Investor Cheat Code Podcast with Mike Simmons

Evan and Jordan are two millennials who have been investing in real estate for four years and have grown most of their portfolio within the last two years. They have grown to $15M in current holdings and have transacted over 65 units. Evan and Jordan love to teach people how they too can be real estate investors and get into the market. Their short-term goal is to have over $100M in holdings and build a network of investors that they can teach and help. They are partners at Tuk Capital, Tuk Developments, and Choice Renovations Canada and certified mortgage agents with multi-million-dollar holdings in the Greater Toledo area. Evan and Jordan are considered passionate entrepreneurs and business strategists.

We begin the episode with Evan and Jordan sharing their background stories and how they ended up in real estate. Evan shares that they have been working together in multiple businesses, but they have been in the estate business for four years now and aggressively pursuing it for the last two years. Evans was in athletics, and has always been in the gym, in the numbers game, and is very competitively driven. On the other hand, Jordan comes from an entertainment and sports background. He played sports, and was involved in music and production, large shows, and concerts, including trade shows. For Jordan, the excitement is still there, and he finds a lot of similarity in the thrill of chasing the deals, acquisition processes, turning over the properties, and organizing contracts. Their motivation keeps them moving and resilient and moving no matter what comes their way.   

We then talk about what Evan and Jordan have been doing, where they are, and the real estate market in Canada. Evan shares that they have completed over 100 deals in multiple avenues, including fix and flips, buy and hold, and BRRRRs. According to Evan, they had some really good timing, and now they are back to an aggressive acquisition phase. He also shares that the market has been taking a turn, they have seen a massive decrease in pricing, and it’s becoming a buyers' market. From his perspective, you can’t time the market, but you can change your investment strategy as the market changes. Right now, Jordan and Evan are more focused on cash-flowing properties because of the uncertainty in the market pricing.

Next, we talk about the availability of capital over the next 24 to 36 months. According to Jordan, capital is getting tighter. Many lenders, especially private lenders, are tightening their grip on certain requirements compared to 6 to 8 months ago when everything was going up. They are more cautious but still doing the deals and putting money out there in the market. Overall, Jordan emphasizes that money will not come by as easily as it was a year ago. He also shares that the pinch in the market is also coming from people who are sitting on cash reserves and buying whatever makes sense to them. The overleveraging of deals is due to worry about where the market is going and what their investment and equity are going to be.     

We then talk about Jordan and Evan's sweet spot right now and why. Evan shares that they have a couple of different models, and they use them depending on what fits what criteria. They love the multifamily space, something they got into more recently, and have found long-term value. According to him, it is easier to increase the value of multifamily based on how they are valued and calculated in the market. Evan also shares that they have seen a trajectory with single-family and small multifamily homes becoming valuable rental spaces. Considering that information about homeowners is hard to acquire in Canada, Jordan and Evan do it through in-person and branding techniques such as networking, building credibility in the market, advertising, and driving for dollars.  

Next, we discuss what’s next for Jordan and Evan and where they want to be in the next five to ten years. Evan shares that they will be diversifying to the United States to invest in more geographical locations. According to Evan, the landlord-to-tenant laws in Canada are fully in favor of the tenants. The landlord has no control, and some tenants take advantage of the laws because they can’t be kicked out. This increases the risk of investing in rental properties for mom-and-pops and investors without multiple income streams. They want to diversify to areas where the landlord-to-tenant laws are favorable to help them provide top-notch places to live and be paid appropriately and on time.

Lastly, we talk about how Jordan and Evan help people raise capital in Canada. They have worked as brokers in multi-million-dollar deals where clients are looking for extensive capital. At the same time, they also help people get a $20,000 or $50,000 loan. So depending on what you want, they will guide you on what you should look for. Jordan explains that they don’t take on private loans because the fees are so expensive. Instead, they get the money from friends, family, and people looking to earn income on their money.        

Make sure you don’t miss another amazing episode of the Just Start Real Estate Podcast with Evan Ungar and Jordan King and get valuable information on how to build a real estate empire through honesty and integrity!

“Your investment strategy changes as the market changes.”

“Don’t stop investing when the market changes. Just be flexible with your investment strategy.”

