Podcast Summary
Holiday season is great for real estate investing: Take advantage of holiday season opportunities, banks motivated to sell REOs, hustle and find deals online
The holiday season can be an excellent time for real estate investing, as many people are focused on the holidays and banks are motivated to sell REOs. Mindy Jensen, filling in for Josh Dorkin on the Bigger Pockets Podcast, shared her experience of finding great deals during this time of year. She encourages investors not to take a break and instead, hustle and take advantage of the opportunities available. It's important to remember that the internet is always on, and deals can be found even during the holiday season. This tip goes against the common belief that the holidays are a time to take a break from investing, but with determination and effort, investors can make the most of this period and add to their portfolio.
Revolutionizing Real Estate Investing with Technology and Partnerships: Access reliable contact info for skip tracing with DealMachine, invest in turnkey rentals with no money down through Rent to Retirement, and simplify vacation home ownership with Vacasa. Creative tip: Offer a big screen TV for timely rent payments.
Technology and strategic partnerships are revolutionizing various aspects of real estate investing. DealMachine has transformed the game by providing unlimited access to reliable contact information for skip tracing, while Rent to Retirement offers the opportunity to invest in turnkey rental properties with no money down. Vacasa simplifies vacation home ownership by managing properties and generating higher revenues for homeowners. Matt and Liz Faircloth, New Jersey real estate investors, shared their success story of acquiring a 49-unit apartment building despite initial resistance from the broker. Their creative tip for ensuring timely rent payments involves giving away a big screen TV. To engage further in these topics and learn more from Matt and Liz, listen to their previous appearance on the Bigger Pockets podcast (episode 88) and consider leaving a rating and review for the show.
Making a positive impact through real estate investing: Successful real estate investors have a strong motivation beyond just making money and approach their business with a focus on both capital gains and cash flow deals, requiring hard work and dedication. They make a positive impact in the world and currently focus on Mercer County, New Jersey.
Successful real estate investing is driven by a strong motivation or "why" beyond just making money. The interviewees shared their personal "why" of making a positive impact in the world through real estate, and they approach their business with a focus on both capital gains deals for large profits and cash flow deals for steady income. They also emphasized that real estate investing requires hard work and dedication, and a balanced approach with both types of deals can lead to financial success. The interviewees shared their personal journey of starting with a small investment and growing their portfolio through a combination of flips and rentals, and they currently focus on the Mercer County, New Jersey area for their business.
Managing Labor for Fix and Flips: GCs vs Hourly Workers: GCs ensure projects are completed efficiently and within budget, while partnerships provide access to trusted labor and resources. Trust and relationships are crucial for successful partnerships.
Managing labor for fix and flips can be a challenge, especially when hiring hourly workers. While it may seem cost-effective to pay for labor wholesale, it can lead to inefficiencies and unexpected costs. Hourly workers may not be as motivated to work efficiently or use the best materials for the job. Hiring a general contractor (GC) or forming strategic partnerships are alternative solutions to manage labor effectively. GCs can help ensure projects are completed on time and within budget, while partnerships can provide access to trusted labor and resources. The speaker also emphasized the importance of trust and relationships in successful partnerships, which can be fostered through platforms like BiggerPockets.
Add value and be a resource on online forums: Offer value, be patient, build trust, offer to help in simple ways, and be proactive to build meaningful relationships on online forums like BiggerPockets
Building meaningful relationships on online forums like BiggerPockets requires adding value and being a resource to others. Don't just ask for help, but offer it as well. Be patient and put in the time to build trust and rapport. Even if you're new to real estate or have limited experience, you can still offer value in other areas. And remember, there's no such thing as a stupid question, but be specific and clear in your requests for help. Additionally, offering to help in simple ways, like answering phones or sweeping floors, can lead to valuable learning experiences and mentorship opportunities. So, be proactive, be a resource, and build relationships based on mutual respect and value.
Mentorship in Real Estate: A Mutually Beneficial Relationship: Both mentors and mentees should give and take, leading to successful partnerships and valuable insights. Clear parameters for good deals help guide mentees towards profitable investments.
