Podcast Summary
Networking and Technology in Real Estate Investing: Engage with new members on the BiggerPockets forum, use technology like the BiggerPockets app for lead generation, and explore creative financing options like Rental Retirement for no money down deals.
The BiggerPockets podcast, episode 22, is all about real estate investing with a focus on networking and using technology to grow your business. The hosts, Joshua Dorkin and Brandon Turner, discussed the importance of engaging with new members on the BiggerPockets forum and the recent release of the BiggerPockets iPhone app. They also welcomed their guest, Tucker Marahue, a successful rehabber, builder, and wholesaler in the Portland, Oregon market, who shared his strategies for lead generation. Another highlight of the episode was the discussion about buying a turnkey rental property for no money down through Rental Retirement. While it may seem too good to be true, it's a viable option for those looking to invest in real estate with little to no upfront cost. Overall, the episode emphasizes the importance of networking, utilizing technology, and exploring creative financing options to succeed in real estate investing.
Invest in new construction with Rent to Retirement, start with minimal capital: Investors can begin real estate investing with little capital through Rent to Retirement's discounted new construction properties and flexible investor loans.
Rent to Retirement offers investors the opportunity to get new construction properties at a discount and invest with little to no money down. Their investor loans have low rates and flexible down payment options. This means investors can start investing with minimal upfront capital and still enjoy cash flow appreciation and equity growth. Additionally, good tenant screening is crucial for successful property management. RentReady's new feature simplifies the process with automatic tenant proof of income verification, ensuring financial stability and confidence when renting out properties. Tucker's story shows that even after facing setbacks, like failing a job interview, one can still find success in real estate through various paths, such as starting in mortgage lending or house flipping.
Learning from real estate lending to investing: Transitioning from real estate lending to investing can be challenging, but learning from mistakes and staying persistent are key to success.
Starting in real estate through lending can provide valuable insights into the industry, particularly in understanding real estate financing. However, transitioning to real estate investing can be challenging due to the initial profitability of the lending side. The speaker learned this lesson the hard way during the housing market crash in 2007, when he was forced to fully commit to the investment side. Despite some early missteps, such as purchasing overpriced properties before the crash, the speaker emphasizes the importance of learning from mistakes and continuing to invest in real estate. Overall, the speaker's experiences highlight the importance of persistence and adaptability in the real estate industry.
Challenges of Investing in Condos: Investing in condos comes with unique challenges like property taxes, HOA issues, and unexpected fees, but there's also potential for profit through quick flips using an efficient lead funnel and rehab process
Investing in condos comes with unique challenges, such as increasing property taxes, HOA issues, and unexpected fees. These issues can make holding onto a condo investment a losing proposition over time. Some investors, like the speaker, have had to make the difficult decision to short sell their condos due to these issues. While there are risks, there are also opportunities to make a profit by quickly flipping condos that offer a good deal. The speaker's business, for example, uses a lead funnel to identify potential deals and efficiently rehab and sell them. Understanding these pros and cons is essential for anyone considering investing in condos.
Effective Real Estate Lead Generation and Screening: Using a combination of direct mail and online marketing, an acquisitions manager attracts potential sellers with unconventional messaging for memorable results.
An effective real estate investing business utilizes a well-oiled lead generation and screening process. The speaker shares his experience of having an acquisitions manager who handles leads, using a combination of direct mail and online marketing to attract potential sellers. For direct mail, they use various methods like postcards and Every Door Direct Mail system from the postal service, which allows sending oversized postcards to every door in a mail route for only 14¢ per piece. While the downside is that you cannot target specific motivated sellers, this method can lead to deals from unexpected sources. The messaging used is often unconventional, such as using images of dogs to appeal to dog lovers in their market. The goal is to create marketing that stands out and is memorable. The show notes for this topic can be found at biggerpockets.com/show22.
Portland Real Estate Market: Buy-and-Flip or Buy-to-Live: Focus on buy-and-flip or buy-to-live strategies in Portland's real estate market. Build a strong web presence for increased online visibility and reach potential clients.
The real estate market in Portland, Oregon, varies greatly with both low-end and high-end properties. The speaker mentioned buying a house for as low as $46,000 but also working on a $2,000,000 spec home. The median price is likely in the lower millions, making it less attractive for large-scale turnkey investors or hedge funds. Instead, the market is focused on buy-and-flip or buy-to-live strategies. For marketing efforts, the speaker emphasizes the importance of having a web presence, including a WordPress blog, Facebook page, and YouTube channel, to increase online visibility and reach potential clients.
