Podcast Summary
Learning is Key in Real Estate Investing: Focus on essentials, learn as much as possible, and build a supportive network in real estate investing.
Education is crucial in real estate investing, and it's essential to understand the ins and outs of an investment before diving in. Josh Dorkin, the host of the Bigger Pockets podcast, emphasizes this point and encourages listeners to learn as much as they can before investing. In this episode, they welcomed a doctor as a guest, who helped diagnose Josh's health issue. Before the discussion on health, they talked about the importance of focusing on essential things and not wasting time and energy on non-essential matters, as discussed in the book "Essentialism." Additionally, a surprise visit from a podcast guest, Darren Sager, brought excitement to the Bigger Pockets team as he bought lunch for everyone. These small moments reminded the team of the importance of community and kindness in the real estate investing world. Overall, the episode highlights the significance of learning, focusing on essentials, and building a supportive network in real estate investing.
Exploring Real Estate Investment Opportunities with Minimal Upfront Capital: Explore turnkey rental properties through DealMachine and Rent to Retirement, invest passively in mortgage funds like Pine Financial Group, or join a community of investors on BiggerPockets.com. Remember, some investments may require accredited investor status.
There are various strategies for investing in real estate with little to no upfront capital. DealMachine and Rent to Retirement offer opportunities to buy turnkey rental properties with little to no money down, while Pine Financial Group's mortgage fund provides passive income through lending to house flippers. Additionally, BiggerPockets.com offers a platform for users to invite others to join and learn about investing together. Remember, for some investments, like those with Pine Financial Group, accredited investor status is required. So, explore these options and consider which one aligns best with your investment goals and comfort level.
Private lending in real estate: An alternative investment strategy: Dr. Kenyon, a radiation oncologist, shares his experience of investing in real estate through private mortgage lending for control, potential tax benefits, and hedge against inflation. Networking and seeking advice from trusted sources can lead to valuable opportunities.
Private lending in real estate is an attractive alternative investment strategy for those seeking to diversify beyond traditional stocks, bonds, and mutual funds. Dr. Kenyon, a radiation oncologist, shares his personal experience of getting into real estate through private mortgage lending after having had negative experiences with traditional investing. He emphasizes the importance of careful due diligence and learning the process before diving in. This strategy allows investors like Dr. Kenyon to have more control over their investments and potentially avoid the volatility of the stock market. Alternative assets, including real estate, offer investors a hedge against inflation and taxes. Dr. Kenyon's introduction to private mortgage lending came from a pastor he met at a dinner party, demonstrating that building a network and asking for advice from trusted sources can lead to valuable investment opportunities.
Building trust with borrowers and understanding real estate terms: Private lending involves evaluating borrowers' track records, understanding ARV, loan to value, and interest payments, structuring monthly payments for accountability, and protecting against potential losses with a protective cushion.
Getting started with private lending involves building trust with potential borrowers, understanding key real estate terms, and structuring payments to ensure timely repayment. The speaker shared his experience of his first private lending deal, emphasizing the importance of evaluating a borrower's track record and understanding concepts like ARV (After Repair Value), loan to value, and interest payments. He recommended monthly payments to keep borrowers accountable and motivated to complete projects on time. Additionally, he discussed the importance of having a protective cushion by loaning less than the ARV. This way, even if the property doesn't sell for the expected price, the lender is still protected. The speaker also mentioned that the structure of payments can vary, with monthly payments or a lump sum payment at the end, each having its advantages and disadvantages. Overall, private lending offers attractive yields, but it requires careful consideration and due diligence.
Proven track record is key for real estate investors seeking loans: Lenders prefer experienced investors with successful projects and solid financials. New investors should thoroughly vet potential partners and demonstrate persistence to secure funding.
When it comes to lending money for real estate investments, having a solid track record and proven ability to execute successful projects is crucial. Lenders prefer to work with experienced investors who can demonstrate their capability to manage projects and repay loans. For beginners without an established track record, it's essential to thoroughly vet potential investors by checking their company records, speaking to past clients and contractors, and assessing their volume of projects and financial stability. Persistence and determination can also help new investors find private lenders willing to support their first deal.
Starting with inner circle for funding in real estate: Beginners should seek funding from their network for their first deal to minimize risk and build trust.
When starting out in real estate investing, it's generally advisable to secure funding from within your initial circle rather than relying on an outside investor for your first deal. This reduces the risk of unforeseen issues and helps build trust and experience. Additionally, during our interview with Kenyon, we introduced a new segment called "Random 5," where we ask guests some unexpected questions. We asked Kenyon about his irrational fears, awards, advice for his 15-year-old self, and his worst haircut. Kenyon shared that he's afraid of pickles, won an academic award for football, would tell his 15-year-old self to focus on his education, and had a memorable high top fade haircut experience in high school.
