Podcast Summary
Embrace mistakes and learn from them: Making mistakes is inevitable in real estate investing, but learning from them can lead to valuable lessons and financial freedom
Making mistakes is a natural part of the real estate investing journey. Instead of avoiding them, it's essential to lean into them and keep moving forward. As heard in the Bigger Pockets Podcast Show 716, Greg Cullen shares his story of transforming from a person trying to make ends meet to a successful real estate investor with financial freedom. Despite facing challenges like almost losing his job and a negative partnership, Greg turned these situations around and learned valuable lessons. His disciplined approach to saving and investing allowed him to build a portfolio of 10 rentals despite earning an average salary. The episode offers practical advice for improving your position and achieving financial independence. So, don't be afraid of making mistakes – embrace them and learn from them.
Investing in Real Estate with Minimal Upfront Capital: Explore options like Rent to Retirement, PPR Capital Management, Vacasa, and leveraging hustle for commission roles to invest in real estate with minimal upfront capital, potentially earning high returns and financial independence.
There are various ways to invest in real estate with little to no upfront capital, such as through investor loans, private real estate funds, or vacation home management companies. For instance, Rent to Retirement offers investment opportunities with low down payments and high returns, while PPR Capital Management allows accredited investors to earn passive income through their extensive commercial real estate investments. Vacasa simplifies vacation home ownership by managing properties and generating higher revenues for homeowners. Another key takeaway is that individuals, like Greg Colon, can leverage their hustle and switch to commission-based roles to maximize income opportunities and achieve financial independence earlier. While there may be risks involved, the potential rewards can be significant.
Transitioning from W-2 to 1099: Embracing the Risk and Accountability: Making the switch from a salaried job to an unsalaried position requires reliability, determination, and the ability to handle financial risks for greater earning potential and freedom.
Making the transition from a salaried W-2 job to an unsalaried 1099 position can be a significant shift, requiring a certain level of risk-taking and accountability. The speaker shared his personal experience of making this leap, starting with a hybrid role that offered a base salary and allowing him to put in extra hours to increase his earnings. He emphasized the importance of being reliable for one's own successes and failures. The speaker also discussed his experience starting a sign spinning business at the age of 16, which generated $80,000 a year. This early entrepreneurial venture showcased his determination and resourcefulness. The fear of leaving the security of a guaranteed paycheck can be a barrier for some, but the potential for greater earning potential and freedom can be worth the risk for those who are willing to put in the effort.
Growing up with entrepreneurial influences and financial hardships shaped his drive for success.: Reading 'Rich Dad Poor Dad' during high school inspired him to take risks and build wealth through assets and income generation.
The speaker's formative years, particularly between the ages of 7 to 12, played a significant role in shaping his entrepreneurial spirit and drive for success. Growing up in a middle-income family, he saw his father start and run various businesses, but also experienced financial hardship when they lost their house. This instilled in him a strong sense of accountability and the desire to make money. A pivotal moment came during high school when he read "Rich Dad Poor Dad," which taught him about the importance of assets and generating income. He put this knowledge into practice by taking risks, such as sign flipping, which not only earned him money but also helped him lose weight and build a team. These experiences led him to a successful sales career and a strong entrepreneurial mindset.
Leveraging Transferable Skills for Real Estate Success: Starting a business or investing in real estate requires calculated risks and building on transferable skills. Rob's success in real estate came from his background in theater and copywriting, saving aggressively, and taking calculated risks.
Starting a business or investing in real estate requires taking calculated risks and building on transferable skills from previous experiences. Rob, for instance, leveraged his background in theater and copywriting to excel in real estate. His first real estate deal came about when he was around 25 years old and had saved enough money to invest. He found a property priced well below market value and repaired it, making a small profit each month. Rob's success was not an overnight phenomenon but the result of years of honing his skills and gaining experience. To get started, he saved aggressively while following the FIRE (Financial Independence, Retire Early) principles. Despite the risks involved, he took the leap of faith, knowing that he could still come out ahead even if he made mistakes. This mindset, coupled with his diverse skill set, set him up for success in real estate.
Maintaining a disciplined approach to finances and reinvesting for future growth: Even when reaching financial milestones, save and reinvest for future growth instead of spending on personal gratification.
Even when reaching financial milestones, such as earning significant income or making a profitable real estate investment, it's essential to maintain a disciplined approach to finances and reinvest the money for future growth. The speaker shared how he was excited about reaching a financial goal but chose to save and reinvest the money instead of spending it on personal gratification. He learned from various resources, including Reddit and the BiggerPockets podcast, and credits these influences for shaping his financial mindset and real estate investing journey. The speaker's story demonstrates the importance of having a long-term vision and being willing to make short-term sacrifices for future financial gains.
Investing in areas with desirable businesses and growth potential: Identify areas with Chick-fil-A and Whole Foods for above-average growth. Leverage expertise of successful businesses and track comps for informed investment decisions.
