Podcast Summary
Real Estate Investing: Building Wealth and Financial Freedom: Setting goals, using tools like the Intention Journal, and taking action can lead to financial freedom and building wealth through real estate investing.
Investing in real estate can lead to financial freedom and the possibility of building wealth beyond imagination. Brandon Turner and David Greene, the hosts of the Bigger Pockets podcast, share their experiences and encourage listeners to pursue real estate investing despite initial challenges. They emphasize the importance of setting goals and using tools like the Intention Journal to help stay focused. Their guest, Katie Neeson, is a successful investor who shares her experiences in commercial and residential revitalization. By taking action and staying committed, individuals can transform their lives and create future millionaires.
From corporate world to real estate entrepreneurship: Despite initial reservations, Katie's entrepreneurial spirit led her to explore real estate investing, using tools like DealMachine to find off-market deals and considering passive income through private funds or no-money-down opportunities.
Starting a business in real estate might not have seemed like an appealing option for Katie due to her upbringing in the industry during the 1980s and 1990s in Texas. However, her entrepreneurial spirit led her to explore opportunities outside of the corporate world. Eventually, she was inspired by Robert Kiyosaki's "Rich Dad Poor Dad" and decided to give real estate investing a try. During the podcast episode, Katie shares her experiences of getting into real estate investing, including her initial foray into multifamily properties, which she quickly discovered she didn't enjoy. She then discusses the importance of finding off-market deals and shares valuable insights on how to do so, including the use of tools like DealMachine. Additionally, Katie talks about the potential for passive income in real estate through private real estate funds, such as PPR Capital Management, and no-money-down investment opportunities with companies like Rent to Retirement. Overall, the podcast offers a wealth of information for those interested in real estate investing, emphasizing the importance of research, persistence, and the right tools to succeed.
Lessons learned from investing in real estate: Despite initial challenges, investing in real estate led to valuable lessons and eventual profit. Important to learn from mistakes and keep building wealth.
The speaker's financial journey was shaped by her experience with Robert Kiyosaki's teachings, leading her to buy a low-priced condo in a troubled area. Despite challenges such as high turnover, stressful tenants, and unexpected fees, she learned valuable lessons and ultimately made a profit. After this experience, she took a break from real estate investing to focus on her job but later returned to it with a larger investment in 4 plexes. Overall, her experiences reinforced the importance of building wealth through real estate and the value of learning from mistakes.
Considering personal satisfaction in real estate investments: Evaluate overall fit of a real estate investment, not just financial ROI, and consider personal preferences and passions for long-term success.
While analyzing the financial aspects of real estate investments is important, it's equally crucial to consider the personal satisfaction and enjoyment derived from the investment. The speaker shared their experience of becoming a landlord of HUD tenants, making a good income but hating the experience due to the constant maintenance issues and phone calls. They learned that if a property brings unwanted stress and negativity, it can lead to quitting the real estate business altogether. Therefore, it's essential to evaluate the overall fit of a real estate investment, not just the financial ROI. For new investors, it's recommended to consider their preferences and passions in real estate, as ultimate success depends on enjoying the process. While the speaker still uses spreadsheets for analysis, they emphasize the importance of considering the non-financial aspects of investing.
Learning from experiences in real estate: Taking risks and learning from mistakes is crucial for growth and success in real estate. Don't wait for a perfect solution, start taking action and learn along the way.
It's important to take action and learn from experiences, even if they don't turn out perfectly. The speaker shares how they made investments in real estate, starting with mobile home parks, which wasn't their initial plan. They learned valuable lessons from each investment, and even though they wouldn't make the same choices today, they wouldn't trade those experiences for anything. The speaker encourages others to start taking action and learning, rather than waiting for a perfect solution or path to present itself. They also discuss how their focus on improving properties led them to success in flipping houses and eventually developing commercial properties. However, they had to pivot when COVID hit and their pipeline dried up, forcing them to focus on a commercial project and learn new skills as general contractors. Overall, the key takeaway is that taking risks and learning from mistakes is essential for growth and success.
Inspired by others, take action for growth: Starting small, taking action leads to growth and progress. Surround yourself with supportive influences and learn from others.
Taking action, no matter how small, is crucial for personal and professional growth. The speaker shares how they were inspired by someone else's success and decided to replicate their steps, leading to significant progress in their own life. However, they also emphasize that it's important to start moving, even if it feels uncomfortable or uncertain at first. The analogy of a ship that's hard to turn when it's not moving but becomes easier to guide as it gains momentum resonates with the idea that taking action can help us overcome obstacles and make progress towards our goals. The speaker also highlights the importance of surrounding oneself with supportive influences and being open to learning from others. Ultimately, the key takeaway is that taking action, even if it's just a small step, can lead to significant progress and growth.
