Millennial Real Estate Investor

A quick update about the show, where we've been and what to expect.

Love is a funny thing sometimes. Kevin Galang discovered the wealth-generating power of real estate investing thanks to his girlfriend. Growing up, Kevin was brought up with the mindset of growing your income, while his girlfriend believed in growing your income stream. Kevin believed in investing in a 401(k) for retirement, and his girlfriend believed in investing in real estate for cash flow. They set aside their differences and Kevin figured he’d give real estate an open consideration and look into it. Can you guess how he thought about finances afterwards?

After months of learning and networking, Kevin jumped into note investing, doing three deals right off the bat. And while at the time it felt as if investing in notes was going against the current, Kevin knew his strengths as well as the benefits to know that he was going in the right direction. He stuck with it and the results speak for themselves.

Up to date, Kevin educates others about the nitty-gritty of real estate note investing, as well as other types of investments, in his podcasts Tech Guys Who Invest and Note Nuggets.

Takeaways from our conversation with Kevin: 1) What is a real estate note? In essence, it is a promissory note in which the borrower promises to pay back a specified loan to the lender (in this case being a mortgage on a property). In other words, when you invest in a note, you are acquiring existing debt and acting as the bank, using the property (or otherwise) as collateral should the lending terms be broken or become non-performing.

2) Why invest in notes? As Kevin explains, the largest (and most obvious) benefit is the ability to essentially own real estate without being the attached landlord to any given property. That means that you still earn a return (through cash flow and/or recapitalization), but don’t necessarily have to handle the day-to-day operations like renovations, evictions, or leasing.

3) What are the advantages in notes? For one thing, you can get really creative with how you invest in notes. For example, you can buy in bulk or you can buy in shares. The other thing, Kevin mentions, are the multitude of exit strategies available at your disposal should a note become void or non-performing. You have the choice to create a solution with the borrower directly, you can eliminate the borrower from the investment, or you can part ways with the investment yourself, all of which could be winning solutions if done properly. 

4) How do I get started? Kevin talks about how note investing is generally thought of as an “old person’s game.” He explains while it may be true to an extent, you don’t have to invest in notes the traditional way. So while it may carry more risk, with only a few thousand dollars, you can gain a secondary or (even) tertiary position, or even become a partial note holder. Or say you have more capital available in an IRA, that can also be a source of income to then originate or purchase a primary-position note. Either way, as per Kevin, go learn and network as you get started.

If Kevin could go back and talk to his 16 year old self, he’d tell him, “Read Rich Dad Poor Dad sooner because it would challenge the way [you think] about creating financial success.”

An unexpected benefit of real estate investing, Kevin said, is the ability to endlessly learn new things and learn with a purpose simultaneously.

A piece of advice Kevin would tell his friends looking to get started in real estate would be to know what you want to do, know how much you’re willing to dedicate, and double down on what you’re good at.

Kevin recommends using a HP 10bII Financial Calculator to help you analyze deals on the fly, as well as Google Drive to have a centralized place to store important business information.

Kevin recommends reading How To Win Friends and Influence People by Dale Carnegie to learn the foundation of talking to people and how to build better relationships with others.

If you’d like to get in touch with Kevin, visit: tgwipodcast.com and info.notenuggets.com/home

As a Canadian native, Avery Heilbron immigrated to America to pursue soccer at the collegiate level. He found himself working a W2 job in Boston, Massachusetts. Through various books (not Rich Dad Poor Dad for once!) and BiggerPockets, he discovered real estate investing. He also began networking with other local real estate investors and closed on his first property in early 2019.

Avery attributes his rather quick (and successful) start in real estate to his learn-and-take-action personality. He genuinely enjoys learning and is not one to sit around waiting for things to happen. 

Up to date, Avery is House Hacking and owns two multi-family properties. He coaches other individuals looking to get started investing in real estate, as well as prospects for other larger-scaled real estate investors with the intention to find deals for them and continue his own education with their help. 

Takeaways from our conversation with Avery: 1) Finding the right agent. This was a vital part of Avery’s success in securing his first deal. While taken aback at first at the thought of seeing properties not long after meeting his agent, this agent was willing to take the time to educate Avery every step of the way and move at a pace Avery was comfortable going in. So while you don’t necessarily need an agent who invests nor should you exploit one without compensation, take the time to find an agent who is a good fit or ask around for someone who can help you get the job done.

