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Millennial Real Estate Investor

Author: Dan Mackin and Ben Welch

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The Millennial Real Estate Investor Podcast was started because we love awesome stories of Millennials taking big action in real estate and taking control of their financial future. We interview guests who have taken the leap into the game of real estate and prove that you can do it at any age. Whether you want to earn a little extra money on the side or make investing your full time career, we bring you guests who will show you the road map to your goals.
117 Episodes
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Love is a funny thing sometimes. Kevin Galang discovered the wealth-generating power of real estate investing thanks to his girlfriend. Growing up, Kevin was brought up with the mindset of growing your income, while his girlfriend believed in growing your income stream. Kevin believed in investing in a 401(k) for retirement, and his girlfriend believed in investing in real estate for cash flow. They set aside their differences and Kevin figured he’d give real estate an open consideration and look into it. Can you guess how he thought about finances afterwards?   After months of learning and networking, Kevin jumped into note investing, doing three deals right off the bat. And while at the time it felt as if investing in notes was going against the current, Kevin knew his strengths as well as the benefits to know that he was going in the right direction. He stuck with it and the results speak for themselves.   Up to date, Kevin educates others about the nitty-gritty of real estate note investing, as well as other types of investments, in his podcasts Tech Guys Who Invest and Note Nuggets.   Takeaways from our conversation with Kevin: 1) What is a real estate note? In essence, it is a promissory note in which the borrower promises to pay back a specified loan to the lender (in this case being a mortgage on a property). In other words, when you invest in a note, you are acquiring existing debt and acting as the bank, using the property (or otherwise) as collateral should the lending terms be broken or become non-performing. 2) Why invest in notes? As Kevin explains, the largest (and most obvious) benefit is the ability to essentially own real estate without being the attached landlord to any given property. That means that you still earn a return (through cash flow and/or recapitalization), but don’t necessarily have to handle the day-to-day operations like renovations, evictions, or leasing. 3) What are the advantages in notes? For one thing, you can get really creative with how you invest in notes. For example, you can buy in bulk or you can buy in shares. The other thing, Kevin mentions, are the multitude of exit strategies available at your disposal should a note become void or non-performing. You have the choice to create a solution with the borrower directly, you can eliminate the borrower from the investment, or you can part ways with the investment yourself, all of which could be winning solutions if done properly.  4) How do I get started? Kevin talks about how note investing is generally thought of as an “old person’s game.” He explains while it may be true to an extent, you don’t have to invest in notes the traditional way. So while it may carry more risk, with only a few thousand dollars, you can gain a secondary or (even) tertiary position, or even become a partial note holder. Or say you have more capital available in an IRA, that can also be a source of income to then originate or purchase a primary-position note. Either way, as per Kevin, go learn and network as you get started.   If Kevin could go back and talk to his 16 year old self, he’d tell him, “Read Rich Dad Poor Dad sooner because it would challenge the way [you think] about creating financial success.” An unexpected benefit of real estate investing, Kevin said, is the ability to endlessly learn new things and learn with a purpose simultaneously. A piece of advice Kevin would tell his friends looking to get started in real estate would be to know what you want to do, know how much you’re willing to dedicate, and double down on what you’re good at. Kevin recommends using a HP 10bII Financial Calculator to help you analyze deals on the fly, as well as Google Drive to have a centralized place to store important business information. Kevin recommends reading How To Win Friends and Influence People by Dale Carnegie to learn the foundation of talking to people and how to build better relationships with others.   If you’d like to get in touch with Kevin, visit: tgwipodcast.com and info.notenuggets.com/home
As a Canadian native, Avery Heilbron immigrated to America to pursue soccer at the collegiate level. He found himself working a W2 job in Boston, Massachusetts. Through various books (not Rich Dad Poor Dad for once!) and BiggerPockets, he discovered real estate investing. He also began networking with other local real estate investors and closed on his first property in early 2019.   Avery attributes his rather quick (and successful) start in real estate to his learn-and-take-action personality. He genuinely enjoys learning and is not one to sit around waiting for things to happen.    Up to date, Avery is House Hacking and owns two multi-family properties. He coaches other individuals looking to get started investing in real estate, as well as prospects for other larger-scaled real estate investors with the intention to find deals for them and continue his own education with their help.    Takeaways from our conversation with Avery: 1) Finding the right agent. This was a vital part of Avery’s success in securing his first deal. While taken aback at first at the thought of seeing properties not long after meeting his agent, this agent was willing to take the time to educate Avery every step of the way and move at a pace Avery was comfortable going in. So while you don’t necessarily need an agent who invests nor should you exploit one without compensation, take the time to find an agent who is a good fit or ask around for someone who can help you get the job done. 2) Section 8 comparables. While many may suggest you stray away from this demographic of renters, the truth is these individuals in this tenant pool exist. As Avery notes, one thing to keep in mind when figuring rents for these units is how the Housing Authority determines what is “fair.” Their criteria is different from traditional means of finding comparable units. There’s less emphasis on the glitz and glamour and more focus on the amount of bedrooms and zip code. This can be beneficial to know when it comes time to increasing rent or putting in new Section 8 tenants.  3) Don’t get too friendly with your tenants and screen prospects thoroughly. Especially when House Hacking, you carry the title of landlord, property manager, and next-door neighbor. While you want to maintain a good and professional business relationship with your tenants, Avery suggests not turning your renters into friends. Avery would decline social invitations from his tenants and eventually they caught on. This is done not only to protect your emotions, but also your investment. 4) “Due” your diligence. As Avery explains, when purchasing multi-family properties with (or without) inherited tenants, you have to be thorough in your research about the property. While not encouraged, it’s not uncommon for sellers to lie about rents, expenses, and condition. The seller’s motive is to unload their property so it’s your responsibility to know what you’re buying.   If Avery could go back and talk to his 16 year old self, he’d tell him, “Two things… The first would be to just enjoy school and learning and all the experiences because it doesn't last forever. The second would be to stretch more…” Two unexpected benefits of real estate investing, Avery said, is the fact that his girlfriend is all-in about real estate and personal finance like himself, as well as the opportunity to grow wealth at a higher scale since he invests in a more expensive market. A piece of advice Avery would tell his friends looking to get started in real estate would be to make sure to take focused action while you learn and not get swayed in all the different directions you can go in real estate. Avery recommends using Cozy to help you with your rent collections and other property management needs. Avery recommends reading Set For Life: Dominate Life, Money and the American Dream by Scott Trench as its message resonates a lot with Avery’s philosophy and the same could be set for you! Honorable mention: Retire on Real Estate: Building Rental Income for a Safe and Secure Retirement by Kai Anderson. If you’d like to get in touch with Avery, find him on LinkedIn and BiggerPockets, follow him on Instagram @_averyheilbron, or visit: realworldfaf.com/contact
Sometimes all we need is a little push in a different direction for it to have the biggest ripple effect in our lives. In the case of Adam Ulery, this metaphorical push came in the form of a book recommendation over a coffee break at work. Adam figured it couldn’t hurt so he gave Rich Dad Poor Dad a shot and, as he put it, “became a fiend for information.”   Like many others, he gobbled up as much knowledge he could about finance and investing and ultimately fell into real estate and stuck with it. While those initial stages were tough for him due to his mental roadblocks, with the right guidance and action, he was able to preserve and open up his life to abundance.   Up to date, Adam is the Head of Investor Relations for Dreamstone (a real estate syndication company) and hosts the Tech Guys Who Invest Podcast all while still working a full time W-2 IT job. Collectively, Dreamstone has a goal of owning 5,000 units by the end of 2021. Adam plans on continuing his stride towards wealth to be able to help more people along the way.    Takeaways from our conversation with Adam: 1) Listen to competent advice. While it might be more expensive in cash value up front to pay for the opinion of an expert, you’ll be rewarded tenfold later down the road. In other words, it’s cheaper to do something correctly the first time than to do it the inexpensive way and have to do it again. So when it comes to legal, financial, mental, or structural advice, this is capital well invested. And keep in mind, sometimes you’re going to need the same advice from different people depending on your level and goals. 2) Overcome your limiting beliefs. It all begins with mindset. Adam can vouch this was true for him. Even with his excitement and eagerness to do his first deal, those raw emotions alone weren’t enough for him to overcome his negative attitude. He first had to address his doubts and adjust his thinking about his ability to succeed. Once he was able to do that, he was no longer his own biggest hindrance, but rather his own biggest advocate. He went from fearing a single family property to purchasing over a hundred units at once. 3) The process remains consistent. Adam was a bit taken aback when he first decided to venture into apartment syndications. He was overwhelmed by the work needed to be able to scale at the level he desired. But then he realized something. Even though there were more moving pieces, the end product remains wholly the same. Adam realized that he still needed to learn about the investment type, he needed to pool together enough capital, he needed to find the right deal, and he needed to manage his investment. A duplex is not that different from a 10-unit building. And a 10-unit building isn’t that much different than a 100-unit apartment. It’s a larger scale, sure, but the process remains consistent. 4) Select a property manager with experience in your specific asset class. Similar to point #1 above, you also need competent people to do work on your deals. Competent advice is only half of the battle. The other half involves actually finding the correct employees or partners to fulfill your needs. Not any property manager can manage any type/class of property. Find a specific property (or project) manager that fits your means and can accomplish your needs.    If Adam could go back and talk to his 16 year old self, he’d tell him, “Don’t limit yourself… Choose what you love to do and focus on that. Take action, move forward.” An unexpected benefit of real estate investing, Adam said, is his growth thus far as a person, all things mentally, emotionally, and otherwise. A piece of advice Adam would tell his friends looking to get started in real estate would be to get educated. Start listening to podcasts, read books, and start talking to people who are already doing what you want to do. Adam recommends using Waze to help you navigate your way around town to be more efficient and save time (to do more deals!). Adam recommends reading Killing Sacred Cows: Overcoming the Financial Myths that are Destroying Your Prosperity by Garrett B. Gunderson and Stephen Palmer to help you break free from traditional financial principles imposed by the working class and on the fast track to financial freedom.   If you’d like to get in touch with Adam, find him on LinkedIn, email him at adam@dreamstoneinvest.com, or visit: www.tgwipodcast.com.
