.jpg)
Money Focused Podcast
Helping ordinary people, become extraordinary with MONEY! Each weekly episode is packed with actionable tips, expert insights, and real-world advice to help you grow financially and take control of your future. Whether you’re just starting out or looking to level up your wealth, you’ve found the perfect place. Get ready to transform your financial journey, one episode at a time!
Money Focused Podcast
**Best of Season 1** - "Tips to Turn Small Investments Into Big Returns!!"
Ever wondered if you could turn your side hustle into a full-time gig, especially during tough economic times? Our latest podcast episode promises to unravel the journey of leaving a secure engineering job for a bustling career in real estate, even during the Great Recession. Listen as we share personal experiences and the emotional rollercoaster of balancing a demanding job while building a thriving real estate business. We talk about how losing key team members and facing a demanding boss became the catalyst for this bold career move.
Strategic planning and financial foresight are at the core of our discussion, emphasizing the importance of matching real estate income with your current salary. We dive into the nuances of financial independence, where the ability to secure property investments without relying on traditional income streams is key. Society might pressure us to spend in our 20s, but we assert that this decade is crucial for laying the foundation for future wealth. The journey isn’t just about real estate; it’s also about finding like-minded individuals and navigating the emotional challenges of entrepreneurship.
Our conversation expands to investing without cash or credit, underscoring the power of knowledge and strategy over sheer capital. Explore creative investment strategies like lease purchase options and the potential of investing in out-of-state and international properties. We tackle the complexities of managing properties from afar, balancing the myriad costs involved, and understanding the intricacies of securing construction loans. With valuable advice and firsthand insights, we encourage anyone contemplating a similar path to conquer the fear of uncertainty and trust in the process.
I got the money. I was going to auctions and I had wholesalers. I was getting the properties, like there was nothing slowing me down, but it was my job. I didn't know this at the time. So when my boss changed so I was going to be there forever I was like this is cliche, this is easy, I can do all this from my job. But then when my boss changed, things started getting uncomfortable and this guy would be in my office like yo, can I check my email, can I get settled first? And one day I told him I said listen, you don't have to micromanage me, I do my job. Please, just let me get settled and I will come straight to you. And he kept doing it.
Speaker 1:And so I actually had to make a decision because they also did a buyout at my job. This was during the Great Recession. They weren't giving any raises, they weren't given any bonuses, which I was fine with because I was already making like another 50,000 outside of work and I felt bad for the rest of the people, but I was cool. So when they did this buyout, they paid everyone who was like of age to retire, and this was a lot of my support team. So I'm an engineer and I work in a pilot plant and when a scientist scales up their project, they bring it to me and I design the how to scale it up and I tell the operators what to do and I just monitor them. So this buyout got rid of all the operators. So I was in there doing the work, which I didn't mind it, but I don't want to be there all day and work through my lunch and all that.
Speaker 1:So then I had to make the decision where I had to pick between real estate and my job. And when my boss changed, things got hard. They wanted me there all day and I had the access to the hard money, loans and properties through auctions. I was like I guess I got to go and I took off a month to just kind of recalibrate things and just make sure this is what I wanted to do. And when I was off, I got introduced to so many opportunities. A house right next to mine went up for a share sale and I opportunities. A house right next to mine went up for share sale and I would have never known unless I was there. So I got that house and six months later not even six months, like three months later I told my boss, I said I'm leaving, and he got even worse. But yeah, that was when I made the decision to leave.
Speaker 2:For people that I talk to that that's made that plunge. They always say, hey, like so many opportunities come about once. They actually, you know, leave their job, you know. So it sounds like that happened to you when you know, when you actually left your job, you know, many opportunities came your way. But on the flip side, I'm just curious because I haven't made that plunge yet. So this is a selfish question too. So what was something about the whole plunge, you know? Cause it sounds really sexy to say, yeah, I left my job, but what was one thing that you wish that you said, man, I should have held on a little bit longer. Or maybe you can tell someone like me or some listeners, like, hey, before you make that jump, consider X, y, z. Is there something you want to point out?