“Don’t get discouraged with the market; what goes up always comes down, and what comes down always goes up. Get as much knowledge as you can.“

TUK Capital

Jordan on Facebook 

Evan on Instagram

Evan’s book

Welcome to this version of the Just Start Real Estate Podcast! I am excited to bring you another replay of my Live Question and Answer sessions. For those people that are unable to join us live, this will provide an opportunity to hear the awesome questions I am fielding about business, taking risks, real estate, and so much more!

This presentation is the live Q&A that I did the week of August 10th and each Thursday we will offer you another chance to take advantage of listening to the answers to our guests’ fabulous and compelling questions! Don’t miss this new episode of the  Just Start Real Estate Podcast!

“My guess is that you know if you blew the budget in the original estimate or during the project itself.”

“It isn’t enough to have an itemized budget without a detailed timeline for your project.”

“Managing, or mismanaging, the renovation and the contractors is probably where the issue in going over budget lies.”

“I would hit them immediately and then again in 90 days.”

“I would reach out to leadfuzion.com and tell them you are interested in marketing to probate and foreclosure lists and ask them the best strategy.”

“You should go grab the book, Extreme Ownership.”

“As you grow, you can bring someone in to manage your people, but in the short-term, you just have to do it.”

“There are services out there that will play HR for you, both hiring and firing employees.”

Brandon started a digital marketing company as a sophomore in college and never looked back. After volunteering to do digital marketing for companies, he started the Bateman Collective, which is now the premier digital marketing company for wholesalers across the country. His company handles all digital marketing, from SEO to PPC to Facebook and Instagram ads, as well as designing and creating content for those platforms. He is currently helping real estate investors target motivated sellers in over 90 markets across the United States, Canada, and Australia. Brandon has been a recent podcast guest on Real Estate Disruptors, Wholesaling, Inc., and The Real Estate Jam, among others.

We begin the episode with Brandon sharing his background story and how he got into the lead generation space and real estate. Brandon shares that he’s a marketer and started out in digital marketing. He partnered with a company that was doing wholesaling in real estate in 2017, and they went from hardly breaking even on digital marketing to doing over a million gross profit in a few years. According to Brandon, there were profits from various channels, but consistently, the highest return on investments, largest single lead generation source and lowest number of leads to a deal were best in digital marketing compared to other marketing channels. 

We then discuss what platform to pick and where to invest your money in marketing if your goal is to grow as fast as possible. Brandon shares that google is the best because it is a volume platform. They put the activities they do for their clients into three categories; page search, organic search, and socials. He shares that for social media, they don’t use TikTok. It has a lot of motivated sellers as of now, but the future could change. According to him, Facebook is completely stable, then Instagram is secondary, and it doesn’t have much going on in the real estate industry yet. Google is more scalable from a budget standpoint. On average, the organic side of google has a 3 to 4 higher return on investments from the page site. However, it’s a long game compared to paid ads, which can be short-term.  

Next, we talk about the budget you should be willing to spend minimally if you want to get into google ads. According to Brandon, there are some key factors that will put someone's budget higher or lower. The first one is sustainability. You have to make sure that whatever budget you use, you can afford to spend that consistently for a period of time. Brandon recommends six months. This is sufficient time to follow up on the ads and see what is happening. Pay-per-click can work with any budget, but execution can be tough. If you are working with a small budget, you might pay an agency a lot of money to manage your small amount of money to work miracles. 

We then talk about the chasm between incoming leads and deals getting signed. Brandon shares that you can drive good leads, but your sales strategy, phone calls, and acquisition can be problematic. Brandon shares that one of the things that they do differently from other agents is that they track things closely with their clients. They interview clients with a high closure rate in the top 10% and those in the bottom 50%. They look for things those people do that are in the top 10% that none of those who are in the bottom 50% and have found three core things. The first one is urgency. When you get leads, urgency is key. The second one is assuming motivation. Being delusionally optimistic about every lead that comes in even though 90% of the time it is not the one will help you not to miss it when it is the one in the 10% chance. The last one is who potential clients talk to matters a lot. You get the contract when it’s time, but you win the contract when you establish trust.  According to Brandon, most sellers go to the internet to search because they have a problem, and if you can make them feel like their problem is solved, they don’t need to talk to anybody else. However, if you set an appointment to solve their problem later, they will still have the pain and keep looking. 