Mentorship in real estate is a mutually beneficial relationship. Both parties should aim to give and take. While everyone desires a mentor, not everyone is willing to help out. Offering assistance, such as finding deals, can lead to successful partnerships. This approach not only helps expand your network but also saves time by filtering out those who may not be committed. The mentor can provide valuable insights and education, while the mentee can bring new opportunities to the table. By setting clear parameters for good deals, mentors can guide mentees and potentially discover profitable investments together. Additionally, scaling back parts of a business, such as construction, can be a necessary decision to focus on more profitable areas. Overall, the key is to maintain a give-and-take mindset in all business relationships.
Making tough business decisions, like letting go of employees, can be difficult but necessary.: Making tough decisions, such as letting go of employees due to financial instability, can be difficult but necessary for business success. Consistent profitability is crucial.
Managing a business involves tough decisions, including letting go of employees when necessary. Our interviewee shared his experience of having to let go of a team that handled their fix and flips and renovations due to financial instability. This was a difficult moment as it affected people's livelihoods. The decision was made when the numbers showed that the business was consistently going over budget, and there was uncertainty about its future profitability. The interviewee and his partner had to sell some real estate to pay off debts. While it was a tough situation, they learned that everyone makes mistakes and that it's essential to take accountability for them. They also realized that consistent profitability is crucial for business success. The experience taught them valuable lessons about themselves and the importance of making tough decisions for the betterment of the business.
Acknowledging business misalignments and pivoting: Recognizing when a business strategy isn't working and pivoting to focus on strengths and delegate tasks can lead to better business outcomes.
It takes courage and self-awareness to acknowledge when a business strategy isn't working and pivot in a new direction. Liz and Matt, the founders of a media company, shared their experience of cutting ties with a business partner who was not contributing positively to their projects. This decision was difficult but ultimately led to a profitable year for their business. They learned that focusing on their strengths and delegating tasks that don't align with them can lead to better business outcomes. It's essential to assess the value of continuing a business practice based on personal strengths and the potential return on investment. In their case, they found a reliable general contractor through a previous business relationship and have since focused on their core competencies.
Trust and reliability in GC relationships: Finding a reliable GC saves time and ensures quality work. Negotiate prices but maintain good relationships. Start with a lower budget to play the game, or be upfront about expectations.
Building a strong network of trusted general contractors (GCs) is crucial for real estate investors. The speaker shared his experience of training a GC from scratch and expanding his network through existing relationships. He emphasized the importance of predictability in using a GC, as the cost is known, but managing time becomes a variable. Initially, the speaker would not disclose his budget to GCs, but as trust and repeat business grew, he began to share it. The speaker advised that negotiating prices can be done, but it's essential to find a balance between transparency and maintaining good relationships. When starting out, it's common for GCs to ask for a budget, and the speaker suggested knocking off 10-15% to play the game, but being upfront about expectations can also be effective. Ultimately, having a reliable and experienced GC can save time and ensure quality work, making it a valuable investment for real estate investors.
Cost of renovating a property based on square footage is a helpful estimate but every house is unique, especially with age.: When hiring contractors, be cautious and ensure they're trustworthy. Look for clear communication, a well-defined payment schedule, and thoroughly vet them before hiring.
Estimating the cost of renovating a property based on square footage can be helpful, but every house is unique, especially with regards to age. When it comes to dealing with contractors, it's essential to be cautious and ensure they are trustworthy. Bad contractors may disappear with advance payments, underbid jobs, or hide issues from you. Honesty and transparency are crucial in maintaining a good working relationship. One sign of a bad contractor is their reluctance to be open about project progress and financials. Unfortunately, contractors have been known to steal money or disappear, leaving unfinished projects. It's recommended to find contractors through trusted sources and thoroughly vet them before hiring. Always ensure clear communication and a well-defined payment schedule.
Investing in strong contractor relationships: Paying well, respecting work, flexibility, clear communication, prompt payment, and loyalty incentives build strong contractor relationships, saving time, money, and stress in the long run.