Speaker 1:So I'm a planner and I probably left actually later than what I really probably should have left, which is why things got hard. And another person who was kind of encouraging me to go and kind of made me feel like I would be okay is another engineer who he used to work for Merck and he was out doing real estate for years on his own. I was like you know what, if he can do it, I can do it, you know. And so I just made sure everything was already okay, like I had the infinite money source, I had the infinite properties and I had a point where I had a contractor that I trusted. So I went through five contractors before I found my dude. So once you have your contractors, your funding sources and your properties on paper, you're okay, like you can do it, and it's pretty much a matter of fear and letting go of the uncertainty of the security of your job and then going out and trusting yourself and trusting the process and just taking that leap. But I know this answer is not good enough for most of us, so I'll say these things. This is what this is.
Speaker 1:When I left, I left when my real estate income was almost as much as my job income. So I was making about 70,000 in real estate, which on paper turns out to be more than your W-2, because that's not even taxed. Ok, you're keeping a whole lot more money of that. I was making 70 for my job at that time, so I was making close to what I did at my job. Also, I had already researched how much my health insurance was going to be. I researched how much I want to pay in life insurance. Like I already researched all this stuff, I made sure all my expenses were covered. I could cover my house and cover my car. So I just I've made sure I planned with that and then I just took that leap. You kind of just got to trust the process Once you know that the money's there and I did that too.
Speaker 1:I went to my lender. I said, hey, if I quit my job, can I still get loans? And they say yeah. Then they showed me my numbers. This is what what I teach other people to. I said this is what your numbers need to look like in order to get financing outside of your job.
Speaker 1:So once he showed me that and he showed me my number like way over that I knew that I could get financing. So as long as I know I can get financing, I knew I can get the properties. There was really nothing else holding me back. And once you add not just the rentals but you flip in there, you add flips, you can easily make $50,000 on the flip I was making. I'm not a flipper but I will flip if it's just too easy and I can make $50,000 in two months just from a simple flip. And you can't do that with a job. You want to make an extra $50,000, you can't just go call up and do something when you see that how easy this money is because, like I said, you got the deals clapping, you got your wholesale, you got your auctions that you go to, you got the money. Like, what else is really stopping you? What else? What is it?
Speaker 2:What slows people down, in my experience, is just that security, that guaranteed paycheck. That's really what people kind of struggle with. That's really what people kind of struggle with. And what, what I, what my family, what I teach people to do, is to really number one. In my opinion, right, you have to not live paycheck to paycheck. I think that's one of the fears in itself, to where, if your finances are not in order, it's hard for you to even think about investing because you're so worried about the next week's paycheck, you know. So getting your household expenses in order really helps a lot.
Speaker 1:Yeah, you're right. I was actually really good at that. Having your foundation set, knowing how to manage your finances is a priority. If you don't have that together, then you're going to mess up in business anyway.
Speaker 2:You know, being around, you know a bunch of people that have probably that YOLO mentality and clubbing and going out and doing this and doing that and at the same time you were sitting there thinking about building a business. How did that feel?
Speaker 3:At times I'll be honest, at times it was frustrating. It was at times disheartening to just sometimes feel as though what you're aiming for and what you're interested in, some of your peers aren't really there and really focused on it and you kind of feel like you're being pulled in two different directions. Because in your 20s you're like, oh, I want to have fun, you know, I'm making money for the first time Like, I want to enjoy it. You're like, oh, I want to have fun, I'm making money for the first time, I want to enjoy it. And also there's a part of me that was like man, this is a once in a lifetime opportunity to really make the most of some of my friends and peers hanging, just because, you know, I had a distinct, you know purpose or idea that I wanted to build upon.
Speaker 3:And so it really felt at times like you really don't have many people to talk to that relate to how you're feeling and you feel somewhat alone and you're just kind of going through things in your head.
Speaker 3:You're like you're in your head a lot. And as I actually started to share more of my aspirations and goals with some of my peers, I realized that many others had the same aspirations and it was kind of a surprise because from the outside I just didn't know, until I actually started to be more open about what I was feeling and what I was thinking and I realized a good deal of my friends were actually, you know, thinking about, hey, like I don't want to. You know work behind a desk and, you know, be in corporate America for 30, 40 years like my parents were. I want to do something different and creative and impactful and give myself an opportunity to really build wealth by building a business around ideas that I have. And that was actually a common thing amongst some of my peers that I didn't even know they were thinking about as well.
