Podcast Summary
From Valet to Successful Real Estate Investor: Jake Radowick's Journey: With determination, a willing mindset, and a focus on learning, anyone can build a successful real estate investing business, even starting with limited funds. Surround yourself with smarter and more successful people for growth.
With determination, the right mindset, and a willingness to learn, anyone can build a successful real estate investing business, even starting with very little money. In this episode of the BiggerPockets Podcast, Rob and David interviewed Jake Radowick, a 27-year-old investor with 28 rental doors and over $200,000 in income, all achieved in just 3 years. Jake started out as a valet and saved up $9,000 to buy his first property using the BRRRR strategy. He then scaled up by putting down low down payments and eventually bought a 20-unit apartment complex. Jake's success came from his mindset of building a momentum snowball and surrounding himself with smarter and more successful people. He also shared his personal why, which was driven by his family and past experiences. This episode is a must-listen for both new and experienced investors, as it provides valuable insights into how to get started with limited funds and how to approach banks for financing. The quick tip for this episode is to surround yourself with people who are smarter and more successful than you, as Jake did, to learn and grow in the real estate industry.
Passive Income from Real Estate: Alternatives to Owning Rentals: Investors can earn passive income from real estate without owning rentals by investing in private funds, vacation homes with management companies, or through alternative financing methods.
There are alternative ways for accredited or high net worth investors to earn passive income from real estate without the hassle of owning rental properties. Companies like PPR Capital Management offer the opportunity to invest in private real estate funds and collect monthly income with no tenant, maintenance, or property management responsibilities. Another option is investing in vacation homes with full-service management companies like Vacasa, which can help maximize revenue and simplify the ownership experience. Additionally, some investors may be able to purchase turnkey rental properties with no money down through programs like Rent to Retirement. Ultimately, it's important for investors to consider their personal preferences and financial goals when deciding how to invest in real estate for passive income. Whether it's through a private real estate fund, vacation home management, or alternative financing methods, there are options available to help minimize the headaches and maximize the benefits.
Jake's drive to provide for his family led him to real estate: Determined to support his family, Jake turned to real estate for passive income and financial security.
Jake's determination to be self-sufficient and provide for his family, including his autistic brother, drove him to explore real estate as a means of generating passive income. This decision was influenced by a conversation with the owner of a restaurant where he worked, who recognized his drive and encouraged him to pursue real estate. Jake's goal was to ensure that his future spouse wouldn't have to work and that he could take care of his brother without it impacting his future family. At the time, he was working multiple jobs, including as a valet at a high-end restaurant, and felt the pressure to make more money without working longer hours. Once he experienced the passive income from renting out his first townhouse, he saw real estate as a way to achieve his financial goals while continuing his day job.
Father's sacrifices inspire speaker to succeed and prioritize family: Speaker learned work ethic from father, saw real estate as opportunity to break family's financial cycle, and achieved success through determined action despite lack of clear plan
Observing the sacrifices and hard work of his father inspired the speaker to strive for success while also prioritizing presence in his future family's life. He learned the importance of work ethic from his father's example but also recognized the downsides of overworking oneself. When his restaurant manager encouraged him to invest in real estate, he saw an opportunity to build wealth and break the cycle of financial limitations in his family. Despite not having a clear plan or understanding of the process, he took action step by step and found success in real estate ownership.
Start small and take action in real estate investing: Begin with a small investment and learn as you go, taking action is key to success in real estate investing. Reading resources and taking steps forward will lead to more opportunities.
Taking action on real estate investing is crucial, even if you don't have all the steps figured out yet. David Green's journey began with a small investment of $13,000 and a townhouse in Lake Stevens, Washington. He didn't have a plan, but the experience opened his eyes to the potential of real estate investing. From there, he read books like Brandon Turner's "How to Buy Real Estate with No (or Low) Money Down" and Burr's upcoming book "Scale," which helped him take the next steps. The key is to start small, learn as you go, and keep taking action. Don't wait until you have everything figured out before you begin. Each step you take will open doors to the next one. And remember, investing in a rural area like Spokane, where you believe you can get tenants, can be a successful strategy with limited downside.
Achieving financial goals through determination and creativity: Determination and creativity can help individuals improve their financial situation significantly through hard work, resourcefulness, and a positive attitude.
Determination and creativity can help individuals achieve their financial goals faster than they might expect. The speaker shared his experience of buying two properties with just 6,000 dollars in down payments within a year, after starting with a modest income and side hustles. He emphasized the importance of quick decision-making and turning liabilities into assets, such as using a car rental app (Turo) to offset the cost of a new truck. While the specific numbers mentioned, like the $9,000 from a valet job and the $100 in cash flow from the first property, add context to the story, the core message is that one's financial situation can improve significantly through hard work, resourcefulness, and a positive attitude.
Starting Small with Determination and Action: Taking small steps towards your real estate goals, even with limited resources, can lead to significant growth and momentum through the snowball method. Identify your motivation and take consistent action.
Starting small and taking action towards your goals, even with limited resources, can lead to significant growth and momentum in real estate investing. The story shared by the guest illustrates this concept through his experience of working multiple jobs, using creative solutions like Turo, and eventually buying his first property using the equity from his side hustles. This approach, known as the snowball method, requires determination, humility, and a strong motivation or "why." It's essential to understand that everyone can take similar steps to build their real estate portfolio, regardless of their current circumstances. The key is to identify the desire and take consistent action towards achieving it.