Based out of Kansas City, Missouri, Logan Freeman joins us this week to share his story on how he went from owning less than 40 units after a few years, to in a span of 8 months, owning over 500 units!   Logan focuses on commercial developments and master leasing these buildings (meaning one lease for multiple units/properties between tenant and owner) to non-profit homeless organizations such as reStart. These partnerships help to rehabilitate individuals who have fallen into homelessness and get them back on their feet and a part of society once again.   Up to date, Logan’s goal is to continue to live out his passion in providing affordable housing for people who are in need, as well as continue to work to stay profitable. He wants to educate others about alternative investments within real estate, and show them the different niches available that wealthy people have been utilizing for generations now that these investments are becoming common practice and readily accessible.   Takeaways from our conversation with Logan: 1) Realize what your roadblocks are. One common problem successful investors run into is succeeding too much too soon. By all means, if you have goals to build a scalable business and want to build a large operation, do it. Along the way, just keep your attention open to weak points within the business structure. As Logan explains in his failed deal that cost him $200K, it wasn’t the deal itself that was bad. He knew that deal to be a great one! It was he, himself who was holding that deal back. He got overconfident, wore too many hats, and lacked the experience required to pull off the deal successfully. So as he notes, figure out the different jobs and roles within a deal (or business) and assign the right people to those roles. By doing so, you’ll get more done and get along further. 2) Swallow your pride. Going back to that failed deal that cost Logan $200K, he explains that he didn’t have to pay out that cash. There was nothing legally binding that required him to do that. But for Logan, it was bigger than the law and the cash. It was his reputation and moral conscience at stake. As Logan explains, when you do the wrong thing, your negative reputation spreads like wildfire. So when put in that perspective, that monetary value diminished. He fessed up to his mistake, got out of the way, and in doing so, learned a valuable lesson. Take ownership of your actions, be the buck, and move on. 3) “Doing well by doing good.” This is the mantra that Logan uses for his business. This is what led him to real estate. This is what led him to non-profit work. And this is what led him to teaching others how to succeed in business. Logans explains it well—on one hand, yes, business is business and the objective is to turn a profit. On the other hand, however, that doesn't mean you can’t make money by making the world a better place—by doing something that’s greater than profit alone. So whether you want to be a mom-and-pop landlord or a world-wide real estate corporation, don’t forget (or take for granted) the power and responsibility you hold for communities and individuals with each property.  4) Go out and play the game. The more successful you are, the easier it becomes to achieve success. Common reasons for that is because of experience, network, and opportunities. Just like physical momentum, success builds on another. The hardest part is getting that first push to move. Logan mentions that he’s had the great fortune to be able to work on his life passion and serve people through his business. And while a lot of that is attributed to connections with other people, the results are not achieved by accident. The results stem from methodical and intentional plans and action. You can either sit on the sidelines and wait for the perfect opportunity, or you can create those opportunities yourself. We suggest the latter. And combine that with persistence, magic happens.   If Logan could go back and talk to his 16 year old self, he’d tell him, “Be open to everything and attached to nothing.” An unexpected benefit of real estate investing, Logan said, is the excitement he gets that comes from making a positive impact on the world, as well as being pushed by his business to become a better and better version of himself. A piece of advice Logan would tell his friends looking to get started in real estate would be to first ask them if they want to be an “active” or “passive” investor. From there, it’s a matter of laying out the steps and groundwork to get to your goals. Logan recommends using gTasks and Monday to help you stay productive, organized, and on track. Logan recommends reading The ONE Thing by Gary Keller and Jay Papasan as it helped give him clarity in his life, and he believes it can do the same for you. Honorable mentions: The 10X Rule: The Only Difference Between Success and Failure by Grant Cardone Extreme Ownership: How U.S. Navy SEALs Lead and Win by Jocko Willink and Leif Babi Influencer: The Power to Change Anything by Joseph Grenny   If you’d like to get in touch with Logan, find him on LinkedIn, or visit: www.livefreeinvestments.com
It all started when Ben Mizes took on a sales job with a startup selling a platform for real estate investors in the single family business. And because he had to know at least some things about real estate, he was told to learn about investing. So being the obsessive guy that he is, he consumed all things real estate for a few weeks and hasn’t looked back since. At the time, Ben was in the market for a new place to live in anyway, and he had just heard about this great idea called House Hacking, so he figured if he needs a place to live, that he might as well live for free. Shortly thereafter, he went from owning zero assets to being a landlord of a four unit property. Within a couple of years, Ben had built up a portfolio of 22 units. Up to date, Ben is the CEO of Clever, a real estate tech company and on his way to financial freedom. Along with growing his own portfolio of units, he has the goal of being the largest integrated real estate company in St. Louis in his mission to transform his community. Takeaways from our conversation with Ben: 1) Understand the agreement, use your own contract, abide by the terms. Ben studied at the school of hard knocks during his first experience working with a contractor. He hired the only guy within his budget willing to do a major HVAC job and upon discovery of unsafe working conditions, did the right thing and fired that contractor immediately. However, the drama would continue as the contractor would then file a lien on the property, falsely advertise the property for sale (might we add multiple times), and (suspectedly) even rob the HVAC unit he was hired to install! Had Ben used his own contract and had someone tell him how to better protect himself legally, he could’ve saved thousands of dollars. But with all things, it was a great lesson learned, and an equally great story at that. 2) Homebuyers are buying a product, investors are buying a problem (and this is where the opportunities are). Such problems can be physically the property itself, the tenants living at the property, and sometimes, even the owner and managers of that property. When in the business of purchasing value-add real estate, you’re adding value where others feel it is not worth to them. If you can get creative enough to find solutions to these folks, you’ll never be short of great deals. 3) Build trust. Reality check: Not all homeowners are the most knowledgeable about real estate. In a similar token, not all real estate businesspeople are the easiest to trust in the business! Seek to understand who and what kind of person you’re working with and use that so you both can mutually benefit from that relationship. When seeking his second deal, Ben found the largest fourplex in the area, but the seller would not budge due to her mistrust of Realtors and other investors looking to prey off of her ncompetence. So instead of shoving profits down her throat, they took the time to educate her on their plans and were fully transparent throughout the entire buying/selling process. In doing so, they were able to build enough trust with one another and secure a great deal! 4) “The goal [for your first deal] is to not lose money and learn.” Just jump in. You don’t have to be ultra risk-averse or some adrenaline junky to get started quickly. If you happen to have a low tolerance to risk, that’s okay! What you can do is find a way to insulate yourself financially, learn the basics, and just roll with the punches. In doing so, you’ll actually learn faster and more than you would not doing anything at all. Take Ben, for example. Even with just a month of consuming real estate knowledge, he was able to get his first property under contract because he knew that even if the deal fell apart completely, the worst that could happen was that he’d have to cover the mortgage out of pocket (which he could) or sell. And while he made mistakes, there was none that he couldn’t handle and correct along the way. If Ben could go back and talk to his 16 year old self, he’d tell him, “Smoke less weed, and focus more on reading.” An unexpected benefit of real estate investing, Ben said, is the control he has over his asset. While he hasn’t yet met his ultimate goal of financial freedom at the time of our conversation, he dividends knowing that his investments will get him rich slowly as opposed to other more insecure alleys. A piece of advice Ben would tell his friends looking to get started in real estate would be to “Start modeling properties.” Get good at looking at properties, running numbers, and calculating what the potential net could look like in the end. Oh, and ”Expect to get your teeth kicked in a bit.” Ben recommends using Google Sheets as a simple method to learning how to run numbers on deals. Honorable mentions: Asana to help you manage your team. Clever to help you get connected with top agents in your market at a fraction of the cost. Ben recommends reading The Book on Rental Property Investing by Brandon Turner to help you learn the overall basics of real estate investing and fastrack you to your first property. If you’d like to get in touch with Ben, visit: benmizes.com or email him at: ben@movewithclever.com
