.

George McCleary: 55:10

I fucking love that Dude. I just love that energy.

Dustin Miller: 55:12

He was badass and just a lot, but I remember another coffee shop early on was like we looking at this, like, what do we want to do here, and we're looking at a big large multifamily that was developed on division, it's like, that's what we want to do. Like, that's where we're going to get and it's cool to buy this RX lot because it's like, well, here we are, like we're getting there. So many ways we get to, you know, three properties four properties like, you know, a 10 doors or so and, and then I kind of started saying, hey, buddy, I'm out here grinding all day, doing a lot of work creating a lot of momentum, it's time to shit or get off the pot. And like, either come on, or like let's do this full time. And of course, it's a hard thing to do. You walk away from Nike.

George McCleary: 55:52

Yeah, he's a finance guy at Nike and so that's a big ass. Yeah.

Dustin Miller: 55:56

He was that kind of a big deal. But I, you know, I said he was time to go and he's by this date, by this date, it went a little bit longer than expected. And in the meantime, I started picking up projects on my own. I was like, well, I'm gonna buy this one. I'm gonna buy this one. And if you don't want to do it, you'll buy this one. And...

George McCleary: 56:13

But if you want to come in the waters warm, essentially. Yeah, yeah.

Dustin Miller: 56:15

Right, right. And so but I eventually figured out real quick that Jason and I are better together. Like the projects that we run together are good and tits and in me doing it on my own is not where I want to be. So yeah, he quit the first of the year and so we're like nine months into this.

George McCleary: 56:34

Oh, just in January is uh

Dustin Miller: 56:35

Yeah. Walked away from the big W2 job at Nike.

George McCleary: 56:39

Wow!

Dustin Miller: 56:39

It's pretty good. He wants to actually...

George McCleary: 56:41

I mean that makes it easier from a tax standpoint.

Dustin Miller: 56:44

Well, he's a full time real estate investor now and so we get a you know, we get a call saying a bunch of our properties and like it's, he's gonna do fine.

George McCleary: 56:52

Dude, I love it man.

Dustin Miller: 56:52

Um, but yeah, we started we started getting to a point to where like, we're generating that like money's in the you know, in the in the tank and generating a lot of like

George McCleary: 56:59

Enter one and exit anothe. wealth in the form more of like equity, not cash and stuff, but it's like we're generating a decent amount of like equity

Dustin Miller: 57:07

At the same month. So we're making one by a here. It's like, like, it's time to update let's go and so we're now on a trajectory to go the next two years we're trying to buy one of these cottage cluster projects one a month, so buy and exit like enter and exit one a month. So that... month and gonna start and then obviously going to be completing, you know, one one a month, which is anywhere from four to six units to four six units or so. So that's quite a bit so the next like you really hit that nail on the head

George McCleary: 57:40

I love al it's great!

Dustin Miller: 57:41

of like, what are we doing? And it's I'm trying to figure out how to hold all of these like that's the game because where do we do for selling them off? Like you know, cash comes in cash goes out pay a bunch of taxes, like whatever,

George McCleary: 57:54

Yeah.

Dustin Miller: 57:55

you got to hold them so

George McCleary: 57:56

yeah, or just hold them for every year season them as rentals do like short term midterm whatever and then you know, get like get short term capital gains and pay lower tax rate after you know, a year or take that and you know, combine them into a 1031 and buy a stabilized apartment somewhere, I mean,

Dustin Miller: 58:15

put it exactly or

George McCleary: 58:16

just get a better return on your equity because like if you've got something like an asset like a single family or there's$900,000 essentially like duplexes, your return on equity you know, you're not you're not paying taxes on it, which is great, but your return on equity, I'm guessing is probably not super spectacular. But if you reposition that equity into like a bigger like, you know, purposeful, like cash flowing asset like a multifamily or like an industrial complex, something like that, I have a feeling that is gonna to be the key so unsolicited advice from George today that I think is going to be probably near as I can tell, based on what you've told me today. The single like most powerful wealth creation tool that's really just at your fingertips because you know, to leverage that equity and that you've you know, you worked so hard for it you've shed all this blood and sweat you know, building these things you've got this chunk of equity and if it's only returning know you know, this much per month you know, it's great to not pay taxes here you know, you're keeping things you're you're retaining wealth not paying taxes, but if you can, if you can position that equity to get a really killer ROE

Dustin Miller: 59:15

Yeah.

George McCleary: 59:15

on that, holy smokes man that's when you could that's when you don't have to worry about shit. 100 doors is is great, but if you've got you know all that equity in my mean, shit, you could have far fewer than 100

Dustin Miller: 59:27

Yeah.