2) Section 8 comparables. While many may suggest you stray away from this demographic of renters, the truth is these individuals in this tenant pool exist. As Avery notes, one thing to keep in mind when figuring rents for these units is how the Housing Authority determines what is “fair.” Their criteria is different from traditional means of finding comparable units. There’s less emphasis on the glitz and glamour and more focus on the amount of bedrooms and zip code. This can be beneficial to know when it comes time to increasing rent or putting in new Section 8 tenants. 

3) Don’t get too friendly with your tenants and screen prospects thoroughly. Especially when House Hacking, you carry the title of landlord, property manager, and next-door neighbor. While you want to maintain a good and professional business relationship with your tenants, Avery suggests not turning your renters into friends. Avery would decline social invitations from his tenants and eventually they caught on. This is done not only to protect your emotions, but also your investment.

4) “Due” your diligence. As Avery explains, when purchasing multi-family properties with (or without) inherited tenants, you have to be thorough in your research about the property. While not encouraged, it’s not uncommon for sellers to lie about rents, expenses, and condition. The seller’s motive is to unload their property so it’s your responsibility to know what you’re buying.

If Avery could go back and talk to his 16 year old self, he’d tell him, “Two things… The first would be to just enjoy school and learning and all the experiences because it doesn't last forever. The second would be to stretch more…”

Two unexpected benefits of real estate investing, Avery said, is the fact that his girlfriend is all-in about real estate and personal finance like himself, as well as the opportunity to grow wealth at a higher scale since he invests in a more expensive market.

A piece of advice Avery would tell his friends looking to get started in real estate would be to make sure to take focused action while you learn and not get swayed in all the different directions you can go in real estate.

Avery recommends using Cozy to help you with your rent collections and other property management needs.

Avery recommends reading Set For Life: Dominate Life, Money and the American Dream by Scott Trench as its message resonates a lot with Avery’s philosophy and the same could be set for you!

Honorable mention: Retire on Real Estate: Building Rental Income for a Safe and Secure Retirement by Kai Anderson.

If you’d like to get in touch with Avery, find him on LinkedIn and BiggerPockets, follow him on Instagram @_averyheilbron, or visit: realworldfaf.com/contact

Sometimes all we need is a little push in a different direction for it to have the biggest ripple effect in our lives. In the case of Adam Ulery, this metaphorical push came in the form of a book recommendation over a coffee break at work. Adam figured it couldn’t hurt so he gave Rich Dad Poor Dad a shot and, as he put it, “became a fiend for information.”

Like many others, he gobbled up as much knowledge he could about finance and investing and ultimately fell into real estate and stuck with it. While those initial stages were tough for him due to his mental roadblocks, with the right guidance and action, he was able to preserve and open up his life to abundance.

Up to date, Adam is the Head of Investor Relations for Dreamstone (a real estate syndication company) and hosts the Tech Guys Who Invest Podcast all while still working a full time W-2 IT job. Collectively, Dreamstone has a goal of owning 5,000 units by the end of 2021. Adam plans on continuing his stride towards wealth to be able to help more people along the way. 

Takeaways from our conversation with Adam: 1) Listen to competent advice. While it might be more expensive in cash value up front to pay for the opinion of an expert, you’ll be rewarded tenfold later down the road. In other words, it’s cheaper to do something correctly the first time than to do it the inexpensive way and have to do it again. So when it comes to legal, financial, mental, or structural advice, this is capital well invested. And keep in mind, sometimes you’re going to need the same advice from different people depending on your level and goals.

2) Overcome your limiting beliefs. It all begins with mindset. Adam can vouch this was true for him. Even with his excitement and eagerness to do his first deal, those raw emotions alone weren’t enough for him to overcome his negative attitude. He first had to address his doubts and adjust his thinking about his ability to succeed. Once he was able to do that, he was no longer his own biggest hindrance, but rather his own biggest advocate. He went from fearing a single family property to purchasing over a hundred units at once.