“It was going to be an additional hundred grand and change or whatever,” mentions Kimberly Marie as she casually explains her rationale to begin flipping houses. At the time, she had thoughts of going back to school and getting her doctorate degree. And surprise, surprise—education costs money. So in order to pay off any debt she’d carry as a result, Kimberly turned to flipping real estate to offset her expenses.    Without much more thought, Kimberly began purchasing the ugliest homes she could find in her neighborhood and turning them into fresh, liveable homes that people could enjoy. And not long thereafter, she had established herself as the investor on the block.   Eventually, Kimberly finished school once again (and paid off debt once again), and this marked the first major transition in her investing journey. She didn’t need the immediate lump-sum cash anymore, and she wanted to take her foot off the gas a little bit. As a result, she began to hold these single family properties and turned them into sustainable rentals.   Fast forward to present day, she is amidst another transition in regards to her life. Up to date, she is selling off her single family properties and setting her sights to commercial rentals and developments.     Takeaways from our conversation with Kimberly: 1) Take a look around. At the time, Kimberly explains, in her home market of Indianapolis, the city hadn’t yet seen the gentrification it is undergoing today. But being a local in the city, there was more than meets the eye. Walking around town, she saw more and more people moving in, as well as more and more businesses being put up. So where others felt fear, Kimberly saw opportunity. Gentrification was just around the corner. And to her, it didn’t take a rocket scientist to figure it out. All it took was nothing more than common sense, and a simple question, “Would I want to live here?” The answer was “yes” so she was there to stay. 2) Don’t be a stranger. When renovating her first several flip properties, Kimberly quickly became a staple in her community. As she describes, she wasn’t some out of state, corporate investor. She was in the property every day wearing her construction attire and swinging hammers. We’re not saying that you have to do your own rehabs. In fact, we encourage anyone who wants to outsource labor so they have more time to acquire more deals! The point is, us landlords don’t have the best reputation out there with non-homeowners. It is our individual and collective social responsibility to positively affect and influence our market, our community, and the people in it. Take it upon yourself to make it more than just about cash flow. 3) Audit your goals. As mentioned above, Kimberly has pivoted a few times during her career thus far in real estate. She started off flipping homes, to owning rentals, and now commercial development. And this wasn’t by accident. Kimberly has taken a hard, inside look at herself and understands that her goals and aspirations have changed. Her reasons for investing have changed. And her attitude towards work—you guessed it—has changed as well. Set your goals and get after it. No two ways about it. Just understand that in order for you to grow as an individual, sometimes your goals have to do the same as well.  4) Ignorance is bliss. We don’t mean this in a bad way, not at all! Sometimes, you just need some naivety in your life. That’s all. Take it from Kimberly. Purchasing her first rentals, it was done more or less on the fly. She knew what to look for and what data to analyze, but it wasn’t some esoteric activity for the syndicators or ultra rich. She admits that looking back, she’s surprised just how much she didn’t know. But that’s the point. That’s why beginner’s luck exists. You do something with no idea how hard or complicated something is, and you find that it’s not hard or complicated to do at all. Approach real estate investing as if it's only for the “smart” or “rich,” and you’ll never be either of those things. So when learning something for the first time or trying to master something permanently, keep it simple.    If Kimberly could go back and talk to her 16 year old self, she’d tell her, “Just pay attention and look around.” An unexpected benefit of real estate investing, Kimberly said, was the tax benefits and time. (She literally got a doctorate which, mind you, is the highest level you can study something and now she doesn’t even want to work.) She didn’t expect to earn and learn what she is now. When a friend asks Kimberly about getting started in real estate, she asks them questions. Figure out your “why,” as well as what you can and won’t do.  Kimberly recommends using CoStar and Redfin to find deals and analyze markets. Kimberly recommends reading Skip the Flip by Hayden Crabtree to help you learn aspects of real estate and personal finance that you wouldn’t necessarily learn elsewhere.   If you’d like to get in touch with Kimberly, follow her on Instagram @kimberlymarie920 or contact her at: kim@reddoorrenovation.com
Serial entrepreneur on a mission is how we’d describe this episode’s guest, David Toupin. He started his first business (humble origins of mowing lawns) at 13 years old. In his junior year of college he took a semester off to do some internships. Had he stuck to this route, he would’ve done well financially coming out of college. But six months later, he jumped ship, turned to real estate, and never looked back.   David began with a couple of wholesale deals, and he learned two real important things: 1) You don’t need to buy single families in order to purchase multi-families and 2) You don’t need to use your own money to buy real estate.    David knew he wanted to have an apartment business so he set out to hunt for deals, made a ton of offers, and fished for funding to get the ball rolling. He purchased his first 24 units at 21 years old and has rapidly scaled up since.   Up to date, David is the CFO (and co-founder) of Obsidian Capital Co. and owner of Real Estate Lab. He’s currently working on a ground-up apartment development in Austin, Texas and plans to acquire another 1,000-3,000 units in the next couple of years.   Takeaways from our conversation with David: 1) Leverage. Or as Robert Kiyosaki defines it, ”Being able to do more with less.” Don’t confuse leverage with racking yourself up with debt to acquire negative cash flowing deals or lending money to partnerships that won’t return a profit. In the same token, leverage also isn’t over-improving a property only to find that your value hasn’t increased or purchasing all the latest and greatest technologies for your business only to realize that your current processes were adequate for your operation. Leverage comes down to having the creativity, nuance, and understanding to combine ideas together and create something greater. If you do more with more, according to Robert Kioysaki’s definition, then that isn’t really leverage. That’s just doing more. And as we gather from David’s story, he knows a thing or two about leverage. So work smart, not only hard. 2) Make offers. You can make a good deal great, but you can’t turn no deal into anything. Sometimes, you do need to rely on a bit of quantity over quality. Making offers is one such time where it is appropriate. Now, this is not an excuse to make offers on bad deals, but don’t let your search for the perfect deal make you blind to decent/good deals. Sometimes, it takes those initial decent/good deals to act as your training wheels and be a catalyst for your next great deal. Take it from David, he was making offers before he even had capital! 3) Courage to connect. The beautiful thing about a network is you never know when it’ll come in handy or what will become of it. When David was looking for his next deal after his first 24 units, he sent a letter to an investor from out of state and from some sick twist of fate, this 71 year old gentleman accepted David’s invitation to connect. They formed a relationship with one another and ultimately struck a sale together that David bought from the gentleman at almost a million dollar discount, willingly! The rationale? The other investor liked David. That’s it. And as David explains, it was this deal that really got others to notice who he was. So just imagine where he would have been had he simply forked over sending the letter believing that this old-time investor wouldn’t even see it. Take a breath, puff up your chest, come from contribution, aim to add value, and just reach out to people you want to surround yourself with.  4) Trust the data. Love it or hate it, emotion will always be a factor because of the human condition. Afterall, without emotion, real estate investing wouldn’t really be fun, would it? Emotion is inevitable. Just don’t let your emotions be your downfall. All too often, as with David, new investors trust new-to-them tenants/managers/employees/etc. all too easily, before any real trust is earned. But as a responsible business owner, when excuses come up from others you hire to perform, look at tangible evidence and data to form a conclusion whether or not that excuse is a basis for incomplete or partially completed work. Determine if poor performance is actually being influenced by an external factor or simply an unwillingness to step up to the plate.   If David could go back and talk to his 16 year old self, he’d tell him, “Start buying apartments today and buy everything in sight no matter what the price is… don’t even think about it.” An unexpected benefit of real estate investing, David said, was the freedom. He’s able to travel, work from anywhere, do whatever he wants whenever he wants… and the cash flow is a cherry on top.  A piece of advice David would tell his friends looking to get started in real estate would be to “Set your expectations up front… know what you want to get out of real estate and map your actions.” David recommends using Instagram to connect with other like minded individuals and grow your network. David recommends reading Maintenance Man to Millionaire: Real Estate Wealth Creation for Everyday People by Glenn Gonzales (David’s business partner) to get some insight on how to acquire and manage rental properties, as well as learn how an ordinary man grew his net worth to over seven figures.   If you’d like to get in touch with David, find him on Facebook & Instagram @realestatejedi or visit: www.obsidiancapitalco.com or learn.realestatelab.com to learn more!
