Podcast Summary
Serving Others for Success in Business and Real Estate: Focusing on serving others and providing value can lead to significant opportunities and passive income in business and real estate investing.
Focusing on serving others and becoming an indispensable asset can lead to significant opportunities and success in business and real estate investing. The hosts of the Bigger Pockets podcast, Brandon Turner and David Greene, emphasized the importance of being the "employee or the servant" for someone else and providing value. They shared examples of individuals, like Jesse McHugh and Ryan Murdoch, who became valuable assets to others and were rewarded with ownership opportunities. Changing one's mindset from "what's in it for me" to "how can I help" can open doors to passive income and growth. This concept, when applied to real estate investing, can lead to financial freedom without the burden of property management and maintenance. To learn more about this and other valuable insights, listen to the full episode of the Bigger Pockets podcast featuring Jesse McHugh.
Exploring Low-Cost Real Estate Investing Options: New construction deals with discounted prices and investor loans, or unlimited lead generation for off-market deals, can help new investors enter real estate with minimal upfront capital
There are innovative ways to get started in real estate investing with little to no money down. Rent To Retirement offers new construction properties at discounted prices and investor loans with low interest rates and even 0% down payment options. Meanwhile, DealMachine provides unlimited access to contact information for lead generation, making it easier to find off-market deals. Jesse McHugh, a property manager and real estate investor, started in real estate through property management and fell in love with the industry. His first investment was a 3-unit building he discovered through public notices in the newspaper while managing a property that was in financial distress.
Starting small and taking calculated risks in real estate: Successfully investing in real estate begins with small, calculated risks. Knowledge of the market and seizing opportunities can lead to significant growth over time, including expanding to multifamily units, commercial properties, and even a motel. Partnering with experts can also fuel growth through property management businesses.
Starting small and taking calculated risks can lead to significant growth in real estate investments. The speaker shared his experience of purchasing a 3-unit building at an auction with limited competition and minimal renovation needs, which served as a successful foundation for his real estate portfolio. Over the years, he expanded his investments to include multifamily units, commercial properties, and a motel. The speaker's journey highlights the importance of being knowledgeable about the market and seizing opportunities when they arise. Additionally, his partnership with a commercial broker led to the growth of their property management business, which further fueled their real estate ventures. Overall, this story illustrates the potential for substantial growth in real estate through strategic and calculated investments.
Building successful business partnerships through shared judgment and exploring opportunities: Recognize a good partner, explore new opportunities, learn to do everything yourself first, then delegate as the business grows for more time and freedom.
Successful business partnerships are built on shared judgment, a willingness to explore opportunities, and the ability to let go of day-to-day tasks as the business grows. The speakers in this conversation emphasized the importance of having a big-picture perspective and not getting bogged down by small details. They also discussed the importance of recognizing a good partner and being open to new opportunities, even if they don't seem directly beneficial at first. In fact, one of their businesses, a mobile home park, was started because of a speaking engagement in New York. To build a business that doesn't require constant attention, they recommended learning to do everything yourself first, then hiring and delegating as the business grows. This allows you to take a financial step back in the short term, but gain more time and freedom in the long term.
The Importance of Hiring the Right People: Investing time and effort into hiring the best candidates leads to long-term success by building a team of talented employees.
Hiring the right people is a crucial and labor-intensive process that requires a significant investment of time and effort. The speaker shared his experience of putting in an abnormal amount of effort into the hiring process, interviewing numerous candidates, and checking all references before making a decision. He emphasized the importance of being excited about the candidate and considering them the best person for the role, rather than settling for good enough. The speaker's success in building his cleaning, property management, and real estate businesses can be attributed to the talented people he has hired, some of whom started in entry-level positions and grew within the organization. The hiring process can be challenging, but the long-term benefits of having stellar employees make it worth the investment.
Surround yourself with the right people for success: Investing time in hiring the right people can lead to reduced stress, increased productivity, and long-term success. Address wrong fits promptly and become an indispensable asset for greater opportunities.
Building a successful business, whether in real estate investing or any other field, depends heavily on the people you surround yourself with. Finding the right contractors, employees, or partners can make all the difference in reducing stress, increasing productivity, and achieving long-term success. Investing time and effort upfront in the hiring process can lead to significant dividends in the future. However, if you do end up with the wrong person, it's essential to address the situation promptly and move on. Remember, becoming an indispensable asset to your employer or clients can lead to greater opportunities and rewards.
Serving others leads to valuable opportunities in real estate: Focusing on adding value to others through hard work can lead to strong relationships and investing opportunities
Having a servant's heart and a humble attitude can lead to valuable opportunities in real estate investing. By focusing on adding value to others and proving yourself through hard work, you can form strong relationships and create your own opportunities. Jesse's experience of buying his first triplex with a business partner after financing help, and then continuing to buy properties together, illustrates this concept. The first deal may be challenging, but the momentum and relationships built from it can lead to a successful investing career. Therefore, it's essential to take action and focus on providing value to others rather than just looking for personal gain.
