Podcast Summary
New Book Launches and Podcast Guest Opportunities: Josh Dorkin and Brandon Turner discuss their new books on rental property investing and management. Listeners can apply to be a podcast guest and leave iTunes ratings/reviews to expand reach. They also promote DealMachine and Rent to Retirement.
The Bigger Pockets Podcast, hosted by Josh Dorkin and Brandon Turner, is dedicated to helping people learn about real estate investing through their experiences and resources. They discussed their recent book launches and encouraged listeners to check out their books on rental property investing and managing rental properties. Additionally, they invited listeners to apply to be a guest on their podcast. They also mentioned the importance of leaving ratings and reviews on iTunes to expand the show's reach. Furthermore, they promoted DealMachine, a service that provides unlimited access to contact information for lead generation and deal making, and Rent to Retirement, which offers the opportunity to buy new construction rental properties with no money down.
Streamline rental property insurance with Steadily.com: Linda transformed a $600,000 debt into a rental property portfolio, inspiring investors to explore real estate for passive income
Modern investors can save time and money on rental property insurance by choosing Steadily.com. Traditional insurance companies can have long lead times and tedious paperwork, but Steadily, founded by landlords, offers fast and affordable insurance tailored to the industry, with next-day coverage available online. Meanwhile, Linda McKissick, an author and investor, shares her inspiring story of turning a debt of $600,000 into a portfolio of over 100 rental properties. Her book, "Hold: How to Find, Buy, and Rent Houses to Build Wealth," offers valuable insights for both new and experienced investors. Linda got into real estate after a economic downturn forced her and her husband out of the nightclub and restaurant business, leading them to explore passive income streams, ultimately choosing real estate as the most accessible option.
From Debt to Prosperity: A Real Estate Success Story: Despite significant debt, transforming it into a real estate portfolio is achievable through determination, hard work, and strategic opportunities.
With determination, hard work, and the right opportunities, it's possible to transform a significant debt into a prosperous real estate portfolio. The interviewee shares her story of going from $600,000 in business debt to owning 108 single family rentals and some nightly properties. Her husband's entrepreneurial spirit led them to own various businesses, including nightclubs and restaurants, but their debt piled up when the market crashed. When they found themselves struggling, her husband suggested she get into real estate sales, and they bought their first three properties while still in debt with the help of a friend. This strategic move marked the beginning of their journey to financial recovery and growth in real estate.
Learning from economic downturns to build wealth: Stay informed, ask questions, and adopt a long-term, sustainable approach to wealth creation to protect against economic downturns and build financial security. Understand the difference between speculation and investing, focus on positive cash flow, and consider Robert Kiyosaki's 'Cash Flow Quadrant' for valuable insights.
During economic downturns, it's essential to assess your financial situation, learn from past mistakes, and adopt smarter strategies for building wealth. The speaker shares how they turned their financial situation around during the savings and loans crisis by taking advantage of opportunities to pay off debts and asking deeper questions about wealth creation. They emphasize the importance of understanding the difference between speculation and investing, with the former involving buying on appreciation and overleveraging, and the latter focusing on positive cash flow. The speaker also advocates for having a simple, effective formula for wealth building and being prepared for economic bumps. They recommend Robert Kiyosaki's "Cash Flow Quadrant" as a valuable resource for learning about different ways to build wealth. Overall, the key takeaway is that by staying informed, asking questions, and adopting a long-term, sustainable approach to wealth creation, individuals can protect themselves from economic downturns and build financial security.
Forming strategic partnerships for real estate investment: New investors can enter real estate market with less capital by forming partnerships, pooling resources and expertise, and sharing risks and rewards
Starting a real estate investment journey with limited funds can be achieved through strategic partnerships. The speakers in the discussion shared their experience of creating a plan to reach their financial goals and realizing they needed a larger initial investment than they had. Instead of being discouraged, they approached a trusted business partner with a lucrative opportunity and formed a successful partnership. This strategy allowed them to pool resources and expertise, enabling them to grow their real estate portfolio. This approach is still recommended for newbies as it provides a way to enter the market with less capital while sharing the risks and rewards with a partner.
Investing with partners for newbies and building wealth: Finding the right partner is crucial for successful real estate investing, leading to significant returns if executed carefully, and can help newbies achieve financial freedom by acquiring enough passive income.
Real estate investing with partners can be a successful strategy for building wealth, especially for newbies if it's their only entryway in. The speaker shared his personal experience of buying properties with partners and how it helped him emotionally tie into his investment plan and eventually find people with similar goals and integrity. He emphasized that finding the right partner is crucial and can bring different strengths to the table. The speaker also mentioned that while partnerships have their complications, they can lead to significant returns if executed carefully. They discussed the concept of a "freedom number," which is the amount of passive income one needs to achieve financial freedom. The speaker and her husband calculated their freedom number to be $250,000 and decided to acquire 20 properties free and clear in 15 years to reach that goal.