Meet Jim Murray, a twisted individual crazy enough to actually enjoy property management. No, it’s true. His journey starts back in 2012 when he purchased his first House Hack, a four-unit property in Rhode Island. At the time, he was working full time for Fidelity Investments and was self-managing his property. Since then, he has jumped around to do some wholesaling, some flipping, to where he is today—a full time property manager and real estate investor. The unfulfilment with Corporate America had been building for some time since Jim made his first investment and one bad review too many, he did what most folks could only dream of and started his own company. So what makes Jim crazy enough to do the one thing most investors dread as it pertains to real estate? Simple, he says. He’s a systems-oriented guy who enjoys helping people succeed. Up to date, Jim manages over 600 rental units, owns and operates Lyon Property Management, and hosts The Cash Flow Kings Podcast. Going forward, he plans to continue to scale up his personal portfolio, transition more into the multi-family realm, and help more people grow their wealth. Our takeaways from our conversation with Jim:   1) Systems is the name of the game. Invest in technology that increases profitability. By having the right systems & processes in place, you attract and get to serve the right clients. And fortunately for us, business technology has never been easier to acquire and implement. So whether you self-manage or manage other people’s units, there’s technology out there that exists to help you out. (Find suggestion list down below.) However, understand this: Technology is meant to enhance, not replace. If you fail to develop & implement the proper processes first, investing in technology will do you or your business no good, and will probably only run you and your business dry of cash flow. 2) Fire bad clients. When starting out, you’ll be tempted to accept any and all business that comes your way. And that’s not really your fault. You won’t know what separates a good client from a bad one. But once you build your business to a respectable size, that’s when it’s time to visit our good friend, Pareto (80/20 Rule). Scale your respectable business into a sustainable one. Get rid of problem clients and double down your efforts on the good ones. Good clients (tenants, customers, etc.) are worth keeping around if you want to operate a sustainable business. But more importantly, bad clients are worth getting rid of in order to keep the good ones around. 3) Set expectations and practice accountability. This is the culture that Jim cultivates within his own company that has allowed him to make a business and career in taking over distressed properties. From the very beginning, let tenants (or clients) know what you are all about and what you will do for them. You must make your tenants know it is a privilege to rent from you, and at the same time, you must treat it as such—a privilege. That means holding yourself, your tenants, and all other parties up to the standard that you set. And when the bar is not met, someone needs to be held accountable for their actions. In doing this, you will weed out bad tenants and keep the good ones happy. 4) Image influences perception. As Jim explains in his story, when talking to contractors while wearing scrappy jeans and work boots as opposed to a suit and tie, he was quoted for a lower price for the same work being done. And it’s understandable as this is a natural human bias. So why not use this bias to your advantage? Here’s the point: It’s not always best to look like you’re made of money. While this goes without saying to look appropriate, hygienic, and professional, you don’t always need to look super polished. Rather, fit the profession you’re playing. While there are times that call for formal attire, wearing so in casual settings tends to make others perceive you as willing to pay more for something or are just flat out bougie. If Jim could go back and talk to his 16 year old self, he’d tell him, “Buy more real estate in 2009.” In other words, take advantage of the real estate cycles and buy real estate sooner! An unexpected benefit of real estate investing, Jim said, was the opportunity to live with time, location, and financial freedom. A piece of advice Jim would tell his friends looking to get started in real estate would be to “Listen to other people.” Use the free content and information available to you online, whether it be other real estate & business podcasts, websites like BiggerPockets, or the thousands of educational real estate videos on YouTube. Jim recommends using zInspector to help you create and store tenant condition statements. This comes in handy during any tenant-related litigation, as well as have as an additional layer of legal protection for your business. Honorable mentions: For high-end scaled operations: AppFolio; Buildium; Rent Manager. For low-end (DIY-level) scaled operations: Cozy; Avail; Zillow Rental Manager. For rental unit showings: Tenant Turner; Show Mojo; Rently. Jim recommends reading The Wealthy Gardener: Lessons on Prosperity Between Father and Son by John Soforic to help you grasp important financial concepts found in many of the popular financial/business books around. Honorable mentions: The Pumpkin Plan: A Simple Strategy to Grow a Remarkable Business in Any Field by Mike Michalowicz. The Richest Man in Babylon by George Samuel Clason. If you’d like to get in touch with Jim, follow him on Instagram @thecashflowkings
We welcome back the lovely Diya Liu in this episode. When we first spoke to her back in Episode #78, we had gone over her real estate journey up to that point and how she built her vacation rental portfolio in such a short amount of time. Then, a few short weeks thereafter, our collective world was rocked when the country went into lockdown amidst the COVID-19 outbreak.   At first, like everyone else, Diya approached the situation with cautious hesitation for the simple reason that she (like most other investors) had not experienced such a thing before. How can I sustain my vacation rentals when people aren’t even allowed to travel? thought Diya. Then she realized that a pandemic induced national lockdown can actually be beneficial to her and this can be an investment-altering opportunity. So exactly how did Diya take advantage of COVID-19 and break the myths it has created for aspiring short-term rental investors?   Takeaways from our conversation with Diya: 1) Adjust accordingly. When COVID-19 first broke ground, Diya wasn’t too worried. However, shortly thereafter, guests' reservations began getting cancelled all across the board. Approaching that following month, Diya’s net revenue took a hit and things weren’t looking good. Fortunately, around this same time, as Diya explains, most folks realized that “work from home” really means “work from anywhere.” So that combined with people’s cabin fever from being cooped up at home for weeks, this created a strong demand for people to want to escape big cities such as Los Angeles or New York and social distance in a nice, cozy getaway home. Diya turned her short-term rentals into “mid-term” rentals which are leased out in about 30 days cycles. And in doing this, she also fulfills the regulations placed on short-term rentals. 2) Communicate. So with this new investment strategy in place, Diya had to quickly get her team of property managers all on the same page. She had to create guidelines and best practices that all suited the needs of the guests, the rules of the government, and the capabilities of the property managers themselves. So she spoke to each and every single one of her partners and started executing on the new and improved business model.  3) Cut your losses. However, this goes without saying that not all Diya’s units made the transition smoothly. Many flourished and some not so much. So instead of trying to walk on egg shells with problem properties that would take her energy away from the successful units, she decided to unload those problem units and double down on what was working well. Which takes us to our last point…  4) Diversify and plan. As Diya mentions, her overall philosophy as it pertains to her real estate acquisitions is all about her personal preference to the nomadic lifestyle. This means that she is not tied down to one specific niche or market. She goes where the numbers make sense and where there is business to be had. And part of that means being prepared for trends and shifts that will come along the way. Instead of solely focusing on what this current pandemic has done, she’s already shifting her sights to what’s to come after this pandemic concludes and what investment strategy and niche will work then.   A lot has happened since we last had Diya on the show. She has left her W-2 job and has transitioned full time into real estate investing. Going forward, she plans on continuing to grow her vacation rental portfolio, and help other aspiring investors start theirs.    A recent book Diya recommends reading is Never Split the Difference: Negotiating As If Your Life Depended On It by Christopher Voss and Tahl Raz as it has helped her negotiate agreements with her neighbors, as well as find off market deals. One lesson Diya has learned since our last conversation is that short-term/vacation rentals have a lot tied to search engine optimization (SEO) and digital marketing. As far as these investments are concerned, you have to understand the guests you are hosting, as well as the platform in which you are using to list your units. You fall less on the traditional landlording side and more on the hospitality/hotel services side.   If you’d like to get in touch with Diya, visit: www.diyaliu.com or follow her on Instagram @diyaesq
When asked about what he does for a living, Will Bowman answers, “Professionally, I am three things.” Will is a management consultant (full time), a real estate agent, and a real estate investor. But that wasn’t always the case.   The advice given to many aspiring real estate investors is to find good deals and find someone with money to help fund those deals. If we were to put Will in this example, he would be the one with money to help fund the deal.   Initially, Will had no intention of ever investing in real estate. It wasn’t until his childhood friend, Austin Carrol (see Episode 53), approached him and introduced him to the business. What they quickly realized was how much they complimented each other’s strengths. From there, a partnership was born and they each have not looked back since.   Shortly thereafter, along with his partnership and working full time, Will began venturing out on his own and purchased his own rentals as well. Up to date, he has acquired a total of 14 units, and is almost out of corporate America. Going forward, he plans to invest in real estate full time, grow his real estate sales team, and become an even stronger organization.   Takeaways from our conversation with Will: 1) Stay in the zone. When purchasing (and occasionally selling) a property of any kind, make sure to do your diligence on the zoning of not only the property you are purchasing, but also the zoning of the neighboring in which you’re purchasing. Markets shift constantly, and cities have to keep up with the changes. One way they do this is by changing the zoning of certain areas. That means properties that haven’t been sold in a long time have a good chance that they do not have the same zoning as they once did. To save yourself the trouble in the future, always check the zoning of the property (and neighborhood) and plan accordingly. Quick tip: When doing conversions or additions, this is another time to consider such a topic. Do not overlook code requirements and zoning limits. Making such structural changes to a property may increase your ROI, but it can also inhibit your available exit strategies. 2) Being your own general contractor. What this means is you, as the owner/landlord, take the role and responsibility of hiring subcontractors to complete jobs and tasks as a regular general contractor would. As Will notes, this line of work isn’t for everyone. It takes time, knowledge, and constant attention and communication. On the flip side, the experience can be very empowering and educational. So how can you be a successful general contractor for your properties? As per Will, figure what things cost. Develop your expertise and understanding of labor and materials. Secondly, hire out small tasks. Test your subcontractors with small jobs first and graduate them into larger and larger projects, similar to how your investments will probably go anyway (meaning, your first property probably won’t be a complete tear down). Progress your general contracting skills along with the intensity of your rehabs. And finally, manage and monitor your projects. Stay in constant contact with your subcontractors and take the time to physically visit the work site (or have someone visit the work site for you). Verify jobs are being done correctly, properly, and in a timely manner. 3) Nurturing partnerships. A big part of how Will go to where he is today is thanks to his partnership. Lucky for him, he was able to find someone who suited his strengths and compensated his weaknesses. However, partnerships are much more than that. At the end of the day, you’re dealing with another human being. That means human errors are bound to occur. Do not expect your partner to never make mistakes. That will only lead to disappointment and chaos. Rather, develop a culture of transparency and responsibility, both for yourself and one another. That is how you will mitigate issues and become successful long term. 4) Hospitality services on top of being a landlord. Will also runs an AirBNB unit in his basement. With this kind of investment, Will quickly learned that you aren’t simply managing a tenant, you are also operating a hospitality business. That means that along with the regular duties of maintaining and caring for a unit, you are also expected to deliver a satisfactory experience for your guests. However, with the right systems, most of the time, Will says, “You don’t even notice people are there.”   If Will could go back and talk to his 16 year old self, he’d tell him, “Thank you,” for the relationships that he’s nurtured and the personal responsibility that he’s developed over the years. An unexpected benefit of real estate investing, Will said, was being able to be a part of a community, not just a market. And with that community, he’s built a lot of friendships that transcend real estate. A piece of advice Will would tell his friends looking to get started in real estate would be to know your goal(s) and just get into the game. Build a surplus of capital, preserve that capital, and recuperate that capital as quickly as possible.  Will recommends establishing a Pro Account with Home Depot to not only get discounts, but have a better customer experience. This is especially helpful if you do (or are planning to do) a lot of renovations. Will recommends reading Shoe Dog: A Memoir by the Creator of Nike by Phil Knight to help you find the strength to push through the challenges when times get tough.    If you’d like to get in touch with Will, follow him on Instagram @willbowman10 or contact him at: wbowman@kw.com   Special thanks to our guest host for this episode, Sunitha Rao Feature episode coming soon!   And thank you to everyone that has reached out to us to connect them with our trusted real estate agents in their area! And congratulations to those who have even closed deals using our referrals! For those that didn’t know, we can help connect you with real estate investor friendly agents in your area to help you get started investing in real estate. We recently made some changes to our website that we believe will better suit you in your real estate investing needs. For more information, visit www.millennial-realestate.com and head over to the “Start Investing” Tab. Best wishes and see you in the next one!
