Podcast Summary
Efficiently Underwriting Real Estate Deals: Mastering the art of underwriting deals quickly by using simple formulas and rough numbers, knowing the market's occupancy rate, average rents, and typical expenses to calculate NOI and Cap Rate, and always bringing solutions instead of just problems.
Underwriting a real estate deal efficiently and effectively can significantly change the game for an investor. Ryan Seco, a guest on the BiggerPockets Podcast, shared how he learned to underwrite deals quickly by using simple formulas and rough numbers. He emphasized the importance of knowing the market's occupancy rate, average rents, and typical expenses to calculate the Net Operating Income (NOI) and Cap Rate. By mastering this skill, Ryan was able to underwrite a 300-unit multifamily deal within just a few minutes. This ability to move quickly and solve complex problems set him apart and contributed to his successful career transformation from an airline pilot to a real estate investor and fund manager. Additionally, the podcast hosts shared two quick tips: first, to always bring solutions instead of just problems, and second, to use the BiggerPockets Real Estate Glossary as a resource for understanding real estate terms.
Passive real estate investing for monthly income: Accredited investors can earn monthly income from real estate through private funds or turnkey rental properties with minimal upfront capital and management responsibilities.
There are passive ways for accredited or high net worth investors to earn monthly income from real estate without dealing with tenants, maintenance, or property management. This can be achieved through investing in a private real estate fund like PPR Capital Management, which has a strong track record and extensive experience in both real estate notes and commercial properties. Additionally, there are opportunities to invest in turnkey rental properties with no money down through companies like Rent to Retirement. These investments offer the potential for cash flow appreciation and equity growth with minimal upfront capital. Success in real estate investing, much like flying an airplane, requires discipline, training, and a strong team. A great pilot, or investor, is someone who stays curious, learns continuously, and values safety and the success of their team.
Uncle's influence shaped Brian's career in real estate and aviation: Starting small with house hacking, Brian transitioned to larger apartment complexes and became successful through determination and frugality.
Brian's early experiences in life, particularly with his uncle who introduced him to both real estate and aviation, played a significant role in shaping his career paths. He started in aviation first, but the allure of real estate and the potential for passive income eventually drew him back. In the early days of his real estate investing journey, Brian started small with a "crash pad" or house hacking strategy, but soon realized the management intensive nature of the business and transitioned to larger apartment complexes. Despite making very little money in his early aviation career, Brian was able to save and invest in his first property by being frugal and creative with his resources. His determination to keep buying deals in order to generate passive income was a driving force behind his success.
From buying one family home to acquiring 21 units: Starting small and shifting mindset led to a successful real estate investment journey, requiring curiosity, determination, and calculated risks.
The path to success in real estate isn't always clear-cut, and it often requires learning as you go. The speaker, who started with the goal of buying a single family home, found himself unexpectedly acquiring 21 units by the age of 30. This was due in part to his curiosity and determination, but also to a turning point in his thinking. He realized that trading his time for a low wage at his commercial airline job wasn't sustainable, and he was inspired by the idea of making money through real estate and using it to pay off his student loans. Despite starting small, he was able to build up his portfolio through careful planning and a mindset shift towards buying and holding properties for cash flow. The speaker's journey demonstrates that real estate can be a lucrative investment, but it requires a willingness to learn and take calculated risks.
Unique perspective and proactivity lead to successful real estate investments: Staying focused on long-term goals and being resourceful can help overcome obstacles to successful real estate investments, even while balancing other commitments.
Having a unique perspective and being proactive can lead to successful real estate investments, even while balancing other commitments like a career as a pilot. The speaker shared how they were able to pay off their student loan and invest in real estate by keeping expenses low and using the rents from their properties to pay down the debt. Additionally, being a pilot allowed them to travel and explore new markets, giving them a valuable edge in identifying growth areas. However, managing long-distance investments can be challenging, and it's crucial to have reliable management on the ground. The speaker emphasized the importance of building a strong team and being willing to learn and adapt to new situations. Overall, their story highlights the importance of staying focused on long-term goals and being resourceful in overcoming obstacles.
Joining forces with a successful mentor: Reach out to industry leaders, be open to new opportunities, and be prepared to adapt when unexpected changes occur.
Sometimes taking a leap of faith and joining forces with a successful mentor can lead to extraordinary opportunities. The speaker shares his experience of constantly being disturbed by phone calls and texts during movies, which led him to feel overwhelmed as a young real estate investor. He found inspiration in Grant Cardone and reached out to him, eventually joining his team as a salesperson. However, two weeks later, Grant bought a private jet, and the speaker, with his extensive flying experience, was offered the position of being Grant's pilot and working with him in various aspects of his businesses. This unexpected turn of events allowed him to combine his passion for flying and real estate while learning from a successful industry leader. The speaker's story illustrates the importance of recognizing opportunities and being open to new experiences, even if they don't initially align with one's plans.