3) The process remains consistent. Adam was a bit taken aback when he first decided to venture into apartment syndications. He was overwhelmed by the work needed to be able to scale at the level he desired. But then he realized something. Even though there were more moving pieces, the end product remains wholly the same. Adam realized that he still needed to learn about the investment type, he needed to pool together enough capital, he needed to find the right deal, and he needed to manage his investment. A duplex is not that different from a 10-unit building. And a 10-unit building isn’t that much different than a 100-unit apartment. It’s a larger scale, sure, but the process remains consistent.

4) Select a property manager with experience in your specific asset class. Similar to point #1 above, you also need competent people to do work on your deals. Competent advice is only half of the battle. The other half involves actually finding the correct employees or partners to fulfill your needs. Not any property manager can manage any type/class of property. Find a specific property (or project) manager that fits your means and can accomplish your needs. 

If Adam could go back and talk to his 16 year old self, he’d tell him, “Don’t limit yourself… Choose what you love to do and focus on that. Take action, move forward.”

An unexpected benefit of real estate investing, Adam said, is his growth thus far as a person, all things mentally, emotionally, and otherwise.

A piece of advice Adam would tell his friends looking to get started in real estate would be to get educated. Start listening to podcasts, read books, and start talking to people who are already doing what you want to do.

Adam recommends using Waze to help you navigate your way around town to be more efficient and save time (to do more deals!).

Adam recommends reading Killing Sacred Cows: Overcoming the Financial Myths that are Destroying Your Prosperity by Garrett B. Gunderson and Stephen Palmer to help you break free from traditional financial principles imposed by the working class and on the fast track to financial freedom.

If you’d like to get in touch with Adam, find him on LinkedIn, email him at [email protected], or visit: www.tgwipodcast.com.

Based out of Kansas City, Missouri, Logan Freeman joins us this week to share his story on how he went from owning less than 40 units after a few years, to in a span of 8 months, owning over 500 units!

Logan focuses on commercial developments and master leasing these buildings (meaning one lease for multiple units/properties between tenant and owner) to non-profit homeless organizations such as reStart. These partnerships help to rehabilitate individuals who have fallen into homelessness and get them back on their feet and a part of society once again.

Up to date, Logan’s goal is to continue to live out his passion in providing affordable housing for people who are in need, as well as continue to work to stay profitable. He wants to educate others about alternative investments within real estate, and show them the different niches available that wealthy people have been utilizing for generations now that these investments are becoming common practice and readily accessible.

Takeaways from our conversation with Logan: 1) Realize what your roadblocks are. One common problem successful investors run into is succeeding too much too soon. By all means, if you have goals to build a scalable business and want to build a large operation, do it. Along the way, just keep your attention open to weak points within the business structure. As Logan explains in his failed deal that cost him $200K, it wasn’t the deal itself that was bad. He knew that deal to be a great one! It was he, himself who was holding that deal back. He got overconfident, wore too many hats, and lacked the experience required to pull off the deal successfully. So as he notes, figure out the different jobs and roles within a deal (or business) and assign the right people to those roles. By doing so, you’ll get more done and get along further.

2) Swallow your pride. Going back to that failed deal that cost Logan $200K, he explains that he didn’t have to pay out that cash. There was nothing legally binding that required him to do that. But for Logan, it was bigger than the law and the cash. It was his reputation and moral conscience at stake. As Logan explains, when you do the wrong thing, your negative reputation spreads like wildfire. So when put in that perspective, that monetary value diminished. He fessed up to his mistake, got out of the way, and in doing so, learned a valuable lesson. Take ownership of your actions, be the buck, and move on.

3) “Doing well by doing good.” This is the mantra that Logan uses for his business. This is what led him to real estate. This is what led him to non-profit work. And this is what led him to teaching others how to succeed in business. Logans explains it well—on one hand, yes, business is business and the objective is to turn a profit. On the other hand, however, that doesn't mean you can’t make money by making the world a better place—by doing something that’s greater than profit alone. So whether you want to be a mom-and-pop landlord or a world-wide real estate corporation, don’t forget (or take for granted) the power and responsibility you hold for communities and individuals with each property. 

4) Go out and play the game. The more successful you are, the easier it becomes to achieve success. Common reasons for that is because of experience, network, and opportunities. Just like physical momentum, success builds on another. The hardest part is getting that first push to move. Logan mentions that he’s had the great fortune to be able to work on his life passion and serve people through his business. And while a lot of that is attributed to connections with other people, the results are not achieved by accident. The results stem from methodical and intentional plans and action. You can either sit on the sidelines and wait for the perfect opportunity, or you can create those opportunities yourself. We suggest the latter. And combine that with persistence, magic happens.