Brad Clark had no intentions to even begin investing in real estate. Circa 2019, the only thing Brad knew was that he’d been renting for three years and had no equity or networth to show for it. So he figured he might as well buy a property since he’s going to be paying for housing anyway—that way, he might at least see those payments return back to him one day.   Brad called a  Realtor and began searching for a home. Once again, at this point in time, Brad had no intention to purchase an investment property. He just needed some place to live in. So he half-heartedly put in an offer for a duplex that luckily got outbid because the numbers made no sense from an investor’s perspective. Fortunately, Brad’s Realtor found him a solid duplex in another area with numbers that made sense and House Hack #1 was under way.   From there, Brad was hooked. He had realized the wealth generating power of real estate. He learned as much as he could and consumed information as fast as he could. Not very long after, Brad was on his way to purchasing rentals, doing joint ventures, and dabbling with wholesale deals all while working a W-2 job full time.   Up to date, Brad’s focus is to build his wholesaling team to become a force in the Rhode Island and surrounding markets. His priority is helping out as many people as he can, as much as he can.    Takeaways from our conversation with Brad: 1) What is the difference between wholesaling and wholetailing? Wholesaling is generally defined as putting a property under contract between yourself and the seller, and then finding an interested buyer who you will assign a contract with for a higher price for the same property, thus allowing you to keep the difference as profit. WholeTAILING, on the other hand, is similar in process, with the caveat that you close the original contract agreement and then (generally) do some minor, cosmetic renovations (to sell at or close to retail price), and finally list the property on the MLS or proceed with an off-market buyer as you would with a wholesale deal. Neither strategy is one size fits all (they both exist for a reason), but it doesn’t hurt to have these tools in your tool belt. 2) Gist of setting appointments. Calls from inbound leads can be nerve-racking starting out. You will fumble your sentences, your emotions will be out of whack, and you might even agree to a bad deal. As per Brad: Evaluate the seller’s tone and responses. Feel them out. Next, qualify their condition. Really get a good understanding of their situation, their pain-point, and what you can offer as a remedy. Then, gauge the seller’s price point. Let them throw out their number and evaluate as you go. Don’t be the first to throw out a price. Lastly, offer three (3) scenarios and simply ask if the seller would be willing to accept any of the three. 3) Pre-qualify to subtract, not to add. If marketing for targeted inbound leads is going to be the primary vehicle used to generate your deals, you will get to a point where you might have too many “leads” coming in. Quotations included because many of those prospects might be nothing more than time-wasters looking for someone to chat with. These are objective business conversations. Stick to your agenda and start plucking out said time-wasters. At first you might feel desperate to cling to these leads because they might be the only leads you have. But it’s better to toss bad deals in search of good ones, as opposed to clinging to the bad deals and losing money because of it. 4) Go with the numbers. Even if you might not know a specific market, or have all the data you might want to make the best calculated decision, if you have run the numbers and they make sense, chances are you have a good deal in your hands. At the end of the day, all investing has risks. It’s about how well you can mitigate those risks, not necessarily about trying to eliminate every single one. And one way you do that is by going with the numbers.   If Brad could go back and talk to his 16 year old self, he’d tell him, “Start learning, read books, listen to experts.” An unexpected benefit of real estate investing, Brad said, was simply the experience of getting to help people who have very limited options and provide solutions for them. A piece of advice Brad would tell his friends looking to get started in real estate would be to “Do something, take some sort of action.” It doesn’t have to be perfect (it’s most likely actually going to be messy) but if you know where you ultimately want to be, all you have to do is fill in the gaps in getting there. Brad recommends using the Zillow App to help you do your property diligence on the fly. Just make sure to be logical by what you see (meaning, if a property is a tear down, the Zestimate probably isn’t going to be accurate). Brad recommends reading The Book on Flipping Houses by J Scott as it was the book that first introduced him to real estate investing and ultimately got him started in this business. Honorable mentions: Never Split the Difference: Negotiating As If Your Life Depended On It by Christopher Voss and Tahl Raz & How I Turned $1,000 into Five Million in Real Estate in My Spare Time by William Nickerson.   If you’d like to get in touch with Brad, visit: www.401homebuyers.com or follow him on Instagram @401homebuyers
Circa the beginning of 2019, Tom & Michelle Gendron had just gotten out of debt and were ready to begin investing seriously for their future, both as husband and wife, and as mother and father. They dabbled with the idea of strategically purchasing stocks and holding off on buying rental properties until they had more capital available. Afterall, they were already living in their “forever home,” and were in no rush to become property managers.   Nonetheless, after some intense research and education about the industry, not only did Michelle learn that buying real estate with low capital was a possibility, but that they can do it much sooner than “later down the road.”   Circa the end of 2019, Tom & Michelle had purchased their first out-of-state rental property and were cash flow positive.   Up to date, Tom, Michelle, and their four children are House Hacking in a cozy 900sqft home filled with love and excitement for the financial opportunities ahead. The goal for the next five years is to surpass $10K in passive income to be able to travel the world with their children and grow together as a family.   Takeaways from our conversation with Michelle and Tom: 1) Delay gratification. This is the theme of Tom and Michelle’s entire investing journey. This is how they were able to uproot their life and have the guts to downsize. This is how they embrace the sacrifice it takes and do it as a family. And this is how they will ultimately achieve generational wealth that will enable them to have enough passive income to live the life they so choose. Stop and think about your future self the next time you feel yourself caving into instant gratification.  2) Investing out-of-state in the eyes of a “hands-on” type of person. This was a blessing in disguise particularly for Tom because he considers himself to be a very hands-on person. With their first BRRRR (Buy, rehab, rent, refinance, repeat) property being out of state, Tom was forced to learn how to trust others in taking care of their investment (such as managing the property and completing the rehab work). Furthermore, if you are a hands-on person who wants to have a hands-off business, you’ll be forced to learn to leverage systems to make your investments successful. Don’t shy away from uncomfortable situations, use it as an opportunity to grow. 3) When reading a real estate book (or other books in general), follow along with the action steps contained in the book. It does you no good to read all the how-to books in one sitting and then only remember the last thing you read. And it certainly does you no good, either, not taking action after reading a book as well. So when there are action steps included in a book, follow along and practice the action steps. So when it comes time to take action that counts, you have already gone through the motions and will be less of a novice going in. Take it from Michelle, they found their first property on a classified ad on an online newspaper because the book she was reading mentioned it. She called the number on the ad and instantly got a $5,000 discount on the purchase price no questions asked. 4) Talk to the people outside of a property showing. Whether it be a neighbor or the homeowner themself, it doesn’t hurt to strike up a conversation with anyone who is even remotely associated with the property you are thinking of purchasing. At the very least, you’ll know someone that lives in the neighborhood and have extra “behind the curtain” knowledge about the property. As for Michelle and Tom, on their second property purchase (the triplex they are currently House Hacking), while Michelle was touring the inside of the property, Tom struck up a conversation with the homeowner who was sitting in her car outside in the driveway. In the end, they beat a cash buyer in getting an offer accepted to purchase the property because they had an edge in the relationship with the seller.   If Michelle could go back and talk to her 16 year old self, she’d tell her, “Get outside of your comfort zone. Try all sorts of new things. See what’s out there.” An unexpected benefit of real estate investing, Michelle said, was getting to a financial freedom number. A piece of advice Michelle would tell her friends looking to get started in real estate would be to “Go out and meet people who are doing what you are thinking you want to do.” Michelle recommends using The Facebook Marketplace to help you sell things you don’t need anymore (so you can have more money to invest in real estate!).  Michelle recommends reading The ONE Thing by Gary Keller and Jay Papasan to help you focus on your priorities and accomplish your goals in the best way possible.   If Tom could go back and talk to his 16 year old self, he’d tell him, “Educate yourself on finances. Start early.” An unexpected benefit of real estate investing, Tom said, was the ability to not only imagine, but also achieve early retirement. A piece of advice Tom would tell his friends looking to get started in real estate would be to take initiative. “This is hard to do. But with hard work, it’ll pay off. So if you’re willing to put in the work… there’s a lot of free content out there to learn,” Tom says. Tom recommends using Things app to help you stay productive and accountable with your tasks. Tom recommends reading Extreme Ownership by Jocko Willink and Leif Babin to help you develop your leadership skills for business and life.   If you’d like to get in touch with Tom and Michelle, follow them on Instagram @lifebydesignfamily   Thank you to everyone that has reached out to us to connect them with our trusted real estate agents in their area! And congratulations to those who have even closed deals using our referrals! For those that didn’t know, we can help connect you with real estate investor friendly agents in your area to help you get started investing in real estate. We recently made some changes to our website that we believe will better suit you in your real estate investing needs. For more information, visit www.millennial-realestate.com and head over to the “Start Investing” Tab. Best wishes and see you in the next one!
