Podcast Summary
Exploring different learning methods: Engaging in various learning methods like webinars, books, and live sessions can deepen your understanding and enhance your real estate investing experience.
Expanding your learning methods can lead to new insights and strategies in real estate investing. David and Brandon discussed the importance of finding alternative ways to learn beyond just listening to podcasts. They suggested trying webinars, reading books, or even asking questions during live sessions to engage more deeply with the content. As Brandon learned in a recent class, different people learn in various ways, and incorporating multiple methods can make the learning experience more effective and engaging. For instance, webinars allow for interactive exercises and Q&A sessions, while podcasts provide valuable information in a more passive listening format. By incorporating various learning methods, investors can broaden their horizons and enhance their overall growth and success in real estate investing.
Invest in Real Estate with Little to No Money Down: Explore Rent to Retirement for discounted turnkey rentals, consider private real estate funds for passive income, or leverage 1031 tax-deferred exchanges with 1031 Pros.
There are various ways to invest in real estate with little to no money down. Rent to Retirement offers new construction turnkey rental properties at discounted prices with low down payment or even no money down options. For accredited or high net worth investors, investing in a private real estate fund like PPR Capital Management can provide passive income without the hassle of property management. Additionally, 1031 Pros can help investors save on taxes through 1031 tax-deferred exchanges when selling properties. These strategies can open up opportunities for individuals to build wealth and generate income in real estate.
Overcoming unexpected challenges in real estate: Maintaining a positive mindset and being willing to take calculated risks can help investors overcome unexpected challenges and achieve long-term goals in real estate.
Even in the face of unexpected challenges and setbacks, a resilient mindset and a clear understanding of potential opportunities can lead to successful investments in real estate. The speaker's experience of a neighbor's bus falling through the roof of their house during the closing process was a significant setback. However, they used this experience as a learning opportunity and, with the support of their husband, made the decision to invest in real estate again. Despite initial hesitation, they were able to purchase multiple properties within a year. The speaker's background of growing up with a no-failure mindset and being a collegiate athlete played a role in their ability to bounce back from this experience. They emphasized the importance of logically drawing out the numbers and showing the potential returns to gain buy-in from their partner. This story highlights the importance of maintaining a positive mindset and being willing to take calculated risks in order to achieve long-term goals.
Starting out in real estate investing: Turnkey investments: Turnkey investments offer a time-saving solution for beginners, but investors should be cautious and consider learning rehabbing skills for potential higher returns.
Starting out in real estate investing, especially when balancing other commitments, turnkey investments can be an effective way to get started. Turnkey investments refer to properties that have already been rehabbed and have tenants in place, allowing investors to start collecting rent immediately. This can save time and resources for those who may not have the ability to manage the rehab process themselves. However, it's important to note that not all turnkey providers are created equal, and investors should be cautious of unrealistic promises. For those looking to gain more control and potentially higher returns, learning the ins and outs of rehabbing properties can be a worthwhile investment. Overall, finding the right balance between turnkey and self-managed investments can lead to a successful real estate portfolio.
Learning the ropes through turnkey properties: Beginners can benefit from starting small with turnkey properties, gaining valuable experience, building confidence, and preparing for more complex projects
Starting small in real estate investing, such as with turnkey properties, can be beneficial for beginners. These initial investments serve as learning experiences and help individuals understand the process, build confidence, and gain necessary skills. As they progress, they can gradually take on more complex projects, like rehabbing properties and managing them independently. This approach allows investors to grow their knowledge and experience at a manageable pace. For instance, Whitney started with turnkey properties and later moved on to BRRRR investing, which involves buying, rehabbing, renting, and refinancing properties. This strategy can lead to significant returns, as evidenced by Whitney's 55% return in under a year on five of her turnkey properties. Ultimately, starting small and gradually progressing in real estate investing can lead to valuable learning experiences and increased confidence as an investor.
Successful real estate investments can still yield returns even with initial losses: Despite initial losses, successful real estate investments can provide returns through cash flow, loan paydowns, tax benefits, and depreciation. Thorough research is essential when choosing a location, focusing on areas with strong job markets, income growth, and desirable features.
Even if a real estate investment doesn't go as planned and you don't get all your money back out right away, it can still be a successful investment. For instance, a deal that left $10,000 in the property and cash flowed $3,000 a year resulted in a 30% ROI. This is because the ROI increases over time with rent increases and loan paydowns. Additionally, tax benefits and depreciation add to the returns. When it comes to choosing an investment location, thorough research is crucial. Factors like job and income growth, market appreciation, and cash flow are important considerations. In the case of investing in Kansas City, the area was chosen due to its strong job market, good income growth, and expanding healthcare sector, which attracts a steady renter pool. Research included visiting the area, talking to property managers, realtors, and inspectors, and focusing on areas with desirable features like proximity to medical centers.
Identifying and catering to your best customers: Focusing on your best customers and offering amenities that cater to their needs can lead to a successful business. Be proactive, persistent, and open-minded to find alternative solutions and challenge assumptions.