Exact match domains and keywords for online presence: Using an exact match domain for your business and desired keywords can enhance your online presence and attract more customers, but it may require more effort in competitive markets.
Having an exact match domain for your business and the keywords you want to rank for can significantly improve your online presence and attract more customers. This strategy has helped the speaker's real estate business in less competitive markets, but it may require more effort in more evolved markets. The speaker also shared their experience transitioning from rehabbing houses to building new ones, which they did after encountering unexpected issues with a house they intended to rehab. The process of building a new home involves knocking down an existing house or excavating for the foundation, pouring the foundation, obtaining permits, and working with an architect to design the plan. Overall, the speaker's experiences demonstrate the importance of adapting to unexpected challenges and being open to new opportunities in business.
Building a House: Steps, Costs, and Profit Margins: Building a house entails various steps, costs, and profit margins. Demolition/construction, engineering, and city permitting are involved. Permitting can be time-consuming and costly. Profit margins vary greatly depending on location and neighborhood.
The cost of hiring an architect and building a house involves several steps and expenses, which can vary greatly depending on the architect and location. After finding an architect and getting plans approved, the demolition or construction process begins, followed by engineering and city permitting. Permitting can be time-consuming and require multiple revisions, sometimes for seemingly insignificant reasons. The financials of building a house also vary greatly depending on the location and neighborhood, with higher end neighborhoods typically offering larger profit margins due to higher selling prices. For example, in a mid-range neighborhood, a lot might cost $110,000, a house might be built for $265,000 and sold for $585,000, resulting in a mid-range profit margin. In a high-end neighborhood, a lot might cost between $250,000 and $350,000, a house might be built for $275,000 to $350,000, and sold for $750,000 to $1,000,000, resulting in a significant profit margin. Overall, building a house involves a significant investment of time, money, and patience.
Finding and keeping good contractors for real estate projects: Networking with successful rehabbers can help find top-quality contractors, contributing to better products and easier processes in real estate projects.
Building a successful real estate business involves finding reliable contractors for high-quality projects. The speaker shared his experience of starting as a wholesaler and flipper, then transitioning to building spec houses with his own contracting license. He emphasized the importance of keeping good contractors once they're found, as they contribute to better products and easier processes. For those looking to find trustworthy subcontractors, networking with other successful rehabbers in the market is recommended. They may be willing to share their contacts, as they often have established relationships with top-quality contractors. Building a strong network and maintaining good relationships with contractors is crucial for the success of a real estate business.
Leveraging Networks, Technology, and Alternative Income Streams for Successful Property Management: Networking with trusted contractors and service providers leads to better deals and referrals. Utilize technology like RentReady for thorough tenant screening and Relay for hassle-free business banking. Airbnb can provide extra income for property owners as an alternative income stream.
Building strong relationships with trusted contractors and service providers can lead to better deals and referrals. Additionally, utilizing technology like RentReady for thorough tenant screening and Relay for hassle-free business banking can streamline and simplify the property management process. Airbnb can also be an excellent source of extra income for property owners, whether they're full-time investors or just looking to offset expenses while on vacation. In summary, networking, leveraging technology, and exploring alternative income streams are key strategies for successful property management.
Accessing Private Money for Real Estate Projects: Private money from individuals within your network offers flexible, cost-effective terms and allows for multiple projects, while a good relationship with a property management company simplifies property management.
In real estate investing, particularly in flipping houses, having access to private money is crucial for doing multiple projects at once and growing your business. Private money comes from individuals within your network and typically offers better terms than hard money, which is a loan from a lending institution. With private money, payments are not required throughout the process, making it a more flexible and cost-effective option. The speaker shared that they have around 10 projects in progress and use a combination of cash, private money, and hard money. They emphasized the importance of finding a reliable private money lender who is excited about your projects and is willing to receive a decent return. The speaker also mentioned that they have a good relationship with a property management company, which makes managing their properties easier. Overall, the use of private money allows them to generate cash flow from rentals while waiting for new builds to be completed.
Adapting to market changes and having multiple exit strategies: Successful real estate investors adapt to market changes, have multiple exit strategies, focus on longer-term projects, build in high-end neighborhoods, maintain high profit margins, wholesale excess inventory, and network to maintain a steady cash flow.
