Podcast Summary
Don't hesitate to act on profitable real estate opportunities: Identify profitable opportunities, act swiftly, surround yourself with peers, and stay informed of economic trends to grow your real estate portfolio.
When you've identified a profitable real estate opportunity, don't hesitate to act on it. Buy it without asking further questions. Whether you're just starting out or already experienced, this principle can help you grow your portfolio. Scott McGillivray, a real estate hero and the guest on the Bigger Pockets podcast episode 434, shared his journey to acquiring 25 units by age 25 and offered strategies for getting offers accepted. He also discussed the importance of understanding economic trends to prepare for the future of your business. Additionally, David Green provided a quick tip: surround yourself with investors at your level to gain encouragement and avoid unnecessary stress. Overall, this episode offers valuable insights and strategies for real estate investors at every stage.
Learn from successful investors and connect with peers: Find a mentor or network with like-minded individuals to learn and grow in real estate investing. Consider alternative strategies like renting to retirement or investing in private funds for minimal upfront costs. Proper tenant screening is essential for successful property management.
Finding a mentor or connecting with individuals at your level can significantly help you grow and overcome challenges in real estate investing. David Osborn emphasized the importance of learning from successful investors and focusing on your passion and skills to advance in your investing journey. Additionally, opportunities like renting to retirement or investing in private real estate funds can help you get started with little to no money down. Lastly, good tenant screening is crucial for successful property management, and tools like RentReady can make the process easier and more efficient.
The Power of Persistence and Passion: Despite initial setbacks, staying determined and passionate can lead to success in the long run, as shown by Scott McGillivray's journey with Income Property.
Perseverance and passion can lead to success, even when faced with initial obstacles. Scott McGillivray, the host of Income Property, shared his experience of being asked to be on a podcast 8 years ago, which didn't work out due to tech issues. However, he didn't give up and finally made it happen 8 years later. McGillivray also discussed the inception of Income Property, a show that focused on real estate investing and financial opportunities, which was initially met with skepticism due to its niche topic. Despite this, McGillivray's passion and conviction led to the show's success and it became a go-to resource for people interested in real estate investing. The show even gained popularity during the 2008 market crash, as it provided credible information and focused on the fundamentals of real estate. McGillivray's story serves as a reminder that persistence and passion can lead to success, even when faced with initial setbacks.
Turning a basement renovation into a successful TV show and real estate investing opportunities: Renovating a basement for rental units or investing in real estate, such as condos, can lead to financial freedom and income generation. Focus on potential rental income and don't delay investment opportunities.
Real estate investing, especially house hacking, can lead to financial freedom and even the ability to live in desirable locations. The speaker shares his experience of turning a basement renovation into a successful TV show, where viewers learned how to create additional rental units in their homes to offset costs and even generate income. He also mentions the example of investing in condos in Hawaii, which could have led to significant returns if the investment was made at the right time. The speaker emphasizes that the best time to invest in real estate was likely in the past, but the second best time is now, and delaying investment opportunities can result in missed opportunities for financial growth. Additionally, the speaker encourages focusing on the potential rental income, as it can help pay off the initial investment.
Lesson from a 'slumlord' sparks real estate investing interest: Realizing you're funding someone else's lifestyle can inspire investing in income-generating assets, like real estate, despite fears and perceived lack of readiness.
Investing in assets that generate income or pay for themselves is a key to financial success. This was driven home for the speaker during their college years when they found themselves renting from a "slumlord" who essentially made them pay for the entire cost of the house while he did nothing. The realization that they were essentially funding someone else's lifestyle sparked their interest in real estate investing. However, many people, including the speaker's friends, are hesitant to take the plunge despite understanding the potential benefits. Fear is likely a major factor, as well as a lack of resources or perceived lack of readiness. Nonetheless, the potential rewards of real estate investing can outweigh the risks, especially when it comes to owning income-generating properties.
Desperation and Necessity: Powerful Motivators for Taking Bold Steps: Desperation and necessity can inspire people to take risks and pursue new opportunities, especially when approaching retirement age and realizing financial goals aren't met. Media can help shift mindset and motivate action.
Desperation and necessity can be powerful motivators for taking bold steps in life, such as starting a business or investing in real estate. The speaker shared his personal experience of feeling desperate and having no other options, which led him to buy a property despite his fears. He believes that people often hesitate to take entrepreneurial risks because they're too comfortable. However, as people approach retirement age and realize they're not reaching their financial goals, they may experience a crisis and be motivated to try something new. The speaker also emphasized the importance of aligning both the logical and emotional sides of our brains to achieve remarkable goals. He suggested that media, such as shows, podcasts, and books, can help change our mindset and motivate us to take action. In the speaker's own experience, buying his first property brought him a new sense of pride of ownership and marked the beginning of his investing journey.
