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Creating Passive Income Through Turnkey Real Estate With Leah Collich 

Passive Income Through Turnkey  

 

Real estate has been proven to be one of the best long-term investments and best ways to increase passive income to live your dream life. Moneeka Sawyer interviews real estate investor and investment counselor Leah Collich to ask about her journey of becoming a real estate investor and eventually being Real Wealth Network‘s investment counselor. She explains how turnkey property investment works and how she and her husband ended up doing it. So if you want to venture into this type of real estate investing, listen to the conversation and be more familiar with it.

Listen to the podcast here:

Creating Passive Income Through Turnkey Real Estate With Leah Collich

Real Estate Investing For Women

I am excited to welcome to the show Leah Collich. She is a native Texan and is a spouse of an active-duty Army officer. The army has afforded them the opportunity to see the world and live in Asia, Europe, South America and all across the United States. Their life abroad led them to realize a passion for travel and adventure. They quickly discovered that real estate investing was one of the best ways to boost their passive income so they could continue this lifestyle after the military. Her professional background is in communications and after working as a government consultant for many years, she now works full-time in real estate, passively managing her portfolio of rentals and as an Investment Counselor for Real Wealth Network with Kathy Fettke. Every week, she speaks with dozens of investors about how they can make their real estate investment goals a reality through the purchase of turnkey investments. Leah, welcome to the show.

Moneeka, thanks so much for having me. I’m excited to be here.

I’m excited too. We’ve loved hearing from Kathy in the past. I wanted to introduce my ladies to the team. Ladies, Leah is one of the counselors for Real Wealth Network, which many of you have already checked out. Some of you have already talked to Leah and because of the synergy with the two companies, Leah’s now our designated blissful coach. I wanted to introduce you ladies to her and we’ll talk a little bit more about that later but in the meantime, Leah, could you tell us about your real estate story?

I’m pleased with this collaboration and being able to connect with you and your readers. I think a lot of understanding my background and where I come from feeds into the mission of real wealth. I’d love to share that with you. I’m a regular person. I know filling in some of the information and preparation for this show, we call it expert session. I found myself going, “I get that a lot even on calls. When I talk to investors, people assume that I’m some expert or that I know everything there is to know about real estate.” I always tell them, “I’m a regular person. The only difference between me and you is time and action at this point.” My story starts off as a lot of beginner investors.

I happened into real estate on accident. In 2010 during the middle of the last housing recession, I had just gotten married. My husband was starting his career in the military. We were stationed in a small tiny town in Southern Alabama. We were smart enough to do some basic math when we were house hunting. We found this brand new construction townhome and we looked at the numbers and said, “We can rent this townhome for $950 a month or we can buy it for $750 a month.” My dad had had a rental property growing up. There was nobody in my corner telling me like, “Don’t do that. Bad idea.” The math made sense. We bought this brand new construction townhome knowing we would be there short-term, knowing that we would keep it after we left, turned it into a rental and it would make us some money.

That’s what we did. This was in 2010 when there was a home buyer credit. You got a check, we got a $15,000 or $10,000 home buyers credit to buy this cashflowing investment. Fast forward, maybe seven years or so, we were subscribing to the traditional way of preparing for retirement. We were doing everything right. We were saving, not maxing out credit cards, opening up 401(k) accounts, IRAs and maxing them out every year, trying to be as diligent as possible to be sure that we were prepared for retirement. It was when my husband got close to his halfway point in his military career that we were like, “In another 10 to 12 years, we could maybe retire, you’d get a pension.” We looked at these retirement accounts and we went, “We can’t touch that money until we’re 59.5. That doesn’t help us retire early.”

We started looking for opportunities in our life of, “Where can we create income that we can live on?” That rental had been cashflowing all along and rented nonstop. We got inspired to replicate that but be a little bit more intentional with it with the purchases ongoing. We flipped a house that we lived in, freed up a bunch of cash as we moved to Europe and said, “We’re going to get this cash reinvested and we’re going to focus on cashflowing markets.” We had a comfort level with that first market that we bought in. We went back to that same market. We bought a foreclosure from Europe, we’re overseeing a renovation. We’re on the phone with general contractors late at night. We’re trying to hustle and get this great deal going.

It was a lot of work but it was a success story. We were so pleased with ourselves but we did at the end in our reflection on how it went go, “What could we have done better in that scenario?” One, it wasn’t super passive. We were both working full-time. It was a lot to take on as an investment strategy. Two, we didn’t improve the value of that home enough to justify a cash-out refinance. We were a little bit under leveraged in this property. We started seeing that if we want to scale that extra cash that’s stuck in that asset, if we did that over and over again, we’re limiting our ability to scale and expand.

Sometimes, the only difference between a successful person and those who are not is time and action. Click To Tweet

We thought, “Wouldn’t it be great if we could find a company or someone who could do the rehab for us, we could come in with the capital, put our money to work passively, have maximum leverage and move on to the next one.” That’s how we found Real Wealth Network. Living from Europe, we’re looking for opportunities to connect in new markets with opportunities that we could put that income to work passively. We scaled quickly in that year. Now we’re diversified in about five different markets and that’s how I got to this idea of passive income but turnkey because it allows me to continue to pursue passion, interest and use my time in those ways instead of on the asset itself.

I have ads running for you, this is the true blissful path. That’s the way that I’ve done things too is I always want things to be like little time and energy commitment. For me, I’m more of an appreciation person. I’m moving from an appreciation market to more of cashflowing markets and that happens. We evolve in life to what it is that we’re needing as did you, you went through an evolution. Ladies, that’s one of the things to keep in mind is whatever strategy you are trying or doing. I don’t like to say try because real estate is not a try-thing. You got to commit and give it some time. Whatever you’re doing in this stage of your life could be different than what you’re doing in the next stage of your life. You’re not married to this strategy but you could get married if you fall in love. I’m trying to use definitively one of those places where we can fall in love because the benefits are great.

I find that it does embolden you when you experienced mastery that might be too strong of a term even but when you’ve experienced success in one avenue, I feel like it can embolden you to take risks in new areas and try out some different strategies. It doesn’t have to be an exclusive strategy. We’re always looking for deals elsewhere. I certainly have an appetite for flipping and doing some of that more active approach but it’s been such a journey for me and something that I’m grateful now to get to share and encourage other people on how they can do the same and how this is a viable strategy for creating retirement, creating freedom, or even diversifying. It doesn’t have even to be that grand of a plan. It can be a simple diversification measure as well.

Do you feel like you’ve replaced your income? Could you go have that lifestyle with what’s coming in with cashflow?

We’re getting close to having choices.

I love that you say that. It’s not retirement, it’s having choices.

We started realizing our whole career we’ve spent away from family and we’ve had a wonderful adventure. It’s been so rich but at the end of this career, we were inspired. Our why was the ability to have the choice to go where we want to go. We don’t have to go and follow a job in a specific city. We can choose to go back with family or abroad but having those options, to me is worth so much and you discover that you enjoy it. These ideas that you had of paying down loans, it evolves and suddenly, you’re moving in a different direction. We’re continuing to have a lot of fun with it. Retirement keeps getting kicked further down the road by choice.

I know what you mean because we could retire too. David loves what he’s doing and I love what I’m doing. Why would you retire when you love what you’re doing? Ladies, read me talk about retirement all the time and it’s not the right word. I love your choice of where it’s better, where we have a choice. We can now make decisions based on what we want to be doing with our time, life, energy and money as opposed to what we need to be doing to pay the bills. I love the way that you put that.

REW 46 | Passive Income Through Turnkey

Passive Income Through Turnkey: When you’ve experienced success in one avenue, it can embolden you to take risks in new areas and try out different strategies.

 

Finding people like Kathy has been instrumental to that for me. That’s what Real Wealth is passionate about is about. It’s not chasing this idea of that society puts on us of what is successful but what is real wealth to you? It is freedom, a choice and being able to live life on your own terms. That resonated with us so much and little did I know that one day I would join the Real Wealth team and get to share in that mission of spreading that dream with others.

Why did you choose to do that?

My background is in communications. I did a lot of adult curriculum development. That instructional and teaching background is my speed and then the opportunity to marry that with this personal passion that we developed of investments, I find it super exciting. What we do at Real Wealth is providing a lot of emphasis on education and teaching people the fundamentals because the fact of the matter is the reason more aren’t investing in real estate is there’s a significant learning curve and it’s intimidating. In our minds, we’re thinking of these mega moguls that have invested in real estate.

We think that’s where we have to be and that we self eliminate. We choose to pursue other options that are maybe easier. In Real Wealth, we break that barrier of like, “Ask questions. Let’s be curious and learn together. We don’t have to be an expert about it.” The second part of that is offering a tactical means by which you can take action and turnkey offers you the ability to connect with people in markets that are experts there in that market boots on the ground who understand the market dynamics and who can help you find a product there and that long-term buy and hold investment.

How does this work for people once they’re in the system, they joined and everything, what happens?

We aggregate a lot of data on what makes a good market for real estate investors. We’re looking for job growth, population growth, strong diversified economies but yet we want them to be affordable markets where we can come in as levered buyers and have good solid cashflow. We want landlord-friendly laws. We let all of this data point us to those markets. We’re interested in about fifteen different markets and that’s not an all-inclusive list. There can be great things about many different markets but once we found those fifteen markets, we go out and look for a team there locally that specializes in finding those deals and in rehabbing those properties or in some cases, building new construction homes. In addition to that, they have professional property management again so that you get connected to that deal.

If that were it, that would be too easy because it’s overwhelming. Fifteen markets is a lot to choose from. It still doesn’t make it tangible. That’s where an investment counselor helps. We’re experienced in these markets, myself and there are three others. We know these markets, these teams and general investing strategy. We get on the phone with an investor who’s ready to pursue that. Through a conversation, we talk, what is their search criteria? What are your goals? What is it that you’re looking to do? That can guide us to a market that’s maybe the best fit for an investor. I’m sure you’ve heard before some people want to drill it down and go, “What’s the best market?”

The answer to that is always, “It depends. What are you looking for? How much capital are we working with? Are you looking to create maximum cashflow or the greatest return over a longer period of time?” What is the priority? Through a conversation, we help you refine what it is that you’re looking for and refine what your buy box is. What can help you get to those goals that you have sooner? We can make those referrals and connections to these companies and those markets that can help you identify the property.

Turnkey allows investors to continue to pursue passion and interest. Click To Tweet

You introduce to a company in the market. Are you hands-off after that or what happens?

What makes us different is that we maintain a relationship with our investors. It truly is a network. The strength of the network is in our investors. It’s providing that full circle or full feedback loop if for a lot of people, this is their first time going through a transaction like this. We, Real Wealth Network, remain involved and offering you that strategic guidance. We’ve put together some great checklists that help you with due diligence and how things you should be looking for when you’re screening property and getting home inspections, appraisals and offering you some of those good tips to guide you along the process. We love getting feedback from our investors on how it’s going.