George McCleary: 59:28

and have it pumping out more passive cash flow, then you could ever know what to do with.

Dustin Miller: 59:32

Yeah, we're just it's funny. It's just kind of this is all coming together last like couple weeks what exactly you're talking about. Yeah. And we're trying to find ways and we're talking to a portfolio lender that's gonna allow us to like, actually, like hold a lot of these. It's really cool. And then exactly like 1031 them in a year to when like the market goes up and game over. Right? So

George McCleary: 59:54

Dude. I love it, man. And so before we close, I just want to say I just want to say something. So that energy that you and Jason were creating when you guys, you know, put your kids to bed. And so I don't know about you, but after my kids we both have young kids are like, you know, mine are now a little bit older. So things are easier now. But you put your kids down at the end of the day, you're completely zonked, you've worked all day, you were with the family put the kids down, I'm ready to be horizontal. But you guys found the energy to get to get together to talk business to hatch a plan, because you guys were just compelled to like to move forward to move to move the ball down and down the field night after night after night. And I really think that's really what separates the men from the boys in this type of business and everything, I really applaud you guys for doing that. And that type of passion, I think is what really grows wealth and cash flow and makes people successful. And that is the whole point of this podcast is to have these conversations with people that are doing just that, that are out there hustling, like, after the work is done. They do more because they're just driven, they're compelled to do that.

Dustin Miller: 1:00:59

Yeah, right.

George McCleary: 1:00:59

And it's something I admire, it's something I aspire to. And something I try and practice as much as I can scrape the bottom of my energy barrel as much as I can. But like, you know, if I had to, you know, if I had to give you a, I'll just call it like an armchair analysis of you know, one of the biggest reasons why you got where you are today. I mean, it's that energy right there, man and I just, I just love to see it,

Dustin Miller: 1:01:21

We start to like, we start to notice when you put in a bunch of effort towards something and you you don't just like zonk out or you fall for like what impulsive like behaviors. We all have. Okay, I grind you know, and then and then you grind for like a while and you're like holy shit like there's some big like results and so you start to get into this pattern where you understand that if I do put in way more effort than everybody else that I'm going to get somewhere farther than most people can actually like get and then that gets like somewhat addicting were like well let's let's go.

George McCleary: 1:01:54

It starts to bleed over to other parts of your life and starts to go into other parts of your life like so. Before the podcast we gotten the cold plunge maybe I should make that a recurring thing I kind of love that

Dustin Miller: 1:02:04

Yeah. but if you're listening and you're not watching this on YouTube, you know Dustin's you know, he's in his under his get into the hole punch the guy is absolutely fucking shredded is absolutely absolutely shredded. So this, like, this type of mentality bleeds over to, you know, to physical fitness, you know, to relationships to all sorts of things and everything it's like, and when you have that that kind of mentality and mindset in all your different parts of your life. It's just it's success be getting success, and that's, that's why I love these conversations. That's and that's why I had you on man. So, dude, thank you so much for coming on. It was it's been an absolute pleasure, man. Oh, yeah. He's great. Yeah, man, enjoy it. So. But anyway, Dustin, gave everybody your socials and your contact or whatever, anything you want to plug right now. So people if people want to reach out to you and get in touch with you. Learn more about you. Yeah, yeah, you bet. I'm on social media. You know, you have Instagram. Yeah. Dustin Michael Miller is the Instagram handle.

George McCleary: 1:03:01

Luminent Website is luminent.us,

Dustin Miller: 1:03:11

so that's our development company.

George McCleary: 1:03:13

Luminent

Dustin Miller: 1:03:13

And yeah, I love sharing. I love talking about real estate. This is I feel like we could go another half hour here.

George McCleary: 1:03:21

Oh, yeah, easily.

Dustin Miller: 1:03:22

It's great. This is just like time flew by real quick.

George McCleary: 1:03:25

It flies man. Love it. All right, man. Well, thanks again.

Dustin Miller: 1:03:28

All right, brother. You bet. Good stuff.

George McCleary: 1:03:33

So that was developer Dustin Miller. What a remarkable guy and how generous of him to share his business model with us and reveal just how bountiful these infill development opportunities are. Do you think other cities are going to pass laws like Portland and Seattle did to increase density? If so, that's going to create a massive nationwide opportunity because you'll have new houses in prime locations that were previously not buildable due to zoning restrictions. Dustin is taking advantage of it and perhaps you should too. I really hope you enjoyed our first episode and if it's earned a five star review from you, I love to see it. Don't miss our next episode where I'll once again be cold plunging and talking with another self made millionaire. And until then, if you too want to be a successful person like Dustin Miller, I encourage you to embrace the cold and ignite the dream. Thanks for listening!