Lastly, we talk about the best practice for handling inbound calls. Brandon shares that the best practice is having the acquisition team receive, make the calls and set appointments.  According to Brandon, the reality of lead marketing is that over time there are fewer leads and those leads are more valuable. There are also a few jobs in wholesaling that are more valuable than the first phone call to an inbound PPC lead. However, most people pay lead generators more money than the person making the calls and driving the conversation, which is potentially the highest value interaction in your entire business.  People answering your phones and getting appointments are your ambassadors. If they are not good, they will not represent you well, no matter how good your solution is. 

Make sure you don’t miss another amazing episode of the Just Start Real Estate Podcast with Brandon Bateman and get valuable information on how to use paid ads to find motivated seller leads!

“The most expensive marketing is marketing that doesn’t work. You would rather spend your $10K well than waste your $50.”

“When you hire a marketing expert, trust their experts and let them guide you through the process to become better. They have done it a hundred times in hundreds of markets.”

“When someone searches your keyword, google greets them with massive results, and if you're quick, you have a greater likelihood of getting the deal.”

“People lose motivation when they find a solution and when they find it somewhere else, they don’t care about you.“

“Unless you assume that every lead is golden, you will miss the one that actually is.”

“Marketing is an attitude thing, and your outcome is a little dependent on you.”

Bateman Collective 

Brandon on LinkedIn

Brandon on Instagram

Brandon on Facebook 

Previous Interviews & Articles:

Welcome to this version of the Just Start Real Estate Podcast! I am excited to bring you another replay of my Live Question and Answer sessions. For those people that are unable to join us live, this will provide an opportunity to hear the awesome questions I am fielding about business, taking risks, real estate, and so much more!

This presentation is the live Q&A that I did the week of August 3rd and each Thursday we will offer you another chance to take advantage of listening to the answers to our guests’ fabulous and compelling questions! Don’t miss this new episode of the  Just Start Real Estate Podcast!

“Don’t let anybody talk you out of real estate.”

“I quit my job and never looked back.”

“I make like twenty times more money each year than I did at my 9-to-5 job.”

“You need to define your buy box - figure out what a good deal looks like to you and stick to it.”

“I am excited about the upcoming market changes and every investor should be, too.”

“Because we are moving into more of a buyer’s market, your disposition process needs to be completely dialed in.”

“Even in my company, we got a little lazy because things got easy.”

Today's Guest: Michael Albaum

Michael has been investing in real estate for the last decade. He has done a variety of deals ranging from single-family homes to longer-term NNN (stands for the net net net which is the property's operating expenses) lease properties with national chain tenants.  After years of investing, he found his niche in long-distance, value-add multifamily investing. Michael left the 9-5 world and, prior to the pandemic, was traveling around the world with his wife, who is also able to work remotely. Michael is also the Program Manager and Head Coach of Roofstock Academy and the host of The Remote Real Estate Investor Podcast, which interviews RE industry professionals about remote real estate investing. He is currently investing in short-term rentals and small multi-family real estate remotely while embodying the nomadic lifestyle of living in a van and traveling with his wife full time.

Highlights From The Show:

We begin the episode with Michael sharing his background story and how he ended up in real estate. Michael shares that he is just a regular guy who grew up in California and did the things most of us were told to do. Go to school, get good grades and get a good job, and then you will be set out for life. Michael loved his engineering job, but he realized that it was not going to get him where he wanted to go fast enough. He got his hand on Rich Dad Poor Dad, which transformed his perspective about money. Being an engineer, real estate investing really resonated with him. Michael played with some spreadsheets, self-educated for about two years, and eventually got his first property. When the first rent showed up, he knew he had solved the Rubik's Cube. Michael set himself bigger goals and bought properties in different markets. However, things started becoming overwhelming. He was chasing down 60 property managers for 60 different properties, which was a pain. So he decided to narrow down and be laser-focused on two markets, which he says has been amazing.    