If Logan could go back and talk to his 16 year old self, he’d tell him, “Be open to everything and attached to nothing.”

An unexpected benefit of real estate investing, Logan said, is the excitement he gets that comes from making a positive impact on the world, as well as being pushed by his business to become a better and better version of himself.

A piece of advice Logan would tell his friends looking to get started in real estate would be to first ask them if they want to be an “active” or “passive” investor. From there, it’s a matter of laying out the steps and groundwork to get to your goals.

Logan recommends using gTasks and Monday to help you stay productive, organized, and on track.

Logan recommends reading The ONE Thing by Gary Keller and Jay Papasan as it helped give him clarity in his life, and he believes it can do the same for you.

Honorable mentions: The 10X Rule: The Only Difference Between Success and Failure by Grant Cardone

Extreme Ownership: How U.S. Navy SEALs Lead and Win by Jocko Willink and Leif Babi

Influencer: The Power to Change Anything by Joseph Grenny

If you’d like to get in touch with Logan, find him on LinkedIn, or visit: www.livefreeinvestments.com

It all started when Ben Mizes took on a sales job with a startup selling a platform for real estate investors in the single family business. And because he had to know at least some things about real estate, he was told to learn about investing. So being the obsessive guy that he is, he consumed all things real estate for a few weeks and hasn’t looked back since. At the time, Ben was in the market for a new place to live in anyway, and he had just heard about this great idea called House Hacking, so he figured if he needs a place to live, that he might as well live for free. Shortly thereafter, he went from owning zero assets to being a landlord of a four unit property. Within a couple of years, Ben had built up a portfolio of 22 units. Up to date, Ben is the CEO of Clever, a real estate tech company and on his way to financial freedom. Along with growing his own portfolio of units, he has the goal of being the largest integrated real estate company in St. Louis in his mission to transform his community. Takeaways from our conversation with Ben: 1) Understand the agreement, use your own contract, abide by the terms. Ben studied at the school of hard knocks during his first experience working with a contractor. He hired the only guy within his budget willing to do a major HVAC job and upon discovery of unsafe working conditions, did the right thing and fired that contractor immediately. However, the drama would continue as the contractor would then file a lien on the property, falsely advertise the property for sale (might we add multiple times), and (suspectedly) even rob the HVAC unit he was hired to install! Had Ben used his own contract and had someone tell him how to better protect himself legally, he could’ve saved thousands of dollars. But with all things, it was a great lesson learned, and an equally great story at that.

2) Homebuyers are buying a product, investors are buying a problem (and this is where the opportunities are). Such problems can be physically the property itself, the tenants living at the property, and sometimes, even the owner and managers of that property. When in the business of purchasing value-add real estate, you’re adding value where others feel it is not worth to them. If you can get creative enough to find solutions to these folks, you’ll never be short of great deals.

3) Build trust. Reality check: Not all homeowners are the most knowledgeable about real estate. In a similar token, not all real estate businesspeople are the easiest to trust in the business! Seek to understand who and what kind of person you’re working with and use that so you both can mutually benefit from that relationship. When seeking his second deal, Ben found the largest fourplex in the area, but the seller would not budge due to her mistrust of Realtors and other investors looking to prey off of her ncompetence. So instead of shoving profits down her throat, they took the time to educate her on their plans and were fully transparent throughout the entire buying/selling process. In doing so, they were able to build enough trust with one another and secure a great deal! 4) “The goal [for your first deal] is to not lose money and learn.” Just jump in. You don’t have to be ultra risk-averse or some adrenaline junky to get started quickly. If you happen to have a low tolerance to risk, that’s okay! What you can do is find a way to insulate yourself financially, learn the basics, and just roll with the punches. In doing so, you’ll actually learn faster and more than you would not doing anything at all. Take Ben, for example. Even with just a month of consuming real estate knowledge, he was able to get his first property under contract because he knew that even if the deal fell apart completely, the worst that could happen was that he’d have to cover the mortgage out of pocket (which he could) or sell. And while he made mistakes, there was none that he couldn’t handle and correct along the way. If Ben could go back and talk to his 16 year old self, he’d tell him, “Smoke less weed, and focus more on reading.” An unexpected benefit of real estate investing, Ben said, is the control he has over his asset. While he hasn’t yet met his ultimate goal of financial freedom at the time of our conversation, he dividends knowing that his investments will get him rich slowly as opposed to other more insecure alleys. A piece of advice Ben would tell his friends looking to get started in real estate would be to “Start modeling properties.” Get good at looking at properties, running numbers, and calculating what the potential net could look like in the end. Oh, and ”Expect to get your teeth kicked in a bit.” Ben recommends using Google Sheets as a simple method to learning how to run numbers on deals. Honorable mentions: Asana to help you manage your team. Clever to help you get connected with top agents in your market at a fraction of the cost. Ben recommends reading The Book on Rental Property Investing by Brandon Turner to help you learn the overall basics of real estate investing and fastrack you to your first property. If you’d like to get in touch with Ben, visit: benmizes.com or email him at: [email protected]

