150: Designing a Lifestyle-Based Real Estate Business with Luke Swab

The BiggerPockets community and platform are constantly evolving and improving. Josh Dorkin and Brandon Turner recently returned from a trip, and while Brandon was away, the BiggerPockets website underwent a rebranding with a new logo and improved site navigation. Additionally, the platform reached a new milestone with 400,000 members. To engage with the community and potentially be featured on BiggerPockets' social media channels, members are encouraged to take a picture of themselves in front of their property and hold up a sign for a quick tip. This is just one example of the active and supportive environment that BiggerPockets fosters for real estate investors of all levels.

BiggerPockets is encouraging its members to share photos of themselves with their rental properties using the hashtag #BiggerPockets on social media, and the organization will share these photos on their own channels. Additionally, the BiggerPockets Podcast is now available on the Android Play Store, and listeners are encouraged to leave ratings and reviews to help the show's reach. For those interested in investing in real estate with no money down, Rent to Retirement offers new construction turnkey rental properties and investor loans with low down payment options. As the market becomes more competitive, finding quality deals can be challenging, and PropStream provides a solution with access to over 155 million properties and advanced search filters to help find motivated sellers. Lastly, BAM Capital is a trusted multifamily syndicator with a strong track record of delivering high returns to investors.

Luke Schwab, a commercial fisherman from Michigan, has turned his unique and challenging lifestyle into a successful real estate business. Starting at the age of 18, he worked for his relative's fishing boat in Alaska for two summers before buying his own boat at the age of 20. Although the job is only for a few weeks a year, he makes a substantial income during that time. The rest of the year, he invests in real estate and has even appeared on TV. Despite the physical demands and short duration of his fishing career, Luke's strategy of making significant income in a short time and utilizing the rest of the year to invest in other ventures has led him to build a successful lifestyle business.

Despite facing challenges in his fishing career, including a poorly rated reality show and unpredictable pay, the interviewee saw an opportunity to invest in real estate. His first attempt didn't work out due to lack of research, but he learned from the experience and continued to pursue real estate as a viable alternative income source. Land contracts, a common method in certain states for buying property with the seller acting as the bank, offer an opportunity for those with limited funds to enter the real estate market. The interviewee's experiences highlight the importance of taking calculated risks and learning from setbacks, ultimately leading to long-term financial growth.

Detroit presents significant investment opportunities, particularly in real estate, despite its challenges. A listener shared his experience of buying his first house in Lansing, Michigan, for $40,000 during a market downturn. He then turned it into a rental property by remodeling and adding an efficiency apartment. Detroit's revitalization, though ongoing, offers potential for savvy investors. The ultimate goal for this investor is to own 40-50 rental properties and live off the income. Real estate allows for passive income and less stress compared to his previous career as a commercial fisherman. Though Detroit may not be for everyone, it's an intriguing market for those seeking substantial returns.

House hacking can lead to significant financial gains through creative living situations and strategic real estate investments. The speaker shares his experience of living rent-free in a house he bought for cash and renting out another property for a good cash flow. He emphasizes the importance of keeping things simple to minimize potential issues and rewards good tenants to maintain positive relationships. The speaker also mentions the importance of finding and retaining good tenants to minimize turnover costs. Despite encountering unexpected expenses like a malfunctioning fridge, the speaker's philosophy is to treat his tenants well to foster a positive landlord-tenant relationship. Overall, house hacking can lead to financial freedom and stability through smart real estate investments and tenant management.

Creating a predictable real estate portfolio is important, but adding "weird houses" or unconventional properties can make it confusing. A clear strategy with consistent tenants and property types can simplify management. The speaker, who has a portfolio of 9 properties, shares his preference for 15-year fixed mortgages to pay off debt faster and have more control over his properties. However, there's no right or wrong answer regarding mortgage terms, and it depends on individual financial situations and goals. The key is to find what works best for you and stick to it.

Having a lifestyle-based real estate business allows individuals to prioritize freedom and enjoyment over working long hours to build a massive business or amass significant wealth. The speaker shares his personal experience of traveling to over 40 countries and observing various cultures, leading him to value experiences and relationships over the traditional American work culture. He emphasizes the importance of finding a balance between working hard and enjoying life, acknowledging that everyone's approach will differ. The speaker's goal is to maintain a professional bum lifestyle, working less and playing more, while still having a steady income from his full-time job and real estate investments. He encourages exploring various ways to supplement or replace income through real estate to build a lifestyle business that supports personal goals and values.

Successful real estate investing requires careful consideration of priorities and selectivity in property choices. The speaker emphasizes the importance of deciding what matters most - time, money, relationships, etc. - and building a portfolio accordingly. He shares his personal experience of prioritizing low-maintenance properties in a specific neighborhood, which allows him to manage his investments effectively with minimal day-to-day involvement. A low-maintenance property, as defined by the speaker, is one without finished basements, easily accessible utilities, and minimal need for major repairs. He also mentions the importance of being selective and paying a premium for turnkey properties to minimize management demands. However, even with a turnkey approach, challenges can still arise, such as the unexpected delays in a current flip project. Overall, the key takeaway is that thoughtful planning, selectivity, and a willingness to adapt can lead to successful real estate investing.

