Podcast Summary
Personal experience of buying a 7-figure house and investing in real estate: Aligning goals with partners, overcoming challenges, and considering passive income opportunities through private real estate funds are crucial for successful real estate investing.
Expanding your horizons and taking calculated risks in real estate investing can lead to significant rewards. The speaker shares her personal experience of buying a house worth over 7 figures, despite feeling nervous and uncertain about the future. She emphasizes the importance of having aligned goals with your partners and looking out for their interests as well as your own. Tamar Hermes, a successful real estate investor, will share her story about both active and passive investing, including overcoming challenges and making informed decisions about selling properties. Additionally, the quick tip encourages investors to consider the importance of mutual goals when choosing partners. Remember, DealMachine offers unlimited access to contact information for potential leads, making it an essential tool for investors. Consider exploring passive income opportunities through private real estate funds like PPR Capital Management for truly passive income.
Investing in Real Estate with No Money Down: Start small with no money down programs like Rent to Retirement, emphasize financial freedom by getting rid of rent, and realize the long-term benefits of real estate investment.
It's possible to start investing in real estate with no money down through programs like Rent to Retirement. This was discussed during the podcast interview with Tamar Hermes, who shared her journey into real estate investing, starting with house hacking a duplex at the age of 29. Tamar emphasized the importance of getting rid of rent to increase financial freedom and the power of starting small and being conservative. She also highlighted the significance of real estate as an investment that becomes more beneficial over time. For those interested in getting started with no money down, Rent to Retirement offers discounted new construction properties and investor loans with low rates and down payment options.
Transitioning from active to passive real estate investing: Successfully balancing active and passive investments requires reaching a financial level to let others manage properties while still earning returns. Passive investments involve finding deals through sponsors and investing as a silent partner, while active investments involve managing properties and acquiring assets for long-term or short-term rentals.
Successful real estate investing involves a balance between active and passive investments. The speaker shares his experience of transitioning from managing multiple units to passive investing and selling larger properties at the right time. He emphasizes the importance of reaching a certain level where one can afford to let others manage properties while still earning significant returns. He also clarifies the difference between passive and active investments, explaining that passive investments involve finding deals through sponsors and investing as a silent partner, while active investments involve managing the property and acquiring assets for long-term rental or short-term rentals like Airbnb. The speaker's personal preference is towards passive investments and long-term rentals, but the choice ultimately depends on individual interests and goals.
Making tough real estate decisions: Selling a performing asset for better opportunities: Selling a performing asset for better opportunities requires careful consideration. Minimize turnover by finding long-term renters, like traveling nurses, using specialized websites. Consider buying properties in a 401k plan for tax advantages, but plan carefully.
Real estate investing involves making tough decisions, such as deciding when to sell an asset that's performing well to upgrade to something potentially better. The speaker shared his experience of holding onto a property for too long, but eventually selling due to high market values and the inability to refinance or use a 1031 exchange in a 401k plan. He also mentioned the importance of finding longer-term renters, like traveling nurses, to minimize turnover and reduce taxes. To find such renters, he suggested using specialized websites. Another strategy he mentioned was buying properties in a 401k plan, which can offer tax advantages, but requires careful planning and understanding of the different types of 401k plans available.
Using Retirement Plans for Alternative Investments: Consult with a financial planner and do thorough research before using retirement plans for alternative investments like real estate or cryptocurrency
Retirement plans like a 401k or a defined benefit plan can offer flexibility for investing in real estate and other assets, such as cryptocurrency or cannabis businesses. While it's possible to buy property in cash using a self-directed 401k, getting a loan on a property through the plan is less common and not typically advised. The rules surrounding these plans are designed to encourage retirement savings, so taking on debt through the plan carries additional risks. To learn more about using retirement plans for alternative investments, it's important to consult with a certified financial planner and do thorough research. Tamar, the speaker in the discussion, learned about these options through a combination of advice from various sources and her own research. She emphasizes the importance of verifying information with multiple experts before making any major financial decisions.
Understanding potential conflicts with financial professionals and real estate agents: When partnering with financial professionals or real estate agents, prioritize your interests, build trust, and look for signs they prioritize your needs. Seek recommendations and do thorough research to ensure a successful partnership.
When working with financial professionals or real estate agents, it's crucial to ensure they have your best interests at heart. Some may be more focused on their own financial gains, and it's essential to be aware of this potential conflict. To build successful partnerships, trust yourself, get educated, and learn to read people. Look for signs that they prioritize your needs over their own. Remember, you're in a partnership, and both parties stand to gain or lose based on the outcome of the deal. Be vigilant, trust your instincts, and don't hesitate to walk away if something feels off. Additionally, consider seeking recommendations from trusted sources and doing thorough research before committing to a professional or agent.