Successful real estate investing involves more than just finding a property that cash flows. It's essential to identify areas that are experiencing above-average growth, as evidenced by the presence of desirable businesses like Chick-fil-A and Whole Foods, as well as population and commercial growth. By doing so, investors can leverage the expertise of companies that have conducted extensive research on these areas and benefit from their insights. Greg and Rob shared their experiences of investing in areas that grew consistently versus those that stayed stale. In areas of consistent growth, such as Orlando and Austin, they saw continuous population influxes and increasing property values. In contrast, stale areas may not provide the same level of growth or potential for equity build-up. Greg emphasized the importance of tracking comps and keeping up with market trends to make informed investment decisions. In Maui, he purchased a property during COVID when tourism was down, but he believed in the long-term potential of the area due to its desirable location and consistent population growth. Rob's "Chick-fil-A rule" and "Whole Foods rule" illustrate the value of leveraging the expertise of successful businesses to inform real estate investment decisions. By focusing on areas with strong growth potential, investors can maximize their returns and build long-term wealth.
Investing in Real Estate: Long-Term Growth and Market Opportunities: Investing in real estate, especially in touristy areas and growing markets, can yield significant long-term returns. Stay informed about market trends, be patient, and seize opportunities during market downturns to maximize returns.
Investing in real estate, particularly in touristy areas and growing markets, can yield significant returns over the long term. The speaker shares his experiences of investing in various locations like Los Angeles, Arizona, Tennessee, and Austin, where most of his properties have seen substantial growth. However, even in a hotbed like Austin, there have been recent price drops due to factors like rising interest rates and inflation. This presents an opportunity for investors to make deals and buy properties at lower prices. The speaker also shares his personal background, stating that he never let past hardships deter him from scaling up his real estate business. Instead, they may have motivated him to work harder and build wealth through real estate investments. Overall, the speaker's advice is to stay informed about market trends, be patient, and seize opportunities during market downturns to maximize returns.
Staying focused on long-term goals despite challenges: Maintaining a long-term vision and persisting through difficulties can lead to financial success and personal growth. Prepare for future expenses, stay focused, and adopt a growth mindset.
Having a long-term vision and staying focused on it, even through difficult times and burnouts, can lead to financial success and personal growth. The speaker shares how they knew they would make mistakes and face challenges, but used that as motivation to keep pushing towards their goal of financial independence. They also emphasized the importance of preparing for future expenses and obligations, and not being swayed by immediate satisfaction or distractions. The speaker's experience in sales taught them the value of hard work and persistence, but also the importance of taking care of themselves and recognizing their own limitations. By focusing on the long-term goal and adopting a growth mindset, they were able to make more sales, build better relationships, and continue to invest in real estate.
Pursuing Financial Freedom Through Clear Goals and Smart Investments: Setting a clear financial goal and consistently investing in it can lead to financial freedom. Understand job politics and negotiate effectively for better pay and benefits. Work hard and put in extra effort for quick wins. Aim for 'fire number' and continue growing towards 'fat fire number'.
Having a clear financial goal and consistently pouring resources into it can lead to financial freedom and the ability to leave a job on your own terms. The speaker shares his experience of using his sales career earnings and real estate investments to reach his "fire number" and continue growing towards his "fat fire number." He emphasizes the importance of being good at your job and understanding the politics to build the power to negotiate with your employer. The speaker also mentions the significance of working hard and putting in extra effort in the beginning to secure quick wins. Ultimately, his goal is to fully commit to real estate investing by 2025, but he's confident that with his current progress, he may be able to make the transition sooner.
The importance of relationships and being a team player: Being indispensable, reliable, and helping others can lead to strong relationships and career success. Highlight others' contributions and don't outshine the master to build a likable reputation.
Building strong relationships and being a likable team player are essential for success in any career, especially in politics or business. The speaker shares his personal experience of making mistakes early on by not understanding the importance of internal politics and not treating people well. He emphasizes the importance of being indispensable, reliable, and helping others, which can lead to a more transparent and risky perspective. Additionally, the speaker mentions the power of being likable and highlights the book "The 48 Laws of Power" as an influence. One law from the book, "never outshine the master," suggests highlighting the contributions of those around you and not taking all the credit for success. Another law, "court attention at all points," advises adding value and being noticed in every situation. Overall, the speaker's message is that treating people well and building strong relationships can lead to greater success and longevity in a career.
Learning from 'How to Win Friends and Influence People': Effective relationship-building skills, treating people well, creating win-win situations, and positive manipulation lead to success.
Effective relationship-building skills are essential for success, especially in areas where it doesn't come naturally, such as politics or business. The book "How to Win Friends and Influence People" had a profound impact on the speaker's career, teaching them how to treat people well, create win-win situations, and manipulate in positive ways. Manipulation isn't inherently negative; it's about using influence to benefit relationships. The speaker emphasized that books like "How to Make Friends and Influence People" are written for those who need it most, and personal development is crucial for financial success. The real estate industry often focuses on the end goal (financial freedom), but neglects the personal growth necessary to achieve it. Connect Invest offers an alternative to traditional real estate investing, allowing passive participation with a minimum investment of $500. By focusing on the path to success rather than just the end goal, individuals can develop the skills and mindset necessary to achieve their financial and personal goals.
