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The Magic of Leverage With Wendy Papasan – Real Estate Women

 

When do you discover your purpose in life? In this episode, Wendy Papasan shares how you can leverage living the best life you possibly can. Wendy enjoys teaching and guiding young adults to figure out what they want to do in life, which empowers and inspires them to become big thinking leaders in the future. Listen as she provides examples of carefully grasping the things you are good at so you can reach your goals and grow!

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Watch the episode here

 

Listen to the podcast here

 

The Magic of Leverage With Wendy Papasan – Real Estate Women

Real Estate Investing For Women

I am so excited to welcome Wendy Papasan back to the show. She leads the top real estate team in Austin, Texas. Prior to getting into real estate, she was a stay-at-home mom making no income. For over a decade, the Papasan Properties Group at Keller Williams has helped more than 1,600 families totaling more than $600 million in home sales.

In addition to a real estate business, she is a Cofounder and chairman of the board for Her Best Life. I can’t wait to hear more about this. It’s a million-dollar startup that helps women build big businesses and even bigger lives, which she’s done for herself. She’s also a co-host of the award-winning podcast Empire Building.

As an activist active real estate investor for many years, she’s passionate about helping others understand how money works and how to build wealth. A community activist and philanthropist, she is active on the board of KW Kids Can, a nonprofit that helps young adults think bigger and find their mission. She and her husband have helped raise more than $1 million for children with cancer. I hope you can see why Wendy and I are so alike. We have so many of the same values.

In her spare time, Wendy enjoys trail running, spending time with her family and international travel, and so do I. She is married to New York Times bestselling author and Keller Williams Vice President of Strategic Content, Jay Papasan. You guys know that I love talking about the book, The ONE Thing, and that is what Jay Papasan co-authored. They are the proud parents of two children and a dog named Taco. I love our conversations. We were sitting in the green room just chatting away and I can’t wait for Wendy to share with you ladies all this cool stuff she’s got going on.

Thanks for having me back.

It’s a pleasure. It’s nice to see you again. I love that you are the woman that likes to talk about leverage. Leverage is the magic to life. The two things that you talk a lot about are leveraging time and money. When I talk about money and time, both we never have enough of but money, we can always get back and make more time we cannot. Time is the ultimate commodity as the thing that once it’s gone, it’s gone.

It’s also a great equalizer. That’s the thing that everybody has the same amount of every single day. We all have 24 hours in a day and how we use it.

That’s what you are good at, is how do we use it? Let’s start by talking about leveraging time and then we’ll move into leveraging money. Does that sound fun?

That sounds great.

Talk to me a little bit about how you see leveraging time and what does that look like for you and your business?

The gift that I got when I started my real estate business was my kids were 3 and 5. I had been a stay-at-home mom for five years. I wanted to continue having a relationship with my kids. I leveraged myself right away, which was I got some help on the contract to close side pretty much from my first deal. That taste of leverage helped a lot.

For me, I was very committed to picking up my kids. I worked part-time my first couple of years in real estate. I was picking up my kids at noon and that compressed the schedule. It made me appreciate this idea of leverage because a lot of people, when they start out, they have too much time in real estate. They don’t know what to do all day long. It forced me to focus on the things that matter most and that’s the key to leveraging your time. It’s understanding what your priorities are. A lot of people wander around and they don’t understand what their priorities are.

 

The key to leveraging your time is understanding what your priorities are.

 

Talk to me a little bit about that. How do you define those priorities and how do you create the leverage required to live by those priorities?

I’m pretty clear about my mission and my mission is to empower and inspire big thinking leaders to create lives of abundance. What my mission does for me is it’s a filter for the choices that I make with my time. A lot of people don’t understand or know why they are on this planet. I strongly believe that everybody’s here for a reason. If you don’t know it, then it’s your job to go out and figure out what it is.

Let me give you an example. If that’s my mission and somebody says to me, “Can you teach a class to young adults on helping them figure out what they want to do with their life?” that’s an easy yes for me because my mission is to empower and inspire big thinking leaders to create lives of abundance.

If somebody says to me, “Will you be on the board for Austin Pets Alive!?” a local animal shelter, that sounds like fun. I do love my dog and I do love animals. However, it’s not in alignment with my mission. For those of us that have a tendency to say yes too much, raise your hand. It’s all of us because we want to do it all and have it all. It’s a nice filter because every yes is literally a no to everything else.

What I love that you talked about that there is that, it would be fun, there are a million fun things that each of us can do. What would it be like if we said yes to the things that were fun, but that were also aligned with our mission? The filter of it would be fun can certainly be there, but it has to be also aligned with a couple of other things in your life. For me, it’s all about core values. I talk about it more in that perspective. Talk to me a little bit about how you came up with that mission statement that defines the yes or the no.

I have an easy framework and it’s an exercise that we usually do over the course of an hour. I’m going to have to give you guys the short version of it. Take a piece of paper and draw a line down the middle of it. On the left-hand side, you want to write down all of the things you are passionate about. Moneeka would write travel, real estate investing, helping women, all these different things, and other things you are interested in. Baking. Maybe you are a baker. I don’t know. On the right-hand side, you write down the things you are good at.

For instance, you would write down communicating, podcasting, talking to people, getting the best out of people, whatever it is, these things that you are good at, and then you make what I would call a through statement. For instance, Gary Keller’s mission statement is to help people live the best life possible through teaching, coaching and writing. It’s an easy framework. That’s his number one passion.

You want to go back to those lists and narrow it down to your top three. You are not going to have seventeen different things. That makes no sense. You are not focused at all. It’s your passions on one side, what you are good at on the other, and then you make a through statement. Moneeka’s mission in life is to help women live their best lives through podcasting or whatever it is. I don’t want to put words in your mouth.

I see how you got through with that. It is to have women live their best lives through real estate and to do it blissfully.

I created your mission statement and it’s one sentence.

This is the other thing. I have worked with coaches before and they are like, “You got to put together a mission statement that will make you cry every single time or get teared up with passion every time you read it.” We would put together this paragraph and we worked on it for months. We came up with this thing and yes, every time I read it, I got tingles. I knew this was it, but when I’m trying to make decisions on where I’m going to spend my time, I’m not reading that. I know that it’s one sentence that captures the essence of everything that I stand for.

I would say take that mission statement, tape it up on the wall in your office and understand that you are not married to your mission statement. You are dating it. We are all dating our mission statements. I’m sure your mission in life has changed and evolved as you’ve grown as a person. As you are looking at it every day, you are thinking, “I’m going to tweak this. I’m going to do that. I’m going to change that.” You look up one day and it sticks.

 

 

Even if it sticks now, in a year, you may have to evolve it again. I love that clarity on that. You have your mission statement and you basically leverage your time based on if this is going to forward my mission or if this is aligned with my mission. I’m a yes, and if it doesn’t, I’m a no. Is that true?

Yeah. For a lot of the extracurricular stuff. For those of you that are reading, if you are working out a job, you are not necessarily going to be aligning all of your work. I would encourage everyone to be at a job that aligns at least with their values or their mission statement, but it’s also important to understand that the way you become more successful in this world is you run towards the things that you are good at and you leave everything else behind, which is what leverage is.

An easy way to do that is to think about what I would call your not-to-do list. Take a piece of paper, tape it to your desk, take a Sharpie and write, “My not-to-do list,” on top of it. This is for every single person reading. Every time you’ve got that feeling of, “I don’t want to do that,” or you put something off, you put it off again, you put it off for the third time, that then goes on the to-do list. When your to-do list is full, you got your piece of paper. When that’s full all the way down to the bottom, then you’ve got a job description for somebody else.

Hopefully, that person wakes up every day and they are thinking about their mission and what they love to do. It’s what’s on your not-to-do list. You can then continue to fire yourself from the things that you are not good at and your role gets smaller and smaller. In some ways, your life gets bigger and bigger, but your role gets smaller and smaller and you get better and better at it, and that’s what success looks like, doing a deep dive into the things that you are good at.

Honestly, women, a lot of times, are good at all things. We are too capable. We are good at this and that, and we keep all that stuff because we are pretty good at it. What ends up happening then is you never become an expert on anything, and that is how you will get paid the most from your work. It’s when you become very good at it. Nobody who’s good at everything ever got paid a large sum of money. That’s not how it works.

I’d like to give a little perspective on that because I know people that run businesses. This is in tech. It’s a little bit different than real estate. Even in real estate, they are in tech, they are a consultant and they run the whole show. They are a one-man shop making $1 million a year, but they run the whole shop, which means they are working fourteen hours a day. The relationship with their children is not as good as they would like it to be. They are up at night thinking about all the things that they need to do, so they are not getting rest. They are getting heavy and unhealthy. They have got all these other things. They are able to do everything and they make a lot of money.

There are two things that I’m trying to say here. There’s a huge sacrifice that we make in life to do everything. You are not leveraging your time that way. You are basically trading time for dollars. I have had this conversation. If I’m doing all of those things, so I’m working fourteen hours a day and I make $1 million a year, I’m making this much per hour.

First, it’s, “I make this much as a consultant.” No. Divide it around everything, and this is what you are making per hour. They are like, “I’m making $2,000 an hour.” That’s pretty good. What if you paid someone $500 an hour to do those jobs? You now have a better relationship with your kids, you are able to work out, you are not working as hard. You might take it up to $2 million a year because you are not so tired. Your brain is more fresh and you focus on the things you have expertise in and growing that expertise.

You are also not going to burn out and you are not going to look up after your kids have left the house and be filled with regret.

We can be successful doing it all. Some of us are that good.

I think you can have it all. I just don’t think you can do it all.

What I’m saying is to take a look at that because there are a lot of different ways to look at the cost of trying to do it all yourself. It’s not monetary either.

 

Move away from scarcity to an abundance mentality.

 

Even those people that are doing it all, I still believe that they got help. They might have help at home. They’ve got a housekeeper. They are probably leveraging some part of their life.

They have to, otherwise, they’d be on the road and never taking a shower. It’s more a matter of like focusing on what it is in your business. I love the way you talked about the not-to-do list. I’m going to use that. That’s so good. We have talked a lot about leveraging time. Do you feel like you got anything else you want to give us before we move to leveraging money?

I do. I think that for a lot of women, especially, leverage starts at home. No matter where you are, you get to leverage the things at home that you don’t want to do. My friend Via always says, “Kids don’t remember who made the dinner. They remember that you all sat down together as a family and had dinner together.”

Especially for women, if you think about it, we are only 50 years removed from our mom’s generation, who couldn’t even have their own checking account. It’s a very short time. There are a lot of feelings that we have as women. We are sexist about ourselves. It’s impossible to be a woman in America and not be sexist, even if you are a woman, because you have beliefs about what women should do. That’s part of where the guilt comes from. We feel like we should do everything that these moms did in the ‘50s and then also be a professional working mom and it’s impossible to do without burning out. You got to do your not-to-do list at home first.

I want the ladies to sit with for a minute because that is not something we talk about. You’ve heard from me. I have a wash and fold to do my laundry. It costs me $125 every time I do it. I go every two weeks. They hang up all my husband’s shirts. They put together all my socks, do all my laundry, and do my red separately because I wear a lot of red. They know how to work for me. It’s $125. That’s 10 to 15 loads of laundry. How much time would I have spent washing, drying, and hanging it?

Folding and putting away. You probably still have to put it away.

We still have to put it away unless you’ve got an organizer. I’ve got that too, but the putting away is a fraction of the time of doing all of those other pieces. What do you get to do with that time? You don’t have to work. This is the other thing. You don’t have to work with that time that can turn into leisure time because you do serve breaks.

You could get a hobby. What’s a hobby?

Leisure time or time to cuddle with your dog or your little person or go to a soccer game. Whatever it is, it doesn’t have to turn into work time. Just because you are leveraging your personal time, it does not mean that it has to turn into work time. It has to turn into your type. Whatever you choose to use it for. I do the wash and fold thing.

The other thing, my husband, when we got married, he promised me, “Moneeka, you will never scrub a toilet as long as you live with me,” and we were dead broke. We made nothing in those early days. We still had a maid because that was a high priority for us. During COVID, when the maid wouldn’t come, I put in this little pill into the tank and the toilet was staying awesome. My husband did the toilet. He promised me I would never scrub it. I thought a lot about it. It was a year and a half later when he finally admitted it.

Moneeka is like, “Haven’t you guys tried these things? They work amazingly. My toilet was never clearer. I don’t even know why I got a housekeeper.”

My husband is like, “No.” It’s one of those things. Even when things have been rough for us, I don’t always have a wash and fold, but I always have a house cleaner. I hate to say that we have rights and we deserve them. Those aren’t words that I like to use it often, but ladies, we should take care of ourselves.

 

 

You also can put other people to work. It’s weird. In America, we feel like we have to do everything ourselves. If you go to other countries, it’s an obligation as you are building wealth to put other people to work. It’s super weird what we do here. We feel like we have to do everything ourselves and I can tell you firsthand, you can have a big impact on people. My housekeeper’s from Ecuador. She owns three investment properties in Ecuador because she’s been my housekeeper for many years. I’m always talking about this stuff, so she ended up buying three investment properties herself. You can have a big impact on the people in your world as well.

You are making jobs. That’s for sure. You are helping the economy, all of those things. I totally love that. Thank you for bringing that point up. It’s so important. Let’s move to leveraging money. Talk to me about what it means to you and some of your strategies around that.

I grew up in a small farming community in Northern Minnesota. I would say it was lower middle-class. A lot of my extended family was farmers. The idea of real estate investing, owning your own business, anything like that was very weird and nobody leveraged anything. My great-grandmother worked on a farm her whole life. She ran the family farm for many years. She shoveled her own walk until she was 97.

This is in Northern Minnesota, where it snows eight months out of the year. The mentality was that you do everything yourself. I can remember when I joined Keller Williams, I was a real estate investor first, and then I became a realtor. I started to understand this idea of moving away from scarcity to an abundance mentality.

I realized that money is flowing freely through the universe. I believe that. I know there are some people reading that are struggling and you may not understand that, but it is true. There are lots of money out there. The trick is to understand that there’s always enough money, and the amazing thing about real estate investing is you get to leverage money to create more wealth.

Unlike any other investment, you get to buy something at a fraction of the cost and complete strangers pay your mortgage off for you. You tell people, for instance, from Russia. You say, “You can buy a property for 20% of what it’s worth.” They look at you like, “What? My family had to save forever to pay for 100% of the property.”

Foreigners come here and they are like, “Why doesn’t everybody own ten properties?” I’m like, “I don’t know. Tell me why.” It’s crazy. The idea of leveraging your money, imagine purchasing Tesla stock and calling up eTrade and saying, “I want to buy 100 shares, but I can only afford 20.” eTrade is going to be like, “No. You can’t do that.” You get to do that in your business, too, because you get to leverage money in order to make more money.” That’s leveraging money.

I’d like to emphasize. We talk about leverage a lot on this show. It is my favorite topic but let’s go into it one more time. Leverage is simply you taking a small amount of money to control a large asset and to get the benefits from the asset. I hear a lot from people, “I don’t want to be a slave to the bank.”

You can choose. You can be a slave to whoever owns the majority share of your asset or you can be a slave to your landlord. One will kick you out and the other will not when their life changes. Who are we a slave to? That feels a little bit negative. I don’t mean to make it sound like you are always a slave, but when people use that leverage, I’m saying that.

It’s more like choosing your hard. I tell people. People are like, “It’s hard to buy investment properties and being a landlord.” It’s not, but it can be hard, but it’s also hard if you wake up and you are 85 and you don’t have any assets or any income. That’s hard too.

You wake up one day and your landlord says, “I’m selling this property. You need to be out in 30 days.” That’s hard. I love that. Choosing your hard, and also choosing our easy. These things are hard, but understand that on the flip side of that, there’s an awful lot of easy. There’s an awful lot that it gives us. When we talk about leverage, don’t be afraid to do 20% down and then someone else is paying for the rest of it because now you are taking 20% of the risk. They are taking 80% of the risk. You get 100% of the benefits. You get 100% of the hard, you get 100% of the easy, and you get 100% of the growth, and that’s how you create your life.

Here’s another way to think about it. I tell my real estate clients who have young children, “Would you like to pay for college $0.20 on the dollar?” They are like, “Wait, what?” “Your son is three. You are going to buy an investment property. You are going to put 20% down. You are going to put it on a fifteen-year note and in fifteen years when your kid is eighteen, complete strangers will have paid the 80% off. You’ll have an asset free and clear and you can sell it. Your kid can go to college or take an equity line. Never sell a good asset. That’s what Warren Buffett says.

 

The amazing thing about real estate investing is you get to leverage money to create more wealth.

 

Keep it and get an equity line that’s cheap and let it keep growing for you.

It’s for refinance.

I have never heard it that way before. I love that. Anything else you’d like to say about leveraging money?

I think we are good.

