Podcast Summary
Starting early with the right foundation and education: Early financial guidance and involving kids in your business can lead to significant success in real estate and finance
Starting early with the right foundation and education can lead to significant success in real estate and finance. The interview with Andrew Abernathy highlighted how his parents' financial guidance at a young age set him on a path to building a real estate empire. Andrew's story reinforces the importance of sharing financial knowledge with children, even if it seems advanced, and hiring people with passion for their work. By starting early and consistently climbing higher, anyone can make progress towards their goals. The quick tip encourages bringing kids into your world and involving them in your business if they show an interest. This can be a valuable way to pass on knowledge and potentially inspire a future career in real estate.
Investing in new construction with discounts and no down payment: Rent to Retirement offers opportunities to invest in new construction properties at discounted prices with no or low down payment. RentReady's property management software verifies tenant income, ensuring financial stability, and Steadily.com provides fast and affordable landlord insurance with next-day coverage.
There are opportunities for investing in new construction properties at discounted prices with no or low down payment through Rent to Retirement. Additionally, RentReady's comprehensive property management software now offers proof of income verification for tenant screening, ensuring financial stability and confidence in the rental process. For landlords, Steadily.com provides fast and affordable landlord insurance with next-day coverage and a commitment-free quote. Andrew Abernathy, a podcast guest, shares an inspiring story of starting to invest in stocks at the young age of 10, demonstrating that he's been an entrepreneur and number enthusiast for a long time. From trading grain futures on the family farm to learning about puts and calls, Andrew's passion for numbers and investing began early and has continued to grow throughout his life. These tools and insights can help investors save time, money, and stress in their real estate investing journey.
Learning financial risk management on a farm: Farming requires both hard work in the fields and strong business acumen, including understanding financial instruments like puts and calls to hedge against potential losses and protect the business.
Growing up on a farm in North Dakota, the speaker learned about financial risk management through the use of puts and calls, which are financial instruments used for speculating on the direction of the market. These concepts were taught to him by his father as a way to hedge against potential losses and protect their farm business. Farming is not just about working hard in the fields but also requires strong business acumen. With the globalization of the economy, farmers now need to wear multiple hats, including mechanic, marketer, negotiator, and more, and a significant portion of their success comes from managing their business operations in the office. The speaker's father, who was an owner-investor, instilled in him the importance of protecting the farm business from downside risks while maximizing upside potential. This early education in financial concepts laid the foundation for the speaker's future success.
Managing risk in business and agriculture: Effectively manage risk through hedging, vertical integration, cost reduction, and emotional control in business and agriculture.
Successful businesspeople, especially those in agriculture where they're heavily reliant on unpredictable weather, understand that risk cannot be completely eliminated but can be managed effectively. This involves hedging against potential losses and maximizing upside. Additionally, vertical integration and cost reduction are crucial strategies to protect the downside. The ability to manage emotions and mental states, learned at a young age through dealing with weather and crop prices, plays a significant role in this approach. As Warren Buffett would say, investing is a sport where you have more than three strikes, and it's essential to take calculated risks, stay within your circle of competence, and learn from each experience.
Learning essential life skills early: Encourage children to explore business, manage money, and learn about risk for a prosperous future
Starting young is crucial in learning essential life skills like managing risk, money, and businesses. The speaker shares his experience of learning these skills at the age of 10, working various jobs, and investing in the stock market during his teenage years. He emphasizes that these experiences helped him gain a unique perspective and financial success. Unfortunately, not everyone is exposed to such opportunities during their formative years. Therefore, it's essential for parents and educators to teach and encourage children to explore various business ventures, manage money, and learn about risk. By doing so, they can set their kids up for a more prosperous future.
Success is a combination of preparation, effort, and discipline: Young people can succeed through financial education, hard work, and understanding complex concepts, despite being born into privilege or good timing
Success in investing, or any area of life, is not just about luck or being born into privilege. It's about the combination of preparation, effort, and discipline. The speaker's success as a young investor was not just due to entering the market at a good time, but also the financial education they received from their parents, their hard work, and their ability to apply what they learned. Additionally, the speaker believes that young people are capable of understanding complex concepts and should be encouraged to explore their passions and interests, even if they seem "adult" or beyond their age. By fostering a love of learning and giving children the tools they need to succeed, we can help them build a strong foundation for their future.