Overcoming fear in real estate investing: Identify worst-case scenarios, surround yourself with knowledgeable individuals, and find a consultant or mentor to navigate new ventures.
Overcoming fear and taking calculated risks are essential for growth in real estate investing. The speaker shared her personal experience of facing fear every time she took a new step in her investing journey, from single family flips to commercial projects. However, she learned to overcome her fear by identifying worst-case scenarios and determining if she could live through them. She also emphasized the importance of surrounding herself with knowledgeable and experienced individuals who could guide her through new ventures. The speaker's story illustrates that fear is a natural part of the investing process, but with the right mindset and support system, it can be overcome to achieve success. The speaker also discussed the importance of finding a consultant or mentor who has already succeeded in the area of investing you're interested in. In her case, she found a consultant who had built some of her first developments and had experience in both commercial and residential investing. By leveraging their expertise, she was able to navigate the complexities of commercial projects and learn from their experiences.
Discovering Passion in Real Estate Development: Exploring your passions can lead to personal fulfillment and future success. Research your city's master plan and align projects for the best chance of success. Commercial properties often follow residential growth, but in revitalizing a downtown, the process is reversed.
Following your passion can lead you to both personal fulfillment and future success, rather than viewing it as a means to an end. The speaker, Katie, shares her experience of discovering her passion for real estate development and how it has brought her joy and led her to a better life. She encourages listeners to consider their own passions and not solely focus on the highest ROI opportunities. Additionally, Katie suggests researching your city's master plan and aligning your projects with their goals for the best chance of success. In the context of real estate development, commercial properties often follow the growth of residential areas, but in revitalizing a downtown, the process is reversed, and shops and boutiques need a residential population to thrive.
Collaborating with city officials for successful downtown development: Developers should align projects with city goals and communicate a clear vision to build trust and create vibrant downtown communities
Successful downtown development requires collaboration with city officials. Developers should identify the city's goals and desires, and then work to create projects that align with those aspirations. This can lead to unexpected benefits, such as land use exceptions or increased density. The key is to communicate a clear and compelling vision to city officials, and to build a strong relationship based on mutual trust and understanding. By working together, developers and city officials can create vibrant, thriving downtown communities that meet the needs of residents and businesses alike.
Shift perspective to view city officials as partners: Approach city officials as potential partners, understand their goals, and create collaborative relationships for successful real estate projects. Utilize resources like Redfin, Walker webcast, and BetterHelp for added support.
Instead of viewing city officials as adversaries, it may be more productive to approach them as potential partners. By understanding their goals and getting them excited about your project, you can create a collaborative relationship that benefits both parties. This shift in perspective can make the often challenging process of working with city governments smoother and more successful. Additionally, utilizing resources like Redfin for buying or selling homes, or the Walker webcast for commercial real estate insights, can help streamline your real estate journey. And if you're in need of therapy to help prioritize what matters most to you, consider trying BetterHelp for its flexibility and affordability.
Persistence pays off in real estate deals: Thorough research, networking, and negotiation skills led to a successful purchase of a gutted commercial building despite initial uncertainty in ownership and price.
Successful real estate deals often require thorough research and persistence. In the discussed example, the property was a gutted commercial building located on Main Street, which was identified during a walkthrough of potential distressed properties. The owner was found through the county appraisal district (CAD) and turned out to be a fellow alumni. Although the building was not for sale, the owner was open to negotiations due to uncertain plans for the property. The negotiation process was tricky as the owner did not initially disclose a price. The buyers estimated the renovation budget and offered 225,000, which was countered at 260,000, and they eventually settled on 250,000. This experience demonstrates the importance of being persistent, doing thorough research, and understanding negotiation tactics. Additionally, Chris Voss's book, "Never Split the Difference," provides valuable insights into negotiation strategies.
Effective negotiation strategies in real estate deals: Prepare well, make a low initial offer, let the other party argue for a higher price, and acknowledge their perspective for successful real estate negotiations.
Effective negotiation strategies, such as anchoring and making the other party feel like they've won, can lead to successful real estate deals. The speakers in the discussion shared their experiences of using these tactics to secure properties, even in situations where there were few comparables and lengthy negotiation periods. They emphasized the importance of being prepared, grounding the other party with a low initial offer, and letting them argue for a higher price. Additionally, acknowledging the other party's perspective and making them feel like they've made a good deal can lead to a more positive negotiation experience for both parties.
Catering to the other party's ego in negotiation: Understanding financial terms like interest-only loans, amortization, and maturity can help negotiate real estate deals effectively, even if it means giving away a large percentage of equity.