One of the things that I love about Wendy is how concise she is. She knows her life and she knows how to say what she wants to say.

Leverage done.

You ladies know that we are going to do EXTRA right after this. I asked Wendy what she wanted to talk about, and she got asked to speak at Inman. She’s going to be talking about self-care, mental health and that sort of thing. It’s important that we take a look at when we are talking about leveraging time. Sometimes we don’t remember that the single most important asset that we have is our own health, and our mental health is a big piece of our health in so many ways. This mental health thing, there’s a little bit of a stigma sometimes with those words, but it’s so important.

Especially now after COVID, we are lonely. We have spent a lot of time alone. We spent a lot of time hearing about other people’s pain, even if we have got our own pain. Sometimes we feel guilty that we are not as in much pain as other people, so we don’t ask for help. We don’t admit that we need help. We don’t admit that we need to take care of ourselves.

There is a lot going on for us, especially as women, because we care so much about the people around us. We forget that the single most important asset is our own health. I asked Wendy to share with us what she’s going to be talking about at Inman and so she’s going to be talking about that at EXTRA. Do you want to add anything else before we move on?

I would say that if you don’t take time for your wellness, you will have to take time for your illness.

We’ll be talking about that EXTRA, and then I know that you have a special gift. She’s offering this for us. I’m so excited. She’s like, “I just got in touch with my ladies so we can do these for her team.” Tell us about the gifts from my ladies.

I have a new startup that I have been working on for a couple of years now. It’s called Her Best Life. It aligns perfectly with you and everything that’s in your heart. It was started because we wanted to amplify the lives and voices of women in business. I believe that it can be leadership lonely. It can be hard to run your own business and to be at a party maybe with other moms in your neighborhood and not be able to have a connection because they are talking about, “It’s so hard to go to Target.” Maybe you are talking about that too and run this $5 million business I have got over here.

 

 

We started this business with the idea that it can be leadership lonely for women, and it’s called Her Best Life. You can go to HerBestLife.com. We have several memberships and one that we are launching is our Net Worth Club. For those of you that don’t know what net worth is, it is the number that you should be focusing on in your personal life.

It’s like your personal P&L, your personal Profit and Loss statement. A lot of times, we focus only on the income, the top-line revenue, but we don’t focus on the profit, which is the sum of all of our assets. Net worth is everything you own, all your assets minus all your debt. We are launching a club where we track our net worth, but we track it together. We meet once a month. We take turns sharing information that’s of value.

Sometimes we talk about cryptocurrency and having the right insurance for your business. Sometimes we talk about real estate investing. It’s all the things. It’s $25 a month. It’s a low price because this is my passion and I want everyone to be able to get in there and do this because I believe that this one habit of tracking your net worth is how my husband and I have built a lot of our wealth.

You can go to NetWorthClub.com and type in the code BLISS and you guys can get three months free. It’s a $75 value. If you are not into it, you can jump out. This is something only for you guys. It’s something we invented before we started. I was reading my email from Moneeka’s team and it said, “If you have something to offer.” I was like, “I do have something to offer.” I hope you guys can join us.

It’s three months free, and then if you love it and you stay, it’s only $25 a month. It was so cute because I was asking Wendy, “What’s the price afterward?” She was like, “There’s no obligation afterward. If you don’t love it, you don’t stay.” It’s interesting because I hear this all the time. It’s because I asked this question, “What is one daily practice that you do?” People will talk about their daily practice.

Every once in a while, someone in the green room will say, “Do you know what my monthly practice is?” That has led to all my success and it’s tracking their net worth. It’s not tracking their profit and loss. It’s not tracking what they did right or wrong. Although, they do those things. Successful people do those things, but the thing they feel has built their wealth the fastest is being aware of their net worth.

It’s true for us and it’s a practice that we have practiced for many years. It’s crazy. It’s old.

No. You’re not old. We’re the same age.

You have fantastic skin. There you go.

Thank you. Are you ready for three rapid-fire questions?

I’m ready.

Tell us one super tip on getting started investing in real estate.

 

If you don’t take time for your wellness, you will have to take time for your illness.

 

This is a little self-serving, but I honestly believe it’s true. I had someone who was on the operations side of my team. She had her real estate license and she hemmed and hawed about getting into real estate. I said, “You need to sit down with so-and-so,” who is the best industrial realtor on my team. This person on my operations team had been looking at into buying an investment property for eighteen months.

She sat down with the investor realtor on my team and, within six weeks, was under contract. My tip is to get in touch with a realtor who does investing, if you are a realtor yourself. Even if you are a realtor yourself and you don’t do investing, hire someone because they will give you the confidence you need to pull the trigger. It’ll be the best money ever spent.

Focus on getting a realtor who does investments. Not deals with investors, but as an investor themselves is the very best. What’s one strategy for being successful in real estate investing?

This is not a tactical strategy, but being it for the long haul. This office that I’m in, I bought this house before I was a realtor in 2006. I bought it off Craigslist. It’s darling. When I bought it, I didn’t even know what I was doing. It’s two bedrooms. It’s 670 square feet. It’s tiny and on a busy street. One of the bedrooms doesn’t even have a closet. I would never tell one of my clients to buy it and I bought it for $135,000. I added on 750 square feet. I moved my office in here and I have probably made a couple of $100,000 on it by owning it for many years. Whatever decision you make in real estate, ten years in the future looks pretty good, even if it’s a poor decision.

It is a strategy because I like to tell people that mindset is a strategy. How you manage your mind, the way that you look at your life and your business is a strategy. It’s the most foundational strategy. It’s where everything begins. Being in for the long haul. You and I are so aligned. It’s so true. Ladies, she’s got a live event. Contact her. Find out what that’s all about.

We are sold out, but we are going to get you a ticket.

Her Best Life is on October 26 to 28, 2022, in Scottsdale, just so you know what’s going on. Tell us one daily practice you do that contributes to your personal success.

This goes back to our conversation about wellness. The thing that contributes to my success the most is getting up. I’m up at 5:00 and I’m working out with a trainer in my gym at 5:30. I do that three times a week. I have been doing that for many years. I do it with my husband. Several years ago, it was a very expensive proposition for us to do that. Honestly, it’s still pricey, but that habit allows me to do everything else. I’m up early. I get a lot of things done. By noon, I have packed more into my day than most people do in a week. It gives me the energy to do what I need to do every day.

Thank you so much for everything you’ve offered on this portion of the show. It’s amazing.

My pleasure.

I can’t wait to talk in EXTRA about self-care, mental health and us ladies, how we can prioritize ourselves so that we are able to do all the things in life we want to do. We’ll talk about that in EXTRA. If you are not subscribed to EXTRA, please go to RealEstateInvestingForWomenExtra.com. You can subscribe there. You get seven days for free. Check it out.

If you are subscribed, stay tuned. We have got more. For those of you who are leaving Wendy and I now, thank you so much for joining us for this portion of the show. I hope you found it as amazing as I did. I look forward to talking to you next time and until then, remember, goals without action are just dreams. Get out there, take action and create the life your heart deeply desires. I will see you soon.

 

Important Links

• Wendy Papasan – Past episode
• Papasan Properties Group
• Her Best Life
• Empire Building
• The ONE Thing
• NetWorthClub.com
• RealEstateInvestingForWomenExtra.com

 

About Wendy Papasan

Wendy leads real estate teams in Austin and Houston, Texas, as well as Minneapolis/St. Paul, Minnesota. After just 10 years in the business, she has sold more than 1000 homes totaling more than $325 Million. In addition to her real estate business, Wendy owns multiple income-producing properties, and is a partner in a Memphis real estate office.

She is a sought-after real estate speaker coach aligned with MAPS, who consults with agents across the country. She is particularly passionate about seeing women succeed in business and helping everyone grow their wealth. A community activist and philanthropist, Wendy is chairman of the board of KW Kids Can, a non-profit that helps young adults think bigger.

Last year she raised $150,000 for Heroes for Children, a Texas nonprofit that helps children with cancer. She also helped raise $30,000 for Community First Village, a master planned community that provides affordable, permanent housing and community for the chronically homeless in Central Texas. She is married to New York Times best-selling author and Keller William’s Vice President, Jay Papasan, and they are the proud parents of Gus and Veronica and a dog named Taco.

 

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To listen to the EXTRA portion of this show go to RealEstateInvestingForWomenExtra.com

To see this program in video:

Search on Roku for Real Estate Investing 4 Women or go to this link: https://blissfulinvestor.com/biroku

On YouTube go to Real Estate Investing for Women

 

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Driving For Dollars: Taking A Leap Of Faith With Zack Boothe

 

What do you feel when you start something new? Is it excitement for the promising outcomes or fear for the possibility of failure? Often, when we start driving for dollars on a completely different territory, we are overwhelmed by the things around us, and these cause us to tumble down the road eventually. DFD Mastery founder Zack Boothe had his fair share of mistakes when he first got into real estate. In this episode, he sits with Moneeka Sawyer to share how he turned these mistakes into lessons and how he managed to conquer the real estate wholesaling industry. Listen in as Zack discloses the insider secrets you will need to make money in real estate.

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Driving For Dollars: Taking A Leap Of Faith With Zack Boothe

Real Estate Investing For Women

I am so excited to welcome back to the show, Zack Boothe. We had him on the show a little while ago, and I fell in love with his strategy, personality, and values. I loved talking to him back then. I wanted to chat with him again, and I thought I’d share that conversation with you this time too. I’m excited to have him back on the show. For those of you that don’t remember him, a few years ago, Zack Boothe was a window cleaner. You can even find his window cleaning tutorial videos on YouTube with millions of views.

However, Zack always dreamed of being a real estate investor. Taking a leap of faith, he walked away from window cleaning. Within a handful of years, he was making over $1 million per year from real estate investing. With his successful business, he now spends his time helping others see how simple it is to make money in real estate. He is here to share his insider secrets to finding massively discounted properties, regardless of your experience level. Zack, welcome back to the show.

Thanks for having me.

Could you tell us your story again? It’s so engaging and fascinating.

I tell the story so much, sometimes I get deep into it, sometimes I don’t get as deep, but my business story is I grew up working because my dad required it. When I was eleven, I started working in the family lawnmowing business. When I was fifteen, I quit the family business and started working for others. I started framing houses and doing finished carpentry.

My dad grew up in a rough situation. He wanted me to become a man very fast. He wanted me to take ownership of my life. I love him to death and I’m so grateful for it because he kicked my butt. It was his way or the highway, but at sixteen years old, he cut me off financially. He said, “You’re a man now. If you want to buy anything, you got to buy it.” He paid for my housing and my food, and that was it. If I wanted to play high school basketball, go on dates, or buy a car, he wouldn’t even co-sign a loan.

At sixteen, I had been working a lot. I found at that point, trading dollars for the time was not possible. I didn’t have enough time to give to do all this stuff I wanted to do, to go to school, play basketball, and have some fun in my life. At seventeen, I started my first business, which was the window cleaning business. I remember the first day I made $100 in a couple of hours. I was like, “That’s $50 an hour. Holy crap.”

I remember the first time I made $1,000 in a day, and I grew that business for almost a decade. By the time I walked away from that business, I had 3 trucks and had 13 or 14 employees at one time. It was a great experience. I learned a ton, but the bigger I got, the less money I made. There was an optimal size for profitability. It was me, 2 or 3 other employees, 2 trucks, and that was it. I had brought on a partner at the time. Our vision for the business was completely different. I felt stuck. The big thing that pushed me over the edge to get out of that and to do something different was the day my son was born.

I remember the day he was born. I was so beat up because all I could worry and think about was how am I going to pay the medical bills. I was so upset about that because I wanted to be an amazing dad and be present for my wife. It was the most beautiful moment to be a part of and then I was mad at myself that all I could think about was the money.

People always say, “just love yourself for who you are,” but there’s more power in encouraging people to be proud of who they can become.

I was upset about the money and I was upset of myself for being upset about the money. It bothered me. I felt inadequate, like a failure, and like I was failing my family. I get emotional every time I say this, “I wanted to give more. My wife deserved more.” My wife believed in me. I remember telling her I was going to drop out of college and be a full-time entrepreneur. I was so afraid to tell her. She said, “That’s fine. I believe in you.” That was her response. There was no fear or doubt. I was like, “I have to prove her right,” and I wasn’t proving her right. I felt like I was not living up to the expectation that I had set for myself. Real estate was what I looked to change all that for me.

You said something that was so key here that transformed me at the moment. We set expectations for ourselves. Sometimes those expectations are based on the people that we love. She believed in you. You wanted to make her happy, but in the end, the only way to get to the place that you wanted to be was to be able to meet your own expectations.

I love that your wife totally trusted you. I love that you wanted to prove her right, but what you said that was so key here was you weren’t meeting your own expectations. Ladies, this is one of those things I want you to know, is that we earn our own right to respecting ourselves. We do that by keeping promises to ourselves and by meeting our own expectations and not lowering them.

That’s so powerful because there are so many people that will say, “Love yourself as you are.” It’s like, “Why don’t you encourage people to be proud of who they can become?” We all have so much potential.

I believe in both, love yourself as you are, and always understand that you have so much more potential. I love that word. Love yourself today and allow yourself to become an even better version of yourself by aspiring to that potential.

I look back when I took that plunge when I walked away from something that was semi-comfortable because I was doing it for several years, but it wasn’t fulfilling my needs and meeting my expectations. I took a risk and I went for something new. That journey of getting to where I am now brought a lot of confidence, self-respect, and happiness, I learned a lot about myself. I had to become a different person and become more of the person I wanted to become to accomplish those goals. One of the cool things is, did I love myself before? Yes. Do I love myself even more now? Yes.

We have that capacity. With the people that we love, your wife and child, you love them so much today, but you hope that tomorrow you’ll love them even more. It’s not true for everybody, unfortunately, but for those of us that want to live a blissful life, the path is to love yourself and the people that you love to death today. Love them to pieces and know that the capacity for that love to grow is huge.

Love yourself and those people even more tomorrow or the next year. That is the true path to bliss and experiencing love in that huge expansiveness. That’s what I teach. As blissful investors, our businesses create a path for growth. They create a path for learning about joy and learning to respect and love yourself.

I had that moment. That’s what pushed me into getting into real estate. I had to have a change. I wanted to change. I needed to change for more than anything for myself. It wasn’t easy. I made a lot of mistakes. I tried flipping a house and I lost a little bit of money, and I realized I hated that. I bought some rentals and did okay there. Even before my son was born, I had bought a duplex a couple of years before that. That went well. I was like, “I need to do more of that.”

 

As soon as I decided to take the plunge, I had all these obstacles to buy another rental. They needed 25% down and debt to income. There were all these complications to scale. I was like, “How do I go from paycheck-to-paycheck window cleaner to a multimillionaire and making over $1 million a year? How is that even possible before I’m dead, let alone in the next 5 or 10 years?”

I finally found out about a strategy that made it possible, which I talked about in the last episode, is known as real estate wholesaling. It’s the concept that I can do some marketing. I can find someone that will sell their property at a discount and turn the opportunity for profit. I could pass the opportunity on as a finder’s fee for the money. I didn’t have to close on it, get debt, and take a risk. I just had to find someone that wanted the deal that I found.

I didn’t believe it was possible. I thought it was sounded too good to be true. It was like, “Why would anybody sell it that big of a discount that I could then sell it for at a discount to someone else?” I was trying to figure out, “Is this possible?” There are a lot of gurus, coaches, and stuff out there talking about this, but they’re selling courses. I was like, “Are they just selling courses or they’re helping people?” I had a lot of skepticism.

I was like, “I don’t know if I can trust this.” I took a leap of faith. I paid for a mentor for $10,000. It was a huge mistake, horrible mentor. Everyone thinks he would be like, “He solved the problem.” No, he didn’t solve my problem. He made more problems. I was even more skeptical. What happened was I had given up on the idea and I was back to washing windows.

I washed windows for a guy named Stan. He was a wealthy real estate developer. I’m cleaning his mansion. He’s an older guy. I had to know everything. We sat and talked for an hour and a half. He was the most kind-loving gentleman. He was pouring into me and telling me a story. I was like, “He’s an incredible guy.”

At the end of the conversation, I was like, “Stan, if I could find two rentals, it would be life-changing.” He was like, “That’s convenient. I got these two properties. I don’t want to deal with them. I haven’t collected rents in four months. I’ll sell them to you.” I was like, “How much?” He’s like, “$500,000.” I was like, “I can’t buy them. I don’t have cash. I can’t get a loan for that much,” which was at a massive discount. They were 1-acre horse properties. They’re worth $350,000 each. He was selling them to me for $250,000 each.

He’s like, “That’s fine. I’ll be the bank.” I’m like, “Okay.” He’s like, “Can you put 20% down?” I was like, “No, Stan. I can put $2,000 or $3,000 down.” He’s like, “Okay.” I’m like, “Holy crap.” He’s like, “Let me get the paper.” He goes and gets a white paper and he starts writing down the agreement. I was like, “Stan, hold on. Don’t we need an attorney to draft an actual contract?” He’s like, “No.”