Learning from Experienced Mentors in Private Lending: Seek knowledge through education, books, podcasts, and networking. Transitioning from private lending to turnkey rental properties can offer benefits, but consider tax implications and seek advice from industry experts.
Knowledge and mentorship are crucial when entering the private lending business or any new investment opportunity. Dr. Kenya McNeil emphasized the importance of education and gaining a solid understanding of the industry through books, podcasts, and networking with experienced mentors. This upfront work can lead to long-term, productive relationships. Another key point from the discussion was Dr. McNeil's transition from private lending to buying turnkey rental properties. He initially resisted this investment approach due to perceived hassles but was eventually persuaded by a mentor. Turnkey properties are pre-purchased, fully-renovated rental properties that investors can buy and rent out without the need for extensive property management. Dr. McNeil's experience highlights the value of seeking advice from industry experts and the potential benefits of owning physical real estate investments. Regarding the tax implications of private lending, the interest payments are not taxed favorably and are considered ordinary income. This contrasts with the favorable tax treatment on rental property income, which includes depreciation and other tax benefits. Overall, the conversation provided valuable insights for individuals considering alternative real estate investments and the importance of learning from experienced professionals.
Investing in Turnkey Real Estate: Hassle-Free but Requires Due Diligence: Turnkey real estate investing offers hassle-free investment experience with immediate cash flow, but thorough research and due diligence are necessary to avoid potential issues.
Turnkey real estate investing involves buying a rental property that someone else has sourced, rehabbed, and even managed, allowing investors to have a hassle-free experience with immediate cash flow. However, it's essential to note that not all turnkey providers are equal, and doing due diligence is crucial to avoid potential issues. Some investors may find their providers through personal connections, while others may rely on online research and reviews. Regardless of the entry point, it's important to speak with other investors who have worked with the provider and conduct thorough research to ensure a quality experience. Ultimately, turnkey investing can offer a convenient and profitable real estate investment opportunity, but it's essential to do your homework before diving in.
Doing Your Own Due Diligence on Turnkey Real Estate Investments: While turnkey investments offer passive income, thorough due diligence is crucial to mitigate potential risks. Visit the property, vet the company, and do the math yourself.
While turnkey real estate investments can be appealing for their convenience, it's crucial for investors, especially new ones, to conduct thorough due diligence before making a purchase. This includes visiting the property and neighborhood in person, vetting the company, and doing the math yourself. Turnkey providers are incentivized to present properties in the best possible light, so it's up to the investor to ensure they're making a sound investment. The speaker shared personal experience of buying properties an hour away and recommending fly-ins for those feeling uneasy about their investments. He also suggested using calculators on Bigger Pockets for assistance with number crunching. Overall, the key message is that while turnkey investments can offer passive income, it's essential to do your homework to mitigate potential risks.
Simplifying financial and real estate management with Relay, Redfin, and Vacasa: Relay allows managing multiple business accounts online, avoiding monthly fees, and collaborating with team members. Redfin offers real-time listing updates, personalized recommendations, and competitive pricing for home buyers and sellers. Vacasa ensures easy vacation home ownership and higher revenue through full-service management.
Both Relay and Redfin offer solutions to simplify financial and real estate management respectively. With Relay, you can open and manage multiple business accounts online, collaborate with team members, and avoid monthly fees. Redfin, on the other hand, provides real-time listing updates, personalized recommendations, and competitive pricing for home buyers and sellers. Additionally, Vacasa offers full-service vacation home management, ensuring easy ownership and higher revenue. The speaker's personal experience with Relay and Redfin, as well as Vacasa's average revenue increase for vacation homeowners, emphasizes the convenience and profitability these services bring. Whether you're managing multiple businesses, looking for a new home, or owning a vacation property, these platforms can help streamline your experience.
Exploring various financing methods for real estate investments: The speaker has built a diverse real estate investment portfolio using private lending, turnkey properties, and real estate crowdfunding, averaging an 11% return and successfully exiting 13 deals.
The speaker has creatively utilized various financing methods, including private lending, turnkey properties, and real estate crowdfunding, to build a diverse investment portfolio in real estate. The speaker started with private lending to friends and family for flipping houses, then moved on to turnkey properties with the help of short-term private loans. Additionally, the speaker has participated in real estate crowdfunding since 2013, primarily focusing on debt deals, and has averaged an 11% return over the years. However, the returns have decreased as more people have entered the market, and the yields are now in the 9-10% range. The speaker has successfully exited 13 deals, while 3 are currently in default. The speaker's exit strategy includes refinancing properties with cash-out refinances as property values increase and interest rates rise. Overall, the speaker's approach demonstrates flexibility and creativity in financing real estate investments.
