Podcast Summary
Creating value in real estate goes beyond just making money: Strive to create a billion-dollar worth of value through properties, be committed to growth, and use interactions with others as opportunities to share and learn.
Creating value through real estate investing goes beyond just making money. It's about making a positive impact on the community. Josh Dorkin shared his perspective on this, emphasizing that the ultimate goal should be to create a billion-dollar worth of value through properties. He also discussed his recent injury and shared a humorous story about an encounter at a bar. But the show's main focus was on conveying the importance of having conviction in one's endeavors. Brandon Turner and Josh Dorkin shared their personal experiences and emphasized the need to be committed to improving and growing, rather than being content with mediocrity. They also shared a quick tip from Jeff Woods, the host of the One Thing podcast, encouraging listeners to use interactions with others as opportunities to share what they're working on or what they need help with, rather than just responding with the usual "I'm great, thanks."
Being transparent about your investing goals can lead to opportunities: Specify your property, deal, or person preferences to connect with leads, use tools for efficient lead generation and tenant screening, and explore no-money-down turnkey rental opportunities.
Being transparent about your investing goals and needs can lead to numerous opportunities. Instead of using the standard response, be specific about what type of property, deal, or person you're looking for. This can help you connect with potential leads and expand your network. Additionally, tools like DealMachine and RentReady can make lead generation and tenant screening more efficient and effective. Another exciting opportunity is investing in turnkey rental properties with no money down through companies like Rent to Retirement. By staying informed and utilizing these resources, you can enhance your investing strategies and potentially discover great deals.
Joe's determination to save and invest despite societal pressure: Start early, live frugally, and prioritize saving and investing for long-term financial success, even when faced with societal pressure to spend.
Joe, a successful advertising executive from New York City, was able to save money and buy real estate in his home state of Texas despite living in an expensive city and facing ridicule from his friends. The environment of New York City, where people live to make and show off money, inspired Joe to prioritize saving and investing. He started buying homes in Texas when he was making around 60,000 dollars, demonstrating the power of starting early and living frugally. This story highlights the importance of financial discipline and long-term planning, even in the face of societal pressure to spend and keep up with others.
Starting Small and Educating Yourself Leads to Successful Real Estate Investing: Educating oneself and starting small with calculated risks can lead to successful real estate investing. Trusted agents and thorough market research are crucial for out-of-state investments.
Starting small and educating oneself can lead to successful real estate investing, even if it means taking calculated risks and relying on trusted agents. The speaker shares his experience of investing in a CD and learning about real estate through books, eventually leading him to buy his first rental property in Dallas without even visiting it. He emphasizes the importance of knowing the market well and having a trusted real estate agent to help assess the property condition. For those looking to invest out of state, he advises having the right people on the ground and doing thorough research on the market before making a purchase.
Identifying Criteria and Engaging with Online Communities: To build a successful real estate investment business, identify your criteria and engage with online communities like BiggerPockets to find potential investors or deals. Be clear about your investment goals and communicate effectively to build valuable relationships.
Building a successful real estate investment business starts with identifying your criteria and sticking to it. One effective way to find potential investors or deals is through online communities like BiggerPockets. You can assess their value to the community based on their activity and engagement. Once you've identified someone to reach out to, be clear about what you're looking for in a deal and communicate your criteria effectively. For beginners, it may be as simple as looking for a property with a certain monthly cash flow or equity at closing. As you gain more experience, you may focus on value-add opportunities. However, it's crucial to know your numbers and criteria beforehand to avoid getting emotionally attached to a property and compromising your investment strategy. Additionally, investing virtually can be beneficial as it allows you to avoid emotional attachment to specific properties, but it also comes with risks such as not having the right team, buying in a bad area, or not getting a thorough inspection. Always do your due diligence before making an offer.
From single family homes to multifamily properties: A journey driven by growth and contribution: Recognizing a need for growth and identifying the limitations of a current approach can lead to significant changes in investment strategy.
The speaker's experience of transitioning from investing in single family homes to multifamily properties was driven by a desire for growth and contribution, as well as the realization that single family homes took too long to scale and required excessive time and resources. This shift was catalyzed by attending a seminar and feeling unfulfilled in his full-time job. The speaker's journey involved teaching a class on buying single family homes remotely, and eventually being approached by a potential client who wanted to invest in larger properties. This interaction signaled to the speaker that he may have potential customers before having a product, and he began exploring multifamily investments in earnest. The takeaway is that identifying a need for growth and contribution, and recognizing the limitations of a current approach, can be powerful motivators for making significant changes in one's investment strategy.