He starts educating me on the process. He’s like, “You’re going to take this to the title company. You’re also going to check with a real estate agent and make sure that’s what they’re worth. You got to confirm that what I’m saying is true.” He’s educating me on how to get these good deals. That experience, long story short with those deals, I ended up doing a rent-to-own with the tenants. They both cash me out within two years. I made over $130,000 profit on those two properties.

It was amazing. I made a fortune. The more valuable to me than the money or the best part of this whole story to me was the a-ha moment that it’s real. It exists. People sell their property at a discount. There are educated people that will trade convenience for price. I needed to find more Stans in my life. I was like, “How do I find Stan? I need Stan on every street corner I walk on. How do we do that?” That experience made me start to believe it was possible. That was the very end of 2016.

You have to give to receive.

The next year, 2017, I started up trying again. It was almost a whole year that went by without finding a deal. I spent a bunch of money on marketing. I signed a $30,000 contract with his online digital marketing company that’s supposed to get me discounted properties. Not only did I never get a deal, I never even got a lead from them. They completely stole my money. That sucked and was very painful.

I made mistake after mistake. What changed everything is the very beginning of 2017. I met my mentor that changed my life. I met a guy named Cody Hofhine. He was business partners with Tom Krol. They were two coaches and they don’t coach anymore, but they taught me how to consistently find sellers that will sell at a discount, build a relationship, and do traditional wholesaling of selling the deal without ever having to close on it.

I joined their program at the beginning of that year and then everything changed. In that first eight months with them, I made over $100,000 profit. For the next twelve months, I made shy of $500,000. The year after that, $1.2 million. It’s allowed me to make large sums of cash, but to cherry-pick my favorite deals, pick up rentals, and it led me into coaching as well.

It led me into helping, serving, giving back, and contributing to other people. That’s why I’m on this show. I want to help, serve, give the gift that was given to me, and give the hope that Stan gave to me. I want people to realize that it is possible, not only to give them that hope but give them the tools and the action steps in what needs to happen to find that success.

It’s interesting because you continue to make a huge amount of money in the wholesaling business and you opted to teach. Talk to me a little bit about that transition because I know a little bit about the story. Ladies, what I’m getting at here is he has an established business, making a huge amount of money and he wants to start another business. Some things have to happen on the back end with that other business in order for him to start a new project.

I want you to see what he’s done and understand that you too, it’s important that as we go out there into the world, whatever business that you’re starting, you want to start it, make it successful before you move to anything else. If you’re spreading yourself too thin between too many things, you don’t get the levels of success that Zack’s talking about. He’s also a very successful coach, so he knows how to do this, but there’s a transition that happened. Zack, could you talk to me a little bit about that?

Becoming a coach was never a plan. I will give you the backstory of why I became a coach will make more sense of why I walked away from so much money. I lost a ton of money to become a coach. What happened towards the end of 2018, it was my second full year of doing wholesaling, and I was going to do shy of $500,000. My mentor, Tom Krol, was putting on a live event in Asheville, North Carolina. I went there, and I spoke. I poured out my heart and shared where I was making money, how I was doing it, and how I was finding these discounted properties. I had come up with a system and a process to do it well.

I felt like I had tapped out my potential, $500,000 a year. I was pinching myself. I was blown away. At that event, I met some people. One of the guys that I met invited me to do a self-help journal for the next year, 2019. The journal is called Living Your Best Year Ever. In that journal, the first 100 pages help you create three big goals for the next year. It talks about who you have to become to accomplish the goals and the kinds of things you have to do. One of my goals was to generate $1 million income that next year.

Reading that, I understood that I had to give away $1 million. It was basically what the principal was taught in there, “If I wanted love, I give love. If I want money, I give money.” You have to give to receive. I was like, “How do I give away $1 million if I’m trying to make $1 million? It’s counterintuitive, but I want to do this. How do we do this?”

 

I sat down with my wife, I was like, “How do we do this? I want to do this. I want to give back.” She said, “Why don’t you teach some people? You’re amazing at teaching. Why don’t you teach people what you’re doing to make $500,000?” I’m like, “You’re genius.” That’s what I did. I went to my mentor, Tom Krol. I said, “Tom, I need ten people that will implement my marketing system. Find me ten people. I’m going to teach them and coach them because I want to put $1 million into their business. It had everything to do with putting money in their business.”

He said, “First of all, 100%, you’re doing that. I love it. I’m going to help you. I’m going to find the people, but you’re not allowed to coach for free because they won’t take it seriously and won’t implement.” He made me charge him money first. It was only like a couple of thousand bucks. It wasn’t much, but we quickly got those first ten students. I started teaching them what I had learned and what I was doing. The craziest thing happened. The more I taught them, the more I realized how many holes I had in my business and all the mistakes I was making, which were very expensive mistakes.

I look back, it makes me cringe, but because of that, I made $1.2 million that year. It’s because of all the efficiencies that were put in place and what I learned from my students. The more valuable and even better than the money that I made was the love of coaching and the a-ha moment that, “This is what I want to do with my time. This is what I want to do with my life.”

My very first student, a few years later, texted me. He said, “I alone have now made over $1 million from what you taught me.” Michael McLeish in Greenville, South Carolina. Scott Dalinger, his very first deal with me made $113,000, quit his corporate job, and is making an absolute fortune still to this day in Portland. These original students were absolutely crushing it. I found so much fulfillment from it and I wanted to do more of it.

At the end of 2019, we did over $1.2 million and I wanted to go into coaching. I wanted to make that transition. I was still very much a big part of my real estate investing and wholesaling business. I had to find people and replace myself completely, so I didn’t even have to go on appointments. I wanted to keep the business running. The next year after, 2020, when I completely walked away from it, we only did $700,000 in income. Now we’re much higher than we ever were. This last year, 2021 was insane. We made a lot of money. I walked away from money to become a coach.

The first two years of coaching, the first year, I lost $8,000. The next year, I made $600 as a coach because of putting all the people in place to help support my students, infrastructure, marketing, and getting my name out there so I could make a bigger impact. I lost money to become a coach. I did it because I love it. 2021 was the first year that I did make money as a coach. I’m grateful for that because I’m getting paid to do what I love, plus my wholesaling business is blowing up. I’ve been doing this for a handful of years now. All of that money that I have made, I’ve reinvested it. That money is starting to snowball super-fast. I’ve passed the point where my passive income is well beyond what I spend each month.

I feel like I am more blessed than I deserve. It’s incredible because not only do I have complete peace of mind and freedom financially, but I’m so fulfilled by what I do and being able to help these students. That’s a long way to answer your question of the transition period of going into coaching and what that looked like. What it looked like was I walked away from money to get it off the ground. It was because I loved it, and it was what I was passionate about.

I love that passion in you. I love your commitment to helping people. The way that you started with a commitment to make people get $1 million into their businesses, that’s an amazing commitment to people outside of you. You didn’t necessarily know upfront how much you were going to benefit from that. Our students do always teach us. That’s a big blessing also in teaching. I know that they have improved your business and all of that stuff. I love watching how the passion started and now how you’re implementing that out into the world to help more people.

It’s been an incredible experience.

People who are successful in business sometimes forget that they run a business to live a beautiful life.

The two examples that you gave us were men. Do you only coach men? I know that’s not true, but talk to me a little bit about what your student makeup is like and what your focuses are.

Like any other industry, it’s predominantly men in the real estate space, mostly because the larger majority of people that are in the workspace are men, but yes, I have successful women students. You should have them on this show. They are inspiring. Jess is one of them. She’s incredible. As a matter of fact, she’s been a student for several months. I don’t think she’s hit the twelve-month mark. She’s by far the most successful student I’ve ever had in the first twelve months. She made my first twelve months in this space look like I wasn’t even trying. She’s crushing it.

I had her on my show and I interviewed her. This is off of memory and not going to be exact, but she has done around eleven wholesale deals. She found eleven deals at a discount and passed the opportunity on for a finder’s fee, no debt, no risk, and made well over $200,000 profit. She’s completed one flip and made $40,000 or $50,000 grand on the flip. She has two flips she’s working on, 2 or 3 properties under contract, and cherry-picked two deals as rentals. That’s in ten months working with me. She’s a freak of nature. It was super funny because I asked her, “How the hell do you have children and do this? How do you balance it all?” She’s like, “I don’t.”

What does that mean, “I don’t?”

“I don’t balance it,” she said. She was talking about the need of building out the team and having people to support her because she did all of this on her own, which is so crazy. She’s impressive. You need to have her on the show. I have so many. I feel bad even mentioning some because I’ll forget so many. Aaron and Mikayla, I need to mention them.

Aaron was a student first. He was a fireman in Southern California. He had done one deal on his own before he met me, joined my program, and he blew up. In the first couple of months with me, he made $50,000 or $60,000, quit his job, and went full-time. He was dating Mikayla at the time and she quit her job to start working with him. I started coaching those two, one-on-one as a partnership and helping them automate and build their business. They’re absolutely crushing it. I became close with those two and they asked me to marry them, which is cool.

In April 2021, I flew to Southern California and I had to get registered to be able to marry someone in California. I got to go marry Mikayla and Aaron. They’re a cute couple. Mikayla is a lot of fun. You should have her on the show. The thing is, I believe that women have more of an edge on men when it comes to this space. I’ll give you an example. All of our cold callers are women because it’s way less threatening when someone calls you and it’s a female. They feel safer and don’t feel like they’re going to be lied to or taken advantage of. Frankly, it’s hard to be mean to a girl.

Everyone knows what I’m talking about, by nature. I look at my little girl, Kate. She is so cute. The other night, she was constantly screaming over anything. She couldn’t find her little teddy bear. She was screaming bloody murder right before bed. I’m like, “Kate, stop screaming,” in a stern voice and look at her. She had these big puppy dog eyes. It was the cutest little face. It made me feel horrible for rebuking her.

She’s definitely daddy’s little girl.

 

She got me so wrapped around her finger. I was like, “You can’t scream. When you need something, you talk to me.” I’m trying to be way more sensitive and then I was like, “Guys, come give me a hug and a kiss.” I was hugging my kids and she lit up because she’s like, “He’s not mad at me.” She’s giggling while she’s hugging me. By nature, women can be more endearing. I find for myself, it’s easier to open up and to be vulnerable to a woman.

A lot of the times when sellers have a problem, let’s say they have a property they inherited and their brother’s a crackhead and lives in the back of the house and got a deathbed will and had the parents sign over everything to him. They now need an attorney to fight the brother. There are all these problems and you step in and say, “I can buy the house.” Now, you have to navigate and understand all these problems and get the sellers to tell you what’s going on and to help them through that process.

To be able to buy the property, it’s a lot easier to get that personal information and have those sellers open up to you when you have a relationship or when you’re close. Men can do it. I’m good at it. I’ve done it a ton and my acquisition manager is a man, but by nature, women if they’re willing to put in the work, they have a little bit of an edge because it’s easier for people, in general, to open up. By nature, you’re better listeners, read facial expressions, and have more of an ability to communicate.

It’s true. I know you’re trying to tap down a little bit because we don’t want to generalize too much, but I do think that it is one of those things inherently that we women have a little bit more of a default advantage. I don’t think it’s necessarily that we’re better communicators, but we’re different communicators.

I moved into a place and my business partner is living with my husband and I now because he’s trying to do some moving and remodeling. It’s interesting when either of those guys is having communication with me or when they’re having communication with each other. I’m like, “What happened there?” They sound like they’re grunting at each other. They’re got one-word responses and full communications are happening. When I come in, they can’t plan together with one-word communications, but I can do the whole planning and get the household running, all the rules, and all of that stuff.

It’s so fascinating to watch the complete difference in our capacity to communicate and the way that we build relationships. This was so much fun. Like my contractor, I’m doing a construction project and I asked him to come in and do some fixes in the house. I was like, “Is it all going to be done by the time I move in?” He goes, “It’s going to be when it’s going to be.” I was like, “Don’t ever say that to me. That stresses me out.” He says, “You don’t deal with stress well.” I said, “I deal with stress really well, just don’t talk to me that way.”

He talks to my business partner that way. They’re totally fine with it. Unlike me, I need to have an understanding that you’re going to get everything done that I need before I move in and that you will support me after I move in to get the rest of it done. That’s the communication that I need. It’s so interesting to see the difference. He totally switched it up to make me happy, but as women, we intuit a lot of that stuff. Sometimes we over-communicate, but then if we notice that, we tend to pull back also. Intuitively, I agree with you. We have an intuitive sense by default on communications and building relationships.

I was tap-dancing. You described what I was doing very well. I don’t like generalizing. It’s funny because my mom is a major tomboy. She is not like any other woman I have ever met. One example is she was pregnant with me when she shot her first deer with a bow and arrow. That’s my mother. A few years ago, I was in Idaho, and I went up to see my parents. We were doing this archery elk hunting thing. When I showed up at their camp at midnight, I had driven up, and I was going to crash in their trailer. They have a little base camp area. They were still awake and walking around.

I was like, “What are you guys doing?” My mom’s like, “I shot a bear. We got to go get it in the morning.” I was like, “You’re nuts. You’re crazy.” She’s 59 years old, running around the forest with a bow and arrow still. When I would mess up as a kid, she’d be like, “Steven, beat your son.” I don’t like generalizing because I know that women, there are all sorts of spectrums of personalities and communications types. Same with men, but in a general sense. That’s all I was trying to say.

You don’t want to freestyle dance before you actually learn the dance. You have to get those simple movements down and understand the footwork and what that movement intends to do.

It’s uncomfortable. I want women trainers for my women because we have an understanding of a lot of that stuff because of our default behaviors. We don’t want to generalize. There are many of us women that are living outside the boxes the same with the men, but we do have an inherent understanding and a lot of unspoken rules that women understand and men don’t understand. It’s a little disappointing to me, what comes with that is an expectation of that understanding also.

For instance, talking about wholesaling. First of all, I love that your program works. I love that you have very successful women in your program. You’re obviously able to be sensitive to their needs and communicate with them in a way that they understand and are able to create not little success, but a massive success. I love all of those things. I love that you’re conscious of their kids and the things that they go through, like Aaron and his wife, Mikayla.

There are different dynamics that happen with them. These are important things when you’re working with women, for you to understand that. I love that. I have tried to have five other women who teach wholesaling on this show. Not a single one of them has ended up being on the show. One of them stood me up five times.

One of them, I looked her up and she had a bad reputation in the industry. It’s like that. As much as I want women to teach my women, I also understand that business is business. As women, we have to understand that business is business. We have to be conscious, considerate, compassionate. We have to show up on time and for our people, and all other things.

I have a lot of great women that can teach it, but wholesaling has been such an interesting thing. I’ve literally been searching for a woman and can’t find one that will show up with the heart, promptness, and awareness of what’s required that you’ve been able to show up with. We can have conversations like we’ve had that I haven’t been able to have with any of these other women.

I appreciate you saying that. I’m going to make a confession though. I haven’t always been great at communicating with women. It has been a learned skill. There was a book I read that changed my life. It was called How to Improve Your Marriage Without Talking About It. For a time in my life, I wouldn’t work with women. I didn’t know how to. I served a Christian mission in San Paulo, Brazil, when I was a young man and I had leadership responsibilities. I worked with women and men. I struggled to communicate with some of the women in leadership positions there and so forth.

Even though we were trying to do good for the community, there was conflict. I didn’t understand why they were so frustrated with me. I’m like, “No doubt. I’m an idiot.” I read this book. It not only helped my marriage, it helped me be even more madly in love with my wonderful person, with my wife, Karen, but it helped me understand how I process information, communicate my fears and insecurities as a man and then the same thing with women.

There are different spectrums, but it allowed me to understand how to communicate, encourage, and be a better leader. I have a lot of women that work for me. My right-hand gal that helps me talk to all of the people that want to become students is a woman. She runs my sales floor. She’s incredible. Her name’s Stephanie.

This is something that I had to learn and figure out. I wasn’t born with the understanding of the differences between men and women. When I got on your show and talked to you about being on the show again, we talked a lot about that. We talked a lot about how I truly want more women students. I want to help more women. I feel like I am capable of doing that and I want to do that.

 

The reason that I’m having you back on the show is that you’ve been able to help women produce these massive results, and encourage the rest of their life. When you were talking about the one woman where you’re like, “How are you balancing this?” She’s like, “I’m not,” but you are now able to understand she needs to balance that because her kids need to be a priority for her. She knows that. You have the experience to help her to put together the team that will allow her that freedom. You understand the value of that.

