Podcast Summary
Transforming a blank canvas into something beautiful: Started as a pastry chef and retail worker, this house flipper shares detailed advice and impressive profit margins. Gain experience and confidence through action, sign up for webinars, and consider passive real estate investing for monthly income.
Real estate investing is about transforming a blank canvas into something beautiful, as shared by a house flipping guest on the Bigger Pockets Podcast. She started as a pastry chef and retail worker before finding success in house flipping, inspiring listeners with her detailed advice and impressive profit margins. The podcast also highlighted the importance of gaining experience and confidence through action, and offered a solution for those who can't get enough of the podcast - sign up for webinars hosted by different perspectives to broaden your knowledge and boost your confidence. Additionally, passive real estate investing is possible for accredited or high net worth investors, allowing them to collect monthly income without the headaches of property management.
From Wedding Cakes to Real Estate Investing: Through hard work and entrepreneurial spirit, Cara transitioned from saving for a car to real estate investing, discovering financial rewards and creativity in the process. Innovative strategies like Rent A Retirement expand accessibility.
Experienced real estate investors like Dave Van Horn and his team at PPR Capital Management offer individuals the opportunity to invest in both real estate notes and commercial properties for passive income, with a strong track record and no money down options through Rent A Retirement. Cara's story highlights the importance of having a strong work ethic and entrepreneurial spirit, even at a young age, which helped her save money for her first car and eventually led her to real estate investing. Despite initially planning to open a wedding cake shop, she pivoted when the economy changed and discovered the potential of real estate investing, which offered more creativity and financial rewards. Additionally, the use of innovative strategies like investing with no money down through Rent A Retirement expands accessibility to real estate investing for individuals.
From baking instructor to successful real estate investor: With determination and savings, anyone can overcome challenges and turn dreams into reality. Learn from mistakes, stay persistent, and interview trustworthy contractors.
With determination and a habit of saving, anyone can turn their dreams into a reality. This was demonstrated by Cara, who started as a baking instructor and ended up becoming a successful real estate investor. She saved up almost $100,000 over years and used it as her down payment and funding for her first house flip. Despite facing challenges and rejections, she didn't give up and instead learned from her experiences. Her first flip was a success, and she made almost as much as she did in an entire year at her retail job. However, she didn't leave her job right away and continued to work on more flips, each one presenting new challenges. Cara's journey shows that it's important to take calculated risks, learn from mistakes, and stay persistent in pursuing your goals. Additionally, she emphasized the importance of interviewing and finding trustworthy contractors, even if it requires some trial and error.
Applying past skills to real estate investing: Transform past experiences into real estate design abilities, develop financial discipline, and track expenses to build a solid financial foundation for success.
Applying skills learned in previous experiences to real estate investing can set individuals up for success. Kara's story of transforming her cake-making skills into design abilities in real estate is an inspiring example. Additionally, developing financial discipline through saving and budgeting is crucial for navigating the financial ups and downs of real estate investing. By tracking expenses and living below means, individuals can build a solid financial foundation for their investing journey. Kara's advice to write down expenses and avoid unnecessary debt resonates with the importance of financial awareness. For those struggling to save, resources like the Bigger Pockets Money podcast can provide valuable insights and guidance. Ultimately, taking control of one's financial situation and learning from past experiences can lead to a successful real estate investing career.
Learning construction skills benefits real estate investors: Gaining a basic construction knowledge can lead to informed decisions and stronger relationships with contractors, ultimately increasing confidence and success in real estate investments.
Having a solid understanding of the construction process can significantly benefit real estate investors, even if they don't plan to work on the job site full time. This was emphasized in the discussion when a speaker shared her experience of learning construction skills on her own to feel more confident in her investments. She hired subcontractors to teach her various aspects of the construction process, from wiring and plumbing to painting and demoing. Although it took longer than hiring a general contractor, she learned invaluable lessons that she applied to her next project. Even if you're not planning to get your hands dirty, asking questions and gaining a basic knowledge of construction can help you make informed decisions and build stronger relationships with contractors. Ultimately, investing in your education can lead to increased confidence and success in the real estate market.
Learning from hands-on experience in real estate investing: Hands-on experience and perseverance are crucial for success in real estate investing. Obtaining proper permits and ensuring their validity from the start can prevent costly and time-consuming setbacks.