“It was going to be an additional hundred grand and change or whatever,” mentions Kimberly Marie as she casually explains her rationale to begin flipping houses. At the time, she had thoughts of going back to school and getting her doctorate degree. And surprise, surprise—education costs money. So in order to pay off any debt she’d carry as a result, Kimberly turned to flipping real estate to offset her expenses. 

Without much more thought, Kimberly began purchasing the ugliest homes she could find in her neighborhood and turning them into fresh, liveable homes that people could enjoy. And not long thereafter, she had established herself as the investor on the block.

Eventually, Kimberly finished school once again (and paid off debt once again), and this marked the first major transition in her investing journey. She didn’t need the immediate lump-sum cash anymore, and she wanted to take her foot off the gas a little bit. As a result, she began to hold these single family properties and turned them into sustainable rentals.

Fast forward to present day, she is amidst another transition in regards to her life. Up to date, she is selling off her single family properties and setting her sights to commercial rentals and developments.  

Takeaways from our conversation with Kimberly: 1) Take a look around. At the time, Kimberly explains, in her home market of Indianapolis, the city hadn’t yet seen the gentrification it is undergoing today. But being a local in the city, there was more than meets the eye. Walking around town, she saw more and more people moving in, as well as more and more businesses being put up. So where others felt fear, Kimberly saw opportunity. Gentrification was just around the corner. And to her, it didn’t take a rocket scientist to figure it out. All it took was nothing more than common sense, and a simple question, “Would I want to live here?” The answer was “yes” so she was there to stay.

2) Don’t be a stranger. When renovating her first several flip properties, Kimberly quickly became a staple in her community. As she describes, she wasn’t some out of state, corporate investor. She was in the property every day wearing her construction attire and swinging hammers. We’re not saying that you have to do your own rehabs. In fact, we encourage anyone who wants to outsource labor so they have more time to acquire more deals! The point is, us landlords don’t have the best reputation out there with non-homeowners. It is our individual and collective social responsibility to positively affect and influence our market, our community, and the people in it. Take it upon yourself to make it more than just about cash flow.

3) Audit your goals. As mentioned above, Kimberly has pivoted a few times during her career thus far in real estate. She started off flipping homes, to owning rentals, and now commercial development. And this wasn’t by accident. Kimberly has taken a hard, inside look at herself and understands that her goals and aspirations have changed. Her reasons for investing have changed. And her attitude towards work—you guessed it—has changed as well. Set your goals and get after it. No two ways about it. Just understand that in order for you to grow as an individual, sometimes your goals have to do the same as well. 

4) Ignorance is bliss. We don’t mean this in a bad way, not at all! Sometimes, you just need some naivety in your life. That’s all. Take it from Kimberly. Purchasing her first rentals, it was done more or less on the fly. She knew what to look for and what data to analyze, but it wasn’t some esoteric activity for the syndicators or ultra rich. She admits that looking back, she’s surprised just how much she didn’t know. But that’s the point. That’s why beginner’s luck exists. You do something with no idea how hard or complicated something is, and you find that it’s not hard or complicated to do at all. Approach real estate investing as if it's only for the “smart” or “rich,” and you’ll never be either of those things. So when learning something for the first time or trying to master something permanently, keep it simple. 

