Podcast Summary
Dropping out for real-life experience: Gaining hands-on experience can lead to valuable lessons and opportunities, sometimes more than traditional education.
Gaining real-life experience can be more valuable than traditional education. Our guest, Hunter Lawler, dropped out of college to start a crawfish business, which ended up being successful enough to provide him with a better learning experience than his classes. This experience led him to real estate investing, where he scaled up to a portfolio of 15 properties while working two jobs. Hunter's story demonstrates that taking risks and gaining hands-on experience can lead to valuable lessons and opportunities. Additionally, the podcast covers master classes on screening tenants and sheriff sales, providing listeners with practical information to apply in their own real estate journeys.
Taking a leap of faith in real estate: Buying a trailer and double wide house without knowing much about business or real estate led to valuable lessons in sweat equity and taking action.
Sometimes taking a leap of faith and making a decision without having all the knowledge or resources can lead to unexpected opportunities and learning experiences. The speaker in this conversation bought a trailer and a double wide house without knowing much about running a business or real estate, but this forced him to learn and figure things out on his own. He used the cash from selling his crawfish business to buy his first rental property, and fixed it up himself to save even more money. This experience taught him valuable lessons about sweat equity and the importance of taking action, even when uncertain. While it may seem risky to spend all your money on a purchase without leveraging debt, this approach allowed him to gain hands-on experience and ultimately contribute to his success in real estate.
Investing in rental properties with no money down: Rent to Retirement offers discounted properties and flexible loans, while Steadily.com provides fast and affordable landlord insurance for real estate investors.
It's possible to invest in turnkey rental properties with no money down through Rent to Retirement. They offer discounted new construction properties and investor loans with low interest rates and flexible down payment options. Meanwhile, securing insurance for rental properties can be a hassle, but Steadily.com offers fast and affordable landlord insurance with coverage tailored to the industry. The speaker shared his experience of buying a rental property, doing the rehab himself, and then tapping into its equity through a commercial line of credit. A commercial line of credit allows you to use the equity in a rental property as collateral, and the speaker was able to borrow 70% of the property's appraised value, which was higher than expected. This gave him the opportunity to invest in another property. It's important to note that commercial lines of credit typically have higher interest rates than residential lines, but they can be a valuable tool for real estate investors looking to tap into the equity of their rental properties.
Effective tenant screening process: Thoroughly advertising properties online, prequalifying applicants, and conducting landlord open houses are crucial steps for successful tenant screening and reducing the risk of bad tenants.
Proper tenant screening is crucial for successful real estate investing. In the past, the speaker's hasty approach led to a disaster when he failed to properly screen tenants, resulting in a loss. Today, he uses a more thorough process, which includes advertising properties online, prequalifying applicants through Rent Ready, and conducting landlord open houses. By doing so, he significantly reduces the number of applicants and increases the chances of finding a qualified tenant. The importance of this process is emphasized by the speaker's experience with a bad tenant who caused extensive damage to a property.
Transforming a weakness into a strength through thorough tenant screening: Implementing clear prequalification standards and filtering out unsuitable applicants can lead to a stable rental situation and fewer applicants.
Implementing a thorough tenant screening process can transform a weakness into a strength. The speaker initially struggled with dealing with unreliable tenants, but by setting clear prequalification standards and filtering out unsuitable applicants, they were able to reduce the number of applicants from 10% to 5% and ensure a stable rental situation. They credit Rent Ready for providing the necessary tools to streamline the listing, showing, and move-in process. However, when the supply of bank-owned properties decreased due to the COVID-19 foreclosure moratorium, the speaker pivoted to sheriff sales to find deals. Although these sales come with challenges such as buying sight unseen, requiring cash, and dealing with tenants or previous owners, the benefits include fewer competitors and significant savings. To find sheriff sales, the speaker suggests showing up at the courthouse on the day of the sale and being prepared with cash or a cashier's check.
Navigating Property Tax Auctions: A Challenging Experience for Beginners: Property tax auctions can be intimidating for beginners due to limited information and fast-paced bidding. Stay focused, recognize tactics, and remain calm to secure a property at a desirable price.