Preparation and value proposition are key in making calls to influential figures: To increase chances of making a positive impression when calling influential figures, prepare a well-thought-out plan and offer a clear value proposition. Be willing to work for free initially to build trust and demonstrate dedication.
Making a call to a influential figure or potential employer requires preparation and a clear value proposition. The speaker's story illustrates this point as he shares his experience of calling Grant Cardone to offer his skills in flying airplanes and managing real estate. He emphasizes the importance of having a well-thought-out plan and a strong value add to increase the chances of making a positive impression. The speaker also mentions the importance of being willing to work for free initially to build trust and demonstrate dedication. By coming prepared with a clear value proposition and a strong work ethic, the speaker was able to transition from making a call to building a successful career with Grant Cardone.
Learning from experienced professionals: Finding the right team or mentor can significantly accelerate growth and success by providing opportunities to learn and grow from experienced professionals
Finding the right team or mentor in your industry can significantly accelerate your growth and success. Grant didn't have to personally train a new hire on the first day, but instead, he could plug them into an existing team. This approach benefits both parties, as the team can evaluate the new hire's character and skills, and the new hire can learn from experienced professionals. Similarly, reaching out to industry leaders or teams with a clear understanding of what you can offer and what you hope to learn can lead to valuable opportunities. In the real estate industry, for instance, investors often save on taxes through 10/31 exchanges. First American Exchange Company is a leader in this area and can help investors navigate the exchange process. By seeking out valuable opportunities and teams, you can learn, grow, and ultimately achieve your goals more efficiently.
Passive Real Estate Investing with Mortgage Funds: Investors can earn passive income through mortgage funds by lending to house flippers, with targeted returns and a portion of net profits. This investment is secure, supports local economies, and can lead to personal growth.
Real estate investing doesn't always require active participation. Instead, investors can earn passive income through mortgage funds like Pine Financial Group's offering. This investment provides a targeted 8% preferred return and 70% of net profits to investors, who contribute by lending to house flippers. The investment is secure due to senior lien holder status and a rigorous underwriting process. Moreover, it supports local economies by directing funds from Wall Street to Main Street. The speaker's personal story illustrates the potential of stepping out of one's comfort zone and seizing opportunities, as when he leased 40 units for a struggling property manager in just 40 days. This experience marked a pivotal moment in his career, transitioning him from a pilot to a real estate investor.
Following up on leads is key to business success: Persistently contacting potential renters who had previously expressed interest can lead to valuable opportunities. Effective communication, leadership, and identifying the right team members are crucial for long-term success.
Following up on leads is crucial for business success, especially in real estate. The speaker shares his experience of turning around an underperforming apartment complex by implementing a simple yet effective strategy of contacting potential renters who had previously expressed interest but hadn't signed a lease. He also emphasizes the importance of identifying and empowering the right team members to ensure long-term success. This story illustrates the power of persistence, leadership, and effective communication in achieving business goals. Additionally, it highlights the often overlooked importance of follow-up and the potential rewards that come from it. It's a reminder that every interaction, no matter how seemingly insignificant, has the potential to lead to a valuable opportunity if approached with the right mindset.
Learning from mentors and industry relationships: Seek out mentors who are a step ahead, immerse yourself in the industry, and focus on building relationships for long-term growth opportunities.
Success in business and leadership comes not only from natural abilities, but also from a willingness to learn and a strategic approach to seeking out mentors and opportunities for growth. The speaker, who had a background as a pilot and captain in the airline industry, emphasized the importance of people skills and learning from those around them. They shared how they climbed the ranks in real estate by immersing themselves in the industry and learning the lingo and relationships from those already established in the field. They also highlighted the importance of finding mentors who are a step or two ahead, rather than trying to learn from the very best who may be too advanced. By focusing on building relationships and gaining experience, the speaker was able to eventually gain access to valuable resources and networks, leading to further success.
Transferable skills in real estate: Leadership and problem-solving: Starting as a pilot for Grant Cardone, the speaker learned the importance of good people and continuous learning. He emphasized due diligence in multifamily real estate and shared how his aviation background helped him excel.
Transferable skills, such as leadership and problem-solving, can be applied to various industries, including real estate. The speaker, who started as a pilot for Grant Cardone and later became the EVP of Cardone Capital, emphasized the importance of having good people around you and continuously learning. He also highlighted the importance of due diligence in multifamily real estate and how his experience as a pilot helped him in this regard. The speaker's success story illustrates that having a strong skill set and being a crucial part of a team can lead to valuable partnerships and opportunities.