If Kimberly could go back and talk to her 16 year old self, she’d tell her, “Just pay attention and look around.”

An unexpected benefit of real estate investing, Kimberly said, was the tax benefits and time. (She literally got a doctorate which, mind you, is the highest level you can study something and now she doesn’t even want to work.) She didn’t expect to earn and learn what she is now.

When a friend asks Kimberly about getting started in real estate, she asks them questions. Figure out your “why,” as well as what you can and won’t do. 

Kimberly recommends using CoStar and Redfin to find deals and analyze markets.

Kimberly recommends reading Skip the Flip by Hayden Crabtree to help you learn aspects of real estate and personal finance that you wouldn’t necessarily learn elsewhere.

If you’d like to get in touch with Kimberly, follow her on Instagram @kimberlymarie920 or contact her at: [email protected]

Serial entrepreneur on a mission is how we’d describe this episode’s guest, David Toupin. He started his first business (humble origins of mowing lawns) at 13 years old. In his junior year of college he took a semester off to do some internships. Had he stuck to this route, he would’ve done well financially coming out of college. But six months later, he jumped ship, turned to real estate, and never looked back.

David began with a couple of wholesale deals, and he learned two real important things: 1) You don’t need to buy single families in order to purchase multi-families and 2) You don’t need to use your own money to buy real estate. 

David knew he wanted to have an apartment business so he set out to hunt for deals, made a ton of offers, and fished for funding to get the ball rolling. He purchased his first 24 units at 21 years old and has rapidly scaled up since.

Up to date, David is the CFO (and co-founder) of Obsidian Capital Co. and owner of Real Estate Lab. He’s currently working on a ground-up apartment development in Austin, Texas and plans to acquire another 1,000-3,000 units in the next couple of years.

Takeaways from our conversation with David: 1) Leverage. Or as Robert Kiyosaki defines it, ”Being able to do more with less.” Don’t confuse leverage with racking yourself up with debt to acquire negative cash flowing deals or lending money to partnerships that won’t return a profit. In the same token, leverage also isn’t over-improving a property only to find that your value hasn’t increased or purchasing all the latest and greatest technologies for your business only to realize that your current processes were adequate for your operation. Leverage comes down to having the creativity, nuance, and understanding to combine ideas together and create something greater. If you do more with more, according to Robert Kioysaki’s definition, then that isn’t really leverage. That’s just doing more. And as we gather from David’s story, he knows a thing or two about leverage. So work smart, not only hard.

2) Make offers. You can make a good deal great, but you can’t turn no deal into anything. Sometimes, you do need to rely on a bit of quantity over quality. Making offers is one such time where it is appropriate. Now, this is not an excuse to make offers on bad deals, but don’t let your search for the perfect deal make you blind to decent/good deals. Sometimes, it takes those initial decent/good deals to act as your training wheels and be a catalyst for your next great deal. Take it from David, he was making offers before he even had capital!

3) Courage to connect. The beautiful thing about a network is you never know when it’ll come in handy or what will become of it. When David was looking for his next deal after his first 24 units, he sent a letter to an investor from out of state and from some sick twist of fate, this 71 year old gentleman accepted David’s invitation to connect. They formed a relationship with one another and ultimately struck a sale together that David bought from the gentleman at almost a million dollar discount, willingly! The rationale? The other investor liked David. That’s it. And as David explains, it was this deal that really got others to notice who he was. So just imagine where he would have been had he simply forked over sending the letter believing that this old-time investor wouldn’t even see it. Take a breath, puff up your chest, come from contribution, aim to add value, and just reach out to people you want to surround yourself with. 

4) Trust the data. Love it or hate it, emotion will always be a factor because of the human condition. Afterall, without emotion, real estate investing wouldn’t really be fun, would it? Emotion is inevitable. Just don’t let your emotions be your downfall. All too often, as with David, new investors trust new-to-them tenants/managers/employees/etc. all too easily, before any real trust is earned. But as a responsible business owner, when excuses come up from others you hire to perform, look at tangible evidence and data to form a conclusion whether or not that excuse is a basis for incomplete or partially completed work. Determine if poor performance is actually being influenced by an external factor or simply an unwillingness to step up to the plate.

If David could go back and talk to his 16 year old self, he’d tell him, “Start buying apartments today and buy everything in sight no matter what the price is… don’t even think about it.”