Hands-on experience and confidence are crucial for success in real estate investing. Carrie's story illustrates how getting involved in the nitty-gritty of a project, even without extensive certifications or licenses, can lead to valuable learning experiences and eventual mastery. However, this path is not without risks. Obtaining proper permits and ensuring their validity from the start can prevent costly and time-consuming setbacks. Despite the challenges, staying committed and taking action are essential for building wealth and achieving success. Carrie's journey demonstrates that even when faced with unexpected hurdles, perseverance and adaptability are vital traits for any investor.
Overcoming Fear in Real Estate Deals: Thoroughly investigate issues, seek expert advice, and negotiate effectively to overcome challenges in real estate deals. Don't let fear prevent you from securing great opportunities. Be prepared, have a solid plan, and jump into real estate with confidence.
When faced with challenges in real estate deals, it's essential not to give in to fear and panic but to ask questions, seek expert advice, and negotiate effectively. The speaker shared an experience where a potential buyer backed out due to a leak issue, which turned out to be an external problem. This incident highlights the importance of thorough due diligence and not assuming the worst-case scenario without proper investigation. For agents and investors, it's crucial to have a problem-solving mindset and not let fear prevent them from securing great deals. The speaker emphasized that successful people in real estate adopt this approach and always look for ways to make things work instead of giving up. When considering quitting a day job to focus on real estate, the speaker advised being prepared, having a solid plan, and not relying on finding all the pieces of the parachute on the way down. Instead, do your research, gather the necessary resources, and jump with confidence.
Entrepreneurial Bipolarism: The Highs and Lows of Starting a Business: Expect self-doubt and extreme confidence swings in entrepreneurship, prepare mentally for temporary challenges, gain experience before investing, and use effective lead generation and deal making strategies.
Entrepreneurship comes with its own unique set of emotional challenges. Both Brandon and Karen shared their experiences of dealing with self-doubt and extreme confidence swings, which they referred to as "entrepreneurial bipolarism." They emphasized the importance of mentally preparing oneself for the difficulties that come with every project and reminding oneself that these challenges are temporary. Brandon added that having some experience before jumping into real estate investing is crucial, as every project will have its own set of unique challenges. Overall, they encouraged listeners to embrace the craziness that comes with entrepreneurship and remember that it's a normal part of the journey. Additionally, they highlighted the importance of lead generation and deal making strategies, such as DealMachine, in making the most of investment opportunities.
Exploring Real Estate Opportunities with Redfin and Quantum Fiber: Redfin offers cost-effective homebuying and selling services, while Quantum Fiber enhances residents' experiences with fast internet. Successful real estate deals are found through the MLS in competitive markets like Scottsdale, focusing on specific areas and adding value.
The Redfin app offers a user-friendly experience for both homebuyers and sellers, with features like scheduling tours, favoriting homes, and sharing listings, all while saving significant money compared to other real estate services. For homeowners and operators of multifamily properties, Quantum Fiber Internet provides a solution to enhance residents' living experiences with fast and reliable internet. Cara's story illustrates the success of full-time house flipping, having completed 11 deals in the last 2 years, and her future goals include growing her rental properties and expanding into multifamily investments. Deals are primarily found through the Multiple Listing Service (MLS) in competitive markets like Scottsdale, Arizona. By focusing on specific areas and looking for opportunities to add value, successful deals can be found and closed. From a real estate agent's perspective, Scottsdale's market size and competition make the MLS an effective tool for finding deals.
Profitable real estate investing in price discrepancy markets: Leveraging large price gaps for renovations can yield profits, but turnkey investments may not be as effective. Having multiple exit strategies, like Airbnb rentals, and being selective with deals increases chances of success.
Investing in real estate markets with significant price discrepancies, such as Scottsdale, can be profitable for those looking to add value through renovations. The larger the price gap, the more potential there is to increase a property's value. However, this strategy may not be as effective for those seeking turnkey investments or in markets with smaller price differences. Additionally, having multiple exit strategies, like Airbnb rentals, can provide financial security and flexibility in case of market fluctuations or unexpected circumstances. Lastly, being selective with the deals taken on is crucial for successful house flipping, as it allows for a focus on quick and profitable rehabs.
Balancing rehab projects and economic uncertainty, building a team for design and project management: Successful real estate investing involves balancing project size with economic uncertainty, building a team for design and project management, and effectively managing projects with clear budgets and timelines.
Successful real estate investing involves balancing the size of rehab projects with economic uncertainty, and building a team to help with design and project management. The speaker shared that they currently focus on quick-fix and flips due to economic uncertainty, but have experience with larger rehabs and additions. They plan to hire a full-time employee to help with design and eventually build a larger team. The speaker also emphasized the importance of hiring professionals for design and staging if you're not confident in those areas. When it comes to managing rehab projects, the speaker prioritizes creating a detailed budget and timeline with contractors, and communicates regularly to ensure projects stay on track and within budget. The speaker also shared that they find inspiration for designs from various sources, including travel and unique restaurants. Overall, the key takeaway is that successful real estate investing involves a combination of balancing economic factors, building a strong team, and effectively managing projects.
