Podcast Summary
Learning Real Estate with Minimal Upfront Costs: Discover three innovative ways to invest in real estate with little to no money down: Rent to Retirement's turnkey rentals, Integra's rent to own homes, and Pine Financial Group's mortgage fund.
There are innovative ways to get started in real estate investing with little to no money down. During a live podcast at the FinCon conference, hosts Josh Dorkin and Brandon Turner interviewed Zach, the CEO of Rent to Retirement. Rent to Retirement offers turnkey rental properties with no money down through investor loans with low interest rates and minimal down payments. Additionally, Integra Development Group simplifies the real estate investing process with their new construction single family rent to own homes, providing immediate cash flow, built-in equity, and a foolproof exit plan. For those who prefer a truly passive income, Pine Financial Group offers investment opportunities in their mortgage fund, which targets a 8% preferred return and secure payments to investors through senior liens. These options make real estate investing accessible to a wider audience, regardless of their initial investment capital.
Newbie Real Estate Investors Share Their Experiences: Three new investors share their stories of getting started in real estate, offering insights and tips for those just beginning their journey.
This podcast episode features three newbie real estate investors who are sharing their experiences and insights from their early days in real estate investing. They are all relatively new to the game, having made their first or second investments, and they provide valuable insights into the process of getting started. The episode was recorded at FinCon, a conference for financial bloggers, and the hosts, Josh and Brandon, introduce each investor and their background. The episode includes a quick tip to check out the show notes for links to the investors' sites and resources. Matt from New Jersey shares how he became a real estate investor by accident when he bought a condo at the peak of the market in 2008 and had to rent it out due to the economic downturn. Overall, this episode provides valuable insights for those who are just starting out in real estate investing and looking for guidance from those who have recently gone through the process.
Renting out a property with ease: Find a real estate agent friend, decorate the property attractively, utilize online resources for maintenance, and manage the property yourself for potential savings.
Finding a tenant for a rental property can be easier than expected, especially with the right help and proper staging. The speaker shared his experience of renting out his condo after being unable to sell it. He found a tenant within two weeks with the help of a friend who is a real estate agent. The condition and decor of the property, which was decorated by his mom, played a significant role in attracting tenants. The speaker managed the property himself and learned valuable lessons through experience, such as the existence of a reset button for a garbage disposal, which he had mistakenly replaced multiple times. He also emphasized the importance of utilizing resources like Google and YouTube for maintenance issues to save time and money. The speaker paid $180,000 for the condo and rented it out for $13.50 per month.
Considering Total Costs in Real Estate Investing: Evaluate potential costs and benefits before investing in a property, including association fees and special assessments, to ensure positive cash flow and future passive income potential.
While the 1% rule is a common guideline for real estate investing, it's important to consider the total cost of ownership, including association fees and potential special assessments, which can significantly impact your cash flow. The speaker shares his personal experience of owning a condo that costs him $125 per month to own, but is currently underwater and has been a financial drain. He emphasizes the importance of evaluating the potential costs and benefits before investing in a property, and the potential risks of association fees and special assessments in condo investing. He also shares his recent experience of refinancing a mortgage to reduce costs, and encourages investors to hold onto properties with potential for future passive income, even if they are currently underwater.
From accidental landlord to successful real estate investor: Despite unexpected challenges, individuals can learn, save, and grow through real estate investing. Self-reliance and smart financial decisions can lead to success.
Even in challenging situations, such as becoming an accidental landlord, individuals can turn things around and make the best of it through education, self-reliance, and smart financial decisions. As shared in the conversation, a listener named Romeo had to navigate selling a house against his mother's wishes and managing a rental property after a difficult turn of events. He managed to save money by taking advantage of a lower interest rate and learned valuable skills through self-education. Romeo's story is a testament to the potential for personal growth and financial success in the realm of real estate investing, even for those who initially found themselves in unfavorable circumstances. Additionally, his advice to tackle small-scale property management tasks independently and only consider hiring professionals for larger portfolios is a practical tip for those starting their real estate journey.