Speaker 2:Oh yeah, you said three things that I just want to add some color to Well, the first being that it is lonely at times when you're pursuing your entrepreneurial dreams or just thinking with a wealth mindset, because we are a consumption economy, you know, and we're told that in our 20s we should be going for broke and we're young and splurge and do all that. But honestly, I feel like that's a trap, you know, because in your 20s it's an opportunity where most people are truly single, they don't have children, they're fresh out of college, they have a lot of energy. They have a lot of energy. That's the opportunity for you to just go full steam ahead and not really take a step back. Because what happens is, if you don't take advantage of that time, then life starts to happen, the life events. You start getting married.
Speaker 2:You might have a partner who doesn't have the same belief system in entrepreneurship or aspirations to grow a business. You have children and everybody knows, you know, when you start having kids that's a lot of money. So you just start, you know, maybe even progressing in your career. So you start weighing the pros and cons, like, hey, I got this great job on paper. You know, I might dread it every day, but it pays well. Should I take energy away from that job and try to start a business? It's just tough.
Speaker 2:So I really feel like what I want to do on my platform is really educate young people to say, hey, take advantage of this time where you don't have those overarching responsibilities and it's truly just you responsibilities, and it's truly just you. You can just say, hey, I'll sleep in a bedroom, I'll stay at home with my parents if I could, just to stack up your money, focus on your vision and stay targeted to actually bring your company to fruition. The second thing I wanted to touch on is something I'll be honest I didn't do. Maybe you know that would have helped, because I definitely felt lonely at times when I was growing my business. It's to just talk more open about it. Sometimes you just assume people don't, you know, have these aspirations Right. So the fact that you start being open and telling people and telling your peers about what you were doing, that built the community and I'm sure that probably helped elevate your business know-how as you grew your company. So I thought that was cool. How does your personal philosophy influence the wealth builders community that you?
Speaker 3:have? That's a great question. I think my personal philosophy not only on money, but my personal philosophy on life is that there's no bounds, there are really no restrictions to what you can accomplish in life, and I think that philosophy came from understanding and seeing where I grew up and the environment that I grew up in and some of the realities that were in my environment when I was younger, and now seeing some of the other ends of the spectrum as far as money, wealth, business ownership, seeing the world, traveling. My own personal experience has really taught me that it really doesn't pay and it really doesn't benefit you to operate with limiting beliefs and sometimes you might not be aware that you have them do anything you really set your mind to. I use that to make sure that, as I create education content in the Wealth Builders community, I just think about what people may need to be exposed to or learn about in order to have a greater sense of belief in themselves and what they can accomplish financially.
Speaker 3:I think my own personal philosophy that came from my own life experiences is embedded in how I teach financial information and just generally how we as a company create content not only to educate you but to inspire you and empower you mentally and emotionally to say, hey, I can do this. I've seen real examples. I feel even more confident in myself and what I can accomplish, and making sure the context of our content does that 24-7. And so I think that's how my own personal philosophy is embedded in how we educate our users and our members in our community and on our platform is that there's really no limit unless you yourself set the limit.
Speaker 4:That is all about learning how deals work, so it's all knowledge-based. There's two things in real estate money and knowledge. The less you have of one, the more you need of the other. So if you're starting off with very little capital or bad credit, you need a ton of knowledge. You really should focus on educating yourself on how to invest without cash or credit and I know it sounds kind of like cliche, like oh, everybody says that, but can it really be done? That's the reason you have that feeling is because you're that new that you don't have the baseline level of education to truly understand how deals work and that this is real.