Leveraging relationships for real estate investing opportunities: Building strong relationships and industry knowledge can lead to valuable deals and financing options in real estate investing. Focus on the 20% of actions that yield 80% of the results and prioritize relationship building over small details.
Building relationships and being knowledgeable about your industry can lead to valuable opportunities in real estate investing. The speaker shared how he was able to learn about deals and financing options through his network, and how important it was to have a good relationship with his bank and lenders. He also emphasized the importance of focusing on the 20% of actions that give you 80% of the results, and not getting bogged down in small details like interest rates. Instead, successful investors prioritize building relationships and taking action to grow their portfolio. Additionally, the speaker mentioned the importance of local banks for relationship banking and getting things done efficiently.
The importance of having a reliable team: Focus on tasks that energize, delegate tasks that drain, and build a strong team to manage unexpected costs and risks.
It's important to build a strong team of professionals to help manage aspects of your business or investments that you find challenging or time-consuming. The speaker shares his experience of learning the hard way about the importance of having a reliable insurance agent, after having multiple policies with different expiration dates and facing a period without coverage. He now has one agent who handles all his insurance needs, saving him time and peace of mind. The speaker also emphasizes the importance of focusing on tasks that bring excitement and energy, rather than those that feel heavy and draining. He shares an example of a real estate deal that didn't go as planned, involving two duplexes in need of extensive repairs. Despite his initial plan to save money by having the seller finance the deal and handle repairs, the unexpected costs mounted quickly, leading to a financially successful but emotionally challenging experience. The lesson learned is that it's crucial to have a realistic understanding of potential costs and risks, and to have a team in place to help manage them.
Maintaining Financial Reserves in Real Estate Investing: Unexpected expenses and tenant issues can strain finances in real estate investing. Effective property management ensures thorough repairs, efficient maintenance, and a client-focused approach to mitigate risks.
When investing in real estate, particularly fixer-uppers or no money down deals, it's crucial to have financial reserves. Unexpected expenses and tenants moving out sooner than anticipated can lead to significant financial strain. A good property manager can help mitigate these risks by thoroughly fixing up properties at the beginning and providing efficient maintenance and repairs. However, the property management industry is ripe for disruption, with many property management companies not treating clients' properties as if they were their own. Utilizing modern, high-tech solutions and a client-focused approach can set successful property management companies apart.
Considering a property manager? Look beyond references to their systems and processes.: Find a property manager who prioritizes business systems over property management techniques for efficient and effective property management.
Finding a good property manager requires careful consideration and thorough investigation. Beyond the obvious question of checking references, it's essential to inquire about their handling of maintenance, financial reporting, and tenant screening. A well-organized office and property management software are good signs, but the most crucial factor is their systems and processes. The best property managers are those who understand the importance of business systems and prioritize them over property management techniques. The creation of effective systems often stems from past experiences of frustration and a desire to streamline and eliminate stress. Additionally, accountability is crucial in any system, allowing for the identification of who is responsible for any potential issues.
Effective systems minimize mistakes and reduce stress: Good software, clear communication, and accountability help minimize mistakes and reduce stress in business and property management
Having effective systems in place is crucial for minimizing mistakes and reducing stress in business and property management. Accountability is essential, and using good software is a key component of having efficient systems. A user-friendly interface is important to ensure easy understanding of reports and financial information. Regular upgrades and clear communication from property managers can also help alleviate confusion and potential issues. By hiring a trusted partner or team member to manage and explain reports, business owners can focus on other aspects of their operations. In any area of life where something causes stress, it's likely that the system is not functioning optimally, and it can be improved.
Making Real Estate Investing Easier with Tools and Partnerships: Use tools like DealMachine for lead generation and companies like Pine Financial Group and BAM Capital for investment opportunities to simplify real estate investing and focus on joy and lightness in business. Airbnb can also provide passive income opportunities.
Real estate investing can be made easier and more passive through the use of tools like DealMachine for lead generation and companies like Pine Financial Group for investment opportunities. The speaker shares his experience of delegating property management tasks to a "real estate ninja" and emphasizes the importance of focusing on what brings joy and lightness in business. Additionally, the discussion highlights the benefits of investing with companies like Pine Financial Group, which offers a targeted 8% preferred return and contributes to community revitalization. BAM Capital is also introduced as a trusted multifamily syndicator with a great track record and consistent returns for accredited investors. Lastly, the speaker shares his personal story of how Airbnb provided the extra income he needed to start his real estate business and encourages listeners to explore the platform for passive income opportunities.