From accidental landlord to intentional investor: Becoming an unplanned landlord can lead to valuable learning experiences and potential long-term gains in real estate investment.
Real estate can be a valuable asset, even if it doesn't work out as planned the first time. Romeo, a guest on the show, shared his experience of becoming an accidental landlord in 2009 when he was underwater on his property in Georgia. Instead of selling, he decided to rent it out and use the opportunity to learn more about real estate. He eventually moved and purchased a primary residence in Charlotte, North Carolina, where he intended to rent or sell based on market conditions. Romeo emphasized that real estate can be a worthwhile investment despite potential challenges, and he encouraged listeners to educate themselves and consider their options carefully. Chris Guthrie, a friend of the show, was also recognized in the audience.
Effective property management is crucial for investment properties: Properly vet property managers, maintain open communication, and conduct regular checks to ensure optimal investment performance.
While it may be relatively easy to find renters for investment properties, especially in areas with a high demand for housing or military bases, it's crucial to ensure that property managers are doing their jobs effectively. The renter may not pay the full mortgage, but finding a renter is essential to subsidize the mortgage payments. However, relying solely on a property manager can lead to potential issues if proper checks and balances are not in place. It's essential to interview potential property managers thoroughly, obtain good references, and make regular checks on the property to ensure that everything is being managed efficiently. Additionally, having a trusted friend or acquaintance visit the property periodically can provide valuable insights into the property manager's performance. Overall, while property management can be an effective way to manage investment properties from a distance, it's essential to maintain open communication and regular checks to ensure that the investment is performing optimally.
Discovering Hidden Opportunities in Real Estate: A man from Charlotte, NC, found a hidden gem in a fixer-upper home at an auction, invested $101,500, and turned it into a profitable rental property.
Identifying opportunities in real estate can lead to significant returns, even for beginners. In 2014, a man from Charlotte, North Carolina, was inspired to flip a house after discussing potential properties with a neighbor. He discovered an auction property listed for $86,000 and, despite not being able to inspect it beforehand, successfully bid on it. Upon entering the property, he was pleasantly surprised to find a larger-than-expected five-bedroom, 2.5-bath home that only required cosmetic improvements. Instead of managing the rehab himself, he hired a turnkey rental company for a one-time fee of $1,500. The rehab cost around $14,000, bringing the total investment to approximately $101,500. This successful flip not only helped the man recover from previous financial losses but also sparked his interest in real estate investing.
Flipping a House with Cash Offers: Thorough research, having enough capital, and proper planning are crucial for successful house flipping. Cash offers can expedite the process, but risks should be minimized through preparation.
A successful house flip can be completed in a short time frame when working with cash offers. In this specific case, a house was purchased for $104,000, rehabbed in 10 days, listed for sale 5 days before completion, and sold for $146,000, resulting in a profit of about $34,000. However, not all flips go as smoothly, and thorough research, having enough capital, and proper planning are essential for those looking to get into flipping houses. The BiggerPockets forum and "The Book on Flipping Houses" are valuable resources for new investors. Remember, taking unnecessary risks without proper preparation can lead to financial difficulties.
Innovative solutions for home buying and insurance: Redfin updates listings every 2 minutes, offers personalized recommendations, and charges lower fees. Steadily provides fast, affordable landlord insurance with online coverage and next-day availability.
Both Redfin and Steadily offer innovative solutions to make the home buying and insurance processes more efficient and affordable for individuals. Redfin updates listings every 2 minutes, provides personalized recommendations, and allows users to schedule tours with local agents, while charging lower fees compared to competitors. Steadily, on the other hand, offers fast and affordable landlord insurance specifically tailored to the real estate industry, with the ability to secure coverage online in just a few clicks and next-day availability. Both platforms aim to save users time and money, simplifying the home buying and insurance experience.