An unexpected benefit of real estate investing, David said, was the freedom. He’s able to travel, work from anywhere, do whatever he wants whenever he wants… and the cash flow is a cherry on top. 

A piece of advice David would tell his friends looking to get started in real estate would be to “Set your expectations up front… know what you want to get out of real estate and map your actions.”

David recommends using Instagram to connect with other like minded individuals and grow your network.

David recommends reading Maintenance Man to Millionaire: Real Estate Wealth Creation for Everyday People by Glenn Gonzales (David’s business partner) to get some insight on how to acquire and manage rental properties, as well as learn how an ordinary man grew his net worth to over seven figures.

If you’d like to get in touch with David, find him on Facebook & Instagram @realestatejedi or visit: www.obsidiancapitalco.com or learn.realestatelab.com to learn more!

Meet Jim Murray, a twisted individual crazy enough to actually enjoy property management. No, it’s true.

His journey starts back in 2012 when he purchased his first House Hack, a four-unit property in Rhode Island. At the time, he was working full time for Fidelity Investments and was self-managing his property. Since then, he has jumped around to do some wholesaling, some flipping, to where he is today—a full time property manager and real estate investor.

The unfulfilment with Corporate America had been building for some time since Jim made his first investment and one bad review too many, he did what most folks could only dream of and started his own company.

So what makes Jim crazy enough to do the one thing most investors dread as it pertains to real estate? Simple, he says. He’s a systems-oriented guy who enjoys helping people succeed.

Up to date, Jim manages over 600 rental units, owns and operates Lyon Property Management, and hosts The Cash Flow Kings Podcast. Going forward, he plans to continue to scale up his personal portfolio, transition more into the multi-family realm, and help more people grow their wealth.

Our takeaways from our conversation with Jim:

1) Systems is the name of the game. Invest in technology that increases profitability. By having the right systems & processes in place, you attract and get to serve the right clients. And fortunately for us, business technology has never been easier to acquire and implement. So whether you self-manage or manage other people’s units, there’s technology out there that exists to help you out. (Find suggestion list down below.) However, understand this: Technology is meant to enhance, not replace. If you fail to develop & implement the proper processes first, investing in technology will do you or your business no good, and will probably only run you and your business dry of cash flow.

2) Fire bad clients. When starting out, you’ll be tempted to accept any and all business that comes your way. And that’s not really your fault. You won’t know what separates a good client from a bad one. But once you build your business to a respectable size, that’s when it’s time to visit our good friend, Pareto (80/20 Rule). Scale your respectable business into a sustainable one. Get rid of problem clients and double down your efforts on the good ones. Good clients (tenants, customers, etc.) are worth keeping around if you want to operate a sustainable business. But more importantly, bad clients are worth getting rid of in order to keep the good ones around.

3) Set expectations and practice accountability. This is the culture that Jim cultivates within his own company that has allowed him to make a business and career in taking over distressed properties. From the very beginning, let tenants (or clients) know what you are all about and what you will do for them. You must make your tenants know it is a privilege to rent from you, and at the same time, you must treat it as such—a privilege. That means holding yourself, your tenants, and all other parties up to the standard that you set. And when the bar is not met, someone needs to be held accountable for their actions. In doing this, you will weed out bad tenants and keep the good ones happy.

4) Image influences perception. As Jim explains in his story, when talking to contractors while wearing scrappy jeans and work boots as opposed to a suit and tie, he was quoted for a lower price for the same work being done. And it’s understandable as this is a natural human bias. So why not use this bias to your advantage? Here’s the point: It’s not always best to look like you’re made of money. While this goes without saying to look appropriate, hygienic, and professional, you don’t always need to look super polished. Rather, fit the profession you’re playing. While there are times that call for formal attire, wearing so in casual settings tends to make others perceive you as willing to pay more for something or are just flat out bougie.

If Jim could go back and talk to his 16 year old self, he’d tell him, “Buy more real estate in 2009.” In other words, take advantage of the real estate cycles and buy real estate sooner! An unexpected benefit of real estate investing, Jim said, was the opportunity to live with time, location, and financial freedom. A piece of advice Jim would tell his friends looking to get started in real estate would be to “Listen to other people.” Use the free content and information available to you online, whether it be other real estate & business podcasts, websites like BiggerPockets, or the thousands of educational real estate videos on YouTube. Jim recommends using zInspector to help you create and store tenant condition statements. This comes in handy during any tenant-related litigation, as well as have as an additional layer of legal protection for your business.

