Sep 22, 2026 · 56 min · 13 segments
Send us Fan Mail **If you've ever wanted to learn how to successfully invest in real estate for the long-term, you talk to Gary Jonas. Gary is CEO of The How Group, specializing in real estate…
So we're going to, we're going to fast forward, you know, a while and you started with a house, then a second house.
What, what's your biggest building today? Like what's the biggest one you own with like the most amount of units, like in one property or building?
But eventually what happened is we got to a spot where we decided our sweet spot is 50 units to 150 units.
because it's a little too big for the you know guy just kind of getting started and it's too small for the institutional guy so there's there's a spot to create yield there and it's a very difficult project size to scale because it takes a lot of investment in your property management group so we feel like there's some natural barriers to entry there and gives us some competitive advantage
There was two things I heard you speak about previously, Gary, in maybe a previous podcast you were on.
You had talked about doing mortgages and there was a quote in there, something along the lines of like you had 100 employees, but you were making no more money when you had three employees.
And then it sounds like when you talk about these investments, you also said like when you were investing in single family homes, you were peeling off money to fix one, to move money and the margin really wasn't there.
Can you talk a little bit about that in terms of being specific when knowing that you should be making more money or the margin wasn't there, so you need to redirect your business and go in a different direction?
So what I will tell you is that single family to three, four unit type properties are they generally create a lot of equity but not a lot of cash flow and the reason for that is regardless of how efficient you are at managing the property it typically just to pay the taxes insurance a little bit of maintenance pay somebody to lease your property it's costing you 40 to 50 percent of whatever that income is and so when that happens and then you add a mortgage in there those properties generally don't provide a tremendous amount of cash flow right the way people do it and this is interesting right because most of the people that own those properties as investments are people that fit into the category of i call doctor lawyers that they want some tax write-off they think it's going to make cash flow because somebody showed them hey this property rents for a thousand the mortgage is 600 you're going to make 400 a month but nobody ever showed them the real expenses of operating the building so it's okay they continue to buy them because they build equity So the 10, I ended up getting to 10 single family properties that I own myself.
But I had built up a million dollars in equity in those properties by owning them.
So we're going to, we're going to fast forward, you know, a while and you started with a house, then a second house.
What, what's your biggest building today? Like what's the biggest one you own with like the most amount of units, like in one property or building?
But eventually what happened is we got to a spot where we decided our sweet spot is 50 units to 150 units.
because it's a little too big for the you know guy just kind of getting started and it's too small for the institutional guy so there's there's a spot to create yield there and it's a very difficult project size to scale because it takes a lot of investment in your property management group so we feel like there's some natural barriers to entry there and gives us some competitive advantage
There was two things I heard you speak about previously, Gary, in maybe a previous podcast you were on.
You had talked about doing mortgages and there was a quote in there, something along the lines of like you had 100 employees, but you were making no more money when you had three employees.
And then it sounds like when you talk about these investments, you also said like when you were investing in single family homes, you were peeling off money to fix one, to move money and the margin really wasn't there.
Can you talk a little bit about that in terms of being specific when knowing that you should be making more money or the margin wasn't there, so you need to redirect your business and go in a different direction?
So what I will tell you is that single family to three, four unit type properties are they generally create a lot of equity but not a lot of cash flow and the reason for that is regardless of how efficient you are at managing the property it typically just to pay the taxes insurance a little bit of maintenance pay somebody to lease your property it's costing you 40 to 50 percent of whatever that income is and so when that happens and then you add a mortgage in there those properties generally don't provide a tremendous amount of cash flow right the way people do it and this is interesting right because most of the people that own those properties as investments are people that fit into the category of i call doctor lawyers that they want some tax write-off they think it's going to make cash flow because somebody showed them hey this property rents for a thousand the mortgage is 600 you're going to make 400 a month but nobody ever showed them the real expenses of operating the building so it's okay they continue to buy them because they build equity So the 10, I ended up getting to 10 single family properties that I own myself.
But I had built up a million dollars in equity in those properties by owning them.
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