People that are successful in business forget that the reason we run a business is to live a beautiful life. We don’t live our life to run our businesses. That’s a big distinction. I don’t know if this is true for all women, but the women in my circle, that’s a big distinction. We run our businesses to live our beautiful life. I love that you’re able to tap into that and help them and create that life based on those values. I want to ask you, who is it that you can help most? Do they have to have a lot of experience to get started in wholesaling?

Not at all. You don’t have to have any real estate experience at all. Wholesaling’s one of those businesses where you have to get in front of the right types of sellers. You have to communicate with them and get a signed contract. The process is quite simple. It’s not complicated. It is work. There’s a lot of work that takes place, but you do not need a ton of experience.

You will need to have money for marketing and some time to put into it. I won’t even coach. I do have some requirements because if I bring on a student, I want to be able to make them successful. I found that there are a handful of things that they have to commit to for me to be able to help them. I could go through that. The first one is a personal thing. If I coach someone, they have to be willing to share their success story. They have to be willing to be on the podcast because I want them to pay it forward.

I’ve had a lot of students at the beginning that I coached, who made a ton of money, but they were insecure or shy and didn’t want to be on the podcast. I was like, “You’re not paying it forward.” That’s a personal requirement of mine now. If you don’t want to be on my podcast after I help you make a ton of money, don’t apply. I coached to make a difference. If they won’t help me pay it forward and talk about their success, I’m going to spend my time and efforts elsewhere. That one bothered me.

The next one is you have to put enough time into this. I require at least fifteen hours of work. I tell my students exactly what and what has to be done, and when. There’s no question what you need to do, but you need at least fifteen hours per week. You need to be able to put at least $500 a month in marketing at a bare minimum. I’ll tell you where and how to spend it. It’s not coming to me. It’s going out to find sellers.

Lastly, when you joined my program, I didn’t want you binge-watching the content. One of the things you’ll have is my personal cell phone to go over deals when we have deals on the line. You also will have coaching calls with me on a group call like on Wednesday, a Facebook group, and a community. You’ll have ongoing support, but there’s a course that comes with it, a step-by-step course, A through Z setting you up and getting you started.

I have certain students that will binge watch everything and do nothing because they feel overwhelmed. They feel like they don’t know what to do next. That’s now a requirement. You’re not allowed to watch video two until you’ve implemented action step on video one. It’s not an education program. It’s an action-step implementation program. My goal is to make you money. Remember, I started off to put $1 million in people’s businesses. I learned that there were certain action steps that had to take place. Over years of doing this and a few years of coaching, over 300 people, you have to implement a certain series of action steps.

One of my requirements is no binge-watching content. You implement as you go. If you get stuck, confused, or if you feel like you need to move on because you had a lead come in or something, and you don’t know how to negotiate it, then you can call me or text me. I’ll tell you where to go in the program, but I don’t want you binge-watching content. That’s a requirement because it’s going to screw your progress if you don’t do that.

There will be many times when you’re uncomfortable, but one day you’re going to look back on your uncomfortable journey and be so glad you did it.

The last requirement is when you join my program, I need you to trust me. I need you to do exactly what I say. I have found that sometimes students feel a little insecure still and they think that they need to listen to podcasts and watch YouTube videos and do a hybrid of what I teach and what someone else’s teaches.

When you join my program and you do what I tell you to do, it’s my responsibility that you’re successful. I need you to do exactly what I asked you to do and not reinvent the wheel and lean on me. I want you to be laser-focused on the action steps and not do a hybrid, but do exactly as I ask you to do unless you talk to me and I tell you to do something different. Those are the exact requirements that we will go over when people jump on and are curious about our program.

It doesn’t mean that you have to be doing the program exactly this way forever, but you do need to learn a successful strategy first. You can adjust it later when you’ve got enough experience to know what might work better for you, but in the beginning, it’s all hypothetical. If you find a leader and a teacher that you can trust, then give them everything you got. After a few years, depending on how quickly your success comes, you can start to adjust once you’ve got enough experience to make those adjustments. You don’t want to freestyle dance before you learn the dance.

You got to get those simple movements down and the fundamentals.

The basics and understand the footwork, understand what that movement is intending to do, and then you can do some freestyle.

My goal is I want you to do a wholesale deal. The average time to do your first wholesale deal with me as a coach is three months. An average deal is $30,000. It’s a chunk of money to be able to make. I had someone that got upset with me, and I was telling him this. I was like, “No, I need you to follow the action steps.” He’s like, “I want to do it like this. This is how I want to do it.” I was like, “I need you to not reinvent the wheel.”

He’s like, “You’re arrogant. You think you know everything.” I was like, “I want to help you.” This is something I do every day, all day. I’m obsessed with it. I love helping my students. Not only am I teaching this and seeing it implemented all across the country and seeing what works and doesn’t work, but I do this in two different markets.

I make well over $1 million a year doing what I’m teaching. I’m teaching in theory. I didn’t go to college and get a doctorate’s degree and then taught what I understood. I implement, use, study, and I have actual data proving what I do and why I do it. I give them those exact processes. It’s simple. The processes, action steps, and none of the videos are over seven minutes. I don’t brag about how many hours of video. It’s not very much. “This is the action step 1, 2, 3.” You go through the program and implement the action steps. It will be a lot of work. There will be a lot of times where you’re uncomfortable. You’ll be having conversations that you probably never had before.

You might not know someone will say something and you’ll be writing down the word because you don’t know what the word means to google it later. There are going to be moments like that, but I look back on my uncomfortable journey and I’m so glad I did it. I want my students to say the same thing. I look back to what Tom Krol and Cody Hofhine did for me. I want to do that for my students. I want to pass on the legacy that Tom and Cody had. I want to make a difference.

 

Could you tell everybody how they can reach you?

If you have any interest in talking to us about the coaching program, getting on the phone with Stephanie, and sometimes I jump in and help when she’s overwhelmed, you can go to BlissfulInvestor.com/Zack.

Ladies, take advantage of that. There are not many times we get an opportunity to have a full conversation with successful people in this industry. Also, I know you have a free gift you want to offer, could you tell us about that?

I wanted to show people what it looked like to implement the process and to also see that it works to give you belief. The reason for this is, in my story, I talked about Stan, how I met him, and how he gave me properties at a massive discount. That gave me all the confidence to keep going even though I had had bad experiences in the past. I remember being up late and I said, “I got to give that gift to others. I need to go a Stan on camera and show the world.”

I came up with a little challenge of trying to make $40,000 in 40 days and I only got $1,000. Not only that, I flew across the country to somewhere I’d never been because I didn’t want to have my connections, my team, because that would be cheating. I flew to Tampa, Florida with $1,000, my smartphone, and a car. I did exactly what I taught my students, but I did it with a camera over my shoulder. I made $93,000 in wholesale fees off of $1,000 investment in those 40 days.

It was an incredible experience. It’s free for you to watch. You guys should watch it. It was horrible to do and create. It’s a ton of work. I didn’t see my family for a full 30 days to do this challenge. That was a huge sacrifice on my part. I’m so glad I did it. If you guys want to catch that, there’s a link that you can go get full free access. It’s BlissfulInvestor.com/40Days. Go catch and watch that. Get some popcorn and have some fun. You can sit in the comfort of your own home and enjoying my pain.

We will be enjoying your pain, but we will be enjoying watching it. Zack, I’m so excited about what we covered. Thanks so much for coming back on the show.

Thank you for having me. Everyone, thank you for reading. Thanks for being with me.

I am going to interview some of those ladies. You need to connect me with them. That would be fun.

I definitely will.

We do have more. Zack has committed something very generous for EXTRA. He’s going to be talking to us about his Driving for Dollars Mastery Actual Strategy. In EXTRA, he’s going to give us the actual steps or specific steps that you can take to drive for dollars and pick up properties at a highly discounted price. It’s going to be incredible. I’m so excited that he’s willing to give that away to us. If you are subscribed to EXTRA, stay tuned, that’s coming next.

If you’re not, this might be the time to do it. This is going to be amazing content. Go to RealEstateInvestingForWomenEXTRA.com. The first seven days are for free. You can check out this episode and many others. Stay subscribed or not, but go to that website and we’ll get you to get access to EXTRA. For those of you that are leaving us, thank you so much for joining Zack and me for this portion of the show. I look forward to seeing you next time. Until then, remember, goals without action are just dreams. Get out there, take action, and create the life your heart deeply desires. I’ll see you soon. Bye.

 

Important Links

• Zack Boothe
• What Common Mistake Do Many Real Estate Investors Make? – Previous episode
• How to Improve Your Marriage Without Talking About It
• BlissfulInvestor.com/Zack
• BlissfulInvestor.com/40Days
• RealEstateInvestingForWomenEXTRA.com

 

About Zack Boothe

Man, I remember what it was like when I first got started in real estate. I’d wake up every morning full of confidence and courage, ready to attack the day. I had a focused plan and I knew exactly how to find smoking hot real estate deals, and quickly turn those deals for huge profits.

Quite the opposite. In fact my reality was fear, doubt, overwhelm, and frustration. I worked my butt off but I was drowning in bad advice from gurus, and strategies that either didn’t work or just weren’t congruent with who I am.

Five years later and I’ve done over 300 real estate deals and have generated millions. Over the years I’ve made a lot of mistakes and have learned a lot of lessons (sometimes the hard way), and I’ve built a dream real estate business…and I’d love to show you how you can too.

 

 

 

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To listen to the EXTRA portion of this show go to RealEstateInvestingForWomenExtra.com

To see this program in video:

Search on Roku for Real Estate Investing 4 Women or go to this link: https://blissfulinvestor.com/biroku

On YouTube go to Real Estate Investing for Women

 

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Get Unlimited Private Money With Amy Mahjoory – Real Estate Women

 

Raising capital is an important part of starting a business. And private money is one way to get your real estate investments financed. In this episode, we examine how as Moneeka Sawyer deep dives into raising money with real estate investor and educator, Amy Mahjoory. Amy has helped thousands of real estate investors with private money, walking us through each step. From building relationships to crafting your pitch, Amy lets us have a look at her process. Tune in and learn more about building a real estate business right here.

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Watch the episode here

 

Listen to the podcast here

 

Get Unlimited Private Money With Amy Mahjoory – Real Estate Women

The Golden Rule For Raising Capital

I am excited to welcome to the show, Amy Mahjoory. She is a real estate investor and educator, HGTV personality, bestselling author, and keynote speaker. Her life didn’t start in real estate. After fourteen years in Corporate America, she had her fill working for other people. Although she was a highly recognized global leader in procurement, logistics, and operations management for Dell Computers, she decided that a traditional education combined with the false security of a 9:00 to 5:00 was not producing the results she wanted.

Real estate was the game-changer. She has been investing in real estate over the last several years. During that time, she has raised well over $20 million in private money. As a result of her immediate success, she went on to resign from her corporate job to pursue her passion for real estate. Shortly thereafter, she signed a contract with HGTV and began coaching real estate investors all over the country on the same creative rapport and trust-building strategies, systems and scripts that she still uses in her business now. Here is the best part, all of this can be done without having to depend on friends and family members for private money. This is her new passion and focus.

She helps her students transform their minds so that they can feel confident raising private money. She takes the fear out of raising capital and breaks her systems down into a methodical and easy-to-follow system. Her greatest achievements go beyond what she has accomplished herself. Many people become successful in real estate, but her talent is helping others become successful themselves. She has a genuine interest in helping others succeed. Most of her success originates from her streamlined operations and proven systems. She changes people’s lives. Amy, welcome to the show.

How are you? It’s great to be here with that warm welcome.

This is what I love about you. Your bio is so much more about what you’ve done for others. It’s not all about, “I’ve accomplished that,” because you’ve accomplished quite a lot. It’s pretty amazing. Thank you for that. Can you talk a little bit about your story? How did you transition from corporate to entrepreneurship?

Surround yourself with people on a similar path. Believe in yourself, and you will do great things.

My background is very traditional. Like many people out there, I was raised to go to school and get good grades, get a job at a secured stable company, and collect my paycheck for the next 25 years until I retired. The transition for me was easy because once I realized real estate was my new path, I had goals and was committed. I invested in coaching and mentorship. Where it became challenging was the lack of support from my friends and family members, specifically my dad. That’s a whole other conversation.

For me, I’m a product of the system. A lot of people out there can relate to similar situations and losing friendships along the way. It’s always like, “Perseverance will prevail. Keep your head down. Surround yourself with people who are on a similar path. Believe in yourself and you will do great things.” For me, it was an easy transition because I knew I was going to do it. I was committed to doing it.

Some people are committed but they second guess. I love the power of, “I’m committed, even if my dad doesn’t like it.” Many of us are influenced by our families. “People may not like it. It doesn’t matter. I’m doing it.”

Once you know your role and you’re confident in who you are and what you’re doing, it makes that decision-making process so much easier. At the end of the day, I still have to do what’s right for me and my family while respecting my dad, for example. That’s why I believe so much in coaching. The reason I had so much immediate success was because of my coach. If I didn’t know what I was doing, I worked at the corporate for fourteen years, but they helped me with that fast track to success which was cool.

Talk to me a little bit more about overcoming the roadblocks that maybe family and friends put in front of you. A lot of us women are susceptible to that and experience that.

The hard part for me was I’m very sensitive. I wear my heart on my sleeve and I don’t like disappointing my parents, even as an adult. I always seek out my parents’ approval. I want them to be proud of me. They are now. My dad is my biggest cheerleader now. It was very hard for me, more so losing my two best girlfriends during that transition because I was so excited and passionate. I know real estate can be a game-changer for everyone. That’s why I coach and preach it. They didn’t want to hear it. Until this day, I still believe that I drove them away from me.

It was very hard. I cried for years. Even when I speak on stage, I share this example and I get emotional. However, I’ve also learned that friendships are seasonal. People come in and out of our lives for a reason and their purpose was served. I made a bunch of amazing friendships along the way. I never expected my entire inner and outer circle now to be other real estate investors, entrepreneurs and business owners. Our girls’ trips are masterminds. Don’t get me wrong, I still have my OGs. We have fun and go out. It’s just different.

For me, it’s the same way. When I do ladies’ weekend away, we’re ten real estate investors and professionals in that industry. Not a single one of us is an agent. Just because you’re in real estate does not mean that you need to be an agent. I want to emphasize that again. There are a lot of people in the industry that do a lot of this stuff around what we do. It’s so interesting because I remember when I got started with this show, I’m so passionate about real estate anyways, but it’s always been my side hustle. This is what brought me into this fear of learning more about real estate, expanding my own influence, and also my own learning. That’s why I keep going because I learned so much.

 

Suddenly, I’m having these real estate conversations with all my friends. That’s not what we used to talk about before. People are getting a little bit uncomfortable. I had several friends that were like, “I’m totally inspired by you. I’m going to go get my real estate agent license.” I’m like, “No, that’s not what we’re talking about. We’re not talking about getting another job and not investing and not growing your own wealth, and doing that for other people. We’re talking about this.”

Over and over again, “Don’t get your license. Don’t spend all your time on a license. Go get a mentor, learn to be an investor.” I lost so many friends because they got tired of hearing, “Don’t spend all your time and money becoming an agent,” because I was pretty bullheaded about it. I can see what happens when you spend all that time and money doing that. It does not grow your wealth and freedom. In a lot of cases, it takes away your freedom. Some people want to do that. That’s great, but that’s not the strategy for becoming an investor necessarily. I had the same experience, lots of nights crying because people dumped me.

It’s part of the process and journey. We’re going to have the highs, lows, wins, losses, make money and lose it all. I had this conversation with a girl who was at my LA event. She was like, “I’m going to go get my license,” and I was like, “Why?” She said, “Don’t I need to?” I’m like, “No. Don’t get your license.”

For those of you who may not already know this, there are so many ways where we can still generate referral fees and additional income without being a realtor by referring people to realtors. I always believe in working smarter, not harder. I’m not going to spend time getting a license when I don’t need it to list my own properties. I don’t want to list someone else’s properties because that’s another job to your point.

The other thing is once you have a license, you have to hang it. You’re legally obligated to hang it. You have an obligation now to a broker. That broker is going to have expectations. Every year, you have to do your education to renew and to get your hours. You have to renew your license every four years. It’s been a long time since I had my license, so these numbers may be different and they’re different in different states, but there’s a lot involved in that.

In California and a lot of states, you have to disclose that you’re a realtor, which means you often lose offers because people don’t trust a realtor-buyer sometimes. I found that to be the case for me too. It was a complete hindrance in my business and took all this time and energy. I want to work 4 to 10 hours a month. That was a lot more time and energy that was getting put into my business that wasn’t necessary. Talk to us about your transition to HGTV. How did that happen? What did that do for you?

I did have a goal when I first started to be on TV. I didn’t share it with many people. I wanted my own show. I was in the middle of hiring a virtual assistant. She was 21 years old. I was surprised when she asked me, “What are your short and long-term goals?” I was like, “Who is this girl?” I loved it and appreciated it. I ended up hiring her and I said, “One of my goals is to get on TV,” and by having a voice. I always talk about word of mouth going a very long way. She responds with, “My mom knows a producer at HGTV, would you like an introduction?”