Investing in Real Estate Without Being a Landlord: Explore passive income opportunities through mortgage funds like Pine Financial Group or invest off-market using real estate data providers like PropStream. Learn from mistakes, prioritize health, and use the 'Chick fil A method' to assess property locations.
There are various ways to invest in real estate without dealing with the hassles of being a landlord. Pine Financial Group offers a passive income opportunity through their mortgage fund, which targets a 8% preferred return and distributes 70% of net profits to investors. This investment is secure due to senior lien status and the rigorous underwriting process. Another option is to invest off-market by finding motivated sellers using a real estate data provider like PropStream. This approach allows investors to contribute to community revitalization and earn passive income. Both Pine Financial Group and PropStream require accredited investors. Throughout their journey, successful investors have learned from their mistakes, including treating people poorly, neglecting their health, and making real estate mistakes. They emphasize leaning into potential mistakes and keeping moving forward. The "Chick fil A method" is a rule of thumb some investors use to assess a property's location by checking its proximity to a Chick fil A restaurant, as it is often associated with desirable areas.
Partnerships in Real Estate: Be Prepared for the Unexpected: Transparent communication and clear expectations are vital in successful real estate partnerships.
Building strong partnerships is essential in real estate investing, but it's important to be prepared for potential pitfalls. The speaker shares his experience of buying a duplex in Orlando, which initially started as a partnership deal that went sour. He found the property after buying out his partner and conducting his own analysis. The purchase price was around $390,000, and he put down $98,000 as a down payment. Negotiating the deal with his former partner was a lengthy process, but they eventually reached a win-win agreement. However, the partnership failed due to misaligned goals and lack of communication. The speaker emphasizes that it's crucial to be transparent, have clear expectations, and maintain open lines of communication when partnering with others in real estate investing.
Lesson from an Inexperienced Partner's Financial Instability: Choose responsible partners and prepare for unexpected challenges to ensure long-term investment success.
Partnerships come with risks, especially when dealing with inexperienced partners. In the discussed scenario, the partner's lack of financial knowledge led them to make hasty decisions, resulting in financial troubles and the need to sell a property. This situation put pressure on the speaker to sell a deal they had initially intended to hold long-term. The partner's rapid accumulation of wealth, much like a body growing too quickly under the influence of steroids, led to uncontrollable spending and eventual financial instability. The speaker learned a valuable lesson about the importance of choosing responsible partners and being prepared for unexpected challenges. Despite the challenges, the speaker was able to fund the deal personally and turn it into a successful buy-and-hold investment, generating a net profit of around $20,000 annually.
Lessons learned in real estate deals: Follow legal procedures with tenants, understand partners' goals, do due diligence, communicate effectively, and adhere to lease terms during evictions.
Every real estate deal comes with its unique challenges and lessons. In the case of the speaker, they learned the importance of following legal procedures when dealing with tenants and understanding a partner's long-term goals. The speaker also emphasized the importance of due diligence and communication in partnerships. A key lesson learned was the significance of doing everything by the book during evictions and ensuring adherence to lease terms. From a business perspective, the speaker recommended "48 Laws of Power" as a valuable read. Lastly, when not engaged in real estate or sales, the speaker enjoys discussing real estate with others and traveling for work.
Maintaining Confidence in Investing: Even during uncertain times, maintaining confidence in your abilities and long-term plans can lead to successful investment outcomes. Continuous learning, self-improvement, and taking action are key. Connect with Greg and David on social media for more insights.
Confidence plays a crucial role in the success of investors. Greg emphasized that even during uncertain times or setbacks, maintaining confidence in one's abilities and long-term plans can lead to great investment outcomes. He also shared his experience with the power of social media and encouraged listeners to connect with him and other investors on various platforms. David echoed Greg's sentiments and emphasized the importance of continuous learning and self-improvement. Both Greg and David emphasized the importance of taking action and not giving up, even when faced with challenges. To learn more about Greg and David, listeners can follow them on social media and YouTube. Additionally, they encouraged listeners to leave a 5-star review on Apple Podcasts and consider following them on Instagram for more content and insights.
Managing finances wisely before real estate investing: Find an investor-friendly agent, build skills over time, and remember it's time in the market, not timing the market, for financial freedom.
Making a successful transition from a job you don't love to real estate investing requires careful financial management. Rob, a guest on the podcast, emphasized the importance of managing finances wisely before diving into managing a real estate portfolio. He likened it to starting small in the gym and building skills over time. Finding an investor-friendly agent through BiggerPockets Agent Finder is a crucial step in navigating the real estate market and achieving financial freedom. The market may be changing, but the goal of financial freedom remains constant. Remember, it's not about timing the market, but rather time in the market. And as always, investing involves risk, so be sure to consult with qualified advisors before making any investment decisions.