Identifying and catering to your best customers or clients can significantly simplify and enhance your business. The speaker shares his experience of transitioning from working in the medical industry to real estate investment, inspired by the idea of buying properties near hospitals to attract desirable tenants. He emphasizes the importance of not taking "no" as the final answer and being resourceful in finding alternative solutions. The speaker also highlights the importance of challenging lenders' assumptions and encouraging them to think creatively. By focusing on your best customers and offering amenities that cater to their needs, you can build a successful business. The speaker's story underscores the importance of being proactive, persistent, and open-minded in business.
Taking responsibility for finding solutions and learning from challenges: To succeed in real estate investing, embrace challenges, create systems, delegate tasks, and build a strong team, especially a reliable property manager.
When facing real estate investment challenges, it's essential to take responsibility for finding solutions and relentlessly ask why or how to overcome obstacles. Whitney's experience of scaling her portfolio involved learning different aspects of the process, creating checklists, and delegating tasks to simplify the process. Systems and checklists are crucial for managing multiple moving parts and reducing anxiety. For those new to real estate investing, especially with rehabs from a distance, building a strong team, particularly a reliable property manager, is vital for success. By implementing systems and assembling a competent team, investors can streamline the process and focus on the essential aspects of the deal.
Building a Strong Team for Successful Real Estate Investing: Interview multiple providers, evaluate metrics, assess problem-solving abilities, consider tenant placement and contractor management, communication and responsiveness, and maintain a backup property manager for a successful real estate investing team.
Building a strong team is crucial for successful real estate investing, particularly in managing rehabs. A good team can help keep your budget in check, provide valuable insights on property investments, and effectively handle tough situations. To build a team, it's essential to interview multiple providers, evaluate their metrics, and assess their problem-solving abilities. When selecting a property manager, consider their tenant placement and management of contractors, as well as their communication and responsiveness during challenging situations. Maintaining a backup property manager is also a good practice. By leveraging the systems of trusted team members, you can make your job easier and increase overall efficiency. Building a team takes time and effort, but the payoff in terms of reduced stress and increased success is well worth it.
Learning from Books and Implementing Knowledge: Successful people save time and resources by learning from books and implementing the knowledge gained. Identifying and replicating what's already working is a powerful tool for achieving success.
Successful people, like Brandon, attribute a significant portion of their achievements to learning from books and implementing the knowledge gained. This strategy saves time and resources by leveraging the wisdom of those who have already figured out the system. A specific example from Brandon's journey in real estate investing illustrates this point. He began by reading David's book, "Long Distance Real Estate Investing," which led him to identify his ideal deal finder – his property manager. By focusing on this relationship and optimizing it, Brandon was able to save time and resources while still benefiting from a steady stream of deals. This anecdote highlights the importance of identifying and replicating what's already working instead of trying to build everything from scratch. In essence, the key takeaway is that learning from the experiences and expertise of others is a powerful tool for achieving success.
Technology transforms real estate investing: Investors save time and resources through technology-driven lead generation, insurance procurement, and portfolio growth in single family rentals
Technology is revolutionizing various aspects of real estate investing, making processes more efficient and effective. DealMachine, for instance, is transforming lead generation by offering unlimited access to reliable contact information for off market deals, while Steadily.com simplifies insurance procurement for landlords with fast and affordable policies. These advancements enable investors to save time and resources, allowing them to focus on growing their portfolios. The shift from passive to active investing in single family rentals was an unexpected discovery for some investors, but being in control and generating consistent cash flow are key benefits of this asset class. Overall, embracing technology and understanding the active nature of real estate investing are crucial for success.
Question assumptions, find hidden value: Successful real estate investors challenge assumptions and seek hidden value in deals, transforming seemingly ordinary properties into profitable investments.
Successful real estate investors don't blindly accept information given to them, but instead, they question assumptions and look for opportunities to add value to deals that others may have overlooked. This was exemplified in the speaker's experience with purchasing a seemingly small, 1200 square foot, 2 bedroom, 1 bath house that turned out to have potential for an additional bedroom. Despite initial doubts, they saw the potential in the property and transformed it into a profitable investment. Another instance of this mindset was when they faced resistance from a lender who claimed there was an issue with the foundation of a property they were looking to buy conventionally. The investors didn't accept the lender's word and instead contacted the appraiser directly, leading to the removal of the issue and the successful closing of the deal. These stories demonstrate the importance of questioning assumptions, looking beyond initial appearances, and being persistent in the face of challenges.