I said, “What show?” She said, “House Hunters,” which many of us know that show. I respectfully declined her offer because I thought to myself, “I don’t want to be on House Hunters. I want my own show.” Two days later, I thought to myself, “Amy, what are you doing? You wrote a book on networking. Get your foot into the door with this lady and see what happens.” That’s what I did. I had a snowball effect. I hit it off. I was on House Hunters. We did a four-part mini-series, but it’s cool because they broke the mold with me.

Everyone you encounter is a prospective private money lender.

In the 12 or 15 years at that time that they had been filming, they had never had an investor on the show. They showed my transition out of Corporate America into real estate on the show. My contractor walked through projects before, during and after. That was cool and it was great for credibility. The relationships, I still have and cherish until this day. I realized I don’t want my own show because it is a lot of work and that’s not a priority for me anymore.

For a long time, I thought I wanted my own show and then I realized there’s this thing. Ladies, this is relevant to you too. How many times are you shooting for something because you think it would be cool? You’re afraid of missing out. You want to have that credibility and whatever it is in your life that you’re looking for that lifts you, but so much that we drive towards is not serving our core values or serving our dreams. This is something that I’m focusing on now on the backside of the pandemic where I’ve been sitting at home for two years. I’ve had so much time to think about, “What is it that makes my heart sing?”

Traveling and speaking, I was gone every single weekend. I remember the year before the pandemic, I was home for six weekends out of the entire year because I was traveling. I miss my husband, my little dog, my family and my life, but I was doing it because it was what was expected, it gave me more credibility, got my voice and message out there, and all of those things, but it wasn’t doing it in a way that supported the bliss of my own life.

As we move forward, I’ve realized, “No, I don’t want a television show. I don’t want to be working that hard. I want to be working hard on the things that are going to reach my goals and are aligned with my own core values and the things that make me happy.” I love that you mentioned that because we can have so many opportunities. Which ones do we choose?

I hear you talking and I hear myself. We were the exact same. That’s the only reason I wrote the book. I wrote this bestselling book because all my friends were writing a book and I’m like, “That’s the next thing to do. I got to beat my friends. I got to be bigger and better.” Now, I love what I do and it’s the only thing I want to do. I’ve cut back on speaking and all these other things. I don’t care anymore. I want to do genuinely what makes me happy, but I also treat it as a business and capitalize on it. How do we do that?

Talk about what you do.

I never thought I would be a nationwide coach showing other investors all over the country how to raise private money. That’s what I do now. I was a leader at Dell, but I was never a manager of people. I was always an individual contributor. When I got into real estate, I never thought I would be hiring a team of twenty people and getting on stage and being on TV. I was super shy growing up. For the first eight years of my real estate career, investors kept saying, “How did you raise all this capital? You must have asked your friends and family.” I was like, “No, it’s the opposite because I’m so stubborn.”

Once they heard that out, they were like, “What list did you buy?” I have never bought a list to target private money lenders. If you have, great. I would love to hear how your experience was. I launched a coaching program a few years ago, once my daughter turned one because I wanted to be a soccer mom. Now, I get to still stay connected with investors all over the country from the comfort of my own home while changing their lives and showing them how to raise capital to get 100% funding for their deals. That’s my main focus now. I’m still an active investor so is my husband, commercial, residential and all that stuff, but now I’m a coach myself and it’s on one topic.

 

The topic that you focus on specifically is private money. I want you to dive a little bit deeper because the very first time that you and I connected, everything you said was like magic. I was like, “That’s so cool.” That’s why I wanted to bring you on. Tell us a little bit more about the private money angle. I know that the way that you approach it is different. You’re not going after friends and family. At least, in the beginning, you opted out of that.

I still don’t because I’m stubborn. If you guys get out there and you listen to podcasts and read books, you take other coaching programs, the majority, if not every real estate educator out there will say, “Raising capital is easy. Go ask your friends and family members.” What if you don’t want to? What if they’re not supportive? What if they’re not in a position to invest? How do we get out there and build rapport and trust with strangers?

I’m talking about your Uber driver, cashiers at a grocery store, people at airports, church communities, sporting events, happy hour, anyone and everyone you encounter is a perspective private money lender. How do we make those mindset shifts? Start planting seeds to open up those conversations to coffee talks where you get them to ultimately invest with you. What I teach is raising capital from people who aren’t even a part of your inner circle. I have students who want to target their friends and family members, and I show them how to have those conversations as well.

I have taken her online course. It’s phenomenal. Ladies, you know that I will not recommend a course unless I’ve vetted and liked it. Many of you asked me, “Moneeka, if you’re only working 4 to 10 hours a month on your real estate business, what’s all this other time? Why are you always so busy?” First of all, this show takes a huge amount of my time because I want it to be the very best for you, but the other thing is I will not recommend anything to you that I have not been through myself.

I take a lot of coursework, not that I need it. I’m not doing this for me. I’ve got my business, but I do love to learn and I do want to get to know the people that I am doing business and partnering with, so I vet their courses. Over the last few years, I’ve vetted twenty courses and only two that I have recommended. It’s a lot of work that goes into that. I’ve never shared this before, but this is what I do. If I’m going to recommend it to you, I’ve been through it or one of you have been through it.

I meet with some of you and you tell me, “I have this great coach. I’ve got a great program.” That’s how I met Mark Willis. Someone else recommended him to me because they loved working with him. You’ve heard from him a few times. A lot of it is recommendations and coursework. Many times, I’ve done the investing with them before I’ll recommend them. I don’t vet everybody that’s on the show and that we do courses for, but I will tell you if I’ve gone through their coursework and I have with Amy. That allows you to feel a little bit more comfortable about the recommendation. I do want to be clear, I don’t vet everybody on the show.

Some of the people out there who know me or many of you who may not know me, I’m raw, real and direct. I’m very approachable and easy to talk to. I am not scripted. It’s a proven system. It’s stuff that I’ve been doing for many years. I’m tested and fine-tuned. If you are coachable and can follow steps, I’ll hand you everything you need on a silver platter, “Do this, call this person, say that. Call me back when they do this.” You will have success and can raise unlimited capital if that’s aligned with your goals. All of our goals are different.

Having money is a good problem to have.

It’s cool because, with private money, there are endless opportunities. You don’t have to flip or wholesale. Buy five rental properties tomorrow with private money. Start a fund and invest in commercial syndication.  Invest in a multifamily deal. There is so much we can do. I’ve got mortgage brokers and realtors who learn how to raise capital because all they want to do is generate referral fees for their investor clients. Having money is a good problem to have. Let’s educate people on why they should invest with us.

Do you find that when you raise the money, you should have some idea of where it’s going to go before you raise the money? They’re excited about giving you money and then you stalled.

The answer is no, we do not need to have a deal right now. We don’t want to wait until we have a deal. For those of you who are looking for a deal, whatever your strategy is, we want to be looking for deals and raising money at the same time. Even though I’m telling you that you’re going to raise money from your Uber driver, which is what I did and what you can do as well, it is rapport-based lending. We’re building a relationship and developing trust. You can do this in as little as three weeks, but you don’t want to wait until you have a property under contract. You want to be proactive in that skillset.

You’ve told us a little bit about what makes your course different. You’re talking about not going to friends and family, and doing the fundraise simultaneously. There are some other special things about your course.

I know a lot of big and small name educators out there and nobody teaches private money the way I do. No one teaches how to get creative and think outside the box. I have over 54 different creative trust and rapport-building strategies scripts and templates. My course is a done for you system. I give you all twelve of my credibility pieces, all my contracts, and my list of FAQs. What’s cool about the program is the online portion is eight different modules. Each module is built upon the previous one. In order to have success, you want to come and watch the videos, and do the action items in order of priority because it all means to one another.

I don’t guarantee success and I never will. I have a 90-day money-back guarantee because I can and it works if you follow the system. What’s also unique about my program is I give you lifelong access. Not just to your online curriculum which I’m also fine-tuning and tweaking because I’m still an active investor, but you get lifelong coaching with me that does not expire. I’m not going to call you six months later and be like, “Your coaching is expired. Would you like to reinvest?” That’s it. One investment, lifetime access. It’s a no-brainer.

It’s unheard of. While we’re talking about the course and since you ladies already know a little bit about it, Amy and I are doing a few things together for you. We want to do a webinar. We’re calling the webinar Grow and Scale Your Real Estate Empire with Private Money. We’re going to be doing that together so you can meet Amy, ask questions live, and all of that stuff. If you want to join us, go to BlissfulInvestor.com/PMWebinar. The webinar is going to be held on Thursday, April 7th, 2022 from 1:00 to 2:30 Pacific time. Let’s talk about that a little bit more. What are we going to be covering, then I’ll talk more about the coursework.

My webinars are pretty insightful and eye-opening. People are walking away mind blown, which is cool. We have plenty of time in the end for Q and A so I got you. I always keep it simple and to the point. I always focus on three things. Number one, what is private money? Who are we targeting? Who aren’t we targeting? Where is it? Number three, how do we obtain it? How do we get our hands on it?

 

When you understand all three of those points, you can obtain 100% funding for your deals moving forward. This is regardless of your experience, credit, and whether or not you’re doing this part-time or full-time. None of that matters. Follow these proven systems, be coachable, and you will have success. We’ll get into some of those strategies during the webinars, so make sure you guys attend.

Grow and Scale Your Real Estate Empire with Private Money, Thursday, April 7th, 2022, 1:00 to 2:30. Go to BlissfulInvestor.com/PMWebinar. Some of you may be like, “I’m all-in. I want to do the course,” join us for the webinar also. If you want to do that, Amy’s already shared a little bit about the coursework. Do you want to give us a few more details before I give them some links?

One of the first things I have my students do is start building our foundation and getting ready to raise capital as early as module one. One of the key takeaways from module one is what I refer to as our Four-Second Power Pitch. In four seconds, you are going to explain to anyone and everyone, the minute you leave your house, who you are and what you do by dangling that carrot and getting them to ask you more questions about it.

The Four-Second Power Pitch is how I got Larry, a retired physician who was my Uber driver to become my money lender. That’s going to be step one. As we build our foundation, and there are a lot of things that go with building a foundation, how do we start to take action? It’s with your Four-Second Power Pitch. The minute you leave your house, anyone you encounter is a prospective private money lender. What do you say? It’s your Four-Second Power Pitch.

For our ladies that are subscribed to EXTRA, she’s going to give us a Four-Second Power Pitch in EXTRA. In that first module, she’ll be covering that. That’s the foundational building block. That’s where we start. From there, there’s a world of information in the course.

That’s opening up the door to having ongoing conversations with each of your private money lenders. Step two is, how do we take action? How do we find the people to book these coffee talks with? At these coffee talks, what do we even say to them? That’s going to get into all your credibility pieces and all the content that I give you. Don’t worry about what that looks like.

If you are in and ready to go, you can get her course. Go to BlissfulInvestor.com/PrivateMoney. That’s for the full-pay option. Her courses are insanely inexpensive. I can’t believe that she offers all this information for this little amount. It’s a good deal. If you can’t make the full payments right away, you want to do a payment plan, she offers that. She wants to make sure that everybody can get the advantages of this coursework. If you want to do a payment plan, go to BlissfulInvestor.com/PrivateMoneyEasy. Is there anything else you wanted to add?

I don’t think so. It’s a lot of fun. It’s a tight-knit community. It’s like a family. We got each other’s backs. A lot of us develop friendships and end up hanging out outside of our work and coaching environment, but you think about what if you could raise six figures in as little as 21 days. If you can raise six figures, how much more can you raise? What would your business and life look like?

You never know who you’re talking to. You never know who is standing in front of you. Be respectful, and follow the golden rule.

You can sit out there and go read a bunch of books and listen to a hundred podcasts, but why not leverage from my years of experience, lessons learned and mistakes? Stop posting desperately on Facebook groups. I see this all the time. Get the system in place and position yourself as a polished professional poised for aggressive growth. Get out there and do everything you’ve ever dreamed of when it comes to growing your real estate business. You can do it.

That’s the thing. Us real estate investors, what is it that we love? Leverage. Leverage when we’re purchasing and other people’s information. I love that you said it that way. Leverage her years of experience to fast-track yourself. Thank you so much for all that you offered in this part of the show.

It was great being here. Thank you so much for the opportunity to chat with you and your audience. I look forward to coming back.

We got more on EXTRA but before we move on to that, let’s talk about our three Rapid-fire questions. The first one is, what is the super tip on getting started investing in real estate?

Number one is to commit to it and decide that, whether or not it’s for you. Commit and then set your goals up.

What is number two? What is the strategy for being successful in real estate investing?

Once we have our goal, because thoughts expand, number two is to get after it. Get out there and take action. For example, take my Four-Second Power Pitch and start implementing it every single day. Practice it at home. Don’t just sit there and talk about it and do it. That’s why I could do a lot of these implementation workshops. We can sit here and talk about it and take a bunch of notes that you’re going to throw in the garbage, or we can meet up live and start taking action and see results. Just do it.

What is one daily practice that you use that you would say contributes to your personal success?

For me, it was treating anyone and everyone I encounter the minute I leave my house as an equal and specifically private money lender. I have struggled in the past with anger management. I had an anger management journal. I had a very low tolerance for poor customer service regardless of the industry. I’m comfortable saying no. I would go off on people. I would be rude to them if they were rude back.

 

Once I decided to commit to being a real estate investor and a business owner, I said to myself, “You can’t talk to people this way. You never know who you’re talking to. You never know who is standing in front of you.” Be respectful, the golden rule from here on out. Anyone and everyone you encounter, treat them as equal and better yet, target them as private money lenders. How do you do that? My Four-Second Power Pitch. Everything is very closely linked to one another.

One of the things is that how we do anything is how we do everything. If you have to improve yourself or your business, you’re improving yourself for your life. That’s what blissful investing is all about. It’s who are you getting to become as you’re building your wealth because that’s the person that you are going to be when you’re wealthy. As you improve yourself, you’re treating people with a little bit more respect or a lot more respect whatever. That’s going to show up in every area of your life.

It’s going to show up in how you bring up your children. Our businesses help us to grow. They help us to become a better version of ourselves. I love that example. Nobody has ever admitted something like that on this show but it’s so amazing. Being vulnerable and allowing people to see that we all grow is a perfect example of that.

Thank you. I had a therapy session. I got personal and professional coaches. I’m like all of you. I’m still an investor and a student. All I’m doing with you is sharing the secrets behind some of my success. I’ve had plenty of failures too. What you choose to do with it is on you. I invite you to consider taking action, invest in coaching whether it’s with me or someone else, and start seeing results sooner than later.

Join us for our webinar. You can get to know Amy more. I always love meeting with you, Ladies. I’m trying to do this once a month. It’s like a community. Let’s get together. Several of you come to every single webinar, so I’m getting to know you. I’m loving that. Again, it’s on Thursday, April 7th, 2022 from 1:00 to 2:30 Pacific time, go to BlissfulInvestor.com/PMWebinar. Come join us for that. We’ve got more.

Stay tuned for EXTRA. We’re going to be talking about the Four-Second Power Pitch. You get that for free if you are subscribed to EXTRA. If you’re not subscribed to EXTRA, but would like to be, this might be the time. Go to RealEstateInvestingForWomenEXTRA.com. You get the first seven days for free. For those of you that are leaving Amy and me now, thank you so much for joining us. I always love spending time with you and I look forward to next time. Until then, remember, goals without action are just dreams. Get out there, take action, and create the life your heart deeply desires. I’ll see you soon.

 

Important Links

• Amy Mahjoory
• BlissfulInvestor.com/PMWebinar
• BlissfulInvestor.com/PrivateMoney
• BlissfulInvestor.com/PrivateMoneyEasy
• RealEstateInvestingForWomenEXTRA.com

 

About Amy Mahjoory

I’m a Real Estate Investor & Educator, Best Selling Author, HGTV Personality & Keynote Speaker who built my business by Networking w/ A Purpose!

I am lucky to be able to travel the country, doing what I want – when I want, with who I want.

After building multiple businesses and through many lessons learned, I am able to enjoy my time coaching and mentoring real estate investors all over the country on how they too can grow and scale their real estate business by CONFIDENTLY raising private money!

The most important concept I teach is that with the right attitude, anything is possible.

I was born and raised in the midwest in one of the tightest families you’ll ever meet!

My mom and her two sisters married my dad and his two brothers before immigrating to America and no, none of it was arranged. They decided to buy homes within three miles of one another which is where they raised all of us! Although I technically have one brother, I always say that I am one of seven since I have five double cousins, we all look the same and we grew up within three miles of one another.