We touch base and maintain that relationship beyond acquisition but into the management phase where the proof is in the sauce, that long-term hold of the property. How’s it doing? Did it do what we hoped it would? At the end of the day, you can’t make guarantees about how someone’s experience can be? How past performance can’t guarantee that, but it can be a good indicator to be able to point to 100 or 300 sales in a specific market and the track record of the property management team that has managed those homes for this period of time. That can give a lot of people the confidence that they need beyond taking a shot in the dark, in a market that they’re unfamiliar with where they don’t know anybody. It’s a lot of the benefit that you get when you’re a part of Real Wealth.

What happens if something does go wrong with the management company? This has been my biggest fear of going outside of the California market. I’ve kept all of my assets close within 50 miles so I can get there. If you’re out of state then you can’t do that. What happens if there’s something that goes wrong for instance with a management company or the house or something like that?

Think of it as a risk. That is a risk tolerance that is beyond some people, that idea of not being able to go there. Due diligence is extremely important and not just taking what we say and going with it regardless. We always say, “Trust what we say,” but verify it. Make sure that this is something you’re comfortable with. I tell everybody, we have a property manager here that is proven that we have some leverage with because we’ve worked with for many years but at the end of the day, you need to make sure that they meet your criteria because even within something like property management, there’s a personal preference. You can talk to five different people about the same property manager and you’ll get five different takes on some of the nuances of how they do business and whether they love them or whether they’re okay.

The important part and what we put a lot of emphasis on is you own this process. I do interview a couple of property managers who have a backup plan. When I’ve had situations like that personally, where something has not gone well and a property management experience wasn’t the best, it’s something that you can focus a little bit of energy into. I was quickly able to identify another property manager that could meet my expectations a little bit better. We at Real Wealth are here to help guide you through that process and lead you through that process of evaluating. Sometimes, it’s hard to know what is a typical experience or what is something that is a normal risk of owning real estate. Let’s not throw the baby out with the bathwater yet and dump your property manager. This might be a problematic tenant and you need to ally with the property management company and get beside them in the real issue.

Do you give references for property management companies? How do people find who to interview?

We provide the reference for the specific property manager there in that market. That’s the reference that we offer but then you can go online and find other property managers on your own. We do encourage you to do that to make sure that they’re who you want to work with.

REW 46 | Passive Income Through Turnkey

Passive Income Through Turnkey: Make decisions based on what we want to be doing with our life, energy, and money, as opposed to what we need to be doing to pay the bills.

 

Do you offer the opportunity to talk with other network members that have used that property manager as a reference? How might that work?

COVID has put a little bit of a damper on our normal processes for that. We had live events every month before March 2020. That was an opportunity for investors to all get in the same room, share their experiences, talk about the pros and cons of different areas and that was hugely beneficial when we did that so regularly. Now that we’ve gone virtual, that looks a little bit different. We do though have the ability to connect you with some people there locally in the market who have bought there over a period of time and who can give you some insight into their experiences with property management.

That would be my big thing is to get the references and get some validation around that decision. Tell us a little bit about, how you fit into my Blissful community? I’m excited about this collaboration. Let’s talk about how it happened and what my ladies can expect?

Kathy and you share a lot of synergies in your approach to this. You’ve got a similar abundant mindset that Kathy and Rich Fettke both have. This was an opportunity for us to provide a woman to woman connection in real estate where we can help your investors who are curious about the turnkey model, curious about a more passive approach to real estate investing so we can have that warm handover. We’ve set up a website for our blissful friends who are interested in turnkey where you create a profile on Real Wealth Network and then you’ll automatically be linked to me as your investment counselor. Once you’re logged in and created that account, you’ll have access to all of the free educational resources. You can start educating and you can look at all the market data that we’ve aggregated. You’ll have the ability to look at the teams that we work with. You’ve got access to me as your investment counselor to help you navigate the process, streamline it and hopefully get you going.

Nothing happens until we take action. We can think about it all day long.

I had a blissful investor come and we had a great strategy session. She was contemplating lots of different investment strategies, some more active some more passive but recognizing that there was a place in her investment strategy for a passive approach. We got her connected with the team that works in the market that she was most interested in. It’s that power of networking. It’s working for her already.

It has been interesting because my ladies email me and I love that. Several of them had connected with Real Wealth and a couple got to talk with you and a couple of the guys. Ladies, every single person on their team is unbelievable. I know that all of your coaches are awesome but I did feel that like, “We’re a ladies’ group and we want to talk to a lady.” It was cute when you called me and said, “Would you like your ladies to talk to Leah?” I was bouncing around excited about that. As women stay in the community, we think a little bit differently than men do and our priorities feel a little bit different. It is nice to talk to another woman about this stuff. I’m honored that you’re going to be working with my ladies.

It’s a topic that I know you’re passionate about but I feel financial literacy, engagement hasn’t been instilled in women like it has in men. Because of that, subconsciously, we’re more prone to take the back seat and to let somebody else lead that. I love and am inspired by women who recognize that that doesn’t have to be true and that there is a place for you to engage. If it’s easier to come to that place by engaging with another woman who’s already done it then let’s do that so that we can empower more people to do the same.

Nothing happens till we take action. Click To Tweet

Women are better suited to real estate. We love to nest, love our homes and love creating beautiful spaces. It’s intuitively and naturally one of our powerhouses is this ability to create a home and that’s what real estate is all about. Being able to do that, we can look at the numbers, creating space, to do your research but we get good gut feelings or inspirations about where to where to invest. It can be confusing. Once you look at the numbers, you then can use your intuitive sense, “Three different markets work. Where do we want to start?” Also, neighborhoods and all of that stuff. We are inherently better suited for this business. It seems sad that we’re not as involved as we could be and not benefiting from the amazing cashflow, appreciation and wealth that can be built through this industry.

There’s a lot of pressure too in this space to marry this idea of being a real estate investor and entrepreneur. I’ve had to tell people before and had to slow people down sometimes, I’m like, “You don’t have to make this a business. You don’t have to go and employ people.” I get some people who right out of the gate want to talk about entity formation and the tax structure for their entity formation. I’m like, “You don’t even have a house yet. Let’s slow down. Let’s learn some correlations of cashflow and appreciation. Let’s study some proformas and look at the basic math before we start blowing this up to be some gigantic entrepreneurial idea.” Real estate can be a diversification strategy. It can be passive. It can be a little side hustle hobby that you enjoy doing and it gives you that feeling of power or validation if that’s what you’re searching for. It can be that and it can be small. It doesn’t have to be huge.

It’s interesting because real estate was always my side hustle. I was in corporate, I ran my own businesses and real estate was that thing that I didn’t pay attention to. As a matter of fact, if I had paid attention to it, I can’t even imagine where I would be now. I pay no attention to it and suddenly, I’m worth millions of dollars. There were hard times. 2001 and 2008 was a hard time but through most of it, I haven’t had to think about it and I love that. It’s the side hustle without the hustle. Much of that is what turnkey is all about. It’s about the side creating the side hustle without the hustle.

The opposite of the hustle like people in the blissful business. I do agree with you, people get caught up in what everybody is out there talking about like the entity structuring, taxes and the, “You should be flipping as they do want to HGTV. You can make all of this money. You should have 1,000 doors.” No. You do what’s right for you. I only have 6 or 7 doors because I don’t like lots of doors. I’m in an appreciation market because that’s what I know for now and I’m making a transition cause I want to make a difference. That’s working in my life. You don’t have to do all of those things and all the gurus are telling you to do. You do what’s right for you.

It is prevalent in this space and I’ve always tried to resist against it and own my experience for it being my experience. We all have our scales of risk and reward of what’s right and wrong. It’s up to us to zero our scales and determine, “For me, where’s the risk and the reward here? Where’s that balance?” What we don’t want to do is allow somebody else who’s in a completely different phase, space balance our own scales. Being okay with your process looking a little bit different. If it’s not turnkey, that’s great. Do whatever it is. That’s probably the one thing that I would say is the rule you got to take action somewhere. I’ve heard you say this before, “Goals remain undefined. It’s a dream. It’s not ever going to happen. We’ve got to give ourselves some concrete tactical steps and create a timeline for ourselves so that we step into that.”

The other piece about this and I know that this is true with a lot of us women because we do feel intimidated. We haven’t necessarily had the network or educational support and all of this stuff. You want to know your stuff. You want to get educated. You want to make sure that you’re doing the right thing. You don’t want to look stupid. You don’t want to have lost money. This is what I say to that, everybody in business loses money. Don’t be afraid of it but it also isn’t something that you have to do either. You can make good decisions consistently. I’ve never lost money ever on a real estate project. That’s been many years.

Not everybody has that same track record and it’s okay. When I say that I haven’t lost money, that doesn’t mean that I haven’t had a lot of fear. In 2008, I lost 50% of the value of all my properties, I was underwater on every single one but I didn’t sell, so I didn’t lose money. Let’s all keep that in perspective. That’s what I’m trying to say is that keeping it all in perspective and understanding that you’re going to have to learn along the way. You can do as much research as you want. You can look at as many videos. You can talk to as many people. You can listen to as many podcasts but nothing happens with your wealth or your education until you start doing something because you’ll learn a lot being in there.

I see it all the time. The analysis paralysis. It’s putting a lot of pressure on yourself to know everything. I was talking about this with my husband. I’m like, “Everybody wants to step up to the plate and they want to first swing knock it out of the park.” That would be epic. That would be awesome. I’d rather be the person who is confident who understands it but I’m okay with a base hit. Like I’m going to load up those bases. The better I get at loading the bases, the more my confidence builds. At some point, I’m going to knock it out of the park. When I do, the bases are loaded. That takes the pressure off me to make sure that everything is nailed and that there wasn’t a single thing. Part of what I always try to do is reflect on a situation and look at it, even when I thought it went great, like, “Let’s look at it. What could we have done better next time?” That’s how we wound up in the turnkey space. Evaluating going, “That was good. Nice job,” but how could we refine this? The next time it’d be even better? That’s a sweet spot to stay in.

REW 46 | Passive Income Through Turnkey

Passive Income Through Turnkey: There’s a lot of pressure in this space to marry this idea of being a real estate investor and being a real estate entrepreneur.

 

We are going to move towards the end of this show but before we do that, I want to talk a little bit about Extra because you’ve got some yummy, exciting stuff to offer my ladies. Tell us a little bit about what you’re going to cover in Extra?

The seven steps for new investors is what we’re going to cover. It’s going to be tactical, if I’m getting started, what are the next seven steps for me to do? Starting from let’s think about goal setting down to, “Let’s refine my buy box so that I can take informed action.” We’ll talk a little bit about what those next seven steps are.

I love that. I can’t wait. I love it when we get a breakdown like that, specific steps that we can take. I’m excited about that. Tell us where we can reach you.

We have set up a page on RealWealth.com for the Blissful Investor. You can go to RealWealth.com/Blissful. If you create a login there, we’ve already set it up on the backend so that you’re immediately linked to me as your investment counselor. You can click around once you’re on there. You’ll see It’s very easy to connect with me once you’re logged into your account. We can set up an initial strategy session and get you going.