Exploring Real Estate Crowdfunding for Portfolio Diversification: Do your due diligence on platforms and deals, minimize risk by investing in multiple small deals, look for platforms with a good track record, transparent information, and a strong sponsor selection process, consider alternative options like private lending or turnkey investments, and stay informed to make informed decisions.
Investing in real estate through crowdfunding platforms can be a viable option for diversifying your portfolio, but it's important to do your due diligence on the platforms and the deals they offer. Some deals may go into default, but by investing in multiple small deals, you can minimize the risk. Look for platforms with a good track record, a strong selection process for sponsors, and transparent information about their deals and success rates. Additionally, consider spreading your investments across multiple platforms or investing larger amounts in fewer deals. For those who don't want to be landlords or deal with property management, alternative options like private lending or turnkey real estate investments may be worth exploring. Ultimately, it's essential to educate yourself and stay informed about the various investment opportunities in real estate to make informed decisions.
New investors can leverage technology and crowdfunding for real estate and high yield debt investments: New investors can start early, invest in peer-to-peer lending platforms like LendingClub and Funding Circle, and gain mid-teen percent yields from real estate and high yield debt investments
Technological innovation, specifically crowdfunding, can provide new investors with an opportunity to get into private lending and real estate with modest amounts of money. This was advised by a doctor who recently graduated from residency and was looking to get into real estate. He encouraged starting early and taking advantage of platforms like LendingClub and Funding Circle for peer-to-peer and small business lending, respectively. These investments can offer mid-teen percent yields and provide exposure to high yield debt. The doctor also expressed regret for not starting sooner and encouraged younger investors to take the plunge. Overall, the use of technology and crowdfunding can open doors for passive investments in real estate and high yield debt for those with limited resources.
Networking with separate business cards and real estate investing strategies: Specialize business cards for networking, wait for better neighborhoods for real estate, and approach student loan debt strategically.
When it comes to networking and business cards, it's better to specialize and have separate cards for different types of contacts. However, when it comes to real estate investing, it's recommended to wait and save up before buying in a better neighborhood rather than settling for a cheaper property in a worse location. Additionally, the approach to handling student loan debt while investing depends on the specific interest rate and structure of the loan. Lastly, Kenyan's favorite real estate related book is "Bridge Over Troubled Wall Street" by Stephen Gardner, and his hobby is gaming, particularly Battlefield.
Emphasizing the importance of knowledge and preparation in real estate investing: Successful investors gain confidence through solid knowledge and awareness of potential downsides before investing. Explore alternative strategies and learn from diverse perspectives.
Successful real estate investors have a solid knowledge base and are well-aware of potential downsides before diving into investments. Doctor Kenyon Meadows, a guest on a recent podcast, emphasized the importance of this mindset, which gave him the confidence to try his first real estate deal. He also encouraged listeners to explore alternative real estate investment strategies and learn from different perspectives, even if they don't personally invest that way. Meadows also invited listeners to check out his website, alternativefinancialmedicine.com, for more information and to read his new book on Amazon. Overall, the conversation highlighted the value of knowledge, preparation, and an open mind in real estate investing.
Embarrassing first date stories and relationship lessons: Being responsible, authentic, and compassionate are key to success in relationships and life.
Being a youth leader comes with great responsibility, and even the smallest mishaps can leave a lasting impression. Josh Dorgan shared a story about his embarrassing first date with his wife, which despite the financial hiccup, ultimately led to their successful relationship. In the Random 5 segment of the show, Josh also revealed that he has never set up friends on dates due to fear of potential conflict, and he doesn't miss Polaroid cameras due to the poor quality of the photos. When it comes to interacting with panhandlers, Josh prefers to engage in a kind and discreet manner, sometimes offering food or money, but always with caution. Overall, the conversation highlights the importance of being responsible, authentic, and compassionate in various aspects of life.
Find investor-friendly real estate agents with BiggerPockets Agent Finder: Using BiggerPockets Agent Finder can help match you with a local expert to navigate real estate investing and achieve financial freedom
Finding an investor-friendly real estate agent is crucial for those looking to get into or advance in real estate investing. With the market constantly changing, having a local market expert to help navigate neighborhoods, analyze numbers, and take action with confidence is invaluable. BiggerPockets Agent Finder is a free resource that can help you instantly match with an agent who fits your investment goals. Remember, it's not about timing the market perfectly, but rather being in the market consistently to achieve financial freedom. However, always consult with qualified advisors before making any investment decisions, as investing in real estate involves risk. To get started on your journey to financial freedom, visit biggerpockets.com/deals today.