After attending undergrad at Michigan State University, I moved away from home for the first time to Austin, Texas where I landed a job working for Dell Inc. After working in Corporate America for over fourteen years, I was doing well, but felt like my true potential was elsewhere. I was completely burnt out and had no passion for the work I was doing. I knew I needed a change.

During my spare time, I was glued to all of those home renovation shows. I absolutely loved the idea of taking an old dumpy house and turning it into something new and modern!

Although it may have sounded a bit ambitious and even unrealistic, especially since I had no previous knowledge of the real estate market, my mind was set! I was on a brand new mission prepared to learn how I too could learn how to buy, renovate and then sell distressed properties.

In my hunt for quality real estate investing education, I found mentors Than Merrill, Paul Esajian and JD Esajian from A&E’s hit TV show, Flip This House. With their ongoing support, guidance and trust, my very first company was born.

 

 

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To listen to the EXTRA portion of this show go to RealEstateInvestingForWomenExtra.com

To see this program in video:

Search on Roku for Real Estate Investing 4 Women or go to this link: https://blissfulinvestor.com/biroku

On YouTube go to Real Estate Investing for Women

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Investment Strategies: Choosing Between A 30-Year Or 15-Year Fixed Mortgage With Jen Du Plessis – Real Estate Women

 

People always ask our guest Jen Du Plessis, whether to decide on a 30 year-fixed or a 15-year fixed mortgage. In this episode, she shares in-depth insights on what to choose and expect. She explains that the factors in your decision should always include analyzing the market opportunities and your life goals. There is no right way for everyone since people have different situations. Listen as Jen discusses the various factors affecting the rates of your investments, mortgages, and business. She also shares critical success strategies to help scale your real estate business. Tune in to know your assets and loans and make the right decisions.

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Watch the episode here

 

Listen to the podcast here

 

Investment Strategies: Choosing Between A 30-Year Or 15-Year Fixed Mortgage With Jen Du Plessis

Real Estate Investing For Women

I am so excited to welcome back to the show, my friend, Jen Du Plessis. She is known as America’s lifestyle mastery mentor. People most attracted to her are high achieving professionals and entrepreneurs who are missing something. Through her mastermind, she helps people increase their awareness of what’s possible and to multiply the results in record time while having the courage to say yes to their personal lives.

She is the CEO and founder of numerous companies. She is from Northern Virginia and attended Colorado State University where she studied Architectural Design and Construction Engineering. She has been married to her high school sweetheart, has two children and three grandchildren. She has been in the financial services industry for many years and was listed in the Top 200 of Nationally Ranked Mortgage Originators and funded over $1 billion in mortgage loans. She is an eight-time #1 Amazon Best-selling Author, host of two top podcasts and a TV show host.

She is an expert in living a life of luxury, priority and time management, business relationships, business scaling, sales management and a certified mastermind facilitator. She is a charismatic speaker. She’s been sharing stages with icons such as Tony Robbins, Les Brown, Darren Hardy, Jeff Hoffman, Sharon Lechter, and many more. She believes that entrepreneurs can live their legacy while building it and it’s time to start living a life of luxury every single day.

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Jen, welcome back to the show.

It’s so painful to listen to all that. Every time I get introduced, it’s what happens. You have to do it.

It’s so funny because we were in the green room chatting away and I was like, “I’ve got your bio.” She’s like, “No, I’m updated.” It’s so funny because I updated mine too.

We grow. That’s what happens. You have to add stuff.

That’s what we are doing. That’s what we’re supposed to do. We’re supposed to grow. I love that. Thank you. The last time you came on the show, we talked about mortgages and some of that stuff. I want to talk about specifically the 30-year versus the 15-year. I get questions on this all the time about, “Which one should I invest in because the rate is lower? Which one should I get when I do my refinance or purchase because one has a lower rate, but the other one has a lower payment?” I know what I say and my audience knows what I say, but I want to hear what you have to say about that because you’ve been in the industry about that.

When I was originating, I got asked that question all the time and it was funny because people don’t believe that you can customize a 30 or 15-year fixed-rate loan or 20, or 25. I used to have clients call me and say, “What’s your rate,” which is the wrong question to ask. I would say, “What have you been quoted on a 30-year?” They would tell me. I’d say, “Did they tell you about the Super Saver 25?” They’re like, “No.” “All that is a 25-year term. There’s nothing different, but you are a customizing.”

Even the difference between a 30 and a 25, if you look at how the loan pays off, you look on a graph, it’ll pay off sooner, not as much as a 15. There would be a smaller line, but depending on the person’s life goals or the goals that they have, that can be a good strategy for you. If you’re going to be in the house for a shorter period of time because, at any point in time, you have a lesser balance if you want to accelerate that.

The answer to your question is it depends. I used to reply it depends and bring them and go, “What do you think the answer is?” Everybody goes, “It depends.” There is no one strategy that’s good and I don’t think anyone should put their mindset to, “I only do 30-year. I only do-15.” Your life events, the market and the opportunity costs are all going to play a role in the decision that you make on it.

We wanted more return on our money and better ways to invest.

Before we move deeper because I do want to find out about this customizing, I was a mortgage broker for years. I didn’t know about that. I’m excited to hear more about that. The other question is, “What is the rate?” You said, “That’s the wrong question to ask.” What’s the right question to ask?

It’s interesting because the rate is an important factor and this gets down to the customization. I’ll take you back to The Great Recession that we had in 2008. At that time what gave them the momentum for that was that we had all been waiting for some market churn. At the churn of the century, we were all into the dot-coms and leveraging dot-coms and stuff because we wanted more return on our money and we wanted better ways to invest.

What ended up happening is because of dot-com, our eyes were opened and aware of what was happening in investing and in the marketplace and as consumers, all of us, we were hating to open up our 401(k)s every quarter and we’re like, “It’s going to be painful.” I don’t want to go too detailed but into the trenches of the secondary market and everything, loans are sold in pools. On conforming conventional loans or whatever that may be in your area, the standard cookie-cutter conventional loan, if more people are buying that, the pool is larger. It’s like taking all your groceries in at one time. It’s less energy versus 1, 1, 1.

If you have this big pool and you’re selling the big pool and you called the lender and said, “I want 30 or 45 days, 60-day lock.” We’re committing to delivering however many loans are in that pool by that date, otherwise, there are penalties. There’s one loan. It’s going to be more expensive to deliver than if there are 1,000 loans in that. The lender banks on the fact that they’re going to have a plethora of loans in a bigger pool and therefore, the cost of delivery is going to be lower.

You have to know this in order to understand. Back then what happened was, we said, “If you’ve got this big pool of clear water. You can drop one little drop of Coca-Cola in there or coffee and it wouldn’t impact the whole thing.” We as consumers said, “Let’s mix up our investing or mutual funds and stuff like that. Let’s mix them up a little bit and let’s drop even more of this color in.” What ended up happening is it turned color. It got bad because now we had more non-performing and difficult loans into these pools that we thought we would get good returns. We were all living high on the hub because we were like, “Look at this,” as it came in.

What people have to understand is that the rate is very important. I get it. I had been selling a negatively amortizing loan way back in the ’80s and ’90s for nine years. Best performing loan in the marketplace and lowest turnover because no one would refinance because the rate was always better than the market but we got all these brokers who came in and said, “I want that product to. I need to have a mix.” The start rate was one in a quarter.

They didn’t tell you about all the implications that it’s negatively amortizing. The best rate in the world could be a financial disaster. You don’t want to shop for a rate. You want to shop for the terms that fit your financial situation and your life events at that particular moment. It isn’t that there’s a better question. It’s not the only question. A lot of people lead with that and it’s important, but every lender is within an eighth and a quarter, sometimes 3/8 to each other. There are more than 365 lenders in the world and you’re never going to find the best rate every day because it’s all shifting around.

If you call at noon and the market tanks and you’ll call someone at 4:00, then they’re going to have a higher rate than the one you talked to, but when you call them back, they’re going to have the higher rate and vice versa. It’s not about the rate. It’s about who can deliver what your financial goals are or who can help you dissect the DNA. This is why you want to customize it. When I say customizing a 30, 15, 20, 25-year loan, it’s, “Do you want to put 5%, 3% or 0%?” There are different rate options. There are seventeen different things that can affect the interest rate. That’s the customization of interest rate.

When you call and go, “What’s your rate?” “My rate anywhere from 2% to 8%. What’s your deal? What are your terms?” As we talked about on the last show, I do a lot of situational lending. It’s called non-conforming. People will say, “Yeah, but the rates are high.” It’s not that high anymore. There’s not a big spread, but I go, “I understand that the rate is high, however, your situation isn’t fitting into the conforming. You need to understand that.” It’s not about the rate. It’s about who can get you across the finish line with the best terms for your financial situation at that moment.

I was also in the mortgage industry when the NegAms were the biggest thing. There were a lot of people that got killed by the NegAm or they thought they got killed by the NegAm, but the problem is it was because they weren’t educated. I love that you were like, “You need to understand the terms that my rate was 1.25%, but at that rate, it’s negatively amortizing.” Those NegAms all had a rate where you were not negatively amortized. They pay that. There were four options.

When you’re looking at that, all of my clients that did the NegAm, equity were going crazy here in the Bay Area. A NegAm made sense, but then as the market turned, they started to pay so that now they were paying their minimum in order to not NegAm so that they could wait for the properties to recover because we also took a huge dive as far as equity. Instead of getting called on those loans, they adjusted their payment. What happened with a lot of people is they ended up getting called on those loans because they didn’t understand that they could make a different payment.

 

That’s a consumer issue because we lack the financial education to understand how those work, but it’s more in the hands of the lender. You go to Bob and wherever Bob works and he manages your assets. It’s Bob’s job to call you and say, “That stock we were in, it’s going down.” We all experience this. We don’t get a call from Bob. We find out when we get our statement. “Why didn’t you call me, Bob?” The same thing happens with your CPA. They go, “You owe $30,000 in taxes.” You’re like, “If you had told me at month six to make some adjustments, I would have made adjustments.” This is a huge failure in the financial services industry and it includes lenders.

I don’t care if you’re in a 30-year fixed rate or if you’re on a NegAm loan, we need to be able to manage and help guide clients. That’s what I coach on for loan officers is having those mortgages under management. I used to say, “If you’ve been orphaned by your last lender, I’d like to adopt your loan.” They all left at the end of 2008. It’s dropping off like flies and these people were crying. They had negative equity and not because of NegAms loans, but because of other things. They didn’t know who to turn to. I said, “I’ll adopt your mortgage. I’ll be the Bob who helps you go through this.”

We had emotional refinances on 30-year fixed-rate loans, which is interesting because you had said, that adjustment, you could make the minimum payment, the interest-only, the 30-year and the 15-year payment. The people go for the low payment. It’s like your credit cards. Why do you go for the low payment? You know if pay more, it’ll pay off. If you don’t, you’re meeting the interest. That’s it and not even all of it.

If you do the minimum payment, it’s NegAm.

It’s the same exact thing. The only difference is it’s not on an appreciating asset. Be thankful that you have that on your mortgage. We did an emotional refinance on a 30-year fixed because people would say, “I’m not going to make any payments.” I go, “Hold on.” I had a guy call me once and he said, “For the last several years, I’ve been making an extra $100 payment on my mortgage.” He was not my client until I had this phone call.

He said, “All that adds up $1,200 a year times seven years.” Wouldn’t the lender give me that credit and allow me not to make the payment now, since I lost my job? “No. If you had put that $100 in the bank, you could draw from it and make your payment while you’re looking for a job, then you could refinance, but now you haven’t made your payment and you don’t have a job. I can’t help you.”

These are the discussions. It was so funny because I had a little bottle of pink Pepto-Bismol, a box of tissues, a bottle of wine, and I said, “Pick your poison because this is going to be a painful conversation.” If I could do an emotional refinance to help them strategize on how they’re going to get out of it if the market isn’t going to give it to them, that’s huge. On 30 and 15-year mortgages, it doesn’t matter. The customization is, “Do you want to put 5% or 20%? Do you know when you put 20% down, your rates are higher than if you put 19.99% down?”

I did not know that.

People don’t see it. They’re all going to put 20% down. I don’t want that private mortgage insurance. That would give you a lower interest rate. You have to ask these questions. You have to figure them out. One of my specialties was investors. With investors, people would come to me and say, “I want a 30-year fixed because I want the lowest payment.” They want cashflow. The problem is as investors, we’re doing the same thing.

When we make that transition from an owner-occupied homeowner to an investor, you have to take the emotion out of it. It’s about the numbers. When we go to a 30-year fixed-rate loan, while you may have the cashflow, you’re also not paying down the balance on your loan. We’re only looking at cashflow. We’re going to buy for cashflow or appreciation. It amazes me. I would tell people, I’d run these numbers all the time, “What if we did a fifteen-year and an investment?”

People are like, “I got my cashflow.” I remember running one of these negative cashflows. It was $275 a month. He said, “That’s not why I’m buying the property.” I said, “You’re buying the property for appreciation, so we’re going to go for negative cashflow.” “I can’t pay $275 negative cashflow on an appreciating asset that gives me a tax deduction, but I can pay $700 on a car.” While you have a job, this is a strategy. This is why I say it’s all customized. If you didn’t have a job and you were solely relying on that income, then we would put you in a 30-year, so you have the cashflow.

It’s not about the rate; it’s about who can deliver what your financial goals are.

While you have a job and you can afford $275 negative cashflow, let’s accelerate the payoff and let’s use these first two properties as jumping things to your next property. In that same five-year timeframe that you would own the house, one, when you’ll sell it and have had cashflow. The other, you will sell it and have more equity to take those two properties and go buy that one property and go buy two. Now, we’ll put you in the 30-year. That’s called step investing and people don’t see that.

It’s how Brian and I were able to exponentially increase our portfolios because we would take one, hold it, sell it and buy two. The next one we would buy normal and the next one we would buy fifteen-year term, hold it, sell it and buy two more. That’s why for the investor side of things, there’s a great difference between a 30, 15 or a 20, whatever you know is comfortable, but we jump into these crazy 30-year terms because we think it’s the safety, but we’re not going to have the loan that long anyway.

That’s true because most of us refinance.

That’s a NegAm loan. Every time you refinance, you rob yourself of equity because you roll the closing costs in. It’s not about the rate. It’s about the strategy you need to be looking for and how long you think you’re going to have the house and the loan.

What you guys do is you get a house, you take a fifteen-year loan, pay it down, you sell it and then with that equity now or whatever you get from that, you use that and you buy two. The next one you buy on a fifteen and those two, you finance on a 30 because you’re going to hold them longer. You buy another on a 30.

The two houses that I bought, one will be on a 30 and one would be on a 15. That fifteen, I will sell in five years and buy two more.

To explain what happens when you’re amortizing loans on a 30-year, in the first ten years, it’s basically all interest. You get this great write-off but you’re not paying down your principal at all.

You’re at 21 when the streams cross.

Those first ten years are all interests. When you’re in a fifteen-year, you’re paying down more principle, which is why her equity is growing. You’re paying it down. Your equity is growing because the property or asset is appreciating. You’re also paying down the principal. When do those lines cross on a fifteen?

It’s at year nine.

It’s a lot sooner. That’s why she’s doing it that way. She’s got one that she’s holding, one that she’s paying down so that she’s building equity so that she can buy another piece of property.

Instead of trying to save 20% down every single time for investors. At the time, I was doing 10% down for investors because that’s what you could do. That was to my benefit too, but again, this is why your lender is so important to you and why, “What’s your rate,” doesn’t work. Whether it’s owner-occupied and an investor that doesn’t work. You have to talk about the strategy.

 

I call it the EHE strategy. “What’s your Entrance, Holding, and Exit strategy for everything?” We know as investors, we’re always going to have an entrance, holding and exit strategy, but we don’t think about that on owner-occupied. That’s important given what the long haul looks like. It’s not enough to find a good low rate.

You and I had talked about it too is the rate on a 15-year is lower than on a 30 because the investors can’t predict 30 years out. It might be a good loan. They don’t want those low-interest-rate loans on their books. Especially now, with inflation, everybody who refi’d in 2021, they don’t want those loans on their books. They want to get them out because they’re not making as much money as the inflation side. With new loans, they are, but you get a lower interest rate on a fifteen-year loan. More of your payment goes to the principal than to interest on a fifteen loan, so it pays off more. Less of the payment goes to interest on a 30-year loan.

If you’re going to commit to a fifteen-year loan, you’re committing to that loan. You and I talked about this in the green room. It’s better sometimes to get a 30-year loan and pay it as a fifteen anytime you want because no loans have prepayment penalties. You can pay at any time you want. Annually or monthly, it doesn’t matter. I would say, “Put your money someplace else and make lump-sum payments if that’s what you want,” because there’s no obligation to pay it.