Effective communication and clear contracts: Clear agreements, accurate budgeting, realistic deadlines, and incentives for on-time completion are crucial for successful construction projects.
Effective communication and clear contractual agreements are essential for successful construction projects. The speaker shared his experience of implementing incentives for contractors to finish projects ahead of schedule and penalties for delays. He also emphasized the importance of accurate budgeting and staying within the budget by using Excel spreadsheets. Furthermore, he advised setting realistic completion dates and agreeing on consequences for missing those dates in writing. The speaker also learned the hard way that providing large upfront payments and incomplete payments throughout the project can lead to contractors having little incentive to complete the project efficiently. Therefore, it's crucial to be ahead of the contractor financially and ensure that they have a significant incentive to finish the project on time. Ultimately, taking ownership of mistakes and learning from past experiences are crucial for successful project management.
Bring value and build genuine connections: Effective networking involves introducing people, facilitating deals, and engaging in meaningful conversations to build strong relationships and add value to others
Effective networking is about bringing value to others and building genuine connections. As discussed, Karen has mastered this skill through her approach on Instagram and at events, such as introducing people and helping facilitate deals. However, it's essential to go beyond simply sharing contacts or listings and instead, engage in meaningful conversations and understand the other person's goals. By offering assistance and adding value, you can build strong relationships that benefit everyone involved. Additionally, it's important to remember that networking is not a one-way street, and the focus should be on building mutually beneficial connections rather than solely seeking personal gain.
Focus on building genuine connections: Building relationships based on helping others can lead to successful sales and long-term benefits
Networking should not be transactional. Instead, focus on building genuine connections and helping others. This approach not only feels good but also pays off in the long run. During a real estate deal, David found this principle in action when he connected with a Swedish homeowner after recently returning from Sweden. This common ground led to a successful sale at a mutually agreed price. In a hypothetical situation, when selling a property for $200,000, David would consider offering a discount to someone he liked, even if it meant losing some profit. The value of a good connection can outweigh the financial gain.
Winning over an agent's trust and ego: Building relationships with real estate agents can lead to better deals and savings. Compliment their listings and show genuine interest to win their trust and potentially save thousands on your next deal.
Building a strong relationship with real estate agents can lead to successful transactions. According to the speaker, it's crucial to win over an agent's trust and ego before discussing business. Complimenting their listings and showing genuine interest can make all the difference. This principle is based on human psychology, as people are more likely to make decisions based on emotions and relationships. By making an agent like you, you could potentially save thousands of dollars on your next deal. Private money lenders, who are often personal contacts, can also be used to fund real estate projects at a lower cost than traditional lenders.
Seeing potential beyond initial dimensions: Identifying opportunities to add square footage can lead to substantial profits in real estate.
Thinking creatively and adding value to a property can lead to significant profits in real estate. The speaker, Kara, bought a house marketed as a 2-bedroom on Zillow, which had previously been passed over by multiple investors. She saw potential in the 12 feet of side yard and turned the house into a 4-bedroom, 3-bathroom property by building an addition. This addition included a large kitchen, interior laundry room, 4th bedroom, powder room, and dining nook. The rehab budget was $135,000, but the project ended up costing $139,000. Despite unexpected expenses, such as replacing the entire duct system and AC unit, the project sold for $92,000 in profit. This story illustrates the importance of thinking beyond the initial dimensions and perceived limitations of a property and instead focusing on the potential for adding value. Kara's success came from her experience and the ability to identify opportunities that others might overlook. The lesson learned was the value of adding square footage and the significant profit margin it can bring. When considering buying a property, it's essential to factor in the cost per square foot to build and the price per square foot when selling to determine potential profits.
Focus on price discrepancies, unique properties, and lot sizes for profitable real estate investing: Invest in areas with price differences, seek out unique homes and varying lot sizes, maintain a spreadsheet, and use online tools for market data and off-market listings, but master negotiation skills to secure the best deals.
Successful real estate investing often involves focusing on areas with significant price discrepancies between properties, rather than neighborhoods with uniform housing. Older homes with unique characteristics and varying lot sizes can provide better opportunities for profit. Additionally, maintaining a constantly updated spreadsheet is crucial for staying within budget and avoiding unnecessary expenses. Online portals like Zillow, Redfin, and Realtor.com can be valuable tools for investors, providing quick access to market data and off-market listings. However, negotiating skills are essential, and offering full asking price may not always be the best strategy, as it can limit potential for further price reductions.