We then talk about Michael's nomadic investing experience, how it came about and how it works. Michael shares that in 2018 his father passed away, and he requested a completely remote plan to work from home, and it was accepted. He wanted to support his mom for about 3 to 4 months, and when he returned to work, he felt he needed a mental break. He asked for a six-month break to unplug and do a mental reset but was denied. The next step was quitting his 9-5 in 2019, after which his wife suggested they travel for a year to explore and live in other countries. Michael shares that it was a perfect time to do it, they had the real estate backing them up, and his wife had a totally remote job. They went all over the place, had amazing experiences, and in the process, Michael picked up remote freelance work to make more money. However, during the pandemic, they were forced back home as flights were closing down. They were not yet done traveling, so they bought a van, designed it, moved into the van full-time, and rented out the house they were living in. 

Next, we talk about Michael’s business and his current goals. Michael shares that as he was evolving in his career, he went out of state and got involved in multifamily fairly quickly. He was in growth mode for a long time, and he started by buying various sized multifamily properties to get to 100 units portfolio, and again he hit the inflection point. Things started getting heavy, and he realized this was not his goal. Michael started scaling back on the acquisition and the value he had on projects to focus on doing more with less. Now he’s at 61 units after selling off some of the properties to get leaner and easier in managing properties. Michael believes that if it doesn’t feel easier, takes up more mental bandwidth, or takes you away from the things you want to do, it’s pulling you in the wrong direction, it’s not worth it.

We then talk about how doing short-term and long-term works for Michael. Michael shares that doing both short-term and long-term is totally counter-intuitive, but management is the silver bullet. For him, he doesn’t manage 99% of his portfolio of short-term rental properties, and from a remote perspective, he has handed everything to property managers. According to him, you have to run your numbers and be super diligent. Michael also shares that he always tries to learn from the past and not to make the same mistakes again. For the same reason, he’s not investing in short-term rentals all over. His focus is on the Smoky Mountains in Tennessee, a super hot market, very easy to plug and play, and the experience is great. 

Next, we discuss how you can build a side hustle and eventually escape from your 9-5. Michael shares that it’s super important to plan it out. You also have to analyze how much you earn in your job, your real estate investments, and your expenditure before quitting your job. Michael also shares that he was willing to prioritize his mental health over the financial security that he wanted. He knew he could always get another job if everything crashed down and his plan didn’t work. After quitting his job, Michael was also doing supplemental work as a freelancer to be on the safe side if things went sideways. He recommends that you get something going on the side you can quickly grab on to if need be.

Lastly, we talk about small multifamily properties and why Michael chose to focus on this range of properties that are often overlooked. Michael shares that he didn’t know that small multifamily was no man’s land when he got involved. He went to a new market and found an 8-unit property valued the same as a single family, a niche he was investing in at the time. Michael was working with an agent, and there were other properties, but the price points of the property resonated with him. It only pushed him a little outside his comfort zone, and getting his head around the value addition through physical renovation was easier. People like him who were doing single-family thought this was too big for them, and for those who were doing multifamily, this was too small for them.  

Make sure you don’t miss another amazing episode of the Just Start Real Estate Podcast with Michael Albaum and get valuable information on how to start investing in real estate on your own terms to support the lifestyle you want!

Notable Quotes:

“When investing in properties, diversity of scale can make you lose economy of scale and efficiency by being so spread out.”

Michael Albaum

“If it doesn’t feel easier, takes up more mental bandwidth, or takes you away from the things you want to do, it’s pulling you in the wrong direction, and it’s not worth it.”

Michael Albaum

“Investing in both short-term and long-term rentals is totally counter-intuitive, but the silver bullet is management.”

Michael Albaum

“The best time to invest in real estate was 10 years ago, but the next best time is today.”

Michael Albaum

Thank You for Listening!

Connect with Mike on Twitter, Instagram, YouTube, Linkedin, Facebook

Help Out the Show:

Leave an honest review on iTunes. Your ratings and reviews really help, and I read each one.

Subscribe on iTunes.

Resources and Links From Today's Show:

The Remote Real Estate Investor Podcast 

Michael on LinkedIn

Roofstock on LinkedIn

Michael on Twitter 

Roofstock Instagram

Roofstock Youtube

More Resources From Mike:

Level Jumping: How I Grew My Business to Over $1 Million in Profits in 12 Months

WINNING DIRECT MAIL - How to CRUSH IT with direct mail!