Trust your intuition and seek out information: Stay curious, seek out information, and trust your intuition to find what works best for you in financial matters
Trusting yourself and your intuition is crucial, especially when faced with conflicting advice or complex situations. However, it can be challenging to navigate through the abundance of advice and opinions, especially when it comes to financial matters like 401ks or real estate investing. The key is to seek out information, filter it through, and determine what works best for you. As Grant Cardone says, "The secret to success is being a person who is curious." Ultimately, the search for solutions and self-improvement is the secret to success. Remember, what works for one person may not work for another, so it's essential to stay curious and keep trying new things. In the end, it's all about finding what resonates with you and making it work for your unique situation.
Finding the right balance between science and art in real estate investing: Choose properties that are easy to understand, located in desirable areas, and offer potential for both appreciation and cash flow. Be cautious in today's market and look for opportunities to improve or negotiate deals.
Real estate investing involves both science and art, and success often comes from finding the right balance between the two. Tamar shared her strategy for choosing properties, focusing on deals that are easy to understand, located in desirable areas, and have potential for both appreciation and cash flow. She emphasizes the importance of being cautious in today's market and looking for opportunities to improve properties or negotiate fair deals. Ultimately, Tamar's approach is simple and long-term, with a focus on buying and holding properties and taking advantage of the stability offered by fixed-rate mortgages.
Low interest rates due to government money printing and deficit: Low interest rates from gov't actions lead to increased borrowing and asset inflation, but come with risks
Interest rates are expected to stay low for an extended period due to the large amount of money being printed by the government and the country's operating deficit. This low-interest environment has made borrowing money cheap, leading to increased borrowing and asset inflation. However, it's important to note that this strategy comes with risks, as debt can become an asset of itself and the rules of the economic game can change unexpectedly. Therefore, understanding the current monetary policy and its potential future changes is crucial for making informed investment decisions.
Simplifying Real Estate: Integra Development Group and Redfin: Integra Development Group offers rent to own homes for investors with cash flow, equity, and an exit plan, while Redfin provides updated listings, personalized recommendations, and local agents for buyers and sellers. NREIG offers specialized insurance for real estate investors.
Both Integra Development Group and Redfin offer unique solutions to simplify different aspects of real estate investing and home buying. With Integra Development Group, investors can secure new construction rent to own homes with immediate cash flow, above-average rents, built-in equity, and an exit plan. Redfin, on the other hand, provides access to updated listings every 2 minutes, personalized recommendations, and local agents to help guide buyers and sellers through the process. For insurance, NREIG offers a specialized program for real estate investors, allowing them to manage multiple properties on one schedule and receive customized coverage. Despite challenges, successful investors like Tamar maintain a positive mindset and continue to find joy in the process. Whether it's through learning from difficult experiences or delegating tasks, they remain committed to the potential rewards of real estate investing.
Focusing on finding solutions rather than dwelling on fears: Our brains can hold us back from opportunities due to fear, but trusting ourselves to overcome obstacles is crucial.
Our minds have a tendency to project worst-case scenarios during challenging situations, but we are more resilient than we think. Tamar shared her experience of managing unexpected difficulties, such as tenant issues and major investments, by focusing on finding solutions rather than dwelling on fears. David added to the conversation by discussing how our brains are wired to protect us, but this can sometimes hold us back from taking opportunities. He used the example of investing in higher-priced properties and how the fear of the unknown can be overwhelming, but the reality might be much simpler and more manageable than we imagine. Both speakers emphasized the importance of trusting ourselves and our ability to overcome obstacles.
Understanding Different Types of Debt in Real Estate Investing: Being aware of recourse vs non-recourse debt and assessing personal risk before investing is crucial for success in real estate.
Understanding the type of debt you're taking on when investing in real estate is crucial. Recourse debt means that the lender can come after you personally if the investment fails, while non-recourse debt only allows the lender to take the property back. Having too much recourse debt can put your personal assets at risk and make you uncomfortable. It's essential to assess your financial situation and determine what you're willing to put at risk. Additionally, expanding your investments and taking calculated risks can lead to significant rewards, but it's important to have a strong support system to help navigate the process. Overall, being aware of the rules and making informed decisions based on your unique circumstances is key to success in real estate investing.
The importance of building a supportive community: Surrounding oneself with like-minded individuals can significantly boost confidence and provide valuable insights. Building a network can lead to unexpected opportunities and growth.