Building strong relationships with reliable contractors can save you time, money, and stress in the long run. Once you find good contractors, keep them by paying them well, respecting their work, and being flexible with budgets. Even if they underbid a project, consider rewarding them with a bonus or quick payment to build loyalty and ensure their continued availability for future jobs. Effective communication and a clear payment schedule can help maintain a positive working relationship. Additionally, prioritizing prompt payment can be a significant incentive for contractors, especially those who may struggle with their finances. Overall, investing in strong contractor relationships can lead to a more successful and efficient fix and flip business.
Discovering Your Preferred Approach to Real Estate Entrepreneurship: Successful real estate entrepreneurs find their unique balance between self-managing and hiring professionals, prioritize peace of mind with home security systems, and make time for mental health through online therapy.
Successful real estate entrepreneurs like Mindy and her husband find what works best for them in their unique situations, whether that means doing some projects themselves or hiring professionals for others. Real estate is a personal endeavor, and it's essential to discover your preferred approach to building an empire. Mindy's experience of self-managing some projects while hiring for others has led to their success, and it's crucial to find the balance that suits your personal health and resources. Moreover, the discussion highlighted the importance of peace of mind in real estate ventures. SimpliSafe's home security system offers just that, with high-tech sensors, professional monitoring, and affordable pricing. By installing it yourself, you can save time and money while ensuring your property's safety. Lastly, the conversation emphasized the value of therapy in making time for what truly matters in life. BetterHelp's online platform provides access to licensed therapists, allowing you to prioritize your mental wellbeing and find balance in your daily routine. Overall, the discussion offered insights into various aspects of real estate entrepreneurship, leadership, and personal growth. By embracing unique approaches, finding peace of mind, and prioritizing mental health, individuals can navigate the complex world of real estate and build successful ventures.
Growing a Real Estate Portfolio: From Small to Large-Scale Projects: Assessing capabilities, building trust with investors, and thorough due diligence are crucial for successfully growing a real estate portfolio. Finding the right deals through brokers and clear communication can lead to significant returns.
Setting ambitious goals and methodically growing your real estate portfolio can lead to significant returns. The speakers shared their experience of increasing their property size from an 18-unit building to managing over 100 units and eventually purchasing a 49-unit apartment building. They emphasized the importance of assessing your capabilities and building trust with investors before taking on larger projects. The deal for the 49-unit building was found through a broker, and they were able to secure it after another buyer's offer fell through due to a hidden balloon payment on the seller's mortgage. This experience highlights the importance of thorough due diligence and clear communication in real estate transactions.
Meeting with the owner directly and demonstrating experience led to better deal: Direct communication with property owners and showcasing a solid track record can lead to better deals and financing opportunities in real estate.
Having a strong network and a solid track record in real estate can help you negotiate better deals and secure financing, even when facing competition. In the discussed scenario, the investor and his team were able to purchase a property above their initial offer after meeting with the owner directly, and they secured a non-recourse commercial loan by presenting their financials and demonstrating their experience. Additionally, they hired a property management company that shared equity in the building to ensure alignment of interests and profitability. This strategy of involving the management company in the profitability of the building is a different approach the investor had learned from managing their own properties and could be a valuable tip for other real estate investors.
Building strong relationships with local partners: Effective real estate investing in multi-family properties involves more than just collecting rent checks. Trusted local partners provide valuable insights and on-site presence. Engage property stewards, treat them well, and remove bad apples.
Successful real estate investing, especially in multi-family properties, involves more than just collecting rent checks. It requires active management and local involvement. Building a strong relationship with trusted local partners, even if they are family members, can provide valuable insights and on-site presence. Transitioning management of an underperforming property can be a lengthy process, and tenants may react negatively to new ownership. However, it's essential to find and engage the property stewards, who treat the property as their own, while addressing and removing the bad apples. These stewards don't necessarily require incentives, but they do want to be heard and appreciated for their dedication to the property.
Creating a Positive Tenant Experience for Long-Term Occupancy: Treating tenants with respect and offering incentives can lead to long-term occupancy and happiness. Keep it local for educational and investor comfort reasons when investing in larger multifamily properties. Properly screen tenants and their guests to ensure a positive living experience for all.