I know lots of ladies are already in the network and enjoying the benefits. Go check it out and join. It’s free to join. Leah, are you ready for three rapid-fire questions?

I’m ready.

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

Aside from watching our Seven Steps for New Investors, I tell everybody financing is the gas in the tank. We can know where we want to go. We can know that it’s a great place but until we know that we have gas in our tank to take us there, we’re not going anywhere. I always tell beginners, “The first thing you should do is understand your borrowing potential and talk to a qualified lender who specializes in investment loans.”

Women are better suited to real estate. They have the power to create a home. Click To Tweet

What would you say is one strategy for being successful in real estate investing?

We already talked about this a little bit but I think for me, it’s staying curious. This is something that Kathy Fettke does so well. Don’t be afraid to ask questions. I think that could be maybe the flaw of the other genders that there’s sometimes a pride that we have of not wanting to admit when we don’t know something when the reality is, it’s a very good question and there are lots of other people in the room who don’t know it either. Staying curious and not being intimidated to ask for additional information. I see this a lot in our space, people assume that if someone is trying to sell them something that they’re trying to deceive them or trick them into something. I say, “They are humans too and they’re a real estate investor, be curious about their experience, leverage their experience in that market, ask questions.” That has been instrumental to my success.

I was having a conversation with another investor and I ask a lot of questions. He’s doing something that I’ve never done and will never do. It’s a type of construction because I’m doing construction. I am constantly asking questions. At one point, I said to him, “I get that I ask a lot of questions. You can shut me down.” He’s like, “You can send me an email and see when it gets stopped.” It’s so much fun to be involved with someone who’s interested rather than someone that thinks I’m smart and they’re going to follow my instructions. “You’re going to go places because you care enough to figure it out.” I wanted to share that with ladies so that you know people love you asking questions and if it is too much, they’ll say, “I don’t have any answer. Talk to somebody else. That’s too many questions.” You get to there, that’s a good place because that means that you’ve dug deep. Questions are a good thing. They’re good for your business, self-esteem, success and relationships. Leah, tell us one daily practice that you would say contributes to your personal success.

It’s important to reinforce what you want to be replicated. This is true in many different aspects of life, relationships, finances, with children. Focus your energy on what went right and what you want to see happen again. The example that comes to my mind related to real estate is we have a friend who’s wanting to get into real estate for a long time and has talked about it for a very long time and got a property. It’s not going perfect but it’s typical real estate investment problems, the maintenance and phone call. That kind of stuff. He’s chosen to focus on the negatives of that and focus on, “It’s another call. It’s another problem.”

We always try to say, “Let’s make sure that we’re reinforcing all the good things that happened that month.” You got a tenant with no vacancy, you got top market rent for that property. You’re cashflowing well every month. It’s not ideal to have to go and fix this item but let’s reinforce all of the things that went right and that is going right because that’s what we want to replicate in our life. If we focus on all the negatives and on all the things that didn’t go excellent, those can sometimes be an inhibitor to our future progress.

This has been so good. Leah, thank you for all you’ve shared so far.

I’m happy to be here and looking forward to connecting with you ladies.

Ladies, stay tuned for Extra. We’re going to be talking about the seven steps for new investors. If you are already subscribed to Extra, you’re going to get that on whatever device you’re reading to this show. If you are not subscribed to Extra but would like to be go to RealEstateInvestingForWomenExtra.com. You get the first seven days for free, so you can check it out. If you love it, you stay. If you don’t, at least you got a lot of good content. For those of you that are leaving us now, thank you so much for joining Leah and I for this portion of the show. I appreciate you and I look forward to seeing you next time. Until then, remember, goals without action are dreams. Get out there, take action and create the life your heart deeply desires. I’ll see you next time. Bye.

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How To Invest In Real Estate Right Now Even If You Have Little Or No Money With Mike Wolf

REW 45 | Radical Real Estate Revolution

 

We are about to witness what could be the biggest wealth transfer history has ever seen. As COVID-19 takes its ultimate toll despite the palliative measures the government has taken, real estate is going to undergo a radical revolution that might just be your opportunity to get the real estate career of your dreams running. Are you ready to take part in this massive upheaval? If it’s money you’re worried about, you’ll be glad you tuned in to the show right now. Mike Wolf is here with Moneeka Sawyer to teach you how you can start investing in real estate right now even if you have little or no money. An investor who has over 30 years of experience, Mike is as knowledgeable in the field of distressed properties as he is generous in sharing his best practices to budding investors like you. Stick to the end for another generous gift from him that will surely start your year right!

Listen to the podcast here:

How To Invest In Real Estate Right Now Even If You Have Little Or No Money With Mike Wolf

Real Estate Investing For Women

I am excited to welcome to the show, Mike Wolf. He has been investing in real estate for many years. He is also an international speaker, mentor, philanthropist and world traveler. Mike has been featured on all the major TV networks, radio and print publications. He specializes in helping people create passive income so they can enjoy not just financial freedom but time freedom as well. Mike, welcome to the show.

It’s good to see you. How have you been?

I’ve been good. I’m glad we’re finally doing this. Tell us a little bit about your story. How did you get started?

It’s interesting because I get a lot of people that say, “Of course, you can do this, Mike.” They think I came out of the womb knowing how to do real estate. Nothing could be further from the truth. I got into this business totally by mistake. If we go way back in the middle grade twelve, I had no idea what I wanted to be when I grew up. My parents were always talking about doctors, lawyers, that’s all I ever heard. I’m terrified of blood so doctor was off the table right from the get-go. That wasn’t going to happen. Lawyers, you see shows on TV and they always have the fancy offices. I thought that was cool.

I went to a university and got my first degree. With that came a whole bunch of student loans. I decided before I go back and get my second degree, I’m going to get these paid off. I got a job at the phone company because my friend’s mother was a manager there. While I was there, I bought my first home to live in. Shortly after I bought that, my mortgage broker calls me up and says, “Mike, you’re making good money. Your credit is good. I can get you another mortgage if you want to buy another home.” I thought to myself, “Why do I don’t want another home?” He said, “You buy another property. You put tenants in there. They pay down your mortgage and 25 years from now, your home is paid off and that’s your retirement.” I go, “That makes sense.”

I bought a second property and put tenants in there, and two years later the market took off. I was still at the phone company at this time. I’m sitting on all this equity. I remember thinking to myself, “In the last two years, I made this much going into my job, which I don’t like that much. I made this much in real estate and I don’t even know what I’m doing in real estate. If I could do that by mistake, what would happen if I learned how to do this on purpose?” I wish I could say it was smooth sailing after that. I quit my job. I told my parents I’m not going to become a lawyer. My mom was still trying to get me to be a lawyer to this day but that’s all right.

I burnt all my bridges, which I don’t recommend people do. On the next deal, I managed to lose almost everything that I made. On the first one, it was meant to be long-term. That was my 25-year retirement plan. On the next one, I quit my job. I couldn’t wait two years for my next paycheck. I did things very haphazardly. I lost most of what I made. It was a very humbling lesson because back then, I was in my mid-twenties. I’m very cocky at that point because I thought I knew everything there was to know about real estate because I got this paycheck that was pretty sizeable especially back in those days.

Luckily, when I hit rock bottom after messing up, I was much humbler. Instead of being a know-it-all, I became a learn-it-all. I started to seek out and found a mentor. I started to read books on investing. I started to learn how to do this stuff as opposed to winging it. If I haven’t gotten humbler and looked for help, I’d be here maybe talking about real estate law not as an investor, but as a lawyer. I’m very grateful that I had my lessons early on.

It’s funny how many people who’ve been on this show started in real estate by accident. Ladies, I want you to know that. That’s how intuitive this is. In a lot of cases, getting started can happen. I love what you said about finding a mentor to grow and scale, and turn it into a business. I never turned it into a full-time business where it had to pay the bills until now. I’m in that transition, but now I’ve got a huge amount of equity to work with. There are different ways to do that. Could you talk to us a little bit about the last recession? I know that you have some ideas about what’s going to happen in the market and what’s coming up. I’d love to hear a little bit about that and your company that you called Foreclosure Fixers. That was what attracted me to this conversation.

Back during the last recession, a lot of people lost their shirt, unfortunately. I’m talking about investors now. Everybody was affected by it in some way, shape or form. I don’t like the term real estate investor. I prefer the term problem solver because that’s what we do. When people put their home on the market, there’s always a story behind it. Nobody wakes up one day and randomly says, “I think we’ll toss a for sale sign in the lawn.” There’s always a story behind it. Either they’re moving up, moving down, being transferred, or getting divorced. There’s always something behind that. The more problems we know how to solve and the more people we can help, the more we get paid. In this business, the best way to do it is win-win.

The best way to do real estate is win-win. Click To Tweet

Every time you do a transaction, the person on the other end of that deal should also be benefiting. The goal should not be to look for some little old lady who has no idea of the value of her home, steal it out from under her, and leave her homeless. That’s not the goal of this. Back in the last recession, you’ve probably seen those postcards, “We buy homes, we buy ugly homes, we’ll pay cash for your home.” During the last recession, I went at it from a much different angle. I hired an attorney to learn the foreclosure laws inside and out. I sent out marketing materials that said, “We can help stop the foreclosure.” That was what the Foreclosure Fixers business was all about. There were two different types of people that would call me.

The type one person is sometimes bad things happen to good people. I can’t think of a time where there are more bad things happening to good people right now with COVID. Back in those days, a lot of people were losing their homes. A lot of people would have never dreamed of not missing their payments but sometimes things happen. Those type of people quite often lost their job, but then they found another job. Maybe they couldn’t get caught up on all the arrears. They may have been behind $5,000, $10,000, $20,000. They couldn’t get caught up on it, but now they can afford the monthly payments again. For people like that, quite often I would go in and I’d help stop the foreclosure. I’d loan them the money to pay off the arrears and they would pay me back with some interest. I’d help them stay in their home.

There’s the second type of person. Those are people that like to keep up with the Joneses. They like to quite often live way beyond their means. I remember when I used to do my own property management. Never do that, by the way. My tenants always had nicer TVs, better stereos. They had better everything than me. My book collection was a lot better than theirs but everything else that they had, all the material things are always better. There are lots of people that like to live way beyond their means. People like that, if you loan the money, you’re never going to see that money again. It’s going to disappear. For people like that, I give them what I call a soft landing. What I mean by that is instead of stealing their home out from under them and getting that home run, I’d always make sure that they had the money for damage deposit, several months’ rent, and money for food. I put them in a much better position than if they lost the home to the bank.

Sometimes I do a joint venture with them. I’d say, “You’re going to lose your home to the bank but why don’t we fix it up? Put it on the MLS. I know you don’t have the money to fix it. I’ll put up the cash to fix it. When we sell it, I’ll get some of the profits since I’m putting up some money but you’ll walk away with something instead of nothing.” I always looked for what was the best solution for that person on the other end of the table from me. I want to make sure that they’re in a better spot. What was interesting is that I wouldn’t get the home run. I leave some money on the table for the other person, but if they lost their job, they probably know five other people that they used to work with that lost their job too.