Having a supportive community of like-minded individuals is crucial for success in any area of life, including real estate. Surrounding oneself with people who have gone through similar experiences and can offer different skill sets and perspectives can significantly boost confidence and provide valuable insights. The GoBundance community, for instance, brings together successful women in various fields to support and learn from each other. Building such a network can lead to unexpected opportunities, as seen when Tamar helped raise funds for a friend's cause and later connected with David to discuss tribe building. Taking chances and putting oneself out there can lead to meaningful connections and growth.
Learning and growing through networking with real estate investors: Successful real estate investing requires calculated risks, a strong network, continuous learning, and selectivity in finding tenants. Effective communication with multiple agents is crucial.
Successful real estate investing involves taking calculated risks and building a strong network of like-minded individuals. The speaker shared his experience of organizing a retreat for real estate investors, emphasizing the importance of continuous growth and learning from one another. He also highlighted the current challenges in finding good tenants and the importance of being selective. During the Deal Deep Dive segment, he shared a recent purchase of a single-family house in San Antonio, found through a realtor who knew of his specific requirements. When it comes to dealing with multiple real estate agents, the speaker suggested having a primary agent and keeping others informed, ensuring everyone is working towards the same goal.
Benefits of having multiple real estate agents vs exclusive deal: Consider the level of service needed and whether having multiple agents or an exclusive deal aligns with your goals.
Having multiple real estate agents can be beneficial for finding deals, but it's important to understand the level of service you require. If you only need an agent to find deals and write offers, then having multiple agents may be suitable. However, if you require more emotional support, strategy, and engagement from your agent, it's recommended to have an exclusive agency deal. Trying to have both extensive service and the freedom of multiple agents can lead to confusion and ineffective results. In the discussion, Tamara shared her experience of dealing with multiple agents and the importance of defining what you're looking for in an agent. She also mentioned the ease of negotiating a fair off-market price for a property and the arrangement of a leaseback agreement with the sellers. Overall, the key takeaway is to consider the level of service you need and whether having multiple agents or an exclusive deal aligns with your goals.
Considering all costs before investing: Success relies on thorough research, careful analysis, and seizing opportunities when numbers align, not on a location's reputation or a single cost.
Successful real estate investing doesn't rely on a specific location being "good" or "bad," but rather on carefully considering all costs and expenses, including property taxes and HOAs, before making an investment decision. In the discussed deal, the investors found a profitable opportunity in San Antonio, Texas, despite the common perception that Texas is a cheap market. However, they also acknowledged that high property taxes in California, where they came from, made the low housing costs seem more attractive. It's essential to look at the big picture and not be swayed by a single number, such as a low purchase price or high HOA fees, without considering all associated costs. Ultimately, the success of a real estate investment depends on thorough research, careful analysis, and seizing opportunities when the numbers align.
Successful real estate investors learn from mistakes and delegate tasks: Successful investors continuously learn, delegate tasks, and maintain a healthy work-life balance to achieve success in real estate.
Successful real estate investors, as discussed during the show, have a few key traits that distinguish them from those who give up or never get started. One such trait is their ability to learn from their mistakes, as exemplified by Gary Keller's experience with missing out on a lucrative deal. Another trait is their mindset, which focuses on delegating tasks to others rather than figuring everything out themselves, as emphasized in the book "Who Not How" by Dan Sullivan and Benjamin Hardy. Additionally, successful investors are avid learners and continuously seek knowledge through reading and networking. They also have hobbies and interests outside of real estate, which helps them maintain a healthy work-life balance. Ultimately, successful real estate investors are persistent, adaptable, and always looking for ways to improve and grow.
Stepping out of your comfort zone in real estate investing: Being willing to face unknown risks can lead to profitable investments, but fear often holds investors back. To overcome this, find an agent and take calculated risks.
Being willing to step out of your comfort zone and face the unknown can lead to great opportunities in real estate investing. Tamar shared an experience of a potential client who backed out after she listed all the potential issues that could arise during a property rehab. The client's reluctance to face the unknown risks prevented them from making a potentially profitable investment. This fear of the unknown is a common barrier for many investors. However, as Tamar emphasized, being willing to get uncomfortable and take calculated risks can lead to significant rewards. To learn more about Tamar and her investing journey, follow her on Instagram @wealthwarriorwoman or visit her website at wealthwarriorwoman.com. For more resources on real estate investing, visit biggerpockets.com/show458. Remember, the best investors understand that it's not about timing the market but rather time in the market. So, take the first step and find an investor-friendly agent to help you navigate the real estate investing world at biggerpockets.com/deals.
