Podcast Summary
The Power of Persistence and Learning in Real Estate Investing: Persistence and continuous learning are essential for success in real estate investing. Don't give up after setbacks, instead, keep learning and stay determined. Making lots of phone calls is also crucial for securing deals.
Key takeaway from this episode of the Bigger Pockets Podcast is that persistence and a focus on learning are key to success in real estate investing. Jason, a guest on the show, shared his journey from being a hardworking student to a successful investor. He emphasized the importance of not giving up after facing setbacks, such as the near failure of his first deal. Instead, he advised zooming out and looking at the bigger picture, and continuing to learn the necessary skills to become an investor. Andrew and David also discussed the importance of making a lot of phone calls to secure deals, drawing an analogy to taking the stairs instead of the escalator. Overall, the episode underscores the importance of determination and continuous learning in the face of challenges in real estate investing.
Real Estate Investing: Passive Income Opportunities: Real estate platforms offer passive income with minimal upfront capital. Strategies like Rent to Retirement, PPR Capital Management, and Fundrise's private credit provide monthly income and high returns. New investors adapt by increasing marketing efforts and being selective.
Real estate investing offers various opportunities for passive income with no or minimal upfront capital, as demonstrated by platforms like Rent to Retirement and PPR Capital Management. These platforms enable investors to earn monthly income without the hassle of property management or tenants. Additionally, in today's market, alternative investment strategies like Fundrise's private credit strategy can provide high returns as traditional financing becomes more challenging. New investors, like Jason Lee, who have only been in the game for a few years, are also adapting by increasing marketing efforts and being more selective with property purchases. Despite the current market challenges, these strategies and approaches offer promising opportunities for passive income in real estate.
Fear of being broke drives determination: The fear of financial struggles can motivate individuals to work hard and find success, ensuring the well-being of their loved ones.
Growing up with financial struggles instilled a deep fear of being broke in the speaker. This fear was a result of constant conversations about paying bills and the anxiety it caused. However, when the speaker went to college and saw the contrast between his family's situation and that of others, he made a commitment to give back to them and ensure they would never have to experience such hardships again. Despite encountering setbacks, such as not being able to play rugby in college due to health issues, the speaker remained determined to keep his promise and find success. Ultimately, the fear of being broke drove him to work hard and find ways to provide for his family.
Navigating Uncertainty in College: College can be a time of growth and discovery, but it may not always align with initial expectations or goals. Embracing uncertainty and staying open to new opportunities can lead to unexpected and rewarding outcomes.
College can be a confusing and challenging time for many students, especially when they are unsure of their career goals or face unexpected circumstances. Jason and Andrew shared their experiences of feeling lost and unsure during their college years. Jason felt the pressure to succeed academically to meet his parents' expectations, but found himself struggling with the material and questioning the relevance of his studies. Andrew, on the other hand, had a clear goal of becoming an entrepreneur but found himself in a different major and environment than he had anticipated. Both shared how their college experiences were valuable, but they found greater freedom and excitement in their current paths. A key takeaway is that college can be a time of growth and discovery, but it may not always align with initial expectations or goals. Embracing uncertainty and staying open to new opportunities can lead to unexpected and rewarding outcomes.
From a bad experience to a new discovery: Negative experiences can lead to new opportunities and discoveries if we approach them with an open mind and a willingness to explore new possibilities.
Sometimes a bad experience, like a terrible chemistry teacher or an unfavorable class, can lead to new opportunities and discoveries. For instance, a person's hatred for organic chemistry might open doors to exploring different paths and eventually discovering a passion for real estate. This person's journey began with a negative experience, but they used it as a catalyst to explore new possibilities and ultimately found success in real estate. Through networking, asking questions, and attending events, they were able to connect with mentors and professionals in the industry, leading them to a fulfilling career. It's important to remember that even seemingly negative experiences can lead to positive outcomes if we approach them with an open mind and a willingness to explore new opportunities.
Courage to approach leads to valuable opportunities: Expressing interest in new opportunities despite fear or lack of experience can lead to valuable experiences and skills
Determination and persistence can lead to valuable opportunities, even after a brief initial encounter. The speaker shares how a chance meeting at a school event led her to an unpaid internship in real estate, despite her lack of experience or knowledge in the field. She was initially scared to approach the person she met, but mustered up the courage to express her interest and was invited to meet with him and his team. Though she didn't continue working with him after her internship, the experience and skills she gained were invaluable. Additionally, the speaker emphasizes the importance of being adaptable and focusing on your goals, even while juggling multiple responsibilities, such as school and work. Despite facing initial challenges and rejection, she persisted and eventually succeeded.