Four-year search for the right real estate deal pays off: Persistently screen deals despite limited opportunities and verify info beyond sales documents to avoid bad deals and eventually find a profitable investment.
Persistence and due diligence are key in real estate investing. One investor shared their experience of looking for a good deal for four years before finally making a purchase. While they may have missed some opportunities, they also avoided potential bad deals. The importance of verifying information and not solely relying on a property's sales document was emphasized. The investor eventually bought a 24-unit property for $1,400,000 after negotiating the price down. While the property wasn't a cash cow, it covered its expenses and was paying down its mortgage. For those starting out, it's important to screen deals consistently, even if the number of opportunities may be limited. The investor in this case looked at around eight deals a year and eventually found their opportunity through networking with realtors.
Forced depreciation in commercial properties: Buying commercial properties with a large down payment, hiring a reliable on-site manager, and taking advantage of forced depreciation can lead to significant returns.
Investing in commercial properties, particularly those that are fully rented, can provide significant value through a concept called forced depreciation. This means the property's value is determined by occupancy and total rent collected, rather than actual occupancy. Buying a partially occupied commercial property can result in a lower purchase price. Once acquired, hiring a reliable on-site property manager, ideally living on the premises, can help ensure smooth operations. Financing commercial properties with a sizable down payment is common. The interviewee shared success stories of purchasing two properties, one with a resident manager and the other with a friend managing it. Both were financed with substantial down payments. While the process of obtaining a loan for a commercial property can be more complex than for residential properties, the potential rewards make it a worthwhile investment.
Navigating the complexities of a commercial property loan: Securing a commercial loan involves careful planning, research, and preparation. Brandon's story highlights the importance of understanding your financial situation, exploring various financing options, and being persistent in the process.
The process of obtaining a commercial property loan can be more complex than a residential one, but it's not impossible. Brandon's story illustrates this, as he shared his experience of securing a commercial loan and the various steps he took to get a good rate. He also emphasized that starting with larger real estate investments is possible if one has the means and resources. However, it's essential to remember that everyone's real estate investment journey is unique, and there are various strategies and niches to explore. Ultimately, the key is to find what works best for you and be open to pivoting if necessary. Additionally, real estate can serve as an excellent tool for wealth preservation and accumulation, but it might not be the most lucrative business for everyone, especially compared to owning and running a business. So, it's essential to consider various factors, such as age, risk tolerance, and available funds, before embarking on a real estate investment career.
Discussing Favorite Book Recommendations: The hosts shared their recommended books for business and real estate success, emphasizing the importance of continuous learning.
During a live episode of the Bigger Pockets podcast in New Orleans, the hosts discussed their favorite book recommendations for both real estate and business. Matt recommended "The 4 Hour Workweek" for business, while Romeo suggested "The Millionaire Real Estate Investor" for real estate. Romeo also mentioned his own book, "The Wealth Number." JC endorsed "The Wealth Number" and "The E-Myth," while Casey suggested "The E-Myth" and could be found at GenXFinance.com. The hosts also shared their experiences with the books and their personal connections to them. Overall, the discussion highlighted the importance of reading and learning from various resources to succeed in business and real estate.
Find an investor-friendly agent with BiggerPockets' Agent Finder: Use BiggerPockets' Agent Finder tool to connect with local market experts and navigate real estate investing with confidence
If you're looking to get into real estate investing or expand your current portfolio, finding an investor-friendly agent can make a significant difference. The market can be unpredictable, but the goal of financial freedom remains the same. BiggerPockets' Agent Finder tool can help you quickly connect with local market experts who can guide you through the process of analyzing potential deals and making informed decisions. This free resource is available at biggerpockets.com/deals and can help you navigate the complexities of real estate investing with confidence. Remember, it's not about timing the market perfectly, but rather being in the market consistently. And, as always, be sure to consult with qualified advisors before making any investment decisions.