Nearing the end of his tenure with the military, Ashton Levarek wasn’t too sure where he was headed next. Out of the blue, his brother mentioned to him the opportunity he saw in real estate. After running some numbers, they quickly learned about the industry, and started making offers. This was the genesis of their family-run and -operated business Valkere Investment Group. They started small with two duplexes (four units totals). These were not without their issues, but like all great success stories, they only really remember the lessons. And upon the search for their next project, it was at that point, Ashton’s brother’s wife asked the team, “Why are we only working small deals?” Think about it, it was the same amount of work to acquire and manage the property, why bother working on only a few units at a time when they can simply create the systems and scale endlessly? If Ashton could go back and talk to his 16 year old self, he’d tell him, “Get into it sooner!” An unexpected benefit of real estate investing, Ashton said, was learning how to run a business that has opened a whole new way of life for him and his family. (Personal growth and closer relationships are a plus as well.) A piece of advice Ashton would tell his friends looking to get started in real estate would be to have “Clarity, commitment, and take action.” Be clear about your goals. Commit to your goals daily. With daily commitment, you will never fail with the action you take—you will either succeed or you will learn. Aston recommends using monday.com to track projects within your business, as well as assign different tasks to different people. Ashton recommends reading The Vision Driven Leader: 10 Questions to Focus Your Efforts, Energize Your Team, and Scale Your Business by Michael S. Hyatt to help you develop your vision. Honorable mentions: Never Split the Difference by Christopher Voss and Tahl Raz, Pitch Anything by Oren Klaff, Traction by Gino Wickman, Raising Private Capital by Matt Faircloth, and Best Ever Apartment Syndication Book by Joe Fairless and Theo Hicks If you’d like to get in touch with Ashton, visit:www.valkeregroup.com or follow him on Instagram @valkereinvestmentgroup
Devin Moreno started with nothing but a stable job living paycheck-to-paycheck and $500 to his name. Despite coming from a family of investors (stocks and other businesses), it’s a surprise Devin didn’t actually make the jump to real estate sooner than he did. (And this was one of Devin’s motivations to succeed as much as he has so quickly.) So, coming onto the scene a little later than many Millennials investors, Devin buckled down and learned as much as he could about the real estate industry in six months. He knew he struggled with analysis paralysis so the six month deadline was crucial for him to get started. And just like that, Devin had purchased his very first House Hack using a VA Loan, meaning he was able to purchase the property for 0% down. Since then, he has used this first property as a launching point into the small multi-family space using a combination of conventional and private financing to continue leveraging his investments. Up to date, Devin is closing on his first triplex which will be a BRRRR investment purchase. Devin knows his goals have definitely evolved since he began, and thinks they will continue to change going forward. Right now, the important thing for him is to ensure he continues to invest in properties that excite him and challenge his comfort levels. Our takeaways with our conversation with Devin: 1) Run your business like a business. When Devin purchased his first privately funded deal, he confessed to us that asking people for money was not something he was accustomed to (as we’re sure with many investors starting out). That’s okay. As per Devin’s case, the people he was looking to get funding from were people who also didn’t know much about private financing. So as he learned more and more about deal structure, Devin kept an open line of communication with them and explained to his lenders exactly how the deal was going to work. Along with explanations and his competence, Devin proved he was trustworthy by displaying the business systems he had in place. Lastly, he didn’t take too much money for anyone to handle. Each person who funded his deal lent no more than $10,000. 2) Give yourself deadlines. All too much, we see many eager investors cave into fear and fall prey to analysis paralysis. By giving yourself a deadline (and an honest effort), you will be able to hold yourself accountable and examine your “readiness” from an outside perspective. The goal isn’t to learn and/or analyze everything for your first deal. If that’s the case, you’ll never be ready. The goal is to learn and/or analyze enough to do your first deal. Remember, even if your first deal goes completely wrong, you will still have learned more from those mistakes than you would have had you not taken any action in the first place. 3) Read the fine print. One of the many reasons real estate is such a great investment vehicle are the legal loopholes available to investors’ disposal. However, because many loopholes are popular (and maybe even considered common practice), just one overlook of text or just one uneducated assumption can lead you to a plethora of legal trouble. Have competent advisors and be competent yourself. Make sure your business practices are within the confines of the law and protect yourself and your assets. When it comes to asset protection, “Better safe than sorry” is the motto. 4) Learning your market. You don’t always need to invest where you live (not at all), but the real estate industry and real estate markets are very niche. If you want to be successful, it would suit you well to learn where you are putting your money into. There are many ways to learn a new market. You can assemble a team who knows the area, talk to other investors who invest in the area of interest, or spend time traveling around the area for yourself. For Devin, the third option was the way for him. He invests in Baltimore where the market tends to be “block-for-block,” meaning one street over from another can be a totally different market in and of itself. And that’s okay. Regardless of how you learn your market, with enough due diligence and practice, you will learn your market as well as many others along the way (just don’t fall into analysis paralysis!). Devin knew nothing about Baltimore starting out, but now he can distinguish one “block” from another very easily. If David could go back and talk to his 16 year old self, he’d tell him, “The biggest disappointment is starting this so late. At minimum, paycheck-to-paycheck will not do you any favors.” An unexpected benefit of real estate investing, Devin said, was the confidence boost it gives you knowing you are a homeowner, as well as a business owner. A piece of advice Devin would tell his friends looking to get started in real estate would be to “House Hack—even if that is [your] only purchase ever.” Devin recommends using YouTube to learn and consume all things real estate. Subscribe to Devin’s channel at Devin Moreno Investing! Devin recommends reading Landlording on Autopilot by Mike Butler & Real Estate Investing Gone Bad by Phil Pustejovsky to help you get started on your real estate education. If you’d like to get in touch with Devin, contact him at: devinmorenoinvesting@gmail.com
David Richter began his journey early on, like many folks, immediately after he read Rich Dad Poor Dad. He was still in college at the time, but that didn’t stop him from finding a value-add property he would live in and ultimately lease option after two years, in which he then got out of tax-free. The financial savvy displayed in this first deal would become an entire business for David just a few short years later.   Not too long after that first deal, he came across a startup real estate investing company that was just beginning to grow as he came into the team. With such a dynamic company, and one that was starting to produce large amounts of business, David found himself taking on a larger and larger role within the company. As the company grew its employee base, David jumped from seat to seat in order to make room for the folks coming in and in order to stay afloat.   Then it clicked. With all the new members in the team and all the transactions they do year-over-year, David asked himself, “Are we anymore profitable now than we were before?”   After an in depth analysis of the numbers, David found that the company, despite all the business they were conducting, wasn’t really walking away with as much net profit as they originally thought. And that’s where we meet David in this episode.   Up to date, David is the founder and CEO of Simple CFO Solutions, helping real estate investors large and small take control of their finances and improve their bottom line. He has conducted over 800 deals thus far, and has teamed up with Mike Michalowicz to write Profit First for Real Estate Investors.   Our takeaways from our conversation with David: 1) Payroll and overhead. A company (real estate or otherwise) and become really large but not turn a profit due to these two things. Without control and awareness of the financial expenses tied to payroll and overhead, any revenue produced can easily walk out the door the moment it walks in. This was the problem that David saw as he was beginning his business in helping real estate investors understand and manage their books. Surprising as it seems, business owners many times simply just didn’t know what the numbers meant, nonetheless strategize and execute accordingly. 2) Everything and everyone contributes to the bottom line. From the smallest role to the largest position, if you’re going to be a savvy business owner, you have to know when to hire out jobs and bring in new team members. As a real estate entrepreneur, you’re not selling information or running a virtual business… you need to know what you need, where you’re going, and what you want to do in order to turn a profit at the end of the year. And part of that entails knowing exactly what kind of entrepreneur you want to be and what kind of business you want to run. Do you like doing hands on work or do you prefer a more managerial position? Do you want to do one deal a quarter or 50 deals a month? Only then can you even begin to effectively plan and strategy for execution. 3) Hire for what an employee can do to make the business more profitable, not just to hire out the tasks that need to be done. Once again, everything and everyone contributes to the bottom line. Having someone else do a task that you didn’t make more money or save time from kind of defeats the purpose of having someone else do that task, doesn’t it? What David found was that business owners thought that as long as they brought in more people to do more work, that it would result in more profit. They’re not necessarily wrong in their logic, but it depends on the degree of work those hires would be doing. Did their output in results justify their wage? Remember, bottom line. 4) Steps to hiring a good bookkeeper: 1. Know your numbers, they tell your story. Have, at the very least, enough knowledge about your books and what the numbers mean so you can actually benefit from the services of a bookkeeper. 2. Ask if they’ve done real estate books before and/or if they invest themselves. 3. Ask for references and inquire about previous relationships and work. 4. Throw them softball questions and access their confidence. (According to David, anyone can get the basics of bookkeeping from the general education available, but with real estate, because it is so niche and can get complicated really quickly, it’d be wise to go with someone who really understand real estate bookkeeping, hence the need to ask for real estate bookkeeping experience.) 5. Set up your systems, timelines, and establish open and constant lines for communication    If David could go back and talk to his 16 year old self, he’d tell him, “Read all this stuff earlier… Really know what you want as a person.” An unexpected benefit of real estate investing, David said, was the ability to create generational wealth that can be passed down.  A piece of advice David would tell his friends looking to get started in real estate would be to “Read as much as you can, get educated, and start making offers.” David recommends using Scribd and Goodreads for all your reading and learning needs. David recommends reading The Millionaire Fastlane: Crack the Code to Wealth and Live Rich for a Lifetime! by M. J. DeMarco to help you discern whether real estate is really something you want to do.   If you’d like to get in touch with David, visit: www.simplecfosolutions.com or www.profitfirstrei.net   Thank you to everyone that has reached out to us to connect them with our trusted real estate agents in their area! And congratulations to those who have even closed deals using our referrals! For those that didn’t know, we can help connect you with real estate investor friendly agents in your area to help you get started investing in real estate. We recently made some changes to our website that we believe will better suit you in your real estate investing needs. For more information, visit www.millennial-realestate.com and head over to the “Start Investing” Tab. Best wishes and see you in the next one!
