Millennial Real Estate Investor

Latest Episodes:

107: BRRRR’s in Baltimore with Will Bowman Nov 05, 2020

Show notes

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!

106: Finding, Qualifying, and Closing Wholesale Leads with Brad Clark Oct 29, 2020

Show notes

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

105: Full-House House-Hacking with Tom & Michelle Gendron Oct 15, 2020

Show notes

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!

104: Turning Family Partnerships into a Scalable Business with Ashton Levarek Oct 08, 2020

Show notes

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

103: Residential Multi-Family House Hacking with Devin Moreno Sep 30, 2020

Show notes

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

102: Bookkeeping for a Profitable Bottom Line with David Richter Sep 24, 2020

Show notes

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

101: Making Rental Insurance Easier with Ryan Letzeiser Sep 17, 2020

Show notes

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

100: Special 100th Episode Sep 10, 2020

Show notes

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!

99: Small-Town Long Distance Investing with Alex Kies Sep 03, 2020

Show notes

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

98: AirBNB Arbitrage, Creative Financing, and Wholesale Lessons with Michael Glaspie Aug 26, 2020

Show notes

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

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