Brother's determination inspires speaker's work ethic: Being inspired by others' determination can fuel personal growth and success in real estate. Utilize accessible resources and services to overcome obstacles and maximize opportunities.
Having a strong motivation or inspiration, despite the challenges, can help one overcome obstacles and achieve their goals. The speaker shared how her brother's determination to get a driver's license and pursue his degree, despite being told he couldn't, inspired her to work hard and not let others' limitations define her. This perspective shifted her approach to real estate and her dedication to building momentum in her career. Additionally, the availability of resources and services, such as Redfin and Fundrise, can make the real estate journey more accessible and profitable for investors.
Starting small and focusing on learning from experiences: Starting small, learning from mistakes, and staying committed can lead to significant growth in real estate investing
Starting small and focusing on learning from experiences is key to scaling up in real estate investing. Steadily's founders built a successful insurance company catering to landlords, demonstrating the importance of understanding a specific market. The interviewee started with a triplex, learned to flip houses with the help of an agent, and eventually managed commercial construction projects, using those skills to oversee residential renovations. Despite financial challenges, he remained frugal and resourceful, even attempting to do plumbing work himself. Through it all, he emphasized the importance of having great agents and learning from mistakes. So whether you're just starting out or looking to expand, remember that taking things one step at a time and staying committed can lead to significant growth in the real estate world.
Lessons Learned from DIY Home Renovations: Both DIY and hiring professionals have advantages and disadvantages. Consider risks, resources, and expertise before deciding on a renovation approach.
While taking on home renovation projects yourself can save money, it may not always be the most efficient or safest choice. Both Jake and David shared their experiences of tackling various tasks themselves during their renovations, leading to unexpected challenges and expenses. Jake learned valuable lessons throughout the process and promised his partner they wouldn't live in an unfinished house again. David, on the other hand, focused on the numbers and delegated tasks to professionals to avoid potential disasters. While each approach has its merits, it's essential to consider the risks and resources required before embarking on a DIY renovation project.
Learning from Experienced Investors in a Mastermind Group: Joining a mastermind group can provide new opportunities and funding methods for real estate investments. Be open to learning from others and stepping out of your comfort zone.
Joining a mastermind group and surrounding yourself with experienced investors can open up new opportunities and help you grow in real estate. The speaker shared his experience of selling a profitable property in Seattle and using the proceeds to invest in Memphis through a 1031 exchange. He emphasized the importance of being uncomfortable and stepping out of your comfort zone to find better investments. He also learned about using HELOCs (Home Equity Line of Credit) to access funds for investing when you're short on capital. The speaker's story highlights the power of networking and learning from others in the industry to expand your real estate portfolio.
Persistence and creativity pay off in real estate investing: Don't give up on financing deals, communicate with lenders, increase down payment, bring on a cosigner, work with a knowledgeable agent, and examine rent ledgers to maximize returns.
Persistence and creativity are key in real estate investing. The speaker shares his experience of facing multiple rejections when trying to secure financing for a property, but he didn't give up. He continued to communicate with potential lenders, even when they denied his applications, and eventually found a way to make the deal work by increasing his down payment and bringing on a cosigner. He also emphasizes the importance of having a knowledgeable and investor-savvy agent who can help identify profitable opportunities and navigate the complexities of investing out of state. Additionally, the speaker advises looking closely at rent ledgers to maximize returns, as he was able to recover $50,000 from the sale due to tenants moving out before closing.
Reviewing both rent roll and rent ledger for accurate income assessment: Assess potential income through rent roll, but verify with rent ledger for accurate rental income assessment. Seek guidance and learn from experienced mentors to build a successful real estate portfolio.
When evaluating potential real estate investments, it's important to review both the rent roll and the rent ledger. A rent roll shows the potential rental income, which is what tenants are supposed to pay. On the other hand, a rent ledger reveals the actual rental income, which shows if tenants are up to date or behind on payments. This information is crucial as some sellers may try to misrepresent their tenants' payment history using only a rent roll. Additionally, the interviewee shared his success story of building a real estate portfolio at a young age, emphasizing the importance of having a clear purpose and seeking guidance from experienced mentors. He currently owns 28 units and makes $75,000 in passive income per year, which is more than his first salaried position out of college. His ultimate goal is to retire his family. This inspiring story highlights the potential for financial success in real estate, especially for those who are willing to learn, take action, and persevere through challenges. To connect with Jake Radowick, interested individuals can find him on Facebook or Instagram under the username Jake Radawick.
Staying motivated by focusing on providing for your family: Find your personal 'why' for investing in real estate, learn from mistakes, and take action towards your goals with the help of a trusted agent.
Having a clear "why" is essential in building a successful real estate portfolio. Jake shared his personal experience of staying tenacious and motivated by focusing on providing for his family. He emphasized that everyone should have a reason beyond themselves for pursuing real estate investing. The importance of learning from mistakes and taking action towards your goals, one step at a time, was also highlighted. Jake encouraged listeners to find an investor-friendly agent through BiggerPockets Agent Finder to help navigate the real estate market effectively. Lastly, remember that investing in real estate involves risk, and it's crucial to consult with qualified advisors before making any investment decisions.