Honorable mentions: For high-end scaled operations: AppFolio; Buildium; Rent Manager. For low-end (DIY-level) scaled operations: Cozy; Avail; Zillow Rental Manager. For rental unit showings: Tenant Turner; Show Mojo; Rently. Jim recommends reading The Wealthy Gardener: Lessons on Prosperity Between Father and Son by John Soforic to help you grasp important financial concepts found in many of the popular financial/business books around.

Honorable mentions: The Pumpkin Plan: A Simple Strategy to Grow a Remarkable Business in Any Field by Mike Michalowicz.

The Richest Man in Babylon by George Samuel Clason.

If you’d like to get in touch with Jim, follow him on Instagram @thecashflowkings

We welcome back the lovely Diya Liu in this episode. When we first spoke to her back in Episode #78, we had gone over her real estate journey up to that point and how she built her vacation rental portfolio in such a short amount of time. Then, a few short weeks thereafter, our collective world was rocked when the country went into lockdown amidst the COVID-19 outbreak.

At first, like everyone else, Diya approached the situation with cautious hesitation for the simple reason that she (like most other investors) had not experienced such a thing before. How can I sustain my vacation rentals when people aren’t even allowed to travel? thought Diya. Then she realized that a pandemic induced national lockdown can actually be beneficial to her and this can be an investment-altering opportunity. So exactly how did Diya take advantage of COVID-19 and break the myths it has created for aspiring short-term rental investors?

Takeaways from our conversation with Diya: 1) Adjust accordingly. When COVID-19 first broke ground, Diya wasn’t too worried. However, shortly thereafter, guests' reservations began getting cancelled all across the board. Approaching that following month, Diya’s net revenue took a hit and things weren’t looking good. Fortunately, around this same time, as Diya explains, most folks realized that “work from home” really means “work from anywhere.” So that combined with people’s cabin fever from being cooped up at home for weeks, this created a strong demand for people to want to escape big cities such as Los Angeles or New York and social distance in a nice, cozy getaway home. Diya turned her short-term rentals into “mid-term” rentals which are leased out in about 30 days cycles. And in doing this, she also fulfills the regulations placed on short-term rentals.

2) Communicate. So with this new investment strategy in place, Diya had to quickly get her team of property managers all on the same page. She had to create guidelines and best practices that all suited the needs of the guests, the rules of the government, and the capabilities of the property managers themselves. So she spoke to each and every single one of her partners and started executing on the new and improved business model. 

3) Cut your losses. However, this goes without saying that not all Diya’s units made the transition smoothly. Many flourished and some not so much. So instead of trying to walk on egg shells with problem properties that would take her energy away from the successful units, she decided to unload those problem units and double down on what was working well. Which takes us to our last point… 

4) Diversify and plan. As Diya mentions, her overall philosophy as it pertains to her real estate acquisitions is all about her personal preference to the nomadic lifestyle. This means that she is not tied down to one specific niche or market. She goes where the numbers make sense and where there is business to be had. And part of that means being prepared for trends and shifts that will come along the way. Instead of solely focusing on what this current pandemic has done, she’s already shifting her sights to what’s to come after this pandemic concludes and what investment strategy and niche will work then.

A lot has happened since we last had Diya on the show. She has left her W-2 job and has transitioned full time into real estate investing. Going forward, she plans on continuing to grow her vacation rental portfolio, and help other aspiring investors start theirs. 

A recent book Diya recommends reading is Never Split the Difference: Negotiating As If Your Life Depended On It by Christopher Voss and Tahl Raz as it has helped her negotiate agreements with her neighbors, as well as find off market deals.

One lesson Diya has learned since our last conversation is that short-term/vacation rentals have a lot tied to search engine optimization (SEO) and digital marketing. As far as these investments are concerned, you have to understand the guests you are hosting, as well as the platform in which you are using to list your units. You fall less on the traditional landlording side and more on the hospitality/hotel services side.

If you’d like to get in touch with Diya, visit: www.diyaliu.com or follow her on Instagram @diyaesq