Exploring passions at a young age leads to great success: Identifying and pursuing passions early on can lead to significant financial and personal gains
Discovering and following one's passion at a young age can lead to great success, not just financially but personally as well. The speaker, Andrew, shared how his father encouraged him and his siblings to explore various topics and pursue their passions. Andrew himself turned $80,000 into $4.1 million by investing in real estate at a young age, inspired by his interest in history and the potential for quick returns in the industry. Despite the challenges, such as raising additional funds, Andrew persisted and learned valuable lessons along the way. His story underscores the importance of identifying and pursuing one's passions early on.
Young Investor's Success Story: Identifying Opportunities and Convincing Investors: Identifying promising opportunities, taking calculated risks, and presenting compelling investment propositions can lead to significant financial gains, even for young investors.
Taking calculated risks and presenting opportunities as a no-brainer to potential investors, even at a young age, can lead to significant financial gains. The story shared highlights a 16-year-old's successful real estate investment journey, where he identified an opportunity, put himself in a position to act, and convinced a wealthy farmer to invest using a creative deal structure. The key elements include identifying a promising opportunity, taking action despite the risks, and presenting a compelling investment proposition. This approach can be applied to various situations, including borrowing money or seeking investment, and can lead to impressive results.
Navigating Unexpected Opportunities and Successes: Balancing grand achievements with everyday joys, leveraging niche communities for opportunities, and thorough tenant screening with RentReady's software ensure success and peace of mind.
Unexpected opportunities and successes, even at a young age, can be both fulfilling and challenging. The speaker shared an experience of receiving a large sum of money and being encouraged to invest it, which led to further success. However, this experience also left him feeling disconnected from normal life and struggling with identity. He emphasized the importance of balancing grand achievements with the simple joys of everyday life. Additionally, the speaker highlighted the unique opportunities that can be found in niche communities, such as farming communities in North Dakota, where personal connections can lead to unexpected opportunities. Another key takeaway is the importance of thorough tenant screening in property management. The speaker highlighted the benefits of using RentReady's comprehensive property management software, which includes TransUnion certified tenant screening and new proof of income verification. This feature ensures a detailed check of each applicant's financial stability, providing peace of mind for landlords. By automating the tenant screening and verification process, RentReady helps landlords make informed decisions and avoid potential issues. Overall, the speaker's experiences and insights emphasize the importance of staying grounded in the face of success and leveraging technology to streamline property management processes.
1031 exchanges help real estate investors grow their rental property empires: Real estate investors utilize 1031 exchanges to defer taxes and expand their rental property businesses. BetterHelp provides a flexible online solution for those seeking therapy to prioritize their lives.
Top real estate investors utilize 1031 exchanges to defer capital gains taxes and expand their rental property empires. First American Exchange Company is a leader in this process, offering assistance with various types of exchanges. Meanwhile, some individuals choose to follow their dreams and invest in real estate instead of traditional education. Andrew, for instance, dropped out of college to manage his $15,million fund, but his experiences were not without challenges. Despite losses, he persevered and eventually made a life-changing call to Gary, who significantly impacted his career. Overall, these stories illustrate the importance of strategic financial planning and following one's passions. For those considering therapy to help prioritize their lives, BetterHelp offers a flexible, online solution.
Leveraging Relationships with Older Investors: Younger investors can build strong relationships with older, experienced investors by focusing on building a connection rather than just making a sale. Older investors often want to leave a legacy and help those who share their passion for real estate.
Networking is a powerful tool for real estate investors, especially for younger investors looking to build relationships with experienced and older investors. The speaker shared his experience of cold-calling North Dakota billionaire Gary Tharaldson and being surprised when he called back. During their conversation, the speaker discovered that Tharaldson enjoyed sharing his story and mentoring young people with ambition. By focusing on building a relationship rather than just making a sale, the speaker was able to learn from Tharaldson and gain valuable connections. This approach not only benefited the speaker but also allowed him to pay it forward by helping others as he grew older and more successful. Older investors often want to leave a legacy and help those who share their passion for real estate. By leveraging their youth, drive, and hustle, younger investors can build strong relationships and learn from those who have been in the industry for longer.
Focusing on becoming the best in one area: Reflect on your strengths and focus on becoming great at one specific area to make a significant impact
Money and wealth bring about different concerns as one progresses. Initially, it's about acquiring it and building, but later, it's about protecting and preserving what has been created. Legacy and significance become important as one reflects on the impact they want to leave behind. Gary Vaynerchuk, a billionaire, emphasized the importance of focusing on one area of expertise and becoming the best at it. He shared his experience of building hotels as an example of vertical integration and being the best in the business. When I faced a financial setback, Gary advised me that I was good at many things but not great at anything. This realization led me to reevaluate my priorities and focus on becoming great at something specific.