Successful negotiation often involves catering to the other party's ego rather than trying to exploit their weaknesses. The speakers in this discussion shared their experience of funding a real estate deal using both debt and equity. On the debt side, they used a 2-year interest-only loan with a 20-year amortization, which allowed them to build the project while only paying interest on the loan. The 20-year amortization also provided the comfort of knowing they had an option for permanent financing if they couldn't refinance. On the equity side, they kept 10% for bringing the deal to the table, even though they weren't contributing any cash. This meant that 90% of the ownership was left to be divided among other investors. Although they gave away a large percentage of the equity, they emphasized that understanding and using financial terms like interest-only loans, amortization, and maturity can make a difference when negotiating real estate deals.
Calculated risks and creative solutions lead to successful real estate investments: Taking calculated risks, bringing in partners, and considering creative solutions can lead to profitable real estate investments. Understand the seller's desires, take action, minimize partners for easier management, and consider 1031 exchanges for consolidation.
Taking calculated risks and being open to creative solutions can lead to successful real estate investments, even in unexpected ways. In the discussed deal, the investors brought in multiple partners to reduce their cash investment, renovated the property, and turned it into a commercial space with retail stores and offices. The outcome was a refinanced property with significant appreciation and infinite returns for all investors. Lessons learned included not underestimating the seller's desires, taking action, and minimizing the number of partners for easier management. A potential future move could be selling a larger property through a 1031 exchange to consolidate investments and improve cash flow. While the emotional attachment to properties can be strong, it's essential to consider the financial implications and potential benefits of different strategies.
Maximize gains through real estate strategies and tax implications: Understand tax implications like 1031 exchanges, diversify investments, and focus on long-term cash flow for successful real estate investing.
Real estate investing involves various strategies and approaches, including buying and selling properties, flipping houses, and developing commercial and residential projects. Emotional attachments to properties can sometimes lead to difficult decisions, but understanding the tax implications, such as 1031 exchanges, can help maximize gains. Diversifying investments across different types of properties and considering long-term cash flow can help investors achieve their financial goals. Whether it's flipping houses, developing properties, or collecting rental income, the key is to stay informed, be adaptable, and surround yourself with a strong team. Always consult with a trusted financial advisor or CPA to make the best decisions for your unique situation.
Exploring new financing methods and partnerships: Successful real estate investors adapt by exploring new financing methods, partnering with investors, and continuously learning to grow their business
Successful real estate investors like Katie are constantly exploring new ways to finance their projects and adapt to changing circumstances. They may partner with private investors, experiment with different financing models, and even bring in outside experts for guidance. Katie shared her experiences with 50-50 profit-sharing arrangements and a flip model where she and her partner owned a smaller percentage initially but gained a larger share once the project was completed. She also emphasized the importance of education and continuous learning, setting a personal goal to discover three new financing methods by the end of the quarter. Overall, Katie's journey underscores the importance of flexibility, collaboration, and a commitment to growth in real estate investing.
Mindset of successful real estate investors: Successful real estate investors take ownership of their lives and situations, refusing to let external forces dictate their position. Dan's latest book includes interactive interviews after each chapter on Audible.
Successful real estate investors take ownership of their lives and situations, refusing to let external forces dictate their position. This mindset, as shared by Katie during a conversation about books and hobbies, is a common trait among those who persevere in real estate investing despite challenges or failures. Another interesting tidbit from the discussion was the unique format of Dan's latest book, which includes interviews with the author after each chapter on Audible. This interactive approach could be a valuable addition to future real estate investing books. Additionally, Katie mentioned her hobbies, which include spending time with her children and their horse-show activities, as well as exploring cities in Italy and snow skiing. Overall, the conversation provided valuable insights into the mindset and experiences of successful real estate investors.
Clarifying Misconceptions About Brandon and David's Relationship: Finding the right investor-friendly agent is crucial in real estate investing, use BiggerPockets Agent Finder to find local market experts
Despite any perceived competition or rumors, there's no beef between Brandon and David. Katie, a previous guest, shared her experience of working with both investors during a coaching session. She also clarified that there's a difference between working cowboys and rodeo cowboys, and her husband is the former. The conversation ended with a light-hearted exchange about cowboys and their way of life. A key takeaway from the episode is that finding the right investor-friendly agent is crucial in real estate investing. With BiggerPockets Agent Finder, investors can easily find local market experts to help navigate neighborhoods, analyze numbers, and take confident action towards financial freedom. Remember, it's not about timing the market, but time in the market. So, head to biggerpockets.com/deals and find your investor-friendly agent today.