Unexpected opportunities from property investment: Investing in property can lead to financial growth through refinancing, equity extraction, and purchasing more properties.
Making a significant investment in property can lead to unexpected opportunities and financial growth. The speaker shares his personal experience of buying his first house and renovating it, which led him to realize the potential of owning multiple properties. He was able to refinance his first house, extract equity, and use it to purchase more properties, creating a snowball effect. This experience shifted his focus from the micro details to the bigger picture of real estate investing and understanding the practical aspects of managing his finances. The process of buying, renovating, and refinancing properties became a system for him, and he encourages others to explore this path to build wealth.
Hard work and long-term vision in real estate investing: Real estate investing requires patience, persistence, and a long-term vision. Initial stages may involve long hours, budget overruns, and frustrations, but crucial for future success.
Real estate investing requires patience, persistence, and a long-term vision. The speaker's experience of buying 8 houses in one day due to changing financing rules illustrates the importance of acting quickly when opportunities arise, but also the necessity of putting in hard work and effort in the early stages. The first few years of investing may involve long hours, budget overruns, and frustrations, but the knowledge, experience, and connections gained during that time are crucial for future success. As the speaker notes, "it's hard work quick, get rich slow." So, for those starting out in real estate investing, it's essential to stay focused on the long-term goals and not get discouraged by the initial challenges.
Maximizing real estate investment performance: Patience, persistence, and optimization are key to successful real estate investing. Learn strategies to secure deals, optimize properties, and expand your portfolio.
Optimizing real estate investments is a crucial step often overlooked by many investors. The speaker shares his experience of buying eight properties and spending a year and a half to optimize them before refinancing and expanding his portfolio. He emphasizes the importance of maximizing the performance of each property before moving on to the next one. Additionally, having a clear goal and a well-thought-out plan can help investors stay focused and motivated. The speaker's goal of owning 25 properties by the age of 25 pushed him to continuously buy and optimize properties. He also shares the importance of becoming a "professional buyer" by learning various strategies and techniques to secure deals. Overall, the discussion highlights the importance of patience, persistence, and optimization in real estate investing.
Using creative negotiation strategies like the 'Scottie Mac method' can increase your chances of getting an offer accepted.: Present multiple offers with urgency to encourage the seller to choose between them, increasing odds of acceptance. Understand behavioral economics for better negotiation outcomes.
Using a creative negotiation strategy, such as the "Scottie Mac method," can increase your odds of getting your offer accepted, even in situations where the seller seems unresponsive or indecisive. This method involves presenting the seller with multiple, carefully crafted offers, giving them a sense of control and urgency. By providing options, you encourage the seller to choose between the available offers rather than considering external alternatives. This tactic can be particularly effective in complex deals or when working with hesitant sellers. Additionally, understanding the principles of behavioral economics can provide valuable insights into human decision-making, helping entrepreneurs and real estate investors better navigate negotiations and close deals. I highly recommend reading Robert Cialdini's book "Influence: The Psychology of Persuasion" to gain a deeper understanding of these concepts.
Creating positive relationships with tenants: Small gestures like giving gifts and using thoughtful incentives can save time, money, and create positive relationships with tenants. Effective tenant screening using tools like RentReady ensures financial stability and reduces potential maintenance issues.
Building positive relationships with tenants can lead to significant savings and easier property management. The speaker shared an experience of giving gifts to tenants when they moved in and noticed a decrease in work required for property maintenance. This simple act of kindness created a sense of reciprocity and made tenants more likely to take care of small issues themselves. The speaker also shared a story about using a $250 shrimp burger gift certificate as part of a real estate deal offer, although it didn't close that deal, it left a positive impression. These small gestures demonstrate the power of emotional connection in persuasion and can lead to cost savings and easier deal making. Additionally, the speaker highlighted the importance of good tenant screening using tools like RentReady, which offers proof of income verification to ensure financial stability of potential tenants. Overall, these strategies can help investors save time, money, and create positive relationships with tenants.
Specialized insurance and services for real estate investors: Using NREIG for insurance and Redfin for real estate transactions helps investors manage their properties and navigate the market effectively, focusing on fundamentals and long-term growth.