Focus on one idea and make it successful: Instead of waiting for the perfect idea, focus on one, put in the effort, and make it successful. Partner with experts for management and branding to free up time for development and ownership.
Instead of waiting for the perfect idea to come along, it's important to focus on one idea, put in the effort, and make it successful. In the case of self storage, the benefit of signing up with established companies like Public Storage and Extra Space was their expertise in management and branding, allowing the partners to focus on development and ownership. This led to a successful business model, with projects breaking ground and generating profits even before the doors opened. By focusing on cash recycling and continuous growth, the goal is to eventually build a self storage business worth a billion dollars a year.
Vertical Integration in Self-Storage Business: By owning and controlling various aspects of self-storage operations through vertical integration, Abernathy Holdings recycles capital quickly and increases profits while reducing capital intensity.
The key to building a self-storage business with a $1,000,000,000 annual revenue involves quickly recycling capital. By owning and controlling as much of the process as possible through vertical integration, Abernathy Holdings is able to recoup a significant portion of their investment before the doors even open, and then continue to reinvest that capital into new projects. This approach not only increases profits but also reduces the overall capital intensity of the business. The process from finding land to stabilizing a property in Arizona takes approximately three and a half years, and Abernathy Holdings aims to expand into California for even higher upsides. The company, which has not issued dividends in the past decade, acts like a vertically integrated Berkshire Hathaway, keeping investors and business models together while streamlining operations. Vertical integration includes being the garage door dealer, construction company, and equipment dealership, while avoiding manufacturing-heavy verticals like sign-making to minimize headcount and potential mistakes.
Building a Winning Team: Surround yourself with skilled individuals, share ownership, have a clear vision, be the 'dumbest' person in the room, start small, work for equity, and maintain a positive attitude to build a successful team and create a win-win situation.
Building a successful business involves surrounding yourself with passionate and skilled individuals, and sharing ownership with them to create a win-win situation. The speaker, who has a team of six key people, each with their own area of expertise, emphasizes the importance of having a clear vision and being the "dumbest" person in the room. He also advises starting small, working for equity, and having a good energy and attitude to attract partners and investors. Ultimately, the goal is to create a team of millionaires, and the best return on investment comes from giving more to employees. For those starting out in a trade looking to scale into running a business, the advice is to make a no-loss deal, work hard, ask questions, and maintain a positive attitude. The energy and excitement of the team members are crucial as they feed off each other's enthusiasm.
Maintaining a Positive Mindset for Success: Intentionality, resilience, humor, learning from successful people, managing emotions, and a positive attitude are essential for personal and professional success. Recommended books: Trammell Crow Building an Empire, Secrets of Success by Gary Thelton, and Shoe Dog by Phil Knight.
Maintaining a positive energy and mindset is crucial for personal and professional success. The speaker shared how he uses humor and learning from successful people to keep his energy up, even on less than ideal days. He also emphasized the importance of managing emotions, especially when trying new things like golf, which can be frustrating but ultimately rewarding. The speaker's outlook on life, rooted in discipline and learning from an early age, is inspiring. He recommended several books, including "Trammell Crow Building an Empire," "Secrets of Success by Gary Thelton," and "Shoe Dog by Phil Knight," as valuable resources for learning about business and personal growth. Overall, the conversation underscored the importance of intentionality, resilience, and a positive attitude in navigating life's challenges.
Focus on one thing and ignore distractions: Successful investors prioritize long-term strategies, maintain a positive attitude, and ignore distractions to achieve success in real estate investing
Successful investors focus on long-term investment strategies, ignore distractions, and maintain a positive attitude. Andrew Abernathy, a real estate investor and guest on the podcast, emphasized the importance of focusing on one thing and ignoring other potential deals. He also mentioned the significance of having the right mindset and attitude in achieving success in real estate investing. Abernathy can be found on Facebook, Instagram, and his personal website, andrewabernathy.com, as well as Abernathy Holdings co.com for business inquiries. The discussion also touched on the benefits of golf in building relationships and learning valuable life lessons. Overall, the conversation highlighted the importance of perseverance, focus, and a positive attitude in achieving success in real estate investing.