Having multiple exit strategies and being adaptable to market changes is crucial for real estate investors. The speaker shares an example of a project where they initially planned to build new but changed their strategy due to market conditions, opting for a lighter rehab and sale instead. To mitigate risks, they focus on longer-term projects, build in high-end neighborhoods, and maintain high profit margins. The speaker also emphasizes the importance of wholesaling as a way to monetize excess inventory and maintain a steady cash flow. They have a well-oiled marketing machine that generates leads, and they wholesale properties to a consistent group of buyers. Despite having a successful business, they continue to wholesale to keep their momentum going. New investors often fear other investors taking their deals, but networking and knowing everyone in the industry can lead to mutually beneficial relationships.
Focus on building relationships with reliable buyers: Successful wholesaling relies on developing trust with a few consistent buyers, regardless of their business models or preferences. Networking with experienced rehabbers and builders can help find these buyers.
Building a large buyers list is not necessary for a successful wholesaling business. Instead, focusing on developing relationships with a small group of reliable and consistent buyers is crucial. These buyers, who may have different business models and preferences, will provide various opportunities for deal flow. For new wholesalers, networking with experienced rehabbers and builders in their market is an effective strategy to find these buyers. Trust and transparency are essential in these relationships, as wholesalers should be open about their deals and intentions. Additionally, having clear and enforceable contracts in place can help protect both parties and build trust.
Strong relationships and transparency are key in real estate investing: Being transparent and honest builds strong relationships, open floor plans, garages, basements, design touches, and full staging are desirable retail market features, and carefully sourcing materials for high-end spec houses is essential.
Building and maintaining strong relationships in real estate investing is crucial for long-term success. Being transparent and honest with business partners can lead to mutual benefits and future opportunities. In the retail market, creating open floor plans, having a garage, and offering a basement (in certain neighborhoods) are important features that buyers look for. Additionally, focusing on design touches and fully staging houses can set investors apart from competitors. Sourcing materials for high-end spec houses should also be carefully considered to maintain the desired price point and image.
Working directly with vendors for house building or flipping: Directly engaging vendors for house projects offers variety, better pricing, and legal advantages. Consider obtaining a construction contractor's license and partnering with experienced rehabbers to expand your business.
Building or flipping houses through direct vendors can offer more variety, better pricing, and even legal advantages for real estate investors. Working directly with vendors specialized in specific products, such as lighting or doors, can lead to a wider range of choices and potentially discounted prices due to contractor licenses or bulk purchases. However, it's essential to consider the legal requirements, such as obtaining a construction contractor's license if you plan to do five or more houses per year. Partnering with experienced rehabbers is also a great way for new investors to learn the ropes and reduce risk. While spec building might not be the first step for beginners, it's a viable and potentially rewarding option for those looking to grow their real estate business.
Maintaining momentum is crucial for real estate investing success: Keep pushing forward in real estate investing, don't let setbacks deter you, and find inspiration in books like 'How to Win Friends and Influence People' by Dale Carnegie.
Maintaining momentum is crucial for successful real estate investing. Tucker Merahue, a real estate investor, shared his insights during a conversation on the BiggerPockets podcast. He emphasized the importance of keeping going, whether it's marketing, rehabbing, or any other aspect of the business. Tucker mentioned that people often start and stop, making it challenging to achieve success. He advised listeners to keep pushing forward and not let setbacks deter them. Tucker also shared his favorite real estate and business books, including "How to Win Friends and Influence People" by Dale Carnegie. He can be found on Facebook and BiggerPockets, where he shares updates on his business. Overall, Tucker's advice highlights the importance of perseverance and consistency in real estate investing.
Get inspired and learn from real estate experts: Listen to the Bigger Pockets Radio podcast for motivation, education, and access to valuable resources like Agent Finder.
Listening to the Bigger Pockets Radio podcast can provide motivation, education, and engagement for real estate investors. The hosts, Josh Dorkin and Brandon Turner, share their experiences and insights, leaving listeners feeling energized and inspired to take action. The podcast offers valuable information, available on various platforms such as biggerpockets.com, Facebook, YouTube, and Twitter. Additionally, BiggerPockets Agent Finder is a free resource that can help investors find investor-friendly agents to help navigate the real estate market and make informed decisions. Remember, investing in real estate involves risk, so it's crucial to consult with qualified advisors before making any investment decisions.