For real estate investors, it's beneficial to use specialized insurance providers like NREIG, rather than dealing with multiple everyday insurance companies. NREIG offers insurance for various types of real estate properties and allows investors to manage all their properties under one schedule and monthly bill. Meanwhile, Redfin can help homebuyers and sellers navigate the process with their up-to-date listings, personalized recommendations, and experienced agents, all while offering lower fees compared to competitors. The speaker shared his experience of weathering market disruptions by focusing on fundamentals and avoiding speculative investments. He emphasized the importance of maintaining cash flow and adjusting to lower expenses, such as interest rates, when they become advantageous. In summary, using specialized services and maintaining a long-term, fundamentals-focused approach can help real estate investors navigate market disruptions and grow their portfolios.
Seizing Opportunities in Real Estate During Disruptions: During economic uncertainty, focus on cash flow and interest rates for profitable real estate investments. Look for off-the-radar properties with discounts for significant returns.
During times of disruption and economic uncertainty, there are opportunities for significant wealth creation in real estate. In 2008, during a major disruption in the housing market, the speaker saw an opportunity and encouraged investors not to view it as a negative time, but rather as the most opportunistic moment in their lives. He emphasized the importance of cash flow and interest rates, and how they can lead to profitable investments despite market downturns. Fast forward to the present day, with the global pandemic causing massive disruption, the speaker is once again doubling down on real estate investments. He's focusing on buying properties that are off the radar of larger conglomerates, such as smaller mom-and-pop resorts and vacation properties. These properties, which offer individual cabins or lodges with ample space, have seen increased demand due to the shift towards local travel. The discounts on these properties, when evaluated based on price per square foot or price per cabin, are phenomenal. The speaker has already purchased two such camps and plans to continue investing in this niche. Overall, the speaker encourages investors to recognize that disruptions can create opportunities for wealth transfer and to take action during these times rather than waiting.
Focusing on specific niches in real estate investing: Investing in niches like campsites or mobile home parks can lead to significant returns, with potential for $5M+ profit from $2.2M investment, even as a side hustle. Secure favorable financing for max returns during economic volatility.
Identifying and focusing on specific niches within real estate investing, such as campsites or mobile home parks, can lead to significant returns. As one investor shared, they've been able to turn a $2.2 million investment into a potential $5 million return through zoning changes and upgrades. Even as a side hustle, these investments can yield substantial profits, with the potential for even greater returns in the commercial space as vacancy rates rise. Despite the uncertainty of the economy, it's important to get involved during times of volatility and secure favorable financing, such as under 1% mortgage rates, to maximize returns.
US and Canada's Political Closeness Leads to Economic Trends: Low interest rates, increased immigration, and higher real estate prices from Canada may influence the US market. Financial aid and global policy shifts could be the driving factors.
As the US and Canada move politically closer together, we can expect to see economic trends from Canada, such as low interest rates and increased immigration, becoming more prevalent in the US. This trend is driven in part by the large amounts of financial aid being distributed in response to crises, which can lead to lower interest rates and higher real estate prices. Additionally, a more inviting global policy towards immigration is expected to lead to increased immigration and a larger student population, further driving up housing prices. These trends will likely result in a bumpy but ultimately profitable few years for those who invest during this period. However, the future beyond that is uncertain and subject to the unknowns of elections and unforeseen events.
The importance of taking action in real estate investing: Successful investors buy their first property despite uncertainty and focus on long-term strategies. Education is valuable, but action is crucial.
Successful real estate investors are those who take action and buy their first property despite not knowing everything about the market. Education is important, but it's the people who identify a profitable opportunity and seize it who make progress. The guest emphasized the importance of having a long-term investing strategy in real estate, as markets will always go up and down. He also recommended books like "Rich Dad Poor Dad" and "The E Myth" for those interested in real estate investing. Additionally, the guest shared his hobbies, which include making TV shows, swimming, and spending time with his kids. The key separator between successful real estate investors and those who don't make it is the willingness to take the first step and buy a property, rather than getting stuck in the education phase.
Long-term perspective matters more than small return differences: Focusing on minor return variations in early-stage real estate investments may not matter much in the long run, emphasizing the importance of a long-term perspective
Focusing too much on small differences in returns in the early stages of real estate investing may not matter as much in the long run. Scott McGillivray shared his experience of regretting not getting a 1% higher return on an early investment, but later realizing that the asset's performance in later years made that extra percentage insignificant. Therefore, it's essential to keep a long-term perspective and not get too hung up on minor variations in returns. To connect with Scott and learn more about his real estate investing insights, follow him on social media, listen to his podcast "The Real Estate Rebel with Scott McGillivray," and watch for his new shows on HGTV. Remember, the key to financial freedom is time in the market, not timing the market. To find an investor-friendly agent to help navigate the real estate investing journey, visit biggerpockets.com/deals. Happy investing!