Speaker 4:And I had that same feeling when I was getting started. I was learning about it at a Robert Kiyosaki conference. They were selling it for like a course for like 30 K on how to do lease purchase options and sandwich lease options, and it went so far over my head. I was like this stuff ain't real, this can't work. And then I revisited it, maybe like six years later into my journey, and I was just like whoa, this may be the most powerful knowledge in real estate and most people don't know about it, but super powerful. You can absolutely invest without cash or credit. You just need to learn the core strategies. We definitely teach them in, you know, within our mentorship program. But learning those core strategies and then going out and just talking to motivated sellers people who are in distress want to get rid of the property. Maybe they inherited it. They don't know what to do with it If you just keep talking to people, you will find deals and you will uncover gems.
Speaker 2:Yeah. So it sounds like you know, if you don't have money or great credit, that's still not an excuse, it's not. So, yeah, you got to. There's options out there. You could be of service within this game in real estate and and just still make a lot of money with nothing but just hard work at the onset. Eventually, you'll have the money to do bigger and better things, but to get started, you don't necessarily need that Exactly For you as an experienced investor and folks that you work with are you, you know, paying attention to the Fed and the interest rates going up and down. How does that, you know, impact the way you invest?
Speaker 4:I mean it definitely has an impact in terms of what properties cash flow, what types of opportunities are out there, because as rates go up, you know cash flows can compress. But one thing that was a I guess Cash flows can compress. But one thing that was a I guess unanticipated effect of rates rising but I kind of foresaw is that rents are going to go up because rents are a derivative of the mortgage rate. So as rates go up, your mortgage payment goes up, which means the rent that you would pay relative to being an owner is also going to increase at some type of a rate. So I saw rents go up 30 to 60 percent in Philly and that unlocked a ton of cash flow Right.
Speaker 4:So now we're looking at a market where rates are going to start going back down. As rates go down, prices are going to increase a bit. So there's going to be a window of opportunity for investors who have acumen, who have some experience or knowledge or are tapped into mentorship and can. I think this window is going to last for a couple of years where there's going to be a wave of opportunity for people to come in the game and grab maybe 10 to 20 houses within a two year period with the right knowledge and the right birth strategy system. But rates going up and down they can impact things but they don't kill the buy and hold cash flow market, especially if you're in like the top 10 cash flow cities like Philly, baltimore, cleveland, some parts of Delaware, definitely like Detroit, some of the top 10 cash flow cities in America. They're really good right now.
Speaker 2:I was watching something the other day about people that are looking to buy a home to live in. Like retail buyers, they they're waiting for interest rates to drop and they were saying, how you know, on the surface you know that might be sound good and all, but then prices are going to go back crazy, like you mentioned. Yeah, so it's. It's really going to create a whirlwind of challenges until we get enough supply on the market. You know that's really the biggest issue. So for you and I as investors, we like shoot, we'll let the prices go up. You know, shoot, that's more than our net worth. But I think that for anybody who's waiting on the sidelines right now to buy, I wouldn't do it. It's a mistake. I would go ahead and buy me something now that I can afford that has the bones, even my house right now. I got a beautiful house. When I bought it it didn't look like that. You know what I'm saying. We had to put some work into it, some cosmetic stuff, new roof and stuff over time, because you can't pick up the house and move it where you want it. So buy a home that you need to put some work in and just just deal with that rate for now, because these homes are gone, skyrocket again. It's going to happen again because there's not enough inventory out there. It's just it. I agree, appreciate that.
Speaker 2:What are your thoughts about out-of-state investing? I'm originally from New York, which is a hard place to invest even without the high price point, and now I live in Atlanta, which now has turned into a mini New York in itself. The prices are so crazy. So I elected to invest in my wife's hometown of Cleveland and a lot of times people say man, you know how often you go up there? Do you see the place before you buy all this other stuff? Right, a lot of different things where people feel like they have to be physically at the location to invest. My thoughts on that is simply you have to go and invest where you can meet your financial goals. So I'm just curious to know, like, how do you approach out-of-state investing, or even even out-of-country investing? If that's an option for you, what's your thoughts on it?
Speaker 4:I think out of state just makes sense.
Speaker 4:It's one of the main advantages to being born and alive today.