Financial freedom through multiple income streams: Multiple income sources lead to financial freedom, enabling important life decisions and flexibility.
Having multiple sources of income and achieving financial freedom is crucial in today's world. The interviewee shares their personal experience of relying on passive income to provide them with the freedom and options to make important life decisions. They emphasized the importance of going beyond one stream of income and encouraged owning businesses, real estate, and leveraging lines of credit to build wealth. The freedom gained from financial security allows for flexibility and choices in life, as illustrated by a personal story of being able to be with family during a difficult time. The interviewee believes that having enough money is not the primary goal but rather the freedom and options it brings.
Using Leverage to Grow a Real Estate Portfolio: Leverage, such as a line of credit, can help real estate investors expand their portfolio during favorable market conditions. The BRRRR strategy is a popular method, but managing multiple properties and deciding whether to pay off mortgages or keep them depends on individual circumstances.
Using leverage, such as a line of credit, can be an effective strategy for real estate investors to grow their portfolio. This was particularly true during the market crash in the late 2000s when interest rates were low and lenders were allowing high loan-to-value ratios. The BRRRR strategy (buy, rehab, rent, refinance, repeat) is a popular method for utilizing this approach. However, managing multiple properties can be complex, and there is no one-size-fits-all answer on whether to pay off mortgages or keep them. It ultimately depends on individual circumstances, risk tolerance, and financial advice. The key is to keep moving forward and taking action despite the uncertainty. Overanalyzing can lead to paralysis, so having a clear "why" for investing can help guide decision-making.
Formula for Successful Real Estate Investing: Aim for a 70 to 30 loan-to-value ratio, $150-$200 monthly cash flow, 15-year mortgage, and 10% below market value purchase price. Adjust based on personal circumstances.
Successful real estate investing involves a well-thought-out formula and a long-term perspective. The formula includes a 70 to 30 loan-to-value ratio, a cash flow of $150 to $200 a month, financing on a 15-year mortgage, and a purchase price 10% below market value. The strategy also involves considering one's personal circumstances, such as age and income, when deciding on mortgage terms. Appreciation is an added bonus that can significantly increase returns. It's important to remember that every investor's situation is unique, and what works for one may not work for another. The key is to learn the fundamentals, make informed decisions, and adjust strategies as personal goals and circumstances change.
Hating your job can fuel emotional motivation for real estate investing: Identify clear investment criteria to make informed decisions, prioritize goals, and avoid potential pitfalls in real estate investing. Emotional motivation can lead to financial freedom and a passion for the industry, but therapy can help discover true priorities and maintain balance.
Emotional motivation can be a powerful catalyst for taking risks and making significant life changes, such as quitting a job or starting a real estate investment business. Hating one's job can serve as a strong driving force to overcome the fear of the unknown and take action towards a more fulfilling life. However, it's essential to identify and prioritize one's goals and criteria to ensure success in real estate investing. As Linda shared, having clear investment criteria, such as a desired LTV ratio, cash flow, financing terms, and property type, can help new investors make informed decisions and avoid potential pitfalls. And even after achieving financial freedom, the desire to continue investing may stem from a passion for the industry or the pursuit of greater returns. Therapy can also be an effective tool in discovering one's true priorities and motivations, leading to a more balanced and fulfilling life.
Embrace new opportunities for growth: Increased wealth opens doors to positive impact and team building for personal and community growth
The journey of achieving financial success and personal growth involves getting up and putting energy into something new and exciting, whether it's nightly rentals, real estate investments, or other ventures. The goal is not just about reaching a certain number or financial milestone, but rather about becoming and helping others do the same. As the speaker has learned, the more options and opportunities that come with increased wealth can lead to making a positive impact on loved ones and the community. Building a team to manage and grow businesses is also essential once a certain level of success is reached.
The importance of having the right people in place for a successful real estate business: Hiring a dedicated property manager led to better property management and increased focus on growing the business. Focusing on single family homes instead of multifamily properties provided a larger upside for retail investors and preferred cash flow.
Building a successful real estate business relies heavily on having the right people in place. The interviewees shared their experience of owning a property management company and the challenges they faced, leading them to hire a dedicated property manager for their current portfolio. This arrangement has proven to be beneficial as the manager is fully invested in ensuring their properties are rented and well-maintained, while they avoid additional fees and the distraction of managing multiple properties. The importance of having great people on board was a recurring theme throughout the conversation, echoing the BiggerPockets phrase "get people on the bus." Another key takeaway was the interviewees' decision to focus on single family homes instead of multifamily properties. They found that their end buyers were typically retail investors, allowing for a potentially larger upside. Additionally, they preferred the cash flow from single family homes, as opposed to the focus on cash flow in multifamily properties, making it easier to sell to another investor. As their priorities and circumstances have changed over the years, they have also explored commercial properties, but their focus remains on single family homes. Ultimately, the success of their real estate business is a testament to their commitment to finding and working with great people, and making informed decisions based on their unique goals and circumstances.