Advocating for clarification leads to successful deals: Being proactive and persistent in addressing potential issues can lead to successful real estate deals and growth through strategies like BRRRR
Being proactive and persistent in addressing potential issues in real estate deals can lead to successful outcomes. The speaker in this conversation demonstrated this by advocating for the removal of an "x" on a form, which allowed her to leave her notes and ultimately secure a deal. This approach not only showed her determination but also helped the other party feel covered and confident in the transaction. Moreover, the speaker's success in scaling to 22 out-of-state deals using the BRRRR strategy highlights the importance of being resourceful and making the most of available funds. By accessing her basis in her 401k and recycling capital from deal to deal, she was able to grow her equity and net worth while minimizing the amount of capital tied up in each property. This strategy not only protected her investment but also allowed her to turn around capital quickly and make it work for her, contributing to her overall growth.
Successful real estate collaboration and alignment of interests: Effective collaboration and alignment of interests can lead to profitable real estate deals. Leverage property managers, wholesalers, and hard money lenders to find, fund, and manage properties. Expect unexpected costs and have a larger contingency budget.
Effective collaboration and alignment of interests can lead to mutually beneficial deals in real estate investing. David and Whitney discussed a successful investment in a single family house in Kansas City, Missouri, which was found through a property manager who leveraged a wholesaler. The property manager was incentivized through commissions and property management fees, creating a win-win situation. The deal was funded using hard money with minimal upfront capital, and despite unexpected costs during the rehab, they were able to refinance and make a profit. However, they learned the importance of having a larger contingency budget due to the uncertainty of appraisal values. Overall, the conversation emphasized the importance of collaboration, alignment of interests, and flexibility in real estate investing.
Unexpected issues in real estate deals: Maintain a long-term perspective, have contingencies for unexpected issues, and focus on building wealth through real estate despite market conditions.
While you can't always control the appraisal process or unexpected issues during a real estate deal, it's important to have contingencies in place and maintain a long-term perspective. For instance, appraisals may come in lower than expected, but this can lead to higher returns on investment and the opportunity to buy the next property. Additionally, unexpected issues, such as raccoon infestations, can be mitigated through proper inspections and raccoon-proofing. When it comes to market conditions, it's essential to understand your specific market and have multiple exit strategies in place. Overall, the key is to remain adaptable and focused on the long-term goals of building wealth through real estate.
Navigating market challenges through partnership and proactive planning: Successful investors partner with wealthy friends, have a solid rental strategy, conduct regular inspections, ask questions, and avoid ignoring red flags.
Successful real estate investors don't shy away from market challenges but instead find ways to navigate them. One investor shared his strategy of partnering with wealthy friends to split the costs and risks of high-value property investments. He emphasized the importance of having a solid rental strategy in place during market downturns. Regarding property management, the investor suggested regular inspections based on the tenant demographic and property condition. He also recommended utilizing handymen to conduct thorough inspections during routine maintenance calls to prevent potential issues from escalating. For new investors, the investor advised against making assumptions and instead encouraged asking questions and seeking guidance from experienced professionals. He also cautioned against ignoring red flags and taking a hands-off approach to property management. Overall, the investor's insights emphasized the importance of proactive planning, partnership, and vigilance in real estate investing.
Newbies in real estate often give misguided advice or unrealistic claims: Focus on building relationships, leveraging systems, learning from peers, and having a clear investment goal to avoid misguided advice and unrealistic claims in real estate investing
Newbies in real estate investing often lack understanding and experience, leading them to give misguided advice or make unrealistic claims. These include trying to discourage investing based on market conditions, exaggerating their own accomplishments, and seeking advice from those far ahead without providing value in return. Instead, investors should focus on building relationships, leveraging systems, and learning from those slightly ahead in their journey. Additionally, having a clear end goal for real estate investments, whether it be for long-term income or legacy, can help guide investment strategies.
Accelerating Wealth through Equity Building and Passive Income: Focus on building equity through strategic investments and then exchanging them for passive income assets like multifamily syndications to accelerate wealth growth. Build strong partnerships for success.
Building equity in real estate can be a faster way to build wealth compared to relying solely on cash flow. By focusing on building equity through strategic investments and then exchanging those investments for assets that generate passive income, such as multifamily syndications, investors can accelerate their cash flow growth. Whitney, a guest on the Bigger Pockets podcast, shared her experience of implementing this strategy and the importance of creating win-win relationships in real estate investing. For those interested in learning more about Whitney, she can be found on Bigger Pockets and her website, ashcapitalllc.com. Remember, successful real estate investing requires resilience, focus, and building strong partnerships.
Find an investor-friendly real estate agent: Use BiggerPockets Agent Finder to connect with local market experts and boost your real estate investing success
If you're looking to get into real estate investing or expand your current portfolio, finding an investor-friendly agent is crucial. With the BiggerPockets Agent Finder tool, you can quickly connect with local market experts who can help guide you through the buying process, provide valuable insights, and boost your confidence. This free resource, available only at biggerpockets.com/deals, is an invaluable asset for anyone looking to invest in real estate. Remember, the content provided in this podcast is informational, and past performance is not a guarantee of future results. Always consult with qualified advisors and only invest risk capital you can afford to lose. BiggerPockets LLC disclaims all liability for damages arising from reliance on the information presented. To find your investor-friendly agent today, visit biggerpockets.com/deals.