Despite claiming that he left the intellectual role in the family to his brother, Ryan Letzeiser began his real estate journey in college. He went to Michigan State, got his bachelor's, and then shortly made his way over to Clemson University to pursue a master’s architecture. He took Real Estate Development as an elective and almost instantly realized he had gone down the wrong path.   His first summer while in Clemson, he decided to take an internship with a real estate private equity group in Florida as a way to casually dip his toes into the industry to feel out whether he was actually willing to jump ship and dive head first into real estate. Turns out, he loved it!   Some time (and some companies) after that, Ryan decided to do private investments on his own and started a tech company based on managing expenses and insurance for real estate investors. The motivation for this came from the experiences he had during his time working for those large billion dollar organizations in the commercial real estate space. He learned that the “little guys” were often at a disadvantage because they simply could not attract the business of more adequate carriers because they just didn’t make enough on their bottom line.   Up to date, Ryan is the acting CEO of Obie, managing risk for multi-family and commercial real estate investors alike. He looks to continue to grow his personal portfolio, and to continue providing better and better services for his clients looking to navigate their way around the real estate space.    Our takeaways from our conversation with Ryan: 1) As with insurance, you’d want a policy that covers you through and through in any case, but hope you’ll never actually have to make a claim with. And to be fair, that’s only really when you find out exactly what kind of carrier you’re working with. It can get ugly really quickly, Ryan says, and sometimes it is the brokers to blame. These such brokers push for policies in order to attract business that the carrier can’t necessarily handle and it is the investors who pay the price because their bottom line will be greatly affected once it is needed. You want to stay on top of your coverage as well because you don’t want surprises when the time comes to renew or change policies. You need time to choose the best coverage for your specific situation. 2) There are many niches in the real estate industry. If you find yourself in a position to be able to take a role within a large organization or company, it might be worth your while starting out. By working with a larger firm (that doesn’t even necessarily coincide with only investors either), you can learn a lot right away with the insulation of a large company, meaning they will guide you through the deals and issues and even absorb the costs. If you were a sole proprietor, you would have to navigate the waters all on your own with little guidance (if at all) and all the expenses would come right out of your pocket. At the end of the day, real estate investing doesn’t only consist of investors. There are many other people and services out there that investors need for their business. Just look at Ryan. Investors hire his company to manage their individual portfolios because their time (the investor) is better spent elsewhere.  3) The similarities between The Great Recession, The Retail Apocalypse, and today. While we don’t want to speculate on the future, nor do we want to feed into the fear about the economy, there are many similarities that are occurring today that were seen clear as day with hindsight from a decade ago. And truth be told, we probably really aren’t going to see any large effects of this quantitative easing or government stimulus until COVID-19 is all said and done. That will be when the larger shifts and corrections will begin. And the ironic thing is, Ryan said, folks had been predicting a recession (that never came) for years now. And once the economy had finally settled into a smooth cruise, this act of God struck us all and now look at us…  4) Hard times are when you find out what you’re made of. Ryan has now experienced two market downturns and he says that they only made him a better investor both times. And the same can be said for you. It’s easy to get deals and say you’re a great real estate investor when the market makes it so. But when it dries up and deals are far and few, that’s when you really get to roll up your sleeves and work on your craft. You will be tested and if you can handle yourself then, you will come out of the downturn stronger, smarter, and richer.    If Ryan could go back and talk to his 16 year old self, he’d tell him, “It will all work out.” An unexpected benefit of real estate investing, Ryan said, was the ability to grow his network, and more importantly, learn from his network.  A piece of advice Ryan would tell his friends looking to get started in real estate would be to “Make sure that your [partnership] agreements are ironclad,” meaning they are written on paper and signed on the dotted line. Handshake agreements will not suit you well if push were to shove. Ryan recommends using an HP 12C Financial Calculator to help you run the numbers on a deal on the fly. Ryan recommends reading The Art of War by Sun Tzu to help you get insight on how negotiations work, as well as taking an MIT: Real Estate Economics course to help form your foundation on how real estate works in the real world.   If you’d like to get in touch with Ryan, visit: www.obierisk.com or contact him at ryan@obierisk.com Thank you to everyone that has reached out to us to connect them with our trusted real estate agents in their area! And congratulations to those who have even closed deals using our referrals! For those that didn’t know, we can help connect you with real estate investor friendly agents in your area to help you get started investing in real estate. We recently made some changes to our website that we believe will better suit you in your real estate investing needs. For more information, visit www.millennial-realestate.com and head over to the “Start Investing” Tab. Best wishes and see you in the next one!
100: Special 100th Episode

100: Special 100th Episode

2020-09-1001:07:50

We welcome back special guests (and part-time hosts) Lucas Miller (episode #15) and David Pere (episode #35) for this 100th episode special!   At the time of this release, we have had the great fortune to produce episodes with Millennial real estate investors week after week for slightly over two years now. A lot has certainly taken place since it all began.   For one thing, we have put out 99 other episodes! Dan has bought two House Hack properties (refer to episodes #1-99 to learn more about House Hacking). Ben has ventured into assisted living facilities and out-of-state investing. Lucas has left his full time job enabling him to focus on investing in multi-family syndications full time. And David has completely replaced his active income with passive income from his investment properties and other businesses.   But to say it came easily and without challenges would do new and aspiring real estate investors a disservice. Each one of the four of us has lost money, made mistakes, and failed over the last two years. We are not perfect and we don’t always know what we are doing.    And that’s the real takeaway from all this: we are regular Millennial human beings just trying to carve out a better life for ourselves and the people we love… and we just so happened to choose real estate as our main vehicle to do just that. That’s our reality.   It isn’t all glitz and glamour, it takes real effort and commitment, and it won’t come as easily for some as it will for others. It’s just the way life works sometimes. Regardless, go out there, make some offers, close some deals, and have some fun!   Huge thank you to the 90+ guests that were kind enough to speak to us over the past two years. We literally couldn’t have made this show what it is without each and every single one of you.   And to you, dear listener, thank you for tuning in every week and letting us become a piece within your real estate journey. We are overjoyed with the amount of people who decided to act and take control of their financial lives. We love to see your progress and your continued growth. Reach out and tag us on Instagram @millennialinvestorpodcast so we can see and share what you are up to!