Negotiate the lowest price for a house: Aim for low prices during negotiations, especially for houses on the market for a long time. Use LLCs for tax and liability protection, and consider private or hard money loans for initial investments. Profit margins in rehabbing projects can vary, so have a clear investment strategy.
When negotiating the purchase price of a house, aim to offer as low a price as possible, even if it's a good deal on the market. This strategy can lead to better negotiations and potentially lower prices, especially for houses that have been on the market for a longer time. Additionally, real estate investors typically hold their properties in LLCs for tax and liability protection purposes, and may use private or hard money loans during the initial stages of their investing journey. The profit margin in rehabbing projects can vary depending on the size and risk level of the deal. It's essential to have a clear formula or unwritten rule in mind when considering new investment opportunities to ensure consistent and profitable outcomes.
Turn gut feelings into actionable formulas: Formulas help delegate decision-making, minimize emotional involvement, and ensure team alignment. They also help avoid irrelevant factors and scale businesses.
Our gut feelings, though important, can be made more effective and consistent by turning them into formulas or rules of thumb. By doing so, we can delegate decision-making to others and ensure that our business decisions are based on more than just emotions. This not only helps us avoid making hasty or ill-informed decisions but also allows us to scale our businesses by teaching others how to make decisions that align with our formula. This is a smart business practice as it helps reduce workload, minimize emotional involvement, and ensures that our team is making decisions that we would agree with. Additionally, having a formula in place can help us avoid making decisions based on irrelevant factors, such as a liking for the kitchen in a property deal. Overall, this discussion highlights the importance of turning our gut feelings into actionable formulas and the benefits of doing so for both our personal and professional growth.
The Importance of Mindset, Risk Tolerance, and Persistence in Real Estate Investing: Successful real estate investors possess a growth mindset, acknowledge and adjust risk tolerance, and are persistent in their efforts. Cara Beckman, a guest on the podcast, emphasized these traits and encouraged continuous learning.
Successful real estate investors have the right mindset, understand and act upon their risk tolerance, and are persistent in their efforts. Cara Beckman, a guest on the podcast, emphasized the importance of having a growth mindset, being open to change and failure, and constantly learning. She also highlighted the significance of acknowledging and adjusting risk tolerance levels. Lastly, she stressed the importance of persistence, no matter how small the steps taken towards achieving one's goals. These traits have been common among successful entrepreneurs, business owners, and real estate investors. For those interested in following Cara's journey, she can be found on Instagram under the handle @beckmanhouse. Additionally, Brandon mentioned making a video about TikTok and starting a competition with him to see whose video gets more views. Stay tuned for that!
TikTok's Perfection Trap: TikTok's curated content can create unrealistic expectations and lead to feelings of inadequacy and mental health issues. Remember, social media is a highlight reel, not reality. Limit consumption and focus on the positive aspects of your own life.
TikTok, with its addictive nature and carefully curated content, can negatively impact our perception of reality and lead to feelings of inadequacy and FOMO (Fear of Missing Out). The platform's algorithm shows us only the best of the best, creating an unrealistic expectation that everyone's life is perfect and exciting. This constant exposure to seemingly perfect lives can lead to feelings of dissatisfaction with our own lives and even potential mental health issues. As Brandon pointed out, it's important to remember that social media is a highlight reel and not a true representation of reality. To avoid falling into the TikTok trap, it's essential to limit our consumption and focus on the positive aspects of our own lives. Instead of comparing ourselves to others, we should celebrate our own achievements and be grateful for what we have.
Find an investor-friendly agent for real estate success: Connect with local market experts via BiggerPockets Agent Finder for valuable insights and guidance in finding the right investment property, but remember, past performance doesn't guarantee future results and consult with advisors before making decisions.
If you're looking to get into real estate investing or expand your current portfolio, finding an investor-friendly agent can make a significant difference. The market can be unpredictable, but the best investors understand that it's not about timing the market perfectly, but rather having a solid strategy and being consistent. With BiggerPockets Agent Finder, you can quickly connect with local market experts who can help guide you through the process of finding the right investment property. They can provide valuable insights into neighborhoods, market trends, and potential deals. Remember, past performance is not indicative of future results, and all investments carry risk. Be sure to consult with qualified advisors before making any investment decisions. To get started, head to biggerpockets.com/deals and enter your investment criteria to be matched with an agent who can help you get closer to financial freedom.