What is your equity growing at? You can’t cut a piece of your drywall and walk into the bank and say, “I’d like some more of my equity back.” That doesn’t happen. I’d rather retain my equity in the form of cash in my bank account, but there are opportunity costs too. You’re paying more and accelerating the principal reduction for whatever reason you have. I would challenge people, “Why do you want to own your house free and clear? Is it because you don’t have any tax benefits?” Even in my house now, I have a little over $750,000 of equity sitting in my house and it’s killing me.

It’s because it’s dead money.

It’s sitting there and I hate it because we were going to move, but my husband had a medical thing and now we can’t. We got to sit here, but it drives me crazy. There’s no benefit whatsoever to having all that equity in there, but you could reduce the equity if the interest is lower. If you took a 30-year fixed rate and the interest is higher, you have a lesser payment, you could divert that money that you would have paid on the fifteen to something else.

You could divert it to paying off debt, non-preferred high-interest rate debt that’s not tax-deductible. You could divert it to funding your child’s student loans or education. You could do what you and I do. We get capital and then we seek around and try to find another place to invest our money. That’s opportunity costs. If you get a fifteen-year loan, because you want equity, you’re missing out on opportunities to be able to create other cashflows passive income.

Think about the Delta about that. What right now is the rate of a fifteen-year?

I don’t know what the rate of a fifteen-year because I’m not in the market anymore, but I’d say it’s probably 3.25% or something like that.

Your Delta is 3.25%. You’re paying 3.25% more so you have cash available to you so you can make another investment.

To get a 30% return.

As investors, we’re always going to have an entrance folding and exit strategy.

Even if you get an 8% return, is it worth it to you to use that cash to make 4%, 5%, 10%, 50%, 30% or whatever? It gives you the flexibility that we went through COVID. How many people were like, “I can’t afford my mortgage.” If you’re on a fifteen-year and your payment is higher, you have to pay that higher payment. If you’ve got a lower payment because you’ve got a 30-year, you only pay that 30-year payment. When times are flushed, you’re welcome to pay down that 30-year if you want to.

You can put it in a bank or invest it over.

That’s why I recommend always to get a 30-year because it gives you so much more cash flexibility because I’ve seen 2001, 2008, 2019, 2020 and 2021 come. We’ve suffered financially and it’s a bit of a security blanket not for rate, but for payment.

It’s always about the payment. What we were talking about in the green room is there are life events that happen to all of us. During COVID, people got divorced, passed away, or got married. There are life events that depict whether you should be doing a 30 or 15. Whether you should pay points or not. whether you should roll in your closing costs or not or you should escrow or not. All of those seventeen different factors have to be looked at every single time and not because they need to be looked at to get you the lowest rate. You want the lowest rate, I get that. I want it to, but the lowest rate for your terms for the things that you want.

For example, people don’t realize that it costs extra money at closing to waive escrows. People don’t understand that. The reason you don’t understand that is because if you don’t pay your taxes on your own, you don’t pay them. They become the first position and the lender could lose the entire principal balance of your mortgage if you don’t pay your taxes and it gets turned over to someone like me who buys tax liens. I’ll buy a tax lien for $5,000 and I get a $300,000, $400,000 house free and clear because the first mortgage is beneath that. It’s more of a risk on the lender side that you’re going to be capable of striking that check in a timely fashion to not hurt their equity or collateral.

That’s why they want to EMP out.

All of this depicts what your circumstances are. Don’t lead with rate, get the whole gamut.

Go to somebody who understands. This is why we talk about this all the time. When you’re going to a lender, you want someone who understands investing because the conversation is different for investing than it is for a primary residence. It’s significantly different because the package is different. The goals are different. How long are you going to hold that loan is different? There are a lot of different things. Those are the basic things and things we don’t even know to ask or we do know to ask, but there’s a lot that we don’t know what to ask. Your lender will help you through that.

Even if it’s owner-occupied, you need to be taking this strategy and this outlook. You don’t want order takers. You don’t want to call Quicken Loans because they’re not going to do anything to help you. They’re order takers and are there to give you the lowest rate. If you go on Quicken or Rocket Pro go and immediately, they’re on you like, “Do you want to talk?”

You see a great rate. If you scroll all the way down, you’ll find out that you have to put 25% down and it costs three points to get it. If you have a $100,000 loan, that’s $3,000. If you have a $300,000 loan, that’s $9,000 to buy that rate, which may be your strategy, but most people don’t have 25% down and three points on an owner-occupied.

Could you tell me a little bit about doing a 20-year or 25-year loan? I know that they’re out there. I don’t know how to get them and I was a mortgage broker.

 

All you have to do is ask because there’s pricing available for 20, 25, and 30-year loans. Fifteen and below is going to be one price or the same price. Anything above that is going to fit into the category of a 30-year fixed-rate loan and there might be a slight advantage. It’s a little yin and yang that goes on because like a 30-year with 20% down would be X price. A 25 would probably be the same price, but if you put another five down, you might get a better price and then it depends on the day or market.

All of this adjust moment by moment, all day long as stocks are trading. This is exactly what is happening with the market. If you have a phone call with someone at 10:00 in the morning, that’s yesterday’s rate. If you have a call with someone at 11:30 or 12:00, that’s this day’s rates as they were released and good luck the rest of the day because they could be adjusting all day long. This is why you’re never going to find the best rate in the market. You’re going to have to find what works for you.

We were talking about you sell the loans in buckets to Fannie and Freddie or whatever. When you’re trying to get a specialized or customized loan at 25 or 20 years, doesn’t that take it out of the bucket?

No, it’s still sold in the 30-year pool. It’s still the same strategy.

It’s amortized differently.

What makes it different is that it’s the loan amounts. It is not the points you paid or whatever. They’re sold based on the loan amounts. This is interesting because it’s a question that I ask the loan officers and realtors all the time and you wouldn’t believe how many can’t answer the question. This is scary. As consumers, you want to be able to answer it. “Why is the interest rate higher on a $1 million loan than it is on a $400,000 loan?” What do you think the answer is? We’ll put you on the spot. Not because you were a lender or anything. This is what consumers do is risk and it’s not. That is not the right answer.

For example, a $400,000 loan has someone who’s putting 5% down is squeaking by with credit, is squeaking by with qualifying ratios. It is getting a gift. He probably has some job changing and hopping. He has high debt. We’re using all their money. Maybe they’re even getting a 401(k) or all of that. That’s less risky than someone who puts down 35% on a $1.2 million home.

My husband and I have this conversation all the time. We can afford a $1 million loan. Why are we getting hassled when someone who can’t afford the $200,000 loan is not? I get what you’re talking about.

The reason is the pool. There are fewer people buying that high of things. The pool is always smaller. The price across the sale of the pool is higher. It’s not a risk at all.

That’s so fascinating. Thank you for that. I love that. Now, we know.

That’s why when you go to a bank and they have a portfolio loan, they have something that says, “We can do something unique and different as a portfolio.” It’s a higher price because it’s not even sold in a pool. They’re taking on the risk on its whole. They’re shelving the loan and they’re not selling it. That’s why when we get to situational lending, this non-QM or non-qualified mortgage, non-standard Fannie, Freddie, FHA and VA. We start getting into non-QM, the rates are a little bit higher because you’re asking them to take on a riskier situation.

Every day is a choice. You can choose to be successful.

A situation where they can’t sell it in the secondary market or now, we can. We can sell in the secondary market, but again, the pools are smaller because fewer people are coming into that. I call it situational lending, which is the name of my mortgage company, Situational Lending because your situation depicts what the price is.

Tell everybody how they can reach you.

The best way is you can go to JenDuPlessis.com and send me a message or something and I’ll be happy to respond to you. You can text Make Your Mark to 26786 so you can get some preliminary information about what I’m doing. I hold very high-end masterminds that are for people who are highly successful and are missing something in their lives. What I’m here to do is guide you in that facet, mortgages and on business. I don’t coach anybody. It’s a mastermind. We have some personal breakthroughs too. It includes a high-end retreat. I believe that mindset plus mechanics creates momentum. You can’t have one and create momentum. You have to have both.

You can text 26786. The thing you’re going to text is Make Your Mark. It will go through even though it’s not a normal phone number. It’s all set up that way. What are we going to be talking about in EXTRA? We’re going to be talking about priority management. This is one of the things that Jen does better than anybody else. She runs all these companies.

She still has time for vacations, spend time with her husband and her grandkids, and all the things that she loves to do, but she also runs all these businesses. She does a good job of priority management. I want her to share some of her magic and wisdom around that. We’re going to do that in EXTRA, so stay tuned for that. Before we move into EXTRA, here are three rapid-fire questions. Tell us one super tip on getting started investing in real estate.

Get educated. Go talk to several lenders and find out who has, what specialty, where, everybody has a niche and expertise. Make sure that you go to the person who has. Don’t go to your buddy, grandma, sister or grandchild. Go and talk about what their expertise is in any type of investing.

What is one strategy for being a successful real estate investor?

Sometimes we assume things. We get contracts in and we go, “I’ve seen that contract.” Don’t. Look deep into those. I would say that strategy is to get yourself comfortable with looking at contracts and looking at terms, etc. Ask some title companies or escrow companies around you if you could look at investor contracts. They can mark out all the people and all that good stuff just so you get a feel of what it looks like because that first one that comes in is scary.

You feel so much more confident making offers and doing deals if you’ve got some depth of knowledge inside of you that you can count on. It gives you more confidence.

Even with me when dealing with our Buyers Club, the first time I got the contract in I was like, “This is foreign to me.” I’m not going to make assumptions that they know what they’re doing so I’m going to challenge everything on there to make sure that I clearly understand.

 

What would you say is one daily practice that you do that contributes to your personal success?

For lack of a better word, get your head on straight. Get a checkup from the neck up every morning. Meditation, prayer and all those good habits that you have in the morning. Every day is a choice. You can choose to be successful or you can choose to let the day slip by. I choose to be successful and the only way to do that is to reformat myself every day. Recalibrate every single day.

This has been phenomenal. Thank you so much for everything you’ve offered on the show, Jen.

Thank you so much. I sure appreciate it. I always love talking to you, Moneeka.

Thank you for joining Jen and I for this portion of the show. We do have more so stay tuned for EXTRA. We’re going to be talking about priority management. If you would like to subscribe to EXTRA, go to RealEstateInvestingForWomenEXTRA.com. The first seven days are for free. Go check it out. For those of you that are leaving Jen and I now, thank you so much for joining us. I appreciate you. I look forward to seeing you next time and until then remember, goals without action are dreams. Get out there, take action and create a life your heart deeply desires.

 

About Jen Du Plessis

Jen Du Plessis, America’s Mortgage Mastery Mentor helps mortgage loan officers and real estate agents who are overwhelmed, stressed out, and sabotaging their personal lives for the sake of their business to multiply results in record time and have the courage to say yes to their personal lives (which sometimes means saying no to clients).

During fifteen of her 37-year career in the mortgage industry, Jen has been listed in the top 1% of loan officers nationwide; spending 3 years in the top 200 of nationally ranked originators, and has funded over $1 Billion in mortgage loans. She is recognized as an Influencer in her industry as the best-selling author of LAUNCH-How to Take Your Business to New Heights, top podcast host of Mortgage Lending Mastery, and highly sought out and charismatic speaker; speaking on stages with such icons as Darren Hardy, Tony Robbins, and Les Brown.

Today Jen is passionate about empowering mortgage loan officers to achieve professional and personal breakthroughs so that they stop the daily chaos by identifying their priorities to gain calm to take back control of their business and life. She is guiding her coaching students to attract clients rather than chasing them. And lastly, she is devoted to helping each student’s business grow exponentially rather than hitting the reset button to have the same results year-after-year.

She has been seen and heard on Good Morning America, Sirius/XM Radio, Voice America, and Mortgage News Network.  Jen has been featured in publications such as The Wall Street Journal and The Washington Post; is a regular contributor to Mortgage Executive Magazine and Mortgage Women Magazine and has been recognized with the Women with Vision Award as one of the Top Women in the Mortgage Industry.

 

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To listen to the EXTRA portion of this show go to RealEstateInvestingForWomenExtra.com

To see this program in video:

Search on Roku for Real Estate Investing 4 Women or go to this link: https://blissfulinvestor.com/biroku

On YouTube go to Real Estate Investing for Women

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Smart Tax Strategies for Real Estate Investors with Amanda Han – Real Estate Women

 

How can you recharge your wealth and scale your real estate business? Today’s guest has the smart tax strategies for you! Amanda Han has all the background she needs for real estate. Even though her family is pursuing businesses in the real estate industry, she decided to take the traditional route of studying, graduating, and landing a job. She became a CPA which helped her more in the real estate business, where she could focus on expenses and taxes. That knowledge led to successful real estate investments. In this episode, Amanda details what you could write off, especially for your taxes, to gain more savings instead of expenses.

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Watch the episode here

 

Listen to the podcast here

 

Smart Tax Strategies for Real Estate Investors with Amanda Han – Real Estate Women

Real Estate Investing For Women

I am excited to welcome back to the show Amanda Han. Both a tax strategist and real estate investor, she helps investors with strategies designed to supercharge their wealth-building using entity structuring, self-directed IRA investing, and income offset opportunities to keep more of what they make. Amanda has a highly rated book, Tax Strategies For The Savvy Real Estate Investor, on Amazon and has been featured in prominent publications including Money Magazine, Talks at Google, CNBC’s Smart Money Talk Radio, as well as BiggerPockets podcast. Amanda, how are you?

I’m doing good. I’m excited to be back.

Thank you so much for offering to be on the show. You are always full of amazing information. I appreciate your time.

I’m excited to be back and talk about everything taxes.

You have been on the show once before, so everybody knows you. Why don’t you give us a high level of how you got into this story?

I am the third generation of real estate investors in my family. My grandparents first immigrated to the USA and invested in real estate. My parents also invested in real estate, although not full-time. My husband and I decided to invest in real estate after several years of working in a large firm in public accounting, where we helped real estate investors with their taxes. It wasn’t until I read Robert Kiyosaki’s Rich Dad Poor Dad book that I realized that’s something that I should do. My job at the time was to help real estate investors save taxes. For some reason, it never dawned on me that that was something I should be doing for myself until I read Robert’s book. That’s how we got started.

It’s fascinating because I’m a legacy investor also. My parents were immigrants and started investing in real estate. Think about that. All these immigrants are coming to the United States, and they have heard from someone else in the world that the way to build wealth in the United States is by real estate. They usually don’t have those opportunities in their own countries. They come here, buy real estate, build wealth, and do amazing things for their families, yet here in America, we’re sometimes a little bit complacent simply because we don’t know how valuable the opportunities are. We take them for granted.

It sounds like Amanda had the same experience as me like, “That was fine for you, but I don’t necessarily want to do that.” We don’t get the value of the opportunities that we have here. My dad was like, “You should get into real estate not as an agent but as an investor.” I was like, “I don’t want to do that. It’s too stressful.” It was funny that you had to get advice outside of your family.

In Robert’s book, he talks about rich dad and poor dad. Those are two different people for him. For me, it was the same because my parents and grandparents, although they did real estate, they always taught me the traditional route, which is, “Get good grades, get to a good college, get a good job.” When I got into one of the largest public accounting firms, it was like, “That’s it. I made it. I have already attained my life’s goal.” They didn’t talk to me or push me in the direction of being a real estate investor. I had to get that from someone else telling me that and then, “Maybe that’s what I should do.”

Investors are always really good about writing off things that are specific to their properties.

I had both from my parents too. They were like, “You have to go to school, get good grades, go to a good university, get a good job.” They also said, “You should be investing in real estate.” My dad had me managing some of his properties, which stressed me out so much as a kid. I was like, “I don’t want to be doing all this stuff,” but he was trying to help. We have that experience as immigrants. For our ladies who are reading this, know that these opportunities are amazing here in America. We don’t get those in other countries. I’m proud of you for tuning in to this show, but we need to take action. Taking advantage of those opportunities is the only thing that’s going to grow your life. I love that story.

When I was growing up, we lived close to my grandparents, and it was the same feeling as real estate. It wasn’t glorious to be a real estate investor. It was more of a hassle because we did our own work during tenant turnovers. I remember I was really young when my grandparents would take my cousin and me out to the properties. When people moved out, we would be there cleaning up and painting. It’s not like, “This is such a cool thing.” It’s something we didn’t want to do, but it’s different for investors now, you don’t have to be doing that stuff.

It’s not glamorous work. People meet me and they are like, “How did you do what you do?” They all think it’s glamorous. This is not glamorous. First of all, it’s the most intuitive thing on the planet. Buying a home and either living in it or letting someone else live in it is the most intuitive business. We all need housing. I do still manage my property. I’m not into painting but I’m hiring somebody. I’m still vetting out my people. It’s not glamorous. What is glamorous is the levels of money that I made and the wealth that I built working for a few hours. Even though I might be there 4, 5 or 10 hours during a turnover, what do I get for that?