Real Estate Agents Should Consider Investing in Real Estate: Agents can expand their income and secure their future by investing in real estate, but many prefer to focus on their current role and commissions, hindering long-term growth.
The speaker, Brandon Turner, and his partner, Jim, have built their wealth in real estate by owning multiple businesses within the industry. They own several Keller Williams real estate franchises and the regional rights for franchises in Ohio, Indiana, and Kentucky. They don't need the commissions from being agents, but rather the investments from deals brought to them. Turner emphasizes that agents, including his partner Linda, should consider investing in real estate as part of their business, but many don't due to comfort and focusing on the present rather than planning for the future. Turner and Jim have been teaching real estate investing for over 20 years and have seen a gradual increase in agents who invest, but the trend is still slow.
Agents Missing Out on Real Estate Investing and Education: Agents, especially experienced ones, often overlook real estate investing and education due to risk aversion and lack of long-term planning. Companies can help bridge this gap by offering resources and education to agents, enabling them to provide informed advice to clients and build multiple income streams.
Real estate agents, especially those who have been in the industry for a long time, often miss out on creating passive income and educating themselves about real estate investing. This is due in part to human nature's risk-averse tendencies and a lack of long-term planning. Moreover, many brokerage firms don't prioritize educating agents about investing, leaving most agents ill-equipped to help their clients make informed decisions. This is concerning, as inexperienced agents can lead new investors into bad deals. To address this issue, some companies offer education and resources for agents to learn about investing and generate multiple income streams. Ultimately, agents who invest in their own knowledge and skills can not only improve their own financial situations but also better serve their clients.
Long-term investment goals guide decisions on when to exit or hold properties: A clear investment goal, commitment from the investor, and the right exit strategy can lead to successful real estate investments. Long-term passive income may require holding onto properties until they're paid off, while student rentals offer consistent demand. Avoid being too lenient with rent collection and consider professional management.
Having a clear long-term investment goal, such as passive cash flow, can help investors make informed decisions about when to exit or hold onto their properties. The importance of the person behind the investment was also emphasized, as their character and commitment can significantly impact the success of the investment. Regarding exit strategies for buy-and-hold investors, the goal and end game should dictate the strategy. For instance, if the goal is long-term passive income, holding onto the property until it's paid off may be the best option. As for student rentals, they can be a great investment due to the consistent demand, especially for properties near colleges. Lastly, the worst landlord headache mentioned was early on when they were too lenient with collecting rent and getting emotionally involved with tenants, leading to the need for professional management. Favorite real estate and business books included "Building Wealth One House at a Time" by John Schaub and "The One Thing" by Gary Keller, respectively.
The power of emotional connection in real estate investing: Being emotionally invested in the freedom and control that real estate investing offers can help push through challenges and lead to success.
Having a strong emotional connection to your reasons for investing in real estate can make all the difference between success and failure. Linda McKissick, a successful real estate investor, emphasized the importance of being emotionally invested in the freedom and options that real estate investing provides. She shared her personal story of being driven by the desire for control and freedom, which helped her push through challenges and continue investing despite setbacks. McKissick also suggested that considering the long-term consequences of not investing could be a powerful motivator. To learn more about McKissick and her approach to real estate investing, check out her book "Hold, How to Find, Buy, and Rent Real Estate to Build Wealth," available on Amazon or her website, lindamckissick.com. Additionally, by texting "rentals" to 33444, you can receive a free link to watch the process of refurbishing one of McKissick's investment properties.
Staying focused, adaptable, and positive are key to real estate success: With dedication, a positive mindset, and a well-thought-out plan, anyone can invest in real estate and achieve financial freedom.
Real estate investing is not a one-size-fits-all endeavor, and having the right mindset and a solid plan are crucial to success. Linda McKissick, a guest on Bigger Pockets Radio, emphasized the importance of staying focused and adaptable while maintaining a positive attitude. She encouraged listeners to believe in their ability to invest in real estate and to create a plan that fits their unique situation. The conversation covered various strategies and approaches, with Linda emphasizing the importance of networking and learning from others in the industry. Overall, the key takeaway is that with dedication, a positive mindset, and a well-thought-out plan, anyone can invest in real estate and achieve financial freedom. Don't forget to check out the show notes at biggerpockets.com/show153 for more resources and information.