Researching Economic Indicators for a Strong Market: To ensure success in multifamily real estate investments, research employment base, diversity, and supply and demand indicators. A strong and diverse employment base ensures renters can pay rent, while low unemployment and employment diversity reduce risk.
Identifying a strong market is crucial before investing in multifamily properties. The speaker emphasized the importance of researching various economic indicators such as employment base, diversity, and supply and demand. He explained that ensuring a strong and diverse employment base is essential to ensure renters can pay rent, making it possible to cover expenses and generate cash flow. The speaker also advised looking at the unemployment rate, comparing it to the national average, and examining employment diversity. Lastly, he suggested considering supply and demand, which can be obtained through real estate agents or property managers in the market. These factors help investors make informed decisions and increase their chances of success in multifamily real estate investments.
Promising Real Estate Market: Fort Worth, Texas: Investing in Fort Worth's real estate market can lead to significant growth due to population increase and job creation. Prepare with committed investors before finding deals, especially for large multifamily properties.
Fort Worth, Texas, is a promising market for real estate investment due to its significant population growth and job creation. The speaker, who has already invested $130 million in apartment communities in the area, plans to reach $1 billion in total assets by the time they're 40. They emphasized the importance of being prepared with committed investors before finding a deal, especially when raising large amounts of money for multifamily properties. The speaker's personal goal is not about the money but about creating value and jobs in the community. They found their first deal in Ohio by being prepared with interested investors beforehand.
Building a network of investors for real estate deals: Effective networking leads to successful real estate investments. A master lease strategy can be a win-win solution for buyers and sellers, but requires careful negotiation and lender approval.
Building a strong network of interested investors is crucial for real estate deals, even if it doesn't involve transferring money upfront. When you do have a deal, reaching out to those individuals can result in successful investments. However, there will be attrition, so it's essential to have more investors than you need. A master lease can be an effective strategy for buying real estate by taking over the current loan and income, but it's important to understand the potential pitfalls. Ensure you have approval from the lender to avoid the risk of them calling the loan due, which could leave you in a difficult financial situation. From the seller's perspective, a master lease can provide a significant down payment, which may be more attractive than selling the property with a prepayment penalty. Ultimately, both parties need to negotiate the terms to ensure a mutually beneficial agreement.
Real Estate Professionals Can Use Down Payments and Royalties to Attract Investors: Real estate pros can offer down payments and royalties to sellers, create a PPM, operating agreement, subscription agreement, and investor qualifier to bring in investors, and network to find potential investors.
In real estate transactions, instead of paying the full price upfront, sellers can receive a down payment along with a monthly stipend or royalty. The buyer can make additional profits by assigning the rights to purchase the property to another entity at a higher price. To bring in investors, the real estate professional should put together a Private Placement Memorandum (PPM), operating agreement, subscription agreement, investor qualifier, and outline how investors will receive their distributions. Networking and word-of-mouth referrals are essential in identifying potential investors. The PPM, a legal document, outlines the risks and details of the investment opportunity, while the operating agreement outlines the roles and responsibilities of the investors and the entity. The subscription agreement is where investors commit to investing a certain amount, and the investor qualifier ensures that investors meet the necessary accreditation requirements. Networking through various channels, including personal and professional connections, can help in reaching out to potential investors.
Costs of raising capital for real estate deals: Legal fees for securities documents and attorney reviews can be expensive, often exceeding $50,000. It's crucial to put your own money into deals to align interests with investors.
Raising capital for real estate deals involves significant costs, particularly for legal fees related to securities documents and attorney reviews. These costs, which can amount to $50,000 or more, come out of the total amount of capital being raised. It's essential to have alignment of interest with investors by putting your own money into the deals. A notable software solution for property management is RentReady, which offers comprehensive tenant screening and verification through certified reports and automatic income verification, making the process more efficient and reliable. Additionally, ensuring the safety of properties while away is crucial, and SimpliSafe home security offers peace of mind with easy installation, high-tech sensors, professional monitoring, and a 60-day money-back guarantee.
Using Airbnb as a stepping stone to real estate business: Exploring creative strategies like Airbnb and off-market deal packaging can lead to financial gains for real estate investors
Airbnb can provide valuable extra income and even be a stepping stone to starting a full-time real estate business. The speaker shared his personal experience of using Airbnb to fund his confidence to quit his 9 to 5 job and build a portfolio of dozens of properties. He emphasized that anyone can get started with self-management, even while working a regular job. Additionally, the speaker discussed his experience in finding off-market apartment deals by looking across the street and packaging deals together to achieve economies of scale. This strategy allowed him to pay a little below market value for both properties and operate them more efficiently. While this didn't necessarily benefit the initial seller, it benefited him by reducing operating expenses. Overall, the key takeaway is that exploring creative strategies, such as Airbnb and off-market deal packaging, can lead to significant financial gains for real estate investors.