7 Figure Investor Video Course - Scale your business to 7 figures. I'll show you how!

Welcome to this version of the Just Start Real Estate Podcast! I am excited to bring you another replay of my Live Question and Answer sessions. For those people that are unable to join us live, this will provide an opportunity to hear the awesome questions I am fielding about business, taking risks, real estate, and so much more!

This presentation is the live Q&A that I did the week of July 27th and each Thursday we will offer you another chance to take advantage of listening to the answers to our guests’ fabulous and compelling questions! Don’t miss this new episode of the  Just Start Real Estate Podcast!

“The kind of housing crash we are headed toward will do some damage, to be sure, if you are not prepared.”

“Back in 2008, we were going 100 miles an hour and hit a wall. That was a crash.”

“People in my world are calling it a dip or correction, not a crash.”

“If anyone tells you that they know what is going to happen with the market, stop listening to them.”

“Whether you wholesale a property or fix and flip it is a business decision that is unique to you.”

“What is your goal? It is all about that.”

“If you need big chunks of cash, you are probably going to fix and flip houses.”

“Over the years, my decision-making process was driven more by the market and the cash-flow needs of my business than anything else.”

“It is all about your business model and what you want to accomplish.”

“I started the podcast and called it Just Start Real Estate because one of the biggest hurdles in life is just getting started.”

Scott has been in self-storage for the last 9 years after transitioning from real estate to multifamily investments. Scott is a Chicago native whose career in architecture began in 1991 after pursuing his Master of Architecture from the Illinois Institute of Technology. In 2012, Scott founded Coda Management Group, a firm that specializes in managing real estate assets. Scott is also a co-founder of One Stop Self Storage with facilities across the Midwest and the founder of Coda, an award-winning design and build consulting firm. Coda has won numerous design/build awards, including the international Green GOOD Design, Best of Houzz, and Design Evanston Award. Their work has also been featured in notable publications such as Storing Up Profits by Paul Moore, Dream Homes, Midwest Luxury Homes, NBC TV Show Taste, and more.

We begin the episode with Scott sharing his background story and how he ended up in the self-storage space. Scott shares that he grew up as a creative kid involved in various sports but was fortunate to study architecture in high school. However, Scott gave up architecture to play sports and do normal college things rather than being dedicated to a studio. Scott wanted to get into their family business after graduating from college, which was not possible, so he had to go back to architecture. Fortunately, at that time, they had new programs that allowed him to earn a Masters in architecture. He jumped into it and was again fortunate to get connected to a professor who owned a real estate development architecture company and got right in multifamily. Scott started his own company in 1998, with single-family, multifamily, mixed-use, and institutional properties, and then the market crashed. Scott started exploring other options because it was difficult in the residential market except for apartments. This led him to self-storage, which had a lot of similarities to multifamily, but it was more resilient, especially in recession and massive downturn markets. 

We then talk about why self-storage is more resilient than other real estate investments, including multifamily. Scott shares that it is difficult in the market, and self-storage gives viable options to address these problems and overcome the challenges. Scott went back and analyzed every recession since 1979 and compared self-storage occupancy in each of them. Scott shares that no other class of real assets has a natural resilience like self-storage, even the housing market. In recession markets, housing slows down, renovation slows down, and construction stops, but self-storage will always continue to thrive.         

Next, we discuss how you can break into the self-storage world of investing as a new investor. Scott shares that there are three asset classes within self-storage, and they all differ from multi-family. They include class A, B, and C assets. According to Scott, Class C assets include first-generation self-storage (small under 200 units from mom and pops), and they give a nice return on a regular basis. The next one is class B which is a more suburban, larger driver facility and sometimes with primary control. At the top is class A, a property with both appreciation and cash flow, which comprises large institutions in the city.  According to Scott, the three assets represent different strategies, and the easiest way to get into self-storage is by buying class C properties. However, if you want to do a B or A, he recommends joining a venture or partnership group.