They start sending me their friends, and their friends would send me their friends. I never had to look for clients. Instead of getting that one home run, I always have more clients coming down the pipeline and we managed to help a whole lot of people. One of the reasons I’m so passionate about what I do is that when you help people with their financial problems, it’s like the tip of the iceberg. There’s a whole bunch of things below the surface. If they’re struggling financially, it’s almost guaranteed the relationships are there. There’s fighting going on. They’re probably stressed and depressed. Their health isn’t good. You’re fixing a whole bunch of different things. It’s not just the money thing that you’re fixing.

I remember I had one lady back in my Foreclosure Fixer days. She called me after I’d given her the soft landing. She said, “Mike, the day that I got your marketing materials, I was thinking of killing myself that day.” I don’t take very lightly the stuff that I knew. It’s not just about flipping homes. It’s about helping other people and getting paid for it. That’s why I love this business. After many years, I still wake up excited to be in this industry and that’s why.

This completely reminds me why I was excited to share you with my ladies. I heard the story the first time and this time it still chokes me up. It’s so good because I do think many people that teach about real estate investing want every last nickel that they can get. I like you, Mike. I want everybody to win. I’m focusing a lot on construction. When I buy a property that I’m going to tear down and build something else, I want to make sure that they’re getting paid market value. If they’re not getting paid market value, they’re not happy. The numbers have to work for me too, but I’m not going in there trying to low-ball them like all the other contractors are. What that means is that my profits are a little bit less but they’re getting taken care of, I feel good about what I’m doing. I still make quite a lot of money. My margins are a little bit lower. You can still make good money by being good out there. You can be kind. You don’t have to nickel and dime people. I hate to say this but I feel like it’s ripping them off.

We’re still reliant on our teams. When you have their back, they’ve got your back. I did a TED Talk and that’s one of the things I talked about, happiness and fulfillment. You can’t put a value on that. Going to bed at the end of the day and being able to sleep well and knowing that you helped somebody, that’s a much different feeling than, “I got this big paycheck. I wonder if that guy is homeless now. I made a lot of money but my team is struggling.” I think when everybody wins, you get in the flow and everything falls into place almost by magic.

It’s more gratifying. I talk so much on my show about bliss, and bliss isn’t about money. Bliss is about how you feel. When you’re in the business of making money so that you can create wealth, so that you can live the lifestyle, there’s still a disconnect. If you’re building a business that also makes you feel good and you feel good about what you’re able to do with your life, now you’ve got a full picture. You feel good in your business, you feel good in your life. It’s all working. If you have this disconnect where one is outside of yourself, it’s all about the money. There’s no gratification other than the money in that business. It’s not going to support and carry into the rest of your life. It will give you the financial means. When we talk about bliss, it’s about the support of your life and all aspects of your life.

When you do things right, you get this balance and your team will stand up for you. They’ll go above and beyond. This is a people business. I think it was Zig Ziglar that said, “How you show up in one thing is how you show up in everything.” Whether it’s the Uber driver or the server at the restaurant, every single person, it’s important to make that other person happy no matter what that is. Your teams, more than anybody, the people on the other end of that transaction. Everybody should walk away happy and wanting to keep doing it over and over again as opposed to, “I made an extra few thousand dollars on this paycheck, but that guy’s never going to work for me again. This guy’s still working for me but he hates me. The first chance he gets to jump ship and go somewhere else, he’s going to do that.” This is definitely a people business. The better you treat people along the way, the easier it’s going to be for you too. It all fits together. It’s like a puzzle. You have to take care of everybody along the way that helps you to get to the point that where you want to be.

REW 45 | Radical Real Estate Revolution

Radical Real Estate Revolution: Real Estate is a people business. The better you treat people along the way, the easier it’s going to be for you too.

 

I know we’re going to do a deep dive in Extra a lot more about the economy and what to expect. I’m excited about that conversation, but can you give us a high level of what we’re foreseeing and also what strategies might work in the coming months or years given our economy?

We’re definitely heading into some interesting times. If I had to sum up the highest level of what we’re going to see, it is probably going to be the greatest transfer of wealth in history. When I say transfer, the money is not disappearing. It’s not going into thin air. I think of those snow globes, those things you shake up and the little snowflakes fall from the top to the bottom. Imagine those are $100 bills instead of snowflakes, that money is falling from the top. We’re seeing a lot of people that were in an enviable position. Imagine you owned an office space in downtown Manhattan. In 2019, that was like you’re on cloud nine. These days, you’ve got a lot of headaches. There are a lot of people not going to offices. A lot of things shut down. A lot of businesses are never going to go back to how they used to do business.

That money is trickling down somewhere and it might as well be you who gets it. The way to get that is to educate yourself and take these downtimes. There are a lot of places that are unfortunately, back in lockdown again. There are stay at home orders at some places. How are you using that time is going to dictate how things look for you a year from now and five years from now. If you take the time to educate yourself, that transfer of wealth could be transferred down to you. In terms of what opportunities, we have this big moratorium on foreclosures and I’m glad. I’d hate to see banks throwing people out on the streets in the middle of a pandemic.

That would not be good. That’d be horrible but that’s not going to last forever. The government is sending out stimulus checks. That’s not going to last forever. What we’re going to see, and one of my favorite strategies for many years has been tax deeds. What a tax deed is when people haven’t paid their property taxes in a number of years, the county forecloses on them. The county needs that money to keep its schools, hospitals and the police force open. Eventually, they put these homes up on the auction block after 2, 3, 4 years of nonpayment. My favorite auction takes place in Houston, Texas and it’s been shut down now for a good 8, 9 months. Normally, on any given month, there are usually 500 to 1,000 homes that change hands.

You multiply 9 months times 500, that’s a lot of homes that are backlog that never went up on the auction block yet. You added that to the fact that there are a whole bunch of homes that would have been foreclosed on in addition to those, and they haven’t been foreclosed on yet. What we’re going to see is a whole lot of opportunity for people that know how to do that strategy properly. Don’t attempt that strategy if you don’t know what you’re doing. It’s very lucrative if you know what you’re doing and you will lose your shirt if you don’t. If you know how to do that, there are lots of opportunities there. One of my favorite strategies if I was starting out, we’re getting a whole lot of people in preforeclosure.

That’s not yet but that’s coming down the pipeline. Every month when we look at that auction and most of the auctions across the country, they publish a list somehow. Some of them are online. Some of it’s printed. Some you have to subscribe to. They all publish a list of all the homes that are going for auction. Most people that go to those auctions take a look at the list, do their due diligence, show up at the auction and win whatever they win. For me, when I see that list, that’s a list of people that are in trouble. That’s a list of people that need help. They are three weeks to a month away from losing their home usually over a very small amount of money.

One of my students picked up a home for $7,200. Somebody lost their home over $7,200. That’s a list of people in trouble. Those are the people that I would send my Foreclosure Fixers flyer to and try to help them, try to give them a soft landing, help them stay in their home, stop the foreclosure. I’m going to try to come up with a solution for them before it ever makes it to the auction. Not everybody is going to reply to your marketing. There will be a lot of people that unfortunately, their home will struggle on the auction block. I call this a trifecta. The first thing I’m going to do is try to help them before it goes to auction. That’s number one. Number two is I’m going to go to the auction. In my case, I have a team that goes to the auction for me and my students.

I don’t go myself anymore, but I’m going to try and pick up those properties for pennies on the dollar. The third part of the trifecta is a very little known strategy called overages. What that is, when a home goes up for auction, if the opening bid is $5,000 and let’s say it sells for $50,000, that first $5,000 belongs to the county fair and square. The additional $45,000 belongs to the previous homeowner. Few homeowners have any clue this money is owed to them. The county makes little attempt to track down these people and get them this money because after there’s a statute of limitations and certain amounts of time, that becomes their slush fund. They can do whatever they want with it. Imagine you lost your home over $5,000.

That was the only thing stopping you from saving your home, $5,000. Somebody approaches you and says, “I know somebody owes you $45,000. If you’re willing to split that with me, I’m willing to get you this money. You don’t pay me unless I’m successful,” and you can negotiate with them. He might take 20%, 30%, 40%, whatever it is that you negotiate, but you’ve helped somebody who probably lost their home over that small amount of money. They are either moving in with relatives or homeless. They are in a bad spot. You reunited them with a pretty big chunk of cash. There are billions and billions of dollars owed to people all across the country. The great thing about these strategies is this last one requires almost no money.

For those people who are thinking, “I’d love to get into real estate but I’ve got no cash.” That one requires very little money or no money. You might have to pay to get the list. There might be some minor expenses here and there, but for the most part, you can do it with almost zero. Going to auction, I’ve had students pick up properties for $7,000, $8,000, $9,000. You need a little bit of money but it doesn’t have to be your money. The first part, giving people a soft landing or if you find somebody who has a bad position in pre-foreclosure, you can do something called wholesaling. You don’t have to have a whole bunch of cash. You put the home under contract. You contact somebody like myself or you and say, “I found this good deal on a property. I don’t have the cash to do it but I will assign that contract to you.”

When everybody wins, everything falls into place as if by magic. Click To Tweet

What you’re doing is if you’ve found a good deal and you said, “Mike, I found this deal that you’re going to make $100,000 on. I’ll sign it to you for $20,000.” I’ll trade $20,000 and make $100,000 all day long. I know you would too. For people thinking, “I can’t get into real estate because I’ve got no money,” there are many different strategies that you can do that require a little or no cash, and you can go help somebody else on the other end of that transaction and create a win-win.

I love your compassion for people. All three of those strategies I was like, “I want to do that.” That was amazing.

That’s the tip of the iceberg. I got so many more in this program. I can talk for days.

Tell us about the program. Ladies, I’m excited about this. I wanted to share, he’s got a three-day seminar. It’s called Mike’s Wealth Mastery. Tell us a little bit about that and what you cover.

Let me tell you how it all started. Before COVID, I was pretty much retired. I would do 1 or 2 live events a year. They’d be 3 or 4 days long. I take people to Houston, Texas. We’d spend four days. I show them how to do tax deeds inside and out. I’d give them my teams. They don’t have to keep going back to Texas. After the four days, I’d hop on a flight. I’m usually very nomadic when borders are open and airplanes are flying. When COVID hit, it grounded me. I went back to Canada where I’m from because that’s where my grandkids and my daughter are. I spent seven months there. While I was there, I got talked into it. When I first got back, I was sleeping in every day, taking it easy, watching Netflix like everybody else. The phone started to ring and lots of podcasts, summits, radio shows, and people wanted to know what’s happening with the economy. What’s happening with real estate? I could tell there are a lot of people that are very worried about what’s coming up.