Speaker 4:With today's technology right, you could have been born 50 years prior and had no access to the technology that we have today and you wouldn't have the ability to invest out of town no cameras, no people you can connect with through social media to get you tapped in and build different relationships. So you'd be a fool not to take advantage of out of state investing right now, today. But it comes with you know that distance. You need people that you can trust. You need boots on the ground in the area that you're looking to invest in. So that might be six degrees of separation friends, family, somebody sitting on the couch but they had a smartphone and you can send them to look at properties for you. Or there could be different turnkey opportunities. I know there are turnkey opportunities out there. I have one with the Boots on the Ground program, where you know me and my team. We find finance, rehab, tenant and managed properties for people that are all over the country and some people even outside of the country, like I have one guy tapped in from New Zealand.
Speaker 5:Survey is going to give you some important information on it. Boundary points, how big the lot is. You know easements and things like that, and so you know those are some of the most important things that you know you're looking for when you're purchasing a lot to make sure you're not buying a kickball field or a parking lot when people buy their lot, is that typically their cash?
Speaker 2:or you know, do lots can run you? You know so much money that you would actually be able to get financing for that.
Speaker 5:I mean, it really just depends, man. It's a case by case scenario, right? In my experience, man, I've purchased lots with cash and then I've also had hard money lenders that finance my lot and give me the construction loan. So it really just depends. I would say this if you're able to purchase the lot cash, then it benefits you, because most lenders and most banks will use the ownership of that lot as equity to get your construction loan, which then means is going to lower your closing costs when you go to close on that construction loan, right? So we teach our students if, if you can purchase a lot and you have the financial capacity to be able to purchase a lot, go ahead and do it, because you can then turn around and use that as equity. So it really is just a case by case basis, man.
Speaker 5:Some lenders want to be in first lien position, so they want to buy your lot out. So you purchase a lot and then they roll your lot cost, the purchase of your lot cost and your construction loan into one loan. So now they have first lien position, right? So it really just depends, man. I think for those people who don't have money to buy a lot, I would implore that they try to find some type of private money lender where they can do some type of equity return on investment right, a percentage where they may get 20 or 30% on that buy roll money until they get the construction loan right. There are so many ways, man, that you could creatively purchase lots in this game. Man, it is just you know it's a lot of ways, and when you purchase a plot of land, like what are some of the responsibilities you have?
Speaker 2:what you have that put the city on you know so, with taxes. Are there any other costs associated with just having?
Speaker 5:this flat. Oh yeah, you don't spend money before you make money. Let's say that Right. So, man, you have things like permit fees. That's across the board, right? I don't know a city that that's given building permits that's not charging you some type of money for that actual permit, right? And so things like your, your surveys we call these soft costs. So things like your surveys and things like that, these are going to cost you before you even get into the bill. Going through the municipality, some, some permit fees are greater than others. The municipality some permit fees are greater than others. So you might pay $1,500 for a permit fee here, or you might pay $6,000 for a permit in another city, and so those are usually the associated fees, outside of things like closing costs and things like that for your loan or to pay for the lot. Those are the most associated fees with the actual purchase of the lot, getting your permit and then your closing costs for your loans.
Speaker 2:So I'm happy you pointed that out. So again, these are fees outside of the law. Oh yeah, yeah. So OK, gotcha.
Speaker 5:Well, yeah, so usually how it works. Man say, for instance, we're purchasing a lot, I'm paying sixty thousand dollars for that lot, right, I'm going to go purchase that lot through the title company. Well, there's going to be an associated amount of closing costs that I have to pay. Some of those may be to a realtor. If the realtor actually brought me the deal. There are going to be lawyer fees associated with that.
Speaker 5:So all of those things that are in your closing costs document fees, notary fees all of that stuff is encompassed in your closing costs. So that's a fee that you pay just to purchase the lot, right? So that's $60,000 is just for you to own the lot on top of those associated costs. So then what happens is when you go to get your construction loan, you have another closing. So there's another set of associated fees which are construction loan. Now if you have a banking institution that's going to pay for your land and your construction loan altogether combined, then you're only paying one set of fees. But if you're buying them separate and then getting a construction loan on the other hand, then that's two sets of closing costs you have to pay before you even submit an application to build a house. So yeah, you spend some money, man, you spend some money.