We then talk about how to find opportunities and people who own self-storage and want to sell. He shares that you get more opportunities by driving for dollars. Scott tells me that if you are looking for class C, it’s pretty hard to find them because they are not corporate, and the properties might be under their own name. They also use them as bank accounts with cash flow coming in to pay their bills. According to Scott, there are similar institutions for self-storage as there are on the residential side, and the larger ones, classes B and A, are predominantly done by brokers.

Make sure you don’t miss another amazing episode of the Just Start Real Estate Podcast with Scott Krone and get valuable information on how to invest successfully in self-storage!

“In self-storage, you can alter the unit's configuration to match the market condition, but you don’t have that flexibility in multifamily.”

“Self-storage unit portfolios are valued exactly the same way multifamily houses are done  using CAP rate and ROI.”

“During recessions, housing and renovation often slow down, and construction stops, but self-storage always continues to thrive.”

Coda Management Group

Onestop Self-Storage

Coda Design and Build

Scott on LinkedIn

Scott’s Email

Welcome to this version of the Just Start Real Estate Podcast! I am excited to bring you another replay of my Live Question and Answer sessions. For those people that are unable to join us live, this will provide an opportunity to hear the awesome questions I am fielding about business, taking risks, real estate, and so much more!

This presentation is the live Q&A that I did the week of July 20th and each Thursday we will offer you another chance to take advantage of listening to the answers to our guests’ fabulous and compelling questions! Don’t miss this new episode of the Just Start Real Estate Podcast!

“Ask them if you can work for them for free and learn the business.”

“Internships are a vastly underutilized and underestimated path to success.”

“Too many people want to go straight for the gold and I get that because I am impatient.”

“Get busy learning from the inside of a successful business.”

“Age is just a number. Whether you are old or young, it just doesn’t matter. Go after what you want.”

“Seller financing is under the umbrella of creative financing.”

“Let’s say you buy the house for $120,000 so I can do easy public math here.”

“Seller financing poses the exact same risks to you as the buyer as any other type of financing.”

“Send out a letter or postcard to your list once a month for six months before you even consider they are not interested, but in the meantime, build up your list.”

“When I say drama I mean almost Jerry Springer-level drama.”

Doug Lodmell is a co-founder and Managing Partner of Lodmell & Lodmell, one of the nation’s leading Asset Protection Law Firms. Today, Doug’s law firm is responsible for protecting over $4 billion in client assets. He is originally from Geneva, Switzerland, and he stood out at an early age as one of the brightest minds of his generation. Doug spends much of his time teaching, speaking, and leading thousands of professionals in business in Scottsdale, AZ. He is also the author of The Lawsuit Lottery: The Hijacking of Justice in America and was recently featured in BiggerPockets.

We begin the episode with Doug sharing his background story and what he does as an attorney. Doug shares that he started practicing with his father. His father was an attorney for many years but didn’t practice law. He was in real estate syndications, but the 1986 real estate crash steered him toward asset protection after the banks failed to reach him even though he had assets in the syndication. When Doug graduated from law school in 1997, he joined him, and they grew the practice along with his brother, which is also their foundation as real estate investors. They all have a deep understanding of real estate and asset protection and how it all works together. 

We then talk about what you can do in asset protection to ensure you are doing the right thing. According to Doug, when you start investing, you should keep one concept in mind. The safe part of your life and the risk part of your life should be as separate as possible.  The safe part of your life is simply the safe assets you hold. They include your cash in the bank, stocks, bonds, cryptocurrency, etc. You have to keep them in a separate legal entity from assets that can create liability. A home you are flipping can create liability; you have workers, equipment, and a house that can fall or burn down. Doug says the first legal entity you should understand is a Limited Liability Company or LLC. Its purpose is to help you limit liabilities.    

Next, we discuss why you should buy your first property in an LLC and not in C-corp or S-Corp. Doug shares that an LLC and a corporation are two different legal entities, but you can have an LLC taxed as a C-corp, S-corp, partnership, or disregarded entities. According to Doug, the reason it’s always going to be an LLC for asset protection is that LLC has members, and they can create restrictions on who can be a member, which can help eliminate entire classes of people from ever becoming a member. Corporations, on the other hand, are not membership entities. They are shareholder entities and have no way to exclude anybody from becoming a shareholder. 