A friend of mine does a three-day summit. She brought me on as a guest speaker. I was supposed to speak for 45 minutes. She teaches wealth but not the real estate side of things. It was supposed to be 45 minutes. There are so many questions. I ended up speaking for two hours. She said, “Can you do a special event for my people in the afternoon?” I go, “Sure, no problem.” I did that and then she said, “Why don’t we do a three-day for my people.” I go, “Okay, fine.” The next thing, now I’m doing a year-long group coaching program. COVID is doing weird things. I went from retired to never having worked this hard in a long time, but I’m loving it. This three-day event that’s coming up, when I first heard they were shutting down the global economy, I’m going, “This is going to be a nightmare. There’s going to be a lot of people in trouble.”

I started thinking, “I’m going to set up my Foreclosure Fixers again because there could be so many people needing that.” The universe kept putting all this stuff on my plate that made it very obvious that I needed to make this bigger. I might be able to set up Foreclosure Fixers and help 50 or 100 families. When I started to get on all these podcasts and summits, I realized what if I were to do a training and teach people some of the strategies that I talked about and a whole bunch more? I’ll put these people on the front lines and created a movement of ethical real estate investors that were on the front lines, finding people in distress, helping them and getting paid for it.

This is going to be my fourth time doing this event. The first time I did it, it was $997. We got amazing feedback but I also got some people saying, “I don’t have a job right now, $1,000 is a lot of money for me.” I’m not making a ton of money off this event, even $1,000. When people come to my live events, it’s a lot more than that. I decided I want to help get as many people trained as possible. The three-day event is $97. It’s three full days of content like teaching some of the strategies I talked about inside and out and a whole bunch more, teaching how to do deals. It’s mostly focused on how do you do deals with little or no cash.

I know a lot of people are reinventing themselves. They’re not working, their business shuts down. They’re not in a good spot financially. How can I help the people that tune in to get to a better place and have those people help other people get to a better place and create this ripple effect? It’s $97 for three days. It’s been very successful and I’m proud of these events. I never would have done if it weren’t for COVID. It’s allowed me to help a lot of people so I’m super excited about it.

What strategies specifically do you cover at that event? Is there too many to list?

REW 45 | Radical Real Estate Revolution

Radical Real Estate Revolution: There are many different strategies that you can do that require a little or no cash, and you can go help somebody else on the other end of that transaction and create a win-win.

 

We’re going to talk about fix and flips, passive income, wholesaling, subject-to, the list goes on and on. How do you use technology to generate leads? A lot more about how I did the Foreclosure Fixers business, and talk about marketing and how people can emulate and copy exactly what I did. You don’t have to reinvent the wheel. Pretty much all the strategies that are going to be the most effective. When something like this happens, when you have a pandemic or a major change in the economy, what worked a year ago is not what’s going to work now. It’s going to be totally different.

It’s focusing on the stuff that you can do even if you can’t get out of your home, you can’t go look at properties. There are stuff you can do from your computer. Getting the most relevant strategies for these crazy times that we live in. My goal is to teach as many people as possible. Wherever you’re at whether you have money, whether you don’t have money, we’re going to teach you the different strategies to get you in this business and the stuff that’s going to work.

It’s $97. Do you record it? For instance, I know that weekend is my mom’s birthday. I would have to miss it if I were to attend. Will you be recording it and stuff?

I’ve got to check with my team. We have been selling recordings in the past. I’m not sure what the price point is on those. It’s funny because I have teams that delegate to me. They say, “Mike, where’s that video?” They set all this stuff up. I believe this event is going to be $247 but because I said $97. The last one was $97. We’ll honor that for your people. Remind me to make sure that we give you a discount code for your people for $97. We’ve been trying different price points because we want to get people to show up. I’d let people on for free but people don’t put a value on what they get for free, and they don’t show up. If they get it for free, they don’t show up because you don’t put any value. We’ve been testing different price points. We started at $997, and then we did the next few at $97. We’re going to try going a little bit higher but they’ll be $97 for your people.

Let’s use a coupon code and that’s BLISS.

That sounds good. Remind me and I’ll get my team to do that because I don’t know how to do any of that stuff.

I’ll go ahead and email you this stuff. There are a couple of things. That’s the event. Do you want to do a link for that event? I’ve got one for your free gift but let’s make up one for your event also. Let’s do BlissfulInvestor.com/mikeevent. What do you think?

That sounds great. As long as you remind me, that’d be good.

We’re going to do that. It’s going to be BlissfulInvestor.com/mikeevent. The code to get the ticket for $97 is going to be BLISS. That is going to be on March 12 through 14, which is a Friday through Sunday in the middle of March 2021. That will be awesome. Thank you for that. I also know that you have a free gift for everybody. Did you want to talk a little bit about that?

I got to thank COVID. In all seriousness, it created a lot of extra time in my schedule. Normally, I’m catching flights and bouncing all over the place. At the time I settled down, one of the things that I did is I wrote an eBook on the top strategies that are working right now. It’s called the Radical Real Estate Revolution. I’m happy to give it to your followers for free. It talks about some of the things you can get started in that are working. I wrote it while locked down. All the strategies or things you can do from your sofa. If you turn off Netflix for a few minutes, this is the stuff that you can do while you’re on your computer.

Focus on having balance in your life and life will become magical for you. Click To Tweet

The book is called Radical Real Estate Revolution: The Top 7 Ways to Invest In Real Estate, Even If You Have No Money. The link to get the free report is going to be BlissfulInvestor.com/mikewolf. That’s where you can get the free report. That was generous of you. Thank you for that.

The goal is to help as many people as possible. There are many people that they’re going through a lot of stuff, a lot of transformations. I feel like a lot of people are losing hope, unfortunately. If I could share what I have in here, they’d be optimistic about the future and what’s coming up. There’s going to be a lot of people struggling but if we’re problem solvers, that’s an opportunity to help them and get paid for it. We have great times coming up ahead. There are going to be a lot of people that are needing our help. If I can help the people that are reading, and they go help some more people, who knows how many people those other people can help too. It trickles down.

It is the ripple effect. You help ten people, each of them helps people like that. It’s amazing what we can do. Thank you so much for that. In Extra, we are going to go on a deep dive into what Mike is foreseeing in the economy. We’re going to do a deeper dive on that. He talks in the show all over the place about that. I’m interested in his viewpoint. He gave us a high level here, but we’ll do a deeper dive on that in Extra. Before we go to the next show, are you ready for three rapid-fire questions?

Bring it on. I get excited and get passionate. I talk for hours. I had to keep it rapid but no guarantees.

Give us one super tip on how to be successful or how to get started in real estate investing.

The first thing that I would do and the thing that I didn’t do is I would get a mentor right off the bat. I wouldn’t mess around and lose a whole bunch of money and then realize, “I need a mentor.” I’d get the mentor right at the beginning. I’m proud of myself. I did a good job.

What is one strategy in being successful in real estate investing?

The biggest thing is all here. The most important piece of real estate is right in here. I’m pointing at my head and I’m talking about mindset. Mindset is the most important thing. For me, the biggest thing is gratitude. I know it doesn’t sound like it has anything to do with real estate but when you are grateful for where you’re at and what you have. There are people that no matter what they’ve got, they’re never happy. They finish that one big thing that they’ve been trying to do, and then they’ve got the next thing and they’re not even grateful. Start to practice gratitude. Every morning write down the things you’re grateful for.

I do a lot of volunteering. I went to a place called Vanuatu, which are these islands in the middle of the South Pacific between Australia and New Zealand. They had got hit by a hurricane. Myself and several other entrepreneurs who raised a bunch of money bought a bunch of water filters and gave them clean drinking water. After you see people don’t have clean drinking water, when you come home and you turn a tap and magically water appears, you can never be ungrateful. You have something to be grateful for. If you are reading this right now, you have a lot to be grateful for. You have a computer, Wi-Fi and technology. We have so much to be grateful for. I know it doesn’t sound very real estate-esque but that’s the secret. It’s practicing gratitude. Setting goals for where you want to get but being happy for where you’re at too.

That’s one of my big tenets of real estate. I call it the master key of bliss, is gratitude. Thank you so much for sharing that. What would you say is one daily practice that you do that contributes to your personal success?

REW 45 | Radical Real Estate Revolution

Radical Real Estate Revolution

Since I answered it for the second one, I’m going to give you a different answer. The other thing that I do, and this is what I talked about on the TEDx stage. When I was younger, I was always chasing money. I became a workaholic as a result of it. I didn’t mind it because I’m very passionate about real estate. I certainly was back then when I was younger. I was extra passionate because I love being in the trenches. Now I’ve got grandkids, my priorities have changed. For me, every day I wake up, I figure what makes me happy. Instead of figuring out how do I make more money, it’s what can I do to make myself happier?

That’s why I travel a lot because that’s one of my favorite things to do or hanging out with my grandkids, spending a lot of time with them. When my daughter was growing up, when I was a workaholic, I did not spend nearly as much time as I should have. If I could go back, I would definitely change that. Happiness for sure and then fulfillment. To me, fulfillment comes from helping other people. That’s why I do a lot of philanthropy and a lot of giveback projects. I love to help other people because, at the end of the day, I do it selfishly because it’s a win for the people that you help. When I do it selfishly, I’m seeking more fulfillment in my life. Those are the things that I do every day. I look for where can I create more happiness and fulfillment for myself and for others. How can I go help other people? That’s what I would do. Don’t ever become a workaholic. Don’t ever let your business get in the way of family and your health. If you don’t have those other two things, it doesn’t matter how much money you’ve got in the bank. Focus on having that balance in your life, and life will become magical for you. Every day you wake up excited and happy.

It’s as if you’re repeating what comes out of my mouth all the time. Thank you for validating.

There was a time in my life where I had plenty of money in my bank account but everything else around me was falling apart. I had the big house and all the toys and I wasn’t happy. I wasn’t lit up. I was thinking, “I did everything that my parents told me. I got the degree and I did this and I did this. I did all things I was supposed to do.” This is all there is. I got this material stuff but that lights you up. You get the new car and for two weeks you’re excited about it. After that, it’s not a new car anymore. You need that next thing.

It’s like a drug. You need that next thing and the next thing. You get caught up on this treadmill where you’re always chasing after more money to get that other thing. I’m glad those days are behind me now. I love being a nomad because I got rid of a lot of my stuff that I worked hard to get. It was still good to get rid of it. Now I travel with a couple of suitcases and almost everything else, I got rid of it and it feels good. Focus on the things that are important in life. If money was no object, what are the things you would do? I’m pretty sure, for most people, it wouldn’t be to go to a job that you hate every day. Find those other things, get your money in a good position, put that on autopilot, which is some of the stuff that I teach, big passive income, and then focus on the things that matter in life. When you say success, success to me isn’t money. Money is part of it for sure. To me, success is having a well-rounded, healthy, happy, and fulfilled life.

Thank you for that. Ladies, we are going to be talking more about the economy specifically and what Mike foresees for us in Extra. Mike, thank you so much for joining us for this portion of the show, for what you’ve already shared. It’s been amazing.

Thank you for having me. I am grateful to be here and I appreciate you so much.