Growing up, Alex Kies had no intention of ever becoming a real estate investor. As he said it himself, he was supposed to be a doctor! Instead, he chose the next best thing, and became a musician instead. At 24 years old, he uprooted his life in Missouri and settled into sunny Southern California. Here, Alex would pursue music to eventually become a regional manager for a non-profit music studio builder called Notes for Notes. While he did enjoy his work here, he found that he was beginning to reach a financial ceiling, as well as a life plateau. He wasn’t making the doctor salary he had prepared for earlier in life. On top of that, he felt that he wasn’t fulfilling his full potential in this line of work. He needed a change. He read Rich Dad Poor Dad, found BiggerPockets, and decided real estate was what he was going to pursue next. He found a real estate agent back in his hometown in Missouri who was willing to guide him through his first investment purchase. On his birthday, he made an offer on a value-add property that was accepted in 10 minutes! And that is where we meet Alex in this episode. In the coming years, Alex will continue to help his partners grow their investment portfolio, and he looks to grow his own to 250 rental units! Our takeaways from our conversation with Alex: 1) Manage optimism AND expectations. While his investing history has been, as Alex put it, “Pretty cruise control,” that goes without saying that starting out, he did have a few bumps in the road. On his first property, he expected to earn $1,200 in rental income per month and to this day, he still does not make that much. It isn’t because it’s a bad deal, $1,200 goes a long way in Missouri. It’s because Alex’s expectations were too high. As a result, the unit stayed vacant five months! And when he finally got it rented out, he only collected $900 per month. Starting out is very exciting, but the drawback is you don’t really know how your first deal will actually turn out. Afterall, you have no experience to refer to. Expect the unexpected and don’t expect too much, too soon. Keep your optimism aligned with reality. 2) Due diligence. For residential real estate, rent prices are more about what the market says they will be, and less about what a landlord says they should be. Just because a seller says their property collects strong rents, doesn’t mean that is actually the case. You have to remember they are trying to sell their property for a reason. Run the numbers, understand your market, and be quick to correct if projections need adjustment. Understand the seller’s situations, the property’s conditions, and the market’s circumstances. 3) Problem solving. When purchasing value-add real estate, you must understand that you are buying someone else’s problem. The better you can become at solving problems, the better of an investor you will become. And similar to expectations, plan for problems that you don’t know will even occur. That entails having reserves to pay to solve these problems, as well as the team to get the job(s) done. 4) While competition is good and can be healthy, there’s no point in purposefully making things difficult for yourself and putting yourself in a competitive disadvantage. Play the hand you’re dealt with and use that to your advantage. You don’t always need the same deck of cards that other people have. And a lot of times, we don’t focus enough on our own cards that we can capitalize on. For Alex, the cards in his deck that he used was that he was from the same town that he invests in and he had an agent he worked with that saw his potential early on. For others, it might be their access to capital, previous work experience, or other hidden skills. If Alex could go back and talk to his 16 year old self, he’d tell him, “Don’t go to college, major in real estate!” An unexpected benefit of real estate investing, Alex said, was the opportunity to learn about himself, develop his confidence, and take responsibility for his actions. A piece of advice Alex would tell his friends looking to get started in real estate would be to hire him as their agent… Alex recommends using Google Calendar to stay organized and do all the things you need to do every day. Alex recommends reading Long-Distance Real Estate Investing: How to Buy, Rehab, and Manage Out-of-State Rental Properties by David Greene to learn the same steps he used to buy his first investment property. If you’d like to get in touch with Alex, follow him on Facebook or Instagram @alexkies
Michael Glaspie had his humble beginnings in Texas. Having been born and raised there, he naturally went to college in-state and eventually joined the military. What was a means to pay the bills became a sort of passion for him, as he rose to become a member of the U.S. Army Special Forces, better known as the “Green Berets.”   However, several years into his tenure, he started to question whether there was something more out there for him. Was service all that he was meant to do?   Sure enough, Mike realized that in order to be able to do more with his life, he had to be able to financially support it. In enters real estate investing. Mike purchased his first duplex with less than $2,000 and inadvertently House Hacked without fully understanding what House Hacking even was.   Along the way, Mike experimented with many different strategies and have come to accept rental income as his main vehicle for financial freedom. By having steady, passive cash flow every single month, Mike is able to supplement his once military income and build his portfolio to scale.   Up to date, Mike is a real estate agent and looks to triple (yes, triple!) his investment portfolio within the next five years. He attributes this feat to the people he surrounds himself with, as well as his continued education because that’s what got him started in the first place.   Our takeaways from our conversation with Mike: 1) “Subject-to”: Term is used when a property is acquired “subject-to” the existing financing. The mortgage remains with the same person (seller), but the title transfers over to the new owner, you (buyer). In Mike’s case, it works well with military members who have to sell a property with no equity (because military members usually move every 2-5 years). That way, they can maintain their credit score, not pay money out of pocket to sell their home, and have a pain-free solution to their relocation. 2) AirBNB Arbitrage: “A sexy way of saying a ‘sub-lease,’ which is a sexy way of saying ‘to rent out a rental.’ ” says Mike. His reasons for implementing this strategy are speed and profitably. In other words, to be able to invest quickly with less capital compared to other popular strategies with just as much, or more, return on investment (ROI). There is enough room for creativity in this strategy that other larger investments don’t necessarily allow because of the red tape involved.  While many landlords might not like this idea, there are many benefits to them as well. Some include being able to receive steady income for longer term leases, endure less wear and tear on the unit, and have the peace of mind that the unit is being kept in tip-top shape. 3) Three lessons Mike learned on his first wholesale deal: 1. Don’t be overconfident, always keep the other party’s best interest in mind. 2. Keep out of pocket costs to a minimum. 3. Start with the end in mind. During the early stages of Mike’s real estate career, like we mentioned, he tried many different things. One of which was wholesaling. While it sounded simple enough to him at the time, with hindsight, Mike admitted that he did not make the best decisions on that first deal. As a result, the deal fell apart resulting in lost capital for Mike and housing trouble for the seller. Although he learned his lesson, if he might’ve been a little more cautious, the deal could’ve actually went well. 4) Implement fail-safes. Being involved in short-terms rentals (AirBNB), Mike ensures that he and his team are prepared in case a push were to shove. But this goes for every investment strategy out there all across the board. Whether it be on lease agreements, purchase/sale contracts, or partnerships, just to name a few, have specific terms and agreements in place so that all parties are on the same page, all parties can weather out a storm if one were to arise, and all parties are not put in an uncomfortable or unfair situation during the deal or life of the investment.   If Mike could go back and talk to his 16 year old self, he’d tell him, “Be patient and think about the results of your actions.” An unexpected benefit of real estate investing, Mike said, was the freedom it grants you. With this business, you can truly work for yourself and be self sufficient. A piece of advice Mike would tell his friends looking to get started in real estate would be to “Make the first deal… get started as fast as you can!” Mike recommends using Personal Capital to assist you in all of your financial and accounting needs. Mike recommends reading The Millionaire Real Estate Agent/Investor and The One Thing by Gary Keller, Jay Papasan, and Dave Jenks, as well as The Compound Effect by Darren Hardy.   If you’d like to get in touch with Mike, visit: www.fivepillarsrealty.com or follow him on Instagram @michael.s.glaspie
If you were 19 years old in college, recently just discovered real estate investing, and wanted to get started, how would you propose to do it? Affordably.   Gerrit Van Maanen embarked on his journey to financial freedom almost accidentally. It took place early in college when he and his buddy had to do a reading assignment. Borderline jokingly, the two of them chose Rich Dad Poor Dad as their selection and like most others in this line of business, the rest is history.   As an adolescent, Gerrit was already very entrepreneurial. Growing up in Iowa, he and his brother started and ran a sweet corn business. It would be this same exact brother who Gerrit would partner up with to buy their first duplex together.   Remember how we mentioned Gerrit was in college during this time? Affordable meant that this duplex cost only a tad over $50,000! But that also meant they DIYed the property for over a year! But like any good zero-to-hero story, this was sure to be filled with lessons learned.   From there, Gerrit continued to grow his portfolio through steady rentals, and is looking to experiment with different strategies to spice up his investing a bit. Up to date, Gerrit is the acting project manager for Spartan Investing Group, who specialize in value-add commercial properties all across the United States.   Our takeaways from our conversation with Gerrit: 1) Have reserves available. This was the biggest lesson Gerrit learned from his very first investment purchase. Just because you run your calculations and the pro forma looks good, it doesn’t mean that reality will go as smoothly as the plan. Furthermore, just because you can afford the down payment, it doesn’t necessarily mean you can afford the investment! Costs will add up and budgets will be disrupted. Have reserves available! 2) Simplicity. When working on his first house flip, Gerrit was unsure of his renovation plans. He had many ideas, but that only made making decisions even harder. Having options is a good problem to have (that’s what makes real estate investing so attractive to many people). But at the end of the day, a good problem is still a problem. All too often, in our effort to be great, we lose our footing. Investing is done with the intention to stand the test of time. That is accomplished through simplicity. 3) Versatility. Investors with access to more capital may disagree, but Gerrit prefers small multi-family investments (1-4 units) due to the fact that you can do a lot with these types of properties, in terms of strategies. Generally speaking, what makes larger multi-families more attractive to investors are the paper profits. However, paper profits don't necessarily mean more profit in reality. With small multi-families, Gerrit says, you tend to have longer term tenants. And having low maintenance tenants combined with low turnover units can more than make up for the profits you would otherwise not receive. 4) High quality talent is difficult to find, provide value to the people who need it. When Gerrit discovered Spartan Investing Group (SIG), he instinctively provided value to the company by doing research on his market and presenting it as a potential investment opportunity. Although SIG has yet to take Gerrit up on his offer, that was enough for them to notice Gerrit’s qualities as an important person to have on their team. So when looking for a mentor, employer, or partner, be someone who has high quality talent. The other party is more likely to take notice, and the benefits will be reciprocal (win-win!).   If Gerrit could go back and talk to his 16 year old self, he’d tell him, “Focus on school. Learn more by doing more.” An unexpected benefit of real estate investing, Gerrit said, was the ability to have so many doors open to mentorship. A piece of advice Gerrit would tell his friends looking to get started in real estate would be to “Have $10,000 more than your down payment.” Gerrit recommends using Smartsheet to help you run your real estate business smoothly and efficiently. Gerrit recommends reading Creating and Growing Real Estate Wealth: The 4 Stages to a Lifetime of Success by William J. Poorvu to help you envision real estate investing holistically.   If you’d like to get in touch with Gerrit, visit: spartan-investors.com
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