From prohibited to prosperous: Real estate investing post-2015: Recognize inefficiencies, start small, build equity, learn, and improve strategy for long-term real estate success.
Success in real estate investing doesn't happen overnight. Before 2015, general solicitation was not allowed, making it difficult to raise funds. However, with the rules changing, opportunities arose, and those who brought valuable skills and experiences to the table were able to flourish. A key aspect of this is recognizing inefficiencies in capital and reinvesting in stronger opportunities. It's essential to start small and build equity over time, even if it takes longer in today's market. The best real estate, held for the long term, will yield the greatest returns. Learning from each deal and continuously improving your strategy is crucial for success.
Assessing Potential Real Estate Deals Efficiently: Successful investors use the 1% rule and a 2-minute underwriting process to quickly evaluate deals, saving time and resources.
Successful real estate investors quickly assess potential deals using efficient methods like the 1% rule and a 2-minute underwriting process. This empowers them to identify good deals and eliminate bad ones, saving valuable time and resources. The 1% rule, which requires that the monthly rent covers the purchase price by at least 1%, is a useful guideline for evaluating individual units. Meanwhile, a 2-minute underwriting process involves calculating the Net Operating Income (NOI) based on the number of units, in-place rents, and market-specific expenses. By mastering these techniques, investors can make informed decisions and focus on high-potential deals.
Understanding Larger Multifamily Real Estate Deals: The 1% rule may not strictly apply to larger multifamily properties, but thorough financial analysis is crucial for effective communication and identifying potential inefficiencies or hidden costs. Patience and conservatism can lead to long-term success, even with retail investors as partners.
While the 1% rule is a useful guideline for evaluating potential real estate investments, it may not be strictly applicable to larger multifamily properties due to additional income sources and expenses. Quickly understanding the numbers in these deals is essential for effective communication with brokers and lenders, and can help identify potential inefficiencies or hidden costs. Confidence in financial analysis is crucial in larger deals, where there are more partners and thorough scrutiny from debt providers. While growing and scaling a real estate investment business may take time, staying patient and conservative can lead to long-term success, even with retail investors as partners. In the 'flight, fight, or fright' segment, here are my answers: 1. Flight: I would fly to a place with a strong economy and stable rental market, as these factors contribute to a solid foundation for a successful real estate investment. 2. Fight: I would fight for transparency and clear communication with partners and investors, ensuring everyone is on the same page regarding financial goals and expectations. 3. Fright: My biggest fear in real estate investing is underestimating expenses or overlooking hidden costs, which could significantly impact the profitability and success of an investment.
Overcoming fears, walking away from bad deals, and learning valuable lessons in real estate: To succeed in real estate, overcome fears, know when to walk away from deals, and learn valuable lessons through partnerships and experiences. Prepare a plan, underwrite deals quickly, and think about the future when buying properties to stand out from competition.
Success in real estate, like in many other fields, requires overcoming fears (fright), making informed decisions to walk away from bad deals (flight), and learning valuable lessons through partnerships and experiences (fight). Ryan Seco shared his personal experiences of overcoming the fear of failure, knowing when to walk away from deals, and learning the importance of partnerships in his real estate journey. He emphasized the importance of underwriting deals quickly and thinking about the future when buying properties. Additionally, Seco advised that when reaching out to potential opportunities, it's essential to come prepared with a plan and demonstrate value to stand out from the competition. Overall, the discussion highlighted the importance of having the right mindset, being prepared, and making informed decisions to achieve success in real estate.
Leveraging Social Media and Local Expertise for Successful Real Estate Investing: Social media transformation can lead to investing opportunities and financial freedom. Utilize free resources like BiggerPockets Agent Finder to connect with experienced agents and navigate the real estate market confidently.
Investing in real estate requires knowledge, time, and the right connections. David Green and Rob shared their experiences and encouraged listeners to level up their social media and investing game. David's social media transformation parallels Ryan Secco's journey from a pilot to Grant Cardone's pilot and running Cardone Capital. Both David and Rob emphasized the importance of being consistent and committed to financial freedom, even in a changing market. To help investors navigate the process, BiggerPockets Agent Finder offers a free resource to find investor-friendly agents who can provide local expertise and guidance. By utilizing this service, investors can confidently make informed decisions and get closer to achieving their financial goals. Remember, it's not about timing the market, but rather, time in the market. Don't miss out on this opportunity to connect with experienced agents and take your real estate investing journey to the next level. Visit biggerpockets.com/deals to get started.