Thank you, Mike. Ladies, thank you for joining Mike and me for this portion of the show. In Extra, we’re going to be talking about the economy and what we can expect. If you’re not subscribed to Extra but would like to be, go to RealEstateInvestingForWomenExtra.com and you get the first seven days for free. You can check it out and see if you like it. Download a bunch of episodes or listen to them. If you love it, stick with it. If you don’t, no obligation at all. I have to say that I love these conversations, and I have the conversations that I want to have.

They are so juicy and full of great content. It’s like a quick pick me up, something I can do to make my world better. I love Extra. Ladies, definitely check that out. For those of you who are leaving us now, thank you so much for joining Mike 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.

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About Mike Wolf

REW 45 | Radical Real Estate RevolutionMike Wolf is a self-made freedom lifestyle entrepreneur, multimillionaire investor, and international speaker.

He has been investing in real estate for almost 30 years and has been involved in several other entrepreneurial ventures.

 

 

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Randy Lawrence On Balancing Real Estate Focus Between Earning Money And Helping Others

 

Playing the jack of all trades card in real estate is not a good idea. Instead, the best real estate focus is all about determining which type of property you can make the most money out of. But one essential factor must not be forgotten when laying out your strategy: going beyond expectations and helping people. Moneeka Sawyer is joined by Randy Lawrence of Prosperity Capital Partners, dubbed as the Real Estate Preacher, to share his secrets in designing such an elaborate plan that actually works. He shares how he maintains a consistent real estate cashflow by concentrating on deals aligned with his goals and values, all while serving the people through small gifts and free programs.

Listen to the podcast here:

Randy Lawrence On Balancing Real Estate Focus Between Earning Money And Helping Others

Real Estate Investing For Women

I am so excited to welcome to the show, Randy Lawrence, who is known as The Real Estate Preacher. Success as a Financial Advisor and Wealth Manager wasn’t enough for Randy Lawrence in 2003. He knew there was a better way to build wealth and was determined to find it for himself and his family, and that’s what led him to real estate. He has been operating as an investor since 2003. He has had double-digit real estate investor returns with no loss of capital for seventeen years. He has single-family houses and has flipped 75 homes a year. He has over $100 million in ownership and management of apartment complexes and he has a Bachelor’s in Finance and a minor in Economics. How are you, Randy?

It’s awesome to be connected together on the show. I’m so excited about being a blessing to all of your readers.

Give us the two-minute high level story of what got you into real estate and what ignited your passion for it?

My degree is in Finance Economics. I knew at eighteen or whatever, the movie Wall Street was out and I’m going to be a stockbroker and all that back then. I got my degree in Finance and became a stockbroker. I opened my company. I was a money manager and registered investment advisor. I bought my first multifamily, a little small duplex in ‘99 and saw the power of what real estate could do in terms of the consistency of the return. The beta adjusted return or risk adjusted return, comparative to what we were doing in these stock portfolios compared to what I was getting in this real estate.

It began to set that in motion like, “This is benefiting me so much. I want to be able to benefit my clients,” because stock market regardless of how good you are, there’s the up and down. In 2003, we started the private equity company and started focusing on purchasing apartments and single-family homes, working together to help other investors be able to leverage that. We sold our money management company in 2006 and 2003, as I said, started our real estate investing career and journey and helping others as well.

Is that your main focus? You don’t do any of the money management stuff anymore?

No. There was a bit of time where it overlapped from ‘03 to ‘06 and then ‘06, I sold my company to some other advisors that we were partnered together with, and they took over the practice and the management of the clients. A number of those clients came with me as well, also at the same time, some people were conditioned for stocks and bonds. We began focusing on preaching that message, if you will, hence the real estate preacher of what real estate can do for your financial life. Other investors started coming and investing with us either in the small apartment buildings or in the houses. From that period of time to now, I probably flipped a thousand houses. We still have a residential division that buy, fix and sell, about 75 houses a year. Our main focus is in the large-scale multifamily. We have now about 135 million, roughly fifteen apartment complexes, large-scale 75-unit to 200-unit apartment complexes. That continues to be our focus going forward as we scale and grow the company.

It is interesting to me that you moved from financial planner to real estate instead of integrating the two, which indicates your passion for real estate. I’ve seen a lot of people that try to marry them. They feel like the real wealth planning is as a financial planner, and real estate is this other thing. I’m like you, it’s all about the real estate. That’s where the real money is.

One of the things you touched on in the bio, genuinely we’ve had seventeen years with all our private capital individuals. I’ve never lost any money and made double-digit returns. I could not say that as a wealth money manager in the stock arena because the truth is you have the tech crash in ‘99. People lost money in their portfolio. There were other recessions that we went through. That’s the nature of the stock market investment. You’re going to balance it out, “This year is up 30%, this year it’s down 15%.” That’s a difficult thing. Even though I understand that, not everybody can tolerate that. Plenty of people when they’re down 20%, they couldn’t stomach it anymore. They’ve got to sell to assuage that difficulties and they’re locked in that loss. It was something I saw the benefits of the real estate is you have such greater stability and greater return, and you don’t have that massive volatility that you have and you still have the ability to get those double digit returns. When I looked at that I’m like, “Hands down, this is the way for my family and me, no doubt, to create wealth for our family.” It’s the best way to do that for others.

Successful people are not focusing on what didn't work. They're focusing on what they're successful at. Click To Tweet

When you talk about double digit returns, I know I’m totally skipping the gun. What kinds of returns are you guys looking at? We’ll talk more about how he does it. I’m curious.

Anywhere from 10% to 14% and then consistently over the seventeen years, 12% as a consistent return. Even some of our growth-oriented projects we do probably are sixteen-plus type return. For the longer term history, it’s right there 12%. What I’ve learned is consistency is what’s sexy. Sometimes people are, “There’s 20% thing. It’s up, it’s down.” The real pathway to generating long-term wealth is to consistently make money, keep the money that you have, consistently grow it well and that’s generational wealth that you accumulate.

That’s funny the way that you said that. There have been many people on this show that talk about, “Make money fast. You buy foreclosures, do this, do that.” There have not been that many on this show, but I hear it all around, “Do your flips. Become a wholesale or do all these things.” It’s a glorified job, but it’s sexy because it’s money that happens fast. My strategy of buy, hold, wait, have good tenants, keep them up, build equity, build cashflow, it doesn’t sound that sexy because it takes time.

The reality is you can jump to every other opportunity out there. There’s one that will perform consistently. That’s looking at real estate, whether you’re doing syndication, a part of your multi-unit, single-family homes, mobile home parks, whatever it is you’re doing, have the long-term vision to hold on and stay in the game. There will be times when it goes down, but it’s not going to go down like the stock market does. There’s usually going to be a recovery, give yourself the time to be right and to benefit.

That’s the thing you nailed too. By having quality cashflowing real estate type investments, that if there is a period where it’s a little bit on a down slope, whether it’s in the economy or that particular area, that consistency of the cashflow helps to continue to support through that period of time as you navigate through it. There are many benefits to real estate that are not imbued to other investments. I talk to people, “I’m the turtle of the tortoise and the hare.” The turtle won the race by consistency. Jack rabbit jumped around here and there, doing this, doing that. At the end of the story, he lost the race.

When I go back to what has been one of our keys to the success over that period of time is that discipline. We’ve been super disciplined and very focused. It’s not like, “This year we’re doing a ground up construction in Vegas. Next year, I’m doing storage in Europe. Next year, I’m doing condos in Belize.” That’s not it at all. We’re focused, very clear about what we’re going to do. To some people, they go, “That’s boring.” Making real money and accumulating real wealth has a boring component to it because you’re doing this same thing over and over consistently. It’s about the result. I know you preach about what the lifestyle can be, the blissful element of what you’re able to achieve. That’s what got to be a driver for people in their decision-making process.

It is boring. If you want exciting, go to the stock market. Leave us 50% at the beginning of the year. If that’s what you want to do, go do that.

Go skydiving for the adventure but keep your money growing great.

You talked about discipline as being one of the keys to success. What are the other ones?

REW 44 | Real Estate Focus

Real Estate Focus: Even if you don’t have that massive volatility, you can still get those double-digit returns.

 

The other one is critical. It’s not only the discipline, but then the focus. I love the fact too with the readers being able to partake of your wisdom and then even in the inner circle to learn more as well too, is that you can hear what different people are doing and saying, “I see that this area is the right area for me.” For us, it’s mutifamily apartment complexes. That’s the thing that we’ve developed in a very niche focus, even within with workforce housing, for regular working Americans. With that focus, we’ve been able to identify exactly what works well, what the systems are, the economics behind it. Now, it gives us liberation or freedom to skew these one-off opportunities that don’t fit in there.

Somebody calls me up, “I got this incredible ground-up project in Vegas. You should partner with us and do it.” The truth is that would suck me into a black hole of doing all this stuff over here that’s not within our focus. It doesn’t mean people don’t make money in that arena. It doesn’t mean that may not be something in the future we would develop as a whole division with the right resources, but it’s not within our focus. That’s where with the focus we’re able to scale. That’s such a thing that people miss out on because you alluded to it in an earlier comment where people are like, “I’m going to do the flipping. I’m going to do the wholesaling. I’m going to do this. They’re doing lease options. That sounds great.” You become a Jack of all trades and a master of none.

I sent out an email that was, “You’re going to make mistakes. Things are going to get hard at some point,” because usually in the very beginning, that’s where your learning curve is. Every single time if things get hard, that’s when you jump, you never ever get to see success. The truth is it will always be hard in the beginning. Even if it’s an easy strategy, buy a house, put a renter in, wait for twenty years. In the beginning, you’re going to be like, “There are these contracts. I have to make decisions on contingencies. Do I buy a pretty house or do I buy what I’m going to fix up?” There are still decisions. It’s never as easy as somebody who’s successful tells you it is, because they’re excited about their success.

They’re not focusing on what didn’t work. They’re focusing on what they’re successful at. When you get in there, now you get to determine, you get to see what it’s like to be in the mud to be doing the work. It’s never a cakewalk in the beginning. Choose something that is aligned with you and your goals. We’ve talked about that too, aligned with your goals, aligned with who you are, how much money you want to make and how much time you’ve got to make it. Do you want to cashflow or appreciation? Do you want to be hands on? Do you want to do syndication? What is it? Stick with it. Over the long run, there are a million ways to make $1 million in real estate. We don’t have to pick exactly the right one.

That’s the thing too that you said that’s right on is I talk to people about that, even investors that invest with us like, “You have to come to what’s true for you. You have to do what’s in alignment for you and then be okay with that.” It may not be that everybody’s cup of tea is to have ownership of twenty houses that they’re managing themselves. I know friends that have 800 houses. Everybody has got a different temperament, everybody has got a different aptitude, a different core that works well for them. That’s what you got to see, what’s the right thing and that’s going to help you because you’re going to have to stay with it. That’s the key. I remember in 2008, people in real estate, they were gone. The market crashed.