Creating a positive tenant experience can lead to long-term occupancy and happiness. The speaker shared an example of a tenant who had lived in one of their buildings for 25 years, emphasizing the importance of treating her home with respect to keep her satisfied. They also discussed incentivizing tenants with a yearly flat screen TV giveaway, which not only rewards good tenants but also impresses new ones. The speaker advised that for first-time investors in larger multifamily properties, it's generally best to keep it local for educational and investor comfort reasons. Lastly, they addressed a situation where a tenant brought in an unauthorized additional adult, suggesting that proper paperwork and background checks should be completed to ensure proper tenant screening and information gathering.
Managing rental properties with a property management company: Reputable property management software is crucial for clear communication and reporting. Start with Single Family Rentals for first-time investors, or consider private loans, passive investments, or a mix.
Property management companies can handle various aspects of managing a rental property, including day-to-day tasks and bookkeeping. However, the level of involvement can vary greatly between companies. Some may provide detailed financial statements, while others may only offer basic reports. It's essential to use a reputable property management software and ensure that both the property manager and the investor are using the same system for clear communication and reporting. For those with significant capital to invest, starting small with Single Family Rentals (SFRs) is recommended, especially for first-time real estate investors. Alternatively, private loans, passive investments, or a combination of both can offer attractive returns without requiring full-time involvement. Regarding favorite real estate-related books, the speaker mentioned "Rich Dad Poor Dad's OPM: Other People's Money" as a valuable resource for understanding how to work with other people's money in real estate investments.
Learning from Books: Real Estate and Business Insights: Successful investors continue learning from books, with favorites like Rich Dad's OPM, Scaling Up, and As a Man Thinketh, providing insights on raising capital, structuring deals, growing businesses, and maintaining a positive mindset.
Successful real estate investors, like Matt and Liz, continue to learn and apply valuable insights from various resources, both real estate and business-related books. Rich Dad's OPM by Robert Kiyosaki remains a favorite for raising capital and structuring deals, while Scaling Up by Gazelles and As a Man Thinketh by James Allen provide invaluable guidance on growing businesses and maintaining a positive mindset. Outside of real estate, hobbies such as making wine and watching Gilmore Girls bring balance and joy to their lives. The key to success for investors, as Laura emphasizes, is maintaining a mindset of persistence and determination, believing that there is always a way to overcome challenges and achieve goals.
Staying Positive and Overcoming Obstacles in Real Estate Investing: Maintain a growth mindset, learn from mistakes, and stay determined to overcome setbacks in real estate investing
In real estate investing, there will always be challenges and setbacks, but it's important to stay positive and keep moving forward. Matt and Liz Faircloth shared their experiences of dealing with losses and setbacks, and how they learned to shake them off and keep going. They emphasized the importance of having a growth mindset and believing that there is always a way to overcome obstacles. They also highlighted the value of learning from mistakes and applying those lessons to future successes. Overall, their message was one of resilience and determination in the face of adversity. You can find more about the Durosa Group and their resources, including their YouTube channel and website, in the show notes or by searching for "Durosa Group" on YouTube.
Learning from Passionate Individuals: Staying engaged and open to new ideas, even during daily routines, can lead to significant improvements and learning opportunities through various mediums like podcasts, audiobooks, or in-person conversations.
Listening to passionate individuals, like Matt and Liz from the BiggerPockets podcast, can lead to numerous ideas and inspirations for personal and business growth. The hosts, Brandon and Mindy, often find themselves taking notes while listening, even while driving, demonstrating the impact of such conversations. The importance of staying engaged and open to new ideas, even during daily routines, can lead to significant improvements and learning opportunities. Whether it's through podcasts, audiobooks, or in-person conversations, maintaining a curious mindset is essential for personal and professional development.
Connect with local market experts for real estate investing success: Use BiggerPockets Agent Finder to connect with investor-friendly real estate agents and navigate the real estate market for long-term success and financial freedom
Finding the right investor-friendly real estate agent is crucial for success in real estate investing. The market can be unpredictable, but staying in it long-term is key to achieving financial freedom. With BiggerPockets Agent Finder, investors can easily connect with local market experts who can help navigate neighborhoods, analyze numbers, and take confident action. This free resource is available at biggerpockets.com/deals and can help investors get closer to their financial goals. Remember, past performance is not indicative of future results, and all investments involve risk. Always consult with qualified advisors before investing.