Participating in property tax auctions can be an intimidating experience for beginners, with veterans making it seem like a competition. These sales are advertised on county or parish websites, providing only a suit number, plaintiff, defendant, and legal property description. This lack of clear information keeps potential competitors at bay. During the auction, bidders must stay focused and alert, as the auctioneer reads off suit descriptions at a rapid pace. The goal is to outbid your competitors without revealing your top dollar. Veterans use tactics like bidding in large increments to throw off new bidders and make them hesitate. It's essential to be aware of these strategies and remain calm under pressure to secure a property at a desirable price. The art of bidding involves recognizing tendencies and adapting to the competition.
Bidding at a Sheriff Sale: Stick to Your Top Dollar: When buying a house at a sheriff sale, it's important to research properties thoroughly, rely on auction information, and stick to your budget to avoid unexpected costs and potential risks.
When buying a house at a sheriff sale, it's crucial to stick to your top dollar and not exceed it, despite the high emotions involved. The seller, who is typically going through a foreclosure process, doesn't allow potential buyers to see the property before bidding due to legal reasons. Instead, buyers rely on the information provided during the auction. The process can be risky, as buyers might end up with houses requiring minor to major repairs. It's essential to be cautious and thoroughly research the properties before bidding. Additionally, securing funding for real estate investments can be a challenge due to high interest rates and a liquidity crisis. Alternative financing options, such as Fundrise's private credit strategy, can help investors access the capital they need to grow their portfolios. Lastly, 1031 Pros can help investors save significant taxes through 1031 tax-deferred exchanges.
Maximizing Savings with 1031 Exchanges and Finding Off-Market Deals: Investors can save on capital gains taxes using 1031 exchanges and find quality off-market deals through platforms like PropStream, while thorough research and title work are crucial for successful sheriff sales investments.
Real estate investors can save significant amounts of money on capital gains taxes through 1031 exchanges, and 1031 Pros can help facilitate this process with their expertise and experience in handling various types of exchanges. Meanwhile, finding quality investment opportunities becomes increasingly challenging in today's market, making off-market deals a viable alternative. PropStream, a leading real estate data provider, can help investors find motivated sellers and accurate comps to make informed investment decisions. Sheriff sales can offer potential investment opportunities, but thorough research and title work are essential to avoid unexpected liens or positions on the property.
Buying Discounted Properties: Risks and Rewards: Thorough due diligence is crucial when buying discounted properties, but smart financing can help mitigate risks and build a profitable real estate portfolio.
Buying a property at a discount comes with significant risks and requires thorough due diligence. The buyer may not be aware of hidden debts, liens, or the property's actual condition. However, with careful planning and smart financing, such as refinancing and bundling mortgages, it's possible to scale real estate investments and build a profitable portfolio. Financing for mobile homes was not a major issue in the speaker's experience, and drive-by appraisals, while less accurate than interior inspections, can still provide acceptable results for lenders. The speaker's success story illustrates the potential rewards of taking calculated risks and persistently working towards achieving financial goals.
Understanding the importance of independent analysis and adaptability in real estate investing: Appraisals should not be the sole basis for real estate investment decisions. Focus on market understanding, thorough deal analysis, and informed decisions based on personal research and due diligence. Adaptability and finding the right resources are also crucial for success in real estate investing.
Appraisals should not be the sole basis for real estate investment decisions. While they can provide valuable information, relying solely on appraisals can lead to misunderstandings or incorrect assumptions. Instead, investors should focus on understanding the market, analyzing deals thoroughly, and making informed decisions based on their own research and due diligence. Another key takeaway from the discussion is the importance of pivoting and adapting in the world of real estate investing. Hunter Lawler's story is a great example of someone who has successfully navigated different types of investments and continued to grow his portfolio. He emphasized the importance of treating real estate as an investment rather than a career and using the income generated to fuel further investments. Additionally, the discussion highlighted the importance of finding an investor-friendly agent to help navigate the market and make informed decisions. With the help of resources like BiggerPockets Agent Finder, investors can quickly and easily connect with local market experts who can provide valuable insights and guidance. In summary, the discussion emphasized the importance of independent analysis, adaptability, and the right resources in the world of real estate investing. By focusing on these elements, investors can make informed decisions, grow their portfolios, and ultimately achieve financial freedom.