In Florida where I’m at, it dropped 50%. It was a ghost town and other people that were investors instead of fighting through those things fled and went back to that work for Bank of America. “Real estate is getting better in 2013. I’m going to come back.” You missed the goal. The goal was working through the difficulties. Quite frankly, that’s what also helped us to become super strategic. Having to go through those fires created a refinement in us so that we were very laser-focused on being strategic from mistakes that you’re learning from in the middle of that, to then now be hyper-intensely focused, being strategic about looking ahead, multiple years out in the decisions you make how that plays out down the road. The people that jumped out because it was too difficult, they missed out on that gold. That’s why we are where we are at and where they’re at.

Randy, I love the way you talked about that whole crash. I’ve heard on this show that anybody who says they didn’t lose money in 2008 are lying. I know that I did not lose any money. I ended up making $1 million within five years. What that had to do was not that I’m brilliant, but that I had the long-term vision. I didn’t foresee this and I made bad choices but I had a very core strategy, which was I needed to never be so leveraged that I couldn’t cover my mortgages either with my reserve funds or with my rents. It’s super simple things. What happened for me too is in 2008, when our properties are all lost 50% and at least the mortgages were being covered by my renters, it didn’t make me take a look at even me, “What is my vision of my business?”

Getting strategic, taking a look at the thing that we didn’t think would ever happen in California happened. Many of my friends lost their shirts. It was horrible. That’s not what happened to us. We’re lucky, but we were also very strategic and have become more so. I love that you talk about that even with multifamily. Could you tell us about what did you learn? What were those pieces that you took out of that?

The number one thing I would say is strategic in decision-making because there are some of the things ahead of that where we are located in Pinellas County, which is the Tampa Bay, MSA of Florida, super white hot real estate market at the time. Quite honestly, we were buying properties as to where you could get them. It was hard to get them. You get what you get and don’t throw a fit. When the crash came and the meltdown came and again, there were a lot of things, whole neighborhoods went ghost with foreclosures. We even saw in some of our lower-end apartment complexes in D area, smaller places, the rents dropped almost in half because people were almost given houses away to rent them to fill them back up.

Align your business plans with your goals, who you are, how much money you want to make, and how much time you have to make it. Click To Tweet

It showed me the lack of clarity that some of the decisions were made in the earlier years, say maybe in ‘05 and ‘06, that then were difficult now in ‘08, ‘09 that I had to work through. Working through those difficulties, it made me see the power of being strategic and understanding the way I’m making this decisions now. What are those ramifications as to what it looks like 3, 5, 10 years from now, and then making sure that they’re aligned. In fact, what we do now is we work mostly backwards, where I want to be, where my firm wants to be 5, 10 years from now. We just went through a thing where we are working out 30 years from now. When we talked about Tahoe before the show, I can see myself at 85 in my office, overlooking Tahoe in my home as the chairman, talking to the CEO. I’m mapping out those plans now for that, which is 35 years from now.

Being strategic now, that’s very dry, not exciting for a lot of people because it includes being pragmatic, where you’re not emotionally driven by it, but you’re looking at more of a factual thing. It’s more of a calculated focus decision-making. That would probably be the number one thing. The number two thing is being in the right areas. Even now, we skewed a purchase in one of the areas we’re in because the pocket it was in on a dead end street was surrounded by some other unwell run complexes that had suffered in the last downturn and still hadn’t got back significantly.

What that made us think about is, “If we have a little bit more economic softening, you’ve got two other properties dragging this thing down and you’re on a dead end cul-de-sac with other lackluster properties in an area that’s not as desirable. You’re fighting against the stream. No, thanks. We’ll pass.” We had that from the experience of 2008, where some of the properties that were in less desirable areas, they were good cashflow before but not when it went bad.

Being very focused on what is the right area, what are the things around you that make it a good area? You don’t have to be in an A-class area to be a good area, but you have to have good drivers. You’ve got to have good quality people. You’ve got to have good economics for jobs. There have got to be positive things that exist there so that when economics have a little bit of a struggle, your area is still weathering that well and your investments are doing well.

I loved the way you said about going downstream or going upstream. You talked about a stream. For me, one of the things that I always tell people is never be the nicest house on a block, never be the nicest building on a block. You want to make sure that you’re in the flow and that you’re not pulling it down or pulling it up. Because if you’re pulling it up, that means others are pulling you down.

You nailed it on your houses you alluded to is the underwriting is critical. You made sure that your debt was going to be supported. One of our principles that we operate by in our underwriting of investment complexes is we’re never the pioneer, always the settler. If we have to say, “We’re going to be the first one in the marketplace to charge $1,200 rent.” That’s not the place we’re buying. We want to be that there are three competitors offering $1,200 rent. Our rent is $975. We’re going to renovate the place and now offer our rent at $1,150. We’re a little cheaper than them or just as nice if not nicer because it’s brand new renovations and we’re not leading. We’re cleaning up behind them because we’re offering a better product at a better price. What I believe is also better management with better focus on benefiting our tenants.

I run my business the exact same way. It’s good to hear somebody else doing the same thing. They’re fully remodeled, absolutely stunning. I’m always in the middle of the range of what I could charge for that. I’m always a little bit cheaper from a much nicer place. We have all the other core values as you too is putting a good home, making sure that the tenants are happy, management has done well and all of those things.

I was talking with another person about this. It’s the thing that a lot of people learned in Sunday school as a kid. They’re the principle of, “Give and it’s given to you.” A lot of times, if we’re honest as a human being, we’re a little selfish. We want to take care of ourselves first. The funny thing about it is the principle is true. If you will give to help the other human beings, then God, the universe, however you want to put that together, it comes back to you and you receive it. The amount that you have actually grows.

Even for me, when I was a stockbroker and a young guy at eighteen, I wanted to become a stockbroker because Gordon Gekko and stockbroker and making money is like, “What better place to make money than where the money is?” As I matured and grew, it became less about me making money and more about, “What can I do that’s going to benefit other people?” Think and Grow Rich, Napoleon Hill talks about that as well. That’s a key component is serving others will now then begin to enrich you. That’s the truth. It takes us a while to get there. At least, it took me.

REW 44 | Real Estate Focus

Real Estate Focus: Having a consistent cash flow can help support you through a period of time navigating in the real estate industry.

 

It takes a level of maturity for sure on that. In real estate, the numbers have to work but you don’t have to nickel and dime them to work. In other words, you don’t need to charge $1,250. You can charge $1,175. As long as the numbers still work, you’re going to do better because your renters will stay longer. Everybody is going to be happier. This is the thing that happens so much in real estate investing when you’re talking about flipping and wholesaling and these other things that we do. Your margins are so tight that you have to pay attention to those nickels and dimes. I much prefer to run a business that’s about giving, expansion and creating good things for our communities and for our renters. It’s a very different mindset.

This then goes back to the underwriting that you started off with too. If you fudge your numbers and people do this all the time, where they try to make the deal work. They push the limit of the numbers or everything’s got to be exactly perfect, razor-sharp perfect for it to work. What happens is they do it, they buy it and then 6 months, 12 months in they’re experiencing these problems. They’ve got to be pushed to the thread to try to make it all work. That goes back to me having an experience in 2008 and going through that fire, I learned it a long time ago. I’d rather not buy a deal than have to pay for it three years from now with all headaches and problems.

That’s where sticking to your core, criteria and value or however you want to put it to make sure your numbers work. If it’s a deal that doesn’t work, it’s not a deal. You move on through it. We’ve created an entire system where we have an underwriting system where every week I get a two-page 11×14 sheet with our team meeting at one of our acquisition underwriting people. We’re underwriting a bunch of properties to filter through which ones are no good which one trickle up to meet our criteria. We’re able to then hone into those top 2 or 3 that fit our criteria and then see out of those three, “This one looks like it’s going to work for us.” It’s a lot of work. There’s no success I’ve ever seen that doesn’t entail that discipline in work.

There’s a lot of focus with you and your company with helping to create a better life for working class Americans through apartments. You do syndications of apartments. Your whole focus is about benefiting the tenants lives, benefiting the investors and of course benefiting your company. There’s a win-win-win. You came to me as a referral from someone I very much respect, I know that’s not lip service. That’s something that you live by. There’s Twelve Tenets of Bliss and one of them is giving back. Feeling blessed for what we have and then giving back and sharing that with the world. I know that’s where you come from too. Could you talk about that?

We’ve started our initiatives. Premise number one is it’s got to be financially sound complex, for sure. You can’t benefit others if you’re not on stable ground. It’s got to be a solid investment, but we go in and we’re now transforming the community to make it a better quality of life physically. We’re making the exterior appear better, be nicer. We’re transitioning out, some of the tenants that don’t fit that model because we’re inheriting some of them that maybe are not quality disciplined, hardworking people. We’re transitioning them out, get the bad apples that may ruin the bunch so to speak. We’re then also renovating and transforming the insidesto have a new, nice quality apartment.

From there, we’re also implementing standardswith our management team and our maintenance where we want maintenance items addressed within 24 hours. It’s maybe a small thing. Parts got to be ordered, but they’re still being addressed in 24 hours so that this person knows they’re being taken care of. It’s fixed, three days later when the part comes in, but that’s a requirement and a KPI that we put in place to monitor for our management team and to see how they’re doing on that. What we’ve also done is to do community initiatives.

In 2021, we’re rolling out on a national basis with one of our internal team members to have a KPI, the eyes as probably a third of their job is making sure these projects and these programs are happening at every complex. What that is, we are doing a back to school drive for the complexes and empowering them, partnering together with oftentimes local faith-based organizations or community-based organizations. We’re providing these back to school backpacks, but also connecting them together for those that want with additional resources of people that can be helped to them in the community.

Also doing a Mother’s Day thing, where we go to all of the single moms in the community. We deliver to them flowers and a Starbucks gift card recognizing, “You’re making a sacrifice as a single mom. We appreciate and respect that and want to bless you and encourage you.” A lot of times, that’s a thankless job and something that simple goes a long way. The other thing is doing a spring or summer festival there at the complex with hot dogs, cookout and celebration and community feel. All of it is design to impart to the residents.

We’re also working with another organization, non-profit organization to develop a financial literacy program to help them develop financial acumen. I’ve got another couple of friends of mine that have done entrepreneur-based programs. That’s a second generation that this is all of it’s free. If you’re living in our complex, it’s free. If you want to learn how to better manage your money, you can go through this course to learn how to better manage your money. If you have a desire to become entrepreneur, here are some principles through this entrepreneurial track. I’d love to get the development of a real estate program too, to teach, whether it’s wholesaling. There are several other educator people I know as well that in that space, but that’ll be another track.

There are a million ways to make a million dollars in real estate. You don't have to pick exactly the right one. Click To Tweet

The design of it is to help prosper their life. First, their own wellbeing living in the complex. Secondly, their financial ability to manage their affairs better. Third, a spiritual connection. If that’s something that’s desired and fourth, a greater sense of community in where they live. We’re excited. We’ve done it at numerous complexes, but the exciting thing is as part of someone’s job within our company, that’s going to be 1/3 to 50% of their job role full-time is ensuring that these programs are carried out at every complex. Reporting back as part of their regular monthly, quarterly KPIs.

I’ve never heard of anybody that does that.