I love this conversation because this is important for us to point out. Every job has its glamour factor and the grunge work that has to happen as a tax consultant. Amanda is this beautiful woman with a beautiful voice. She’s running this company. She’s wealthy. She invests in real estate. She’s very successful. There’s a level of glamour around that. She’s still the one that’s punching numbers. That is the non-glamorous piece. Everything that we do in the world is going to have like, “This is awesome,” and “This is the thing that we have to do to make it happen.” Keep that in mind as you think about all these things you would have to do in real estate. First of all, you don’t have to do all those things but no matter what you’re doing, you have to do both sides.

 

You still wash dishes together, clean the floors, and wipe your babies’ butt when they poop. You do all of those things. There’s the beauty, glamor, romance, and the living life piece. That’s true for everything that we do. Sorry to belabor this but I feel like some ladies need to know it. They want to do the things that are cool but they don’t understand. Not just ladies, this is for everybody. As you are learning something new, you have to do those other things to make the glamorous end result you are looking for. It doesn’t have to be painful, unhappy or any of that, but it’s part of the course. You’re going to need to do things that don’t feel glamorous.

As it relates to the tax side of things, not for me as a CPA but just for investors, a lot of times, people who either hear me speak on a platform like this or read one of our books will say, “I love hearing the stories about how people saved $10,000 or $50,000 in taxes. I want to do that. Does it happen automatically? I read the book, and now I’m going to expect that to happen.” It doesn’t happen that way. The story is the glamour of this is what happened, but what you’re not seeing or paying attention to is what did that investor do during the year so that by next April, when they’re meeting with their tax person, they have everything in place so they can get the tax savings.

Let’s talk about investing and taxes. What can you write off as an investor? Give us some ideas.

When it comes to write-offs, the IRS sees investors as business owners. By business owners, I don’t mean you have to go out and get an LLC, a corporation or anything like that. I mean that you are in the business of investing in real estate. Whether you are a landlord who’s getting rental income, you are in the real estate business. If you are a flipper, wholesaler or even a realtor and you are making money in those activities, you are in the real estate business. You hear people talk about things when they say, “Business owners get all these incentives, loopholes and benefits,” but the vast majority of those write-offs are also available to us as real estate investors because we are business owners. Investors are always good about writing off things that are specific to their properties.

Let’s say you’re a landlord, most people don’t forget to write off their mortgage interest. There’s a lot of money they are paying into the bank, so they are not going to forget that or property taxes you paid to the county, maybe even paying your property manager to manage properties or repairs. People are usually pretty good about those expenses and not missing out on them. What I find that a lot of people miss out on is what we consider overhead expenses. These are expenses you are spending for your real estate business that are not necessarily specific to a property.

Maybe you bought a membership to be in a club or a group like a women’s group or something, or a tax book to learn how to invest in real estate and save taxes. You are driving your car for real estate purposes. Most of us probably use our cell phones, laptops, and all that for real estate. Even though these are things that are not specific to any property, they are for your real estate business as a whole. It’s important to make sure that as an investor, we are tracking and writing off those expenses. We’re all in agreement that tax rates are not going down. If anything, they will stay the same but possibly go up.

As those tax rates go up and you have $100 worth of expenses and save $20 or $30 in taxes, that’s pretty significant. $100 might not seem like a lot but if you are tracking all those throughout the year, then you are talking maybe a couple of thousand dollars or tens of thousands of dollars. That’s when the savings could be significant that you might save enough money for a down payment on another rental property next year.

I love that last piece where you said, “What if instead of paying taxes, we were buying another rental property?” Understand that Amanda and I are not advocating and doing anything that is not legal, but these are things that are legally accessible by us if we pay attention and prep a little bit. It’s never been positioned that way where you could take the money you are not paying in taxes, get a refund or however that shows up, and then turn it into another rental property and opportunity for cashflow.

Let’s say it was $10,000 we paid in taxes. We know what the return on investment is. It is $0.

We got nothing. We get the stuff that the government gives us but we don’t have it personally.

It’s not a surprise that, as real estate investors, we can save on taxes.

If you instead had $10,000 more to invest as a down payment, that could be $50,000 worth of real estate. That could be small property or at least a part of a property. If you do that year after year, they could supercharge how quickly we build our portfolio. A lot of real estate investors I meet oftentimes will say, “I want to get into real estate but I don’t have money to invest. How do we get bank financing? How do I get investors’ money? How do I partner with other people?” Although those are all great ideas and things we need to use as an investor, why not look in our own pockets first? It’s like, “This is the money I’m making. If I can keep more of my earnings, then I already have more money to invest. I don’t have to worry so much as to where am I going to find the money for my next deal.”

Especially for a down payment, you can use that money to invest in another deal. You could also use that money to do a partial or a down payment for several properties or one property in a nicer area. You can make different choices about the business you want to run.

People don’t look at it that way. They are like, “I don’t want to pay the IRS. I’m going to save money.” I have met people who are like, “I got a big refund, now I’m going to go on vacation with that. I’m going to buy something personal.” That’s not the goal. If you save the money and use it to invest in real estate, that new property will give you more write-offs for next year. It’s a compounding effect of saving and investing more so that you can save more and invest more.

Along the way, you are going to be enjoying that cashflow which would be supplementing, and you can partially reinvest that into your business. You deserved that vacation but it is a mindset switch. Amanda and I had the pleasure of meeting in San Diego. We had a boss lady weekend. I met with all these amazing women that are investors in real estate or some iteration. They do something around the real estate investor thing. It was funny because we all carried nice purses. I’m not a purse person, but we had our nice clothes or purses.

We all drive nice cars and have nice homes. Amanda talked about the tents that her kids built right in their cute bedrooms. We have got nice lives. We had met another woman and she was a friend of ours. She had bought a $50,000 ring. That’s certainly her right. If that’s what lights her up and she loves that, that’s awesome. All of us had the reaction of, “That’s another house.”

I love jewelry. My husband bought me another $6,000 ring for our 25th wedding anniversary, but that’s a house. It is a mindset of you should enjoy your life and have things that you love and make you happy, but understand that it’s balancing between our businesses and those things that we think are going to make us happy. We do need our vacations. I’m a choose-bliss person. A big part of bliss is about loving the journey and vacation is a big piece of that, but you should balance that. Use some of that money for investing. If it’s tax-saving money, that is business money. Business money should be reinvested. You can decide.

 

It’s making that conscious decision and being honest with yourself in terms of what you are doing. Sometimes I’ll meet people who say, “I want to get into real estate investing. I hear all these great things about cashflow, appreciation, and tax savings.” By the next time I see them, they are like, “I was looking at real estate, and then I bought this nice big home for myself. I decide to upgrade. This is like an investment.” It’s being honest with yourself in that, “I didn’t end up buying an investment property. I ended up buying something nice for myself and my family.”

There’s nothing wrong with that, but understanding that the nice large home that you bought is not giving you cashflow. It’s not giving you an additional tax write-off because it’s not a business. It is by understanding the differences between every financial decision you are making, whether that’s more for personal enjoyment or true investment and growing your portfolio.

Do you need an LLC in order to save on taxes?

It piggybacks off of your first question, “What can you write off?” A lot of investors are under the assumption that in order to write-off anything, you have to have an LLC or you have to pay for it from your LLC. That’s not true at all. What I was saying is as real estate investors, we are business owners in the eyes of the IRS. The definition of business is not LLC, S corp, C corp or any of that. It’s whether you are investing in real estate. We have a lot of investors who are landlords who don’t have LLCs. For one reason or another, they choose the whole rentals in their own name, in the trust or something like that.

They can still write off all those same expenses we talked about, a car, home office, cellphone and travel. All those things are tax-deductible. It’s a common myth that people feel like, “I don’t have an LLC yet. Let me go ahead and form an LLC so I can take these deductions,” when more than 90% of the time, those normal expenses can be deducted regardless of whether you have an LLC or if you operate in your personal name. When it comes to taxes, we break it out into two different groups like if you have rental income. That will be rental from single-family, multifamily, commercial, all types of rental income versus the other bucket, which is more active income. Active income will be if you are a realtor, a wholesaler or a fix and flipper.

The reason we have those two different buckets is because taxes are treated differently for those two different types of income. For most landlords with rental income, it doesn’t matter from the tax side whether you have an LLC or not because you don’t pay self-employment taxes. You can write off the same things. For landlords, the reasons for having an LLC would not be for tax. It’s mostly for asset protection purposes. Your attorney might say, “You don’t want to lose all your assets because one of your tenants sue. Let’s put that in an LLC or a partnership to get the liability protection.”

On the other hand, for active income flipping wholesaling, you also have to pay self-employment taxes. Not only do you pay federal and state income taxes, but you are also paying into Social Security and Medicare. That’s another up to 15% tax. That’s where having an LLC or S corporation could help minimize those. It’s difficult to say if you should have an LLC or not, and that investment number two should have one. That’s all based on your unique situation. How much money do you make in real estate? How much other income do you have from a job or a business? That’s something that you want to plan out with your tax person.

For someone who has active income, let’s say you have $100,000 of taxable profit from flipping, wholesaling or as a realtor, if you run it through an S corporation or something similar, you might save up to $7,000 in taxes with the structuring. That’s where it typically makes sense to have an entity. In either situation, you can always write off the same things regardless of whether you have an entity or not.

I loved the clarity on the two different ways that work and how the IRS looks at that. What would you say are the biggest mistakes that real estate investors make when it comes to taxes?

There were quite a few of them. We are talking about entity structuring. There are two big mistakes on the entity structuring side. One is using entity structuring almost as an excuse to delay investing. This is more for newer investors because I do hear this quite a bit like, “I’m going to invest in something,” and then a couple of months later, they will tell me, “I have not invested yet. I could not decide on a name for my LLC.” That’s an excuse to say, “I didn’t do it because I don’t have an LLC yet.” One way to overcome that is to understand you don’t have to have an LLC to buy rental properties. Even if you bought a property now, you can always move the title into an LLC after the fact. We don’t have to worry about that. For a lot of the women investors, it is more of we have to find that perfect name like Blissful Real Estate, LLC.

People get caught up in all that instead of focusing on taking action and doing real estate. The other most common mistake on the entity side is forming the wrong type of entity. That’s one of those things that if you form the wrong entity to hold your real estate and don’t find out until way later that you were in the wrong entity, it becomes very costly to unwind that.

We have seen clients who had owned real estate inside of S corporations for 5 to 10 years. It’s very difficult for them to unwind it because now the property has appreciated. The only way to unwind it is to pay a lot of tax to get it out of the entity’s name into the correct entity. There’s a fine line between not waiting too long to form it, but then also forming it correctly from the start, so you don’t have such costly ways to unwind that structure.

That to me seems a little scary when you think about, “I have to unwind if I screw up.”

Sometimes, you can’t do it. There’s no real way to do it where you don’t have to have taxes. Entity formation is not like a do-it-yourself like, “I was on this podcast. I read this book,” and then you go ahead and do it. It’s something that you want to sit down with your tax advisor and talk through. Some of the questions to answer are not just, where am I buying a property? It’s also, how much is the equity in my property? What’s my exit strategy. Am I just selling it like flipping? Am I going to hold it for 5 or 10 years? What other income am I getting from this property? Is it a long-term rental or short-term? If it’s a larger property, am I also going to have vending machines or a washer and dryer? All these things help determine what type of entity you are going to hold your real estate in. By having that conversation upfront, it helps them minimize the risk of getting into the wrong type of legal entity, to begin with.

The other question we were going to talk about was can we buy rental properties in retirement? The answer is yes. Ladies, you have heard other people talking about self-directed and stuff like that. One of the things that I want to talk to Amanda about is, what are the logistics around that? We got a pretty good high level on the fact that it’s possible and what that looks like, but I asked Amanda to do a breakdown on what that looks like. Amanda, let’s do that in EXTRA.

I have a little different spin for the custodians when they talk about what you can and cannot do. My job is on the step before that, where the investors are figuring out, what type of account is best for you? How do we use that and invest in real estate, and how do we save taxes with the money going in? There are lots to share on that part.

We will do that on EXTRA. We’ll be talking about investing in real estate through retirement funds and from a tax perspective. Before we go into our three rapid-fire questions, let’s talk a little bit about some of the things that you are offering my audience. You do have a free eBook.

We have an eBook. It’s called Tax Strategies For Real Estate Investors. You can find it on our website at KeyStoneCPA.com. It goes a little bit more in-depth in terms of a lot of the things we talked about. We talked about maximizing write-offs and how to take a tax deduction by shifting income to your kids. If you have kids or elderly parents helping you in your business, how do you do that? We talked about entity structuring. In our book, we break down some of the questions and what you should be considering before you meet with your tax person, how to use legal entity structuring correctly, and a lot more stuff. Check it out on our website.

You also have a mini-course for real estate investors specifically. Could you tell us a little bit about that?

It’s an on-demand course for beginner investors. It’s delivered in the course of four days. You can get the content when you have time. We talked about the power of tax savings like how you use tax savings to supercharge your wealth building. We go over the top ten most common tax strategies for all types of real estate investors. We talk about the six-step process like, how do you have an effective tax plan?

Know the main things that you need from the property. If they meet your criteria, then go after it.

It’s not a surprise that as real estate investors, we can save on taxes, but the question is always, “How? What are the things I need to do so that I’m ready for next April?” We also have a risk assessment as part of our on-demand course. Those are a set of questions to help you try to figure out if you are overpaying in taxes. That’s a question we get a lot, “How do I know? Do you think I’m overpaying in taxes?” I don’t know because I don’t know the answers to some of these questions but hopefully, you will, by taking this assessment yourself.

All of that goodness is only $39. Go get that. It’s good stuff. You have to go to BlissfulInvestor.com/AmandaTax. I know that will be helpful. Amanda covers a lot of very good stuff for real estate investors, specifically because she is an investor herself, so she knows what we go through. Amanda, are you ready for three rapid-fire questions?

I think so.

Tell us one super tip on getting started investing in real estate.

I’m a numbers person. The way I look at it is to look at the numbers. If the numbers make sense, then pull the trigger. Don’t overthink it, don’t delay and don’t overanalyze it. Know the main things that you need from the property. If they meet my criteria, then go after it.

What is one strategy for being successful as a real estate investor?

We work with new and advanced investors. One thing that I see across some of my more advanced real estate investor clients is they treat real estate investing as a business. I don’t mean LLCs or set up an LLC. They run it like a business in terms of they have the right teams in place to do the things that they’re not good at. If they are not a good bookkeeper, they have a bookkeeper in place. If they are not good at managing real estate, they have property managers in place. It’s by running that as a business and creating systems around everything you do as you scale your real estate. You don’t have to recreate the wheel every time. Those are the things I see with most successful real estate investors.

 

I have frequently said that systems equal bliss because they give you freedom. A big piece of being blissful is having the freedom to choose what you do with your time. Systems and teams are key to that. Tell us the personal practice that you do daily that contributes to your success.

It’s not a system. It’s more of a habit. My habit is I don’t have a to-do list. My thing is if I have something that I know I need to do that is important to me, I add it to my calendar directly so that time is blocked off. When the time comes, that’s when I do it. I try to organize and prioritize the things I have to do, but it’s not in the list format. It’s more like, “Get it on the calendar so that it’s done.” I’m a big proponent of that because before, I had a to-do list. They kept getting longer. It’s more to-dos and more to-dos until you don’t have time to look at the to-do list anymore.

Nobody has ever said it that way before. We thank you so much for all that you have offered on this portion of the show. It was awesome.

I’m excited to be here. I’m happy to come back anytime.

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Ladies, we do have more on EXTRA. We are going to be talking from a tax perspective all about investing in real estate through your retirement funds. That’s going to be an interesting topic. If you are subscribed to EXTRA, stay tuned. If you are not but would like to be, this may be the time to do it. Go to RealEstateInvestingForWomenExtra.com, and you will get the first seven days for free. Thank you so much for joining Amanda and me for this portion of the show. I look forward to seeing you next time. Remember, goals without action are just dreams. Get out there, take action and create the life your heart deeply desires. I’ll see you soon.

 

Important Links

• Tax Strategies For The Savvy Real Estate Investor
• Tax Saving Strategies for Real Estate Investors with Amanda Han – Past Episode
• Rich Dad Poor Dad
• KeyStoneCPA.com
• RealEstateInvestingForWomenExtra.com
• [email protected]
• BlissfulInvestor.com/AmandaTax

 

About Amanda Han

Amanda received her accounting degree from UNLV. As a CPA and real estate investor, Amanda has helped countless investors across the nation to supercharge their wealth building through proactive tax saving with her top-selling Amazon books as well as her teachings on prominent publications such as Money Magazine, Google Talks, and CNBC.

Amanda brings over two decades of tax planning and compliance experience from working in Big 4 Public Accounting as well as public and private companies. In her spare time, Amanda enjoys canvas painting, biking by the beach, and seeking out the best hole-in-the-wall dining options where ever she visits.

 

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