Unexpected opportunities from unconventional sources: Stay open to new possibilities and be willing to take calculated risks, even if they come from unexpected sources and require unconventional negotiations
Sometimes the most interesting and profitable deals come from unexpected sources and require unconventional negotiations. In this case, a real estate investor discovered a run-down motel through a mutual electrician, who had been having trouble complying with city codes. The investor provided advice and built a relationship, leading to an opportunity to purchase the motel when the owner was looking to exit. The negotiations were challenging due to the extensive electrical issues and code enforcement threats, but the investor ultimately succeeded by sitting down with the owner and discussing the potential of the property. Despite the risks and complications, the investor saw the upside and seized the opportunity, demonstrating the importance of staying open to new possibilities and being willing to take calculated risks.
Seizing Opportunities Despite Discomfort: Having a good income and savings enables investments, reduces stress, and allows for the combination of various income streams and businesses to build wealth. Seize opportunities when they present themselves using strategies like BRRRR.
Being uncomfortable or intimidated shouldn't stop you from moving forward in business or real estate investments. In the discussed scenario, the speakers decided to invest in a property for $500,000 after a potential buyer suggested the price. They were able to pay in cash due to their savings. The importance of having a good income and savings was emphasized, as it makes it easier to invest and reduces stress. The speakers also mentioned the possibility of combining various income streams and businesses to build wealth. After purchasing the property, they refinanced it and made upgrades using the BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat) but with a better approach. Overall, the conversation highlights the significance of being prepared financially and seizing opportunities when they present themselves.
Building strong relationships with vendors pays off: Strong relationships with trusted vendors and having cash on hand can lead to profitable real estate investments
Having a strong network of trusted vendors and being able to pay in cash for real estate deals can lead to significant financial gains. In this specific case, the buyers were able to secure a loan based on an "as completed" appraisal, which took into consideration the planned repairs, leading to a profitable investment. The importance of being good to vendors was also highlighted, as the electrician who vouched for the buyers played a crucial role in the transaction. Additionally, having the cash on hand to take advantage of good deals is a valuable lesson learned. Overall, the story demonstrates the importance of building strong relationships and having financial resources to capitalize on opportunities.
Finding Deals from Experienced Investors and Starting a Property Management Company: Experienced investors offer deals and starting a property management company involves small beginnings, quick turnaround times, and management fees ranging from 5-10%.
Good real estate deals can be found not just from motivated sellers in distress, but also from experienced investors looking to move on to their next phase. Starting a property management company involves starting small and building up references. The turnaround time for getting a property ready for a new renter is typically around a week, and the management fees can range from 5% to 10% depending on the size of the portfolio. If your property management company encounters a tenant with a large item like a 200 gallon saltwater aquarium, it's important to consider the logistics and potential damage to the property before making a decision. Engaging with other investors and attending meetups can also lead to opportunities for growth in real estate.
Proper tenant screening is essential for successful property management: Neglecting thorough tenant screening can lead to numerous problems, including tenants manipulating the system and causing damage. Be firm but fair in payment terms, set clear expectations, and adhere to state-specific laws for a hassle-free rental experience.
Thorough tenant screening is crucial for successful property management. The property manager emphasized that neglecting this step can lead to numerous problems, including tenants who know how to manipulate the system and cause damage to the property. They advised being firm but fair in payment terms and setting clear expectations from the beginning. Additionally, understanding and adhering to state-specific laws is essential to protect yourself as a landlord. Overall, the importance of proper tenant screening and clear communication cannot be overstated for a hassle-free rental experience.
Effective communication and systematization for landlords: Clear policies, clear delegation, business education, and personal hobbies contribute to successful landlording and real estate business growth.
Effective communication and systematization are key to being an excellent landlord and growing a successful real estate business. By establishing clear policies and procedures, delegating tasks to knowledgeable team members, and focusing on business education, landlords can improve their operations and provide better service to tenants. Additionally, reading valuable business books, such as Warren Buffett's "The Snowball" and Tim Ferriss' "4 Hour Workweek," can inspire and inform entrepreneurs in their personal and professional lives. When it comes to hobbies, finding activities that promote mental and physical well-being, like playing basketball and practicing hot yoga, can help individuals maintain balance and focus in their busy lives.
Embracing new challenges and opportunities: Successful real estate investors have a growth mindset and are willing to try new things, leading to success. Say 'yes' to new experiences and be open to doing things outside of your comfort zone.
The mindset of successful real estate investors, and successful people in general, is their willingness to step outside of their comfort zone and try new things. According to Jesse McHugh of Maine Real Estate Management, this is what sets apart those who are successful in real estate investing from those who give up, fail, or never get started. Real estate investing itself is not complicated, but having the mindset to take on new challenges and opportunities is key. Jesse encourages people to say "yes" to new experiences and to be open to doing things they haven't done before. To connect with Jesse, you can visit his company's website at mainrem.com or find him on BiggerPockets under the username "Jesse McHugh." Overall, the discussion emphasized the importance of having a growth mindset and being willing to take calculated risks in order to succeed in real estate investing.