Joe's Real Estate Strategy: Raising Capital, Focusing on Value-Add Opportunities: Joe raises capital for multi-million dollar real estate deals, targets value-add opportunities in Class B properties, earns returns through acquisition fees, preferred returns, and profits, and aligns interests with investors by not charging asset management fees.
Joe's real estate investment strategy involves raising a significant amount of capital, primarily from investors, to purchase properties worth millions. He earns returns through acquisition fees, management of collected income, and a preferred return structure. The preferred return is typically 8%, and once it's met, Joe and his team receive a 30% share of the profits. Investors, including Joe himself, receive 70% of the profits. The deals Joe focuses on are Class B, 150+ unit properties built in the 1980s or newer, which are already cash flowing but have potential for value-add opportunities. These properties must meet a minimum 18% Internal Rate of Return (IRR) over a five-year holding period. Joe and his team do not charge asset management fees, instead choosing to align interests with investors.
Building a Real Estate Portfolio with Off Market Deals: Successful investors like Joe build portfolios with a mix of on and off market deals, found through broker relationships. Off market deals offer competitive prices, shorter closing times, and less hassle for sellers, but access is limited and requires goal clarity and skillset understanding.
Successful real estate investors like Joe build their portfolio through a combination of on and off market deals. Off market deals, which make up 60% of his portfolio, are found through broker relationships. The benefits for both parties include a competitive price, a shorter closing time, and less headache for the seller. However, these deals are not easily accessible to everyone, and it's crucial to understand your goals and skillset before deciding to pursue them. Another key point from the discussion is that apartment buildings with only 1 bedroom units have their downsides. While you can upgrade tenants to larger units when they request, you cannot do the opposite, making it challenging to cater to everyone's housing needs. Overall, the conversation highlighted the importance of building strong relationships, understanding market dynamics, and being adaptable to various investment scenarios.
Factors affecting real estate investment success: Research market conditions, economic drivers, and demand for apartments. Verify investor group authenticity through references and due diligence. Consistently implement effective strategies for significant returns.
The success of a real estate investment project depends on various factors such as market conditions, economic drivers, and supply and demand for one and two-bedroom apartments. It's essential to research and understand these factors before making an investment. Additionally, to ensure the authenticity of an investor group, referrals are helpful, but it's crucial to speak with multiple references and verify their investment history. Consistency is also a crucial factor in successful real estate investing. Identifying effective strategies and implementing them consistently over time can lead to significant returns. Joe, a real estate investor, emphasized the importance of these factors in his experience and recommended the books "Crucial Conversations" and "Blink" for further insight. To learn more about Joe and his investment opportunities, listeners can visit investwithjoe.com or multifamilysyndication.com.
Intentionality in Building Relationships and Networking: Being intentional in following up with those who express interest in investing, and authenticity in friendships, are crucial for successful real estate investing relationships.
Intentionality in building relationships and networking in real estate investing is crucial. Joe Fairless emphasized the importance of keeping track of those who express interest in investing with you, and taking their interest seriously. Both Josh and Joe acknowledged their shortcomings in this area and pledged to be more intentional moving forward. This could lead to potential deals and partnerships down the line. Another key takeaway is the importance of authenticity in friendships. When asked about what he looks for in a friend, Joe emphasized the importance of being true to who you are. Overall, the conversation between Josh and Joe provided valuable insights for investors looking to build meaningful relationships and be more intentional in their networking efforts.
Age is no barrier for success and genius: Tony Robbins, Malcolm Gladwell, and Tim Ferriss demonstrate that age doesn't limit one's ability to make connections, provide insights, and succeed. Giving back is essential for a fulfilling life. Try dark chocolate with sea salt, and find a BiggerPockets agent for real estate investments.
Age is not a limit for making connections or being considered a genius. The individuals mentioned, including Tony Robbins, Malcolm Gladwell, and Tim Ferriss, were cited for their unique abilities to package information and provide practical insights. Additionally, having a "give back" component is important for living a fulfilling life. Regarding personal preferences, dark chocolate with sea salt was chosen as the favorite. Lastly, finding an investor-friendly real estate agent through BiggerPockets Agent Finder can help navigate the market and move towards financial freedom. Remember, it's not about timing the market, but rather being in it for the long term.