Real estate investing offers various strategies to suit different goals, from living a lifestyle business to building wealth on a larger scale. The speaker shares his experience of separating the job and investment aspects of real estate, and discusses the possibility of adopting a unique strategy of buying, fixing, and selling properties every year for a passive income. He also mentions the importance of considering personal goals when deciding on a real estate investing approach. Additionally, the speaker promotes Quantum Fiber Internet as a solution for enhancing the living experience in multifamily properties.

Technology is revolutionizing various aspects of real estate investing, making processes more efficient and convenient. For instance, Relay offers a 100% online business bank account opening experience with no monthly fees or minimums. Meanwhile, DealMachine provides unlimited access to contact information and phone numbers for leads, saving time and resources. Moreover, both hosts shared their experiences with mistakes in their real estate investing journey. The first host mentioned his current flip house being a miss and the second host shared his story about giving $20,000 in cash to potential sellers on a napkin, which turned out to be a scam. These stories serve as reminders that mistakes are inevitable in real estate investing, but learning from them and adapting to technology can help investors avoid potential pitfalls and streamline their processes.

Entering into real estate deals without proper documentation and due diligence can lead to significant risks and potential financial loss. The speaker in this discussion learned this the hard way when he tried to buy a house from untrustworthy sellers who tricked him into giving them extra money and provided incomplete work on the property. He eventually closed on the deal, but only after a long and frustrating process. To avoid similar experiences, it's crucial to obtain official paperwork and ensure all parties involved are trustworthy and reliable. Additionally, considering buying unfinished deals at a discounted price or completing the project yourself may be safer options than relying on the sellers to finish the work.

Making mistakes is a natural part of the real estate investing journey, and it's important to not let fear hold you back from taking action. The speaker, Luke, shares his experience of making a costly mistake in a handshake deal but emphasizes that he's still moving forward and encourages others to do the same. He believes that everyone is equal in the world of real estate investing and that there's no one right way to do things. College education is not a prerequisite for success in real estate investing, and motivation and self-drive are more important qualities. The BiggerPockets community is a platform where people of all levels can learn, get inspired, and share their experiences. The fire round questions provide practical advice on various topics, such as whether to drop out of college to become a real estate investor or the benefits of using invoicing software like FreshBooks.

Success in real estate, or any field, requires hustle and initiative. Whether it's through working for a company like BiggerPockets or managing your own rentals, it's essential to take action and be proactive. For instance, if you're dealing with a tenant who keeps allowing mold to form due to neglect, consider installing a fan that automatically turns on with the bathroom light to ensure the fan is always running. When it comes to finding a good real estate attorney, consider networking at courthouses during sheriff sales, as these attorneys have extensive real estate knowledge. Lastly, to make a lasting impression at networking events, be consistent and take actionable steps towards your goals. This could include following up with contacts, volunteering to help on projects, or even offering to buy someone lunch to further discuss potential opportunities. Ultimately, the key to getting taken seriously is to demonstrate your commitment and passion for the industry.

Taking action and being serious about real estate goals is crucial for success. This can mean making offers on properties, getting preapproved for a mortgage, and even listening to real estate podcasts to learn. For Luke, podcasts have been a game-changer in his real estate journey. When it comes to learning outside of real estate, Luke enjoys adventure and exploration, as evidenced by his recent brown bear hunting trip in Alaska. Success in real estate investing, according to Luke, comes down to having the ability to "pull it off" in tough situations. This skill, honed from his commercial fishing experience, requires creativity, determination, and a refusal to give up. Luke's favorite business book, "How an Economy Grows and Why it Fails," provides valuable insights into economics and the importance of resilience in the face of challenges.

No matter what obstacles come your way, you can still make things work and achieve your goals. Luke shared a story about how he managed to pull off creating a podcast despite technical difficulties and even sinking his boat twice. He emphasized the importance of not giving up and figuring things out in real estate and in life. When it comes to finding out more about him, Luke suggested checking out his website lukeandnick.com, his Instagram @lukeswab, or his boat for sale on Dock Street Brokers. And for a fisherman's tale, Luke shared his harrowing experience of almost sinking his boat twice and the determination he had to keep going.

Setbacks and challenges are a natural part of the real estate journey, and it's important to keep pushing forward even when things get tough. Luke Schwab shared his experience of a harrowing boat ride during a fishing trip, which kept him awake for days and resulted in him losing money but ultimately leading him to buy a new boat and finish the season successfully. He emphasized the importance of avoiding rocks and staying focused on the goal. The conversation also touched on Luke's appreciation for the real estate investing community and the inspiration he finds in podcasts like BiggerPockets. Additionally, the hosts shared their experiences of watching the show "Fargo" and their recent travels to Ireland, highlighting the beauty and excitement of new experiences. Overall, the conversation underscored the importance of resilience, community, and the pursuit of knowledge and adventure.

Finding the right investor-friendly real estate agent can significantly help you navigate the market and get closer to financial freedom. With BiggerPockets Agent Finder, you can easily connect with local market experts who can assist you in analyzing potential deals and taking confident action. Remember, it's not about timing the market perfectly but rather having a solid strategy and being consistent in your investments. The content of this podcast is informational, and past performance is not indicative of future results. Always consult with qualified advisors before making any investment decisions, and only risk capital you can afford to lose. Visit biggerpockets.com/deals to find your investor-friendly agent today.