Persistence and mentorship key to real estate success: Despite numerous rejections, persistence and learning from a mentor are crucial for real estate success. It took thousands of cold calls before making deals, but pushing through and staying focused led to eventual success.
Persistence and learning the ropes with the help of a mentor are key to success in real estate, especially during the initial stages when rejection is common. The speakers shared their personal experiences of facing numerous rejections but pushing through and eventually making successful connections. They emphasized the importance of having a good sales trainer or mentor to guide and teach you the necessary skills, as well as having an older, wiser partner to support you during your first year in the industry. It took both speakers thousands of cold calls before making their first deals, but they emphasized that it's essential not to take rejection personally and to keep pushing forward. The journey may be long and challenging, but with the right mindset, support, and learning, success is achievable.
Personal story of a commercial real estate agent's first challenge: Effective mentoring, self-belief, and determination are crucial for new agents to succeed in commercial real estate.
Providing guidance and support to new commercial real estate agents can significantly impact their success. The speaker shared a personal story of his first client, which turned into a challenging experience due to unforeseen circumstances. Despite the setback, he chose to stay in the business, learn from the experience, and continue working. However, the key insight gained from this experience was the importance of trusting in one's abilities and learning from mistakes rather than quitting and reinforcing a limiting belief. By staying resilient and persistent, the speaker was able to overcome the obstacle and ultimately succeed in the industry. In essence, effective mentoring, self-belief, and determination are essential elements for new agents to thrive in commercial real estate.
Importance of long-term perspective and skill development in commercial real estate: First year in commercial real estate can be financially tough, but skills gained lead to future income growth. Utilize 10/31 exchanges to defer taxes while investing in real estate. First American Exchange Company recommended for assistance.
Maintaining a long-term perspective and focusing on skill development are crucial for success in commercial real estate. The speaker shared his experience of receiving a small check from his first deal but keeping himself motivated by remembering his pipeline and the skills he was learning. He emphasized that the first year in commercial real estate can be tough financially, but the skills gained can lead to significant income growth in the future. Another important topic discussed was the use of 10/31 exchanges to defer capital gains taxes while investing in real estate. The speaker recommended First American Exchange Company for assistance with such exchanges. Overall, the conversation underscored the importance of staying focused on learning and the potential for significant financial rewards in commercial real estate.
Exploring the Opportunity of Renting Out Your Home on Airbnb: Starting an Airbnb business can generate extra income, pay for vacations, and even lead to investing in real estate. Trust the numbers, take calculated risks, and learn valuable lessons along the way.
Starting an Airbnb business can provide extra income and even pay for vacations, as the speaker shared his experience of renting out his home during a trip to Mexico City. He also shared his story of buying his first investment property, a duplex in San Diego, despite facing significant renovation costs. The deal was worth it for him due to the potential for additional units and the strong underlying value. The speaker learned valuable lessons along the way, including the importance of trusting the numbers and taking calculated risks, even without a mentor or extensive experience in managing contractors. While there were challenges, such as dealing with subpar contractors, the potential rewards made it worthwhile. The speaker encourages anyone interested to explore the opportunity and discover the value of their own homes at airbnb.com/host.
Understanding California's unique advantages for real estate investment: Focus on buying at the right basis in California for long-term success despite its reputation, as it offers great weather, a strong economy, and potential for equity gain through appreciation.
California, despite its reputation for being expensive and difficult for real estate investment, can still be a profitable market for those who understand the importance of buying at the right basis. The speaker emphasizes that California offers unique advantages, such as great weather and a strong economy, which make it an attractive place for both living and investing. He also shares his personal strategy of focusing on basis over cash flow, as he believes that equity gained through appreciation is the key to building wealth over time. Contrary to popular belief, not all of California is subject to strict laws, and investors can find good deals if they look beyond the major cities. The speaker encourages investors to research the market carefully and aim to buy below market value to ensure long-term success.
Leveraging San Diego's market inefficiencies for long-term gains: San Diego's desirable location, limited supply, and high demand create opportunities for significant long-term appreciation and cash flow. Delay gratification and creative strategies can help investors uncover hidden deals amidst competition and reduced inventory.
San Diego's unique combination of desirable location, limited supply, and high demand can lead to significant long-term appreciation and cash flow for real estate investors, despite initial challenges such as low cap rates and high competition. This market inefficiency can be leveraged by those willing to delay gratification and employ creative strategies, such as networking and direct marketing, to uncover hidden deals. Additionally, the current market conditions offer a prime opportunity for investors to capitalize on reduced competition and inventory.
Finding leads in a competitive market before they hit the market: Success in real estate investing requires strategic lead generation, considering personal goals, and thorough due diligence with contractors.