We then talk about the volume of properties you can hold in one LLC. Doug shares that when you are flipping, you get your property in LLC, but after flipping, it’s out of the LLC, and the LLC is empty again. According to Doug, you can use that LLC as many times as you want, but as long as that LLC is alive, it has all the hangover liability from any deal it ever did. Doug advises that you should always pick a number that you are comfortable with, such as 10, do the 10 flips in that LLC and then let the LLC die a natural death to start a new one.  Why? If a deal goes bad and they come to you years later, you want the lawsuits to be on an LLC that is empty, not in use, and dying its natural death as opposed to your current LLC with properties in it. LLCs are easy and inexpensive to form, so you should often kill your LLCs if you are in high-risk activities such as flipping houses.  

Next, we talk about a holding company and the importance of having one from a legal standpoint. Doug shares that a holding company can be an LLC, but Doug recommends using a limited partnership, and a lot of syndication deals use limited partnerships instead of LLCs. You should also select a favorable state, and he recommends Arizona. It has incredible laws, inclusive charging for asset protection, great case laws, and their registration is perpetual. According to him, little things like fewer moving parts matter a lot. So, if you are flipping and get a property you want to hold, you have to take it out of the flipping LLC and into a long-term holding company. Doug emphasizes that as you take assets for long-term holding to build your property portfolio, they should be in the long-term holding company structure. Also, don’t put your flipping entity in the holding company because it will increase your exposure to risks, and it’s transient.  

We then talk about the market and some of the risks associated with the market cycle that we are in right now. Doug shares that the biggest risk is over-leverage. Doug advises that we slow down on anything that makes us overleveraged by doing fewer deals, carrying more cash, and putting more cash down on the deals we are doing. According to him, the risk is bigger for the flippers than the portfolio because if you have tenants, they will still pay the mortgage if the market goes down. However, if you’re relying on properties to go up to make money, you will be stuck with the deals in your pipeline, and you might have to sell them for less.  

Make sure you don’t miss another amazing episode of the Just Start Real Estate Podcast with Doug Lodmell and get valuable information on real estate asset protection, managing cash flow, and the dangers of the current market!

“When you start investing, you should keep the safe assets in your life and the risk assets in your life as separate as possible.”

“The first legal entity you should understand is a Limited Liability Company, LLC. It will help you limit liabilities.”

“LLCs are membership entities and are the best for asset protection. Corporations are shareholder entities and have no way to exclude anybody from becoming a shareholder.”

“You can use your flipping LLC as many times as you want, but as long as that LLC is alive, it has the hangover liability trailing from any deal it ever did. 

“Your LLC is a sub-entity of the holding company, and that is why your LLC should not be an S-corp as it makes it possible for the holding company to own it.

“Just because you have LLCs set up for a set of properties doesn’t mean that you need bank accounts or to have all the income and expenses go out to those LLCs.”

Get Doug’s Guide on how to manage your LLCs cashflow:  [email protected]

Lodmell &Lodmell

Doug on LinkedIn

Doug on Facebook

Welcome to this version of the Just Start Real Estate Podcast! I am excited to bring you another replay of my Live Question and Answer sessions. For those people that are unable to join us live, this will provide an opportunity to hear the awesome questions I am fielding about business, taking risks, real estate, and so much more!

This presentation is the live Q&A that I did the week of July 13th and each Thursday we will offer you another chance to take advantage of listening to the answers to our guests’ fabulous and compelling questions! Don’t miss this new episode of the Just Start Real Estate Podcast!

“Market cycles always change.”

“Your cold calling software should give you feedback and analytics on what times are most effective.”

“Traditionally, the best time to get a hold of clients is in the afternoon.”

“There is a lot that I would change if I was starting my business over again.”

“Use other people’s hindsight as your foresight.”

“When you are scaling, generally speaking, you are going to have to build your team.”

“When I first built my team, I didn’t take the training aspect seriously enough.”

“When you hire people, you can’t expect them to be incentivized as you are as the business owner.”

“A huge mistake that I made was to hire people and give them too much responsibility too quickly, with little to no management or oversight.”

“I am really good at execution.”

“Execution is a skill set of action, not of learning.”

“Trustworthy is a little different than ethical.”