Finding leads in a competitive market before they get listed is crucial for securing profitable real estate deals. However, not every investment opportunity may be a buy right away, and personal goals and circumstances should be considered. Some investors may prioritize stable income over immediate equity growth. Another important lesson learned from the discussion is the importance of thorough due diligence when working with contractors. Trusting a contractor who did not have a license, lived out of the country, and did not provide written contracts led to significant financial losses. It's essential to verify licenses, put everything in writing, and ensure that contractors have the necessary skills and manpower to complete the job. In summary, success in real estate investing requires a strategic approach to finding leads, understanding personal investment goals, and exercising caution when working with contractors.
Learning from experienced mentors prevents costly mistakes: Experienced mentors can help investors avoid costly mistakes and enable financial success in real estate.
Having experience and knowledgeable mentors can help prevent costly mistakes in real estate investments. The speaker shared his experience of investing in a property with subpar plumbing work, which went unnoticed due to his lack of expertise. However, with the help of a more experienced broker, he could have avoided this issue and potentially saved himself $100,000. This experience led him to succeed in real estate, enabling him to help his parents financially. Today, he has acquired 26 properties, grown his portfolio without outside capital, and built a successful business partnership. The importance of building trust and strong relationships, especially in the commercial real estate industry, was also emphasized as a key factor in his success.
Finding Great Deals in Today's Market: Jason's Underwriting Approach: Investors can secure great deals by persisting, focusing on GRM, and following up consistently with leads. Building relationships and staying informed about the market are also crucial.
In today's real estate market, finding great deals may be challenging, but with persistence and the right underwriting approach, investors can still make it happen. Jason shared his underwriting formula, which includes considering the current and potential gross rent multiplier (GRM) and cap rate. He emphasized the importance of the GRM because it's based on rents and can't be easily manipulated. If an investor can stabilize a property at a cap rate 2 points above the market rate and pass the 70% or 30% below market value stress test, they likely have a good deal. However, with fewer deals available, investors need to put in more effort and make twice as many contacts to find opportunities. Jason also reminded us that in a slow market, only the superstars can thrive, so it's essential to stay focused and keep working hard. When it comes to turning leads into deals, the key is to be persistent and follow up consistently. Building relationships with brokers and other industry professionals can also lead to more opportunities. Remember, even though the market may be more challenging, the effort put in will lead to better deals and personal growth.
Effective sales strategies include leading with credibility, asking the right questions, and listening to clients' goals: Successful salespeople speak less and listen more to understand clients' goals, tailoring the process to meet their needs, and providing solutions to solve their problems.
In business, particularly in sales, the ability to convert leads is crucial for success. Leading with credibility and asking the right questions from a place of caring are effective strategies for converting leads. Harvard University research shows that the best salespeople only speak 20-30% of the time, and the rest is spent listening to the client. Understanding a client's goals and tailoring the process to meet those goals is essential for a successful transaction. In real estate, this could mean finding a buyer quickly for a cash-out sale or offering extended time for property shopping in an exchange. Ultimately, the goal is to provide solutions and solve problems for clients. Jason Joseph Lee, a successful real estate professional, emphasizes the importance of this approach and encourages those interested in learning more to follow him on Instagram or YouTube or check out his free multifamily investing course.
The Importance of Effective Branding in Real Estate Investing: Thoughtful branding, human connection, and expert guidance are crucial for success in real estate investing. David Green's experience with naming his company and his reservations about AI in customer communication emphasize these points.
Effective branding, even if it involves early mistakes, is crucial for success in business and real estate investing. David Green shared his experience with naming his company, Vantage Point Acquisitions, which he later realized should have been VantagePoint Capital. He also discussed the importance of human interaction in business, sharing his reservations about the increasing use of AI in customer communication. Green encouraged listeners to find him on social media, specifically on BiggerPockets, and emphasized the importance of having a human touch in business dealings. Additionally, he promoted BiggerPockets Agent Finder as a valuable resource for finding investor-friendly real estate agents. Overall, the conversation highlighted the importance of thoughtful branding, human connection, and the value of expert guidance in the world of real estate investing.
Investing in real estate involves risks, past performance doesn't guarantee future results: Always do thorough research, consult advisors, and proceed with caution before investing in real estate, as past performance doesn't ensure future success
Past performance in real estate investing is not a guarantee of future results. Each host and participant expresses their unique perspectives, and it's essential to remember that all opinions are their own. Investing in real estate, like any other asset, involves risks. It's crucial to use your best judgment and consult with qualified advisors before making any investment decisions. Only risk capital that you can afford to lose. BiggerPockets LLC disclaims any liability for damages arising from the information presented in this podcast. In essence, always do your due diligence and proceed with caution in the realm of real estate investing.