I came from a broken home, single-parent, predominant, upbringing and didn’t have any money. Powdered milk was I thought was what milk was until I went to a friend’s house and realized, “There’s real milk.” I recognize that many of the people that live in our complexes that are regular working Americans making $30,000 to $60,000 a year. A lot of those folks are going to be permanent renters for life based on where they’re at. Our goal and desire is to help them to have a better quality of life. The by-product of this and it goes back to what we said about the give and it’s given to you, is that there’s going to bemore stickiness in the community, less turnover. Any number of economic benefits of will come from that but our primary motivation is to genuinely benefit those people’s lives. Most people, if we’re honest about it, they don’t care about it other than what is the financial metric.

They’re like, “I don’t give a crap about that. What’s my return? What’s my money?” That’s not where we’re coming from. I believe that also generates even what will be a greater success than what we’ve already achieved because that’s our mission and our intent. I think the second driver of that is the empowering our investors. That came in 2015. I had a lady that was invested with us for about probably thirteen years at that time. She said, “Randy, I want to thank you for what you’ve done for my family.” I’m like, “What do you mean?” She said, “It’s because of investing with you, when the economy tanked that income buoyed my business.” She owned a retail furniture business in a commercial Plaza. In 2008, nobody is buying furniture. They could barely keep their house.

She said, “After that in ‘09 and ‘10, both my kids were entering college. That income paid for one to become a school teacher and one to become a firefighter. At the time, I’m getting ready to sell the business in the plaza and put that with you to take care of my mom who’s dying of Alzheimer’s.” It was very impactful to me because we make money as well too. I’ve been in this for a long time. Sometimes you get a little immune to it. I’m out jogging on the beach. That’s a time where I think and talk to God and think through thoughts in my mind.

It was such a clear moment. It’s like, “Here are three generations of this family that their life was changed forever. The trajectory of three generations because of their ability to get secure quality returns in investing with us. She couldn’t become a real estate pro like me, but she was connected together with us and it literally changed their life.” That became more of a mission for me. To be on a mission to change people’s lives by being able to have that investment return. It dawned on me too. It’s like, “Where would you be if you hadn’t lost money over the last few years?” Most people are like, “I’ve lost,” because it’s true, whether it’s bad stock investment, bad business investment or bad whatever investment. That has been a super driver for me as well because people have asked me, “Randy, why don’t you go to Tahoe now?”

I love helping people. That’s part of the thing. For me it’s more of this mission to do more, to help more. It’s not at this point about getting more for Randy and Sara Jo. That’s the thing that’s super exciting for me and drives that. There were tons of stories we’ve got of investors that have invested with us that has changed their life. I think of one guy. A doctor and his wife they were their broker, at wherever brokerage firm. They had him on the live until you’re 90 and die plan. If you live to 90, you’ll have enough money. He had good amount money but that’s the plan. It’s like, “What a terrible plan?”

He transitioned over to real estate. They’re traveling on vacation. They support the Girl Scouts and Boy Scouts camp down the road that helped keep that open. Through their church, they support an orphanage in Brazil. They go there once a year on mission trips. Plus, they have enough money to provide for their own lifestyle and will have money at the end for an inheritance for their kids. They’re happy, excited and blissful. It’s super cool to see how that works.

I know that we’re going to talk more about this in EXTRA, but could you give us a high level of exactly how investors do this with you?

REW 44 | Real Estate Focus

Real Estate Focus: Being strategic can be a bit unexciting for many people because it calls for a pragmatic approach instead of being emotionally-driven.

 

What we do is we go in, we buy a complex let’s say for $10 million. We get government-backed Fannie Mae, Freddie Mac bank type loan for say $7.5 million. They then invest with us in that additional $2.5 million. They’re participating in the returns in that project. We’re doing all of the sourcing of the program or property. Management of the programs that we talked about, renovation and oversight of the complex. Everything from soup to nuts, start to finish, we oversee all of that. They’re getting basically a quarterly distribution off of the returns from the project. A built-in appreciation that when the property is later refinanced or sold, they’re getting paid at that time as well. The other thing that’s super amazing about multifamily apartments is the level of depreciation you get.

When you invest $100,000 round numbers, in that first year, you may get $7,000 or $8,000 in terms of income that comes in. In that first year, your typical depreciation may be $40,000, $45,000 as a loss in that first year. That offsets that tax responsibility on that $7,000, $8,000 income you received. It’s a super tax-efficient vehicle. For us, because of the volume of our business, what we do, we set it up where investors can now start investing. Like we used to do in the money management, you ladder the investments. After a period of years, call it maybe 2, 3 years, your investments are maturing where the complex is sold and now it goes into the next one and you start the process over again. You’re maximizing the tax efficiency of it.

It’s a hands-free opportunity for them to invest and to get a double-digit return, have security, have cashflow and have appreciation. That’s how it changed that doctor’s life. He was on the broker plan, which was like, “Draw your money down until you die.” Where with our investing, you’re getting cashflow that supports your lifestyle. You’re getting appreciation that’s built-in to grow it. If you’re still in a working phase, you can take that money that’s coming in on the cashflow and then reinvest it on the next deal as that’s accumulating.

Do you make those double digit returns from the very beginning like the second that you invest or is there a waiting period on that?

It’s typically a waiting period to experience that. Normally speaking, your cashflow is going to be 7% to 8% in that first year or two. To get that additional infusion, that’s going to bring you up into the double digit return. That’s going to come at the capital event probably in year three-ish. A lot of our programs are anywhere from 2 to 4years. We’re buying 5 to 8 complexes a year. With that, we have some projects that are 2, 3, 4 years in length, based on the size, the amount of work that’s got to be done, all of the variables that go into it. That way, that person can work with us to determine what’s the best fit for them as to how quickly they want to get to that place and then having that money reinvested. some people are like, “I’d rather put it with you and keep it for ten years.” We don’t go that long. Others would like to be in the shorter-term, two-year, because then they get that double-digit kicker in the backend.

Do you have a minimum to invest?

Typically on our deals, it’s a $100,000.

Randy has committed to hang out with us for EXTRA. He’s going to do a deeper dive on the power of syndication, which is what he’s talking about. You invest on a property that he is a managing and all of that stuff. We’re going to talk an EXTRA about that power of syndication and some of the intricate details that we don’t think about that he knows because he’s an expert. We’ll be doing that in EXTRA. Randy, could you tell everybody how they can reach you?

You can connect us at our website, which is www.PCPRE.net. That’s stands for Prosperity Capital Real Estate. You can connect with us there or check out The Real Estate Preacher Podcast. We’re happy to connect with you there as well.

If you help other human beings, then God or the universe will see to it that it comes back to you. Click To Tweet

Thank you for that.

Thank you so much. What a blessing. I enjoyed it and I’m looking forward to EXTRA as well.

Are you ready for our three rapid-fire questions?

Yes.

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

Action is key. You have to take action. You’ve got to move forward. Be willing to not have it be exactly perfect. Move forward, take action and iterate. Take a change if you need to, but take it to action.

Tell us one strategy on being successful in real estate investing.

One strategy that’s going to be key is what we talked about and that is focus. You’ve got to focus, explore what the options may be, whatever it is, focus on the one thing and then work through it. As Moneeka said, “Keep going.” When it gets difficult, don’t turn and say, “No. I’m going to try this next thing.” Stay with it and stay focused.

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

You’ve got to have a daily routine right out of the gate in the morning to ground you. For me, I spend probably an hour every morning where I’m praying, reading the Bible, meditating, visualizing, developing a spirit of gratitude and genuinely being thankful for blessings in my life like my wife and I can see us getting married. Waking up in the morning and being grateful for it being here for another day and developing that. Being grateful for the outcomes I want for the day as though I’ve experienced them. Developing a practice in a ritual so that the first thing you do in the morning is not look at this or check your email or whatever, but to connect so that you can be grounded, focused and energized for the day.

REW 44 | Real Estate Focus

Real Estate Focus: Focus and explore all available options you may have. Then, pick one thing you want to concentrate on and work through it.

 

I love this whole thing about being grateful for what you achieved in the end of the day, but you start in the beginning of the day. That’s a beautiful visualization practice. I’m going to take that one.

In connecting it together, I have a sequence of three things I visualize and typically, one of them is almost always my wife and I can see us walking down the aisle, getting married and how grateful I was. She’s a beautiful soul and beautiful lady. One other thing, that’s a big thing a lot of times is my daughter being born or some experience. We had her and I on a dive trip and then one small thing. Now, you’re in the spirit of gratitude for these things you’ve already experienced. I next go individualizing and being grateful for this complex coming together that we’re under negotiation to buy or the successful outcome of whatever this thing I’m working on now. That gratitude energy is already there from you having experienced those already moments. These ones become real. It’s super powerful.

Thank you so much for everything you’ve offered on this portion of the show. I can’t wait until EXTRA.

Thank you so much, Moneeka. It’s been fantastic.

Ladies, thank you for joining Randy and I, for this portion of the show. Stay tuned for EXTRA where we’re going to be taking a deep dive on the true power of syndication and how you can benefit from that. If you are subscribed to EXTRA, stay tuned. If you’re not but would like to be, go to RealEstateInvestingForWomenExtra.com. You get seven days for free. This might be the time to jump in there and subscribe and take a look at this EXTRA. Thank you so much for joining Randy and I. Until then, remember goals without action are just dreams. Get out there, take action and create the life your heart deeply desires.

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About Randy Lawrence

REW 44 | Real Estate Focus

Randy Lawrence is known as a veteran real estate investor with decades of experience with single- and multi-family properties as well as a transformational community leader and church founder.

After receiving a degree in Finance with a minor in Economics, Randy began his career as a traditional wealth manager. Randy understands finance and investing strategies in the broadest sense. Randy previously held Series 7 and 65 licenses from the National Association of Securities Dealers as a Securities Dealer and Registered Investment Advisor. Randy worked in the Money Management sector for fifteen years and owned his own company which he sold in 2006. Ultimately Randy determined that real estate was the ideal investment vehicle for his own portfolio, and early on (over sixteen years ago), he began partnering with other investors, to their mutual benefit.

Today, Randy oversees a real estate portfolio of $160MM in multi-family assets and is on track to double these holdings in the next three years.

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Live Fearlessly With Rhonda Britten – Real Estate Women

REW 43 | Live Fearlessly

 

Life can be tough. There will be moments where the only way we think we can cope through is by wallowing in fear and becoming the victim of what happened to us. Rhonda Britten chose the other way and decided to live fearlessly. This Emmy Award winner and master coach who has changed lives in over 600 episodes of reality television joins Moneeka Sawyer in this episode to share with us her inspiring story. Not without her own difficulties, Rhonda takes us to the worst day of her life, leading her to spiral out of control and, later on, finding her way into the person who helps others come out of the victim story, build the strength to overcome fear and take on life in a bold and fearless way. Join her in this conversation to start your way into the fearless journey of owning your power.

Listen to the podcast here:

Live Fearlessly With Rhonda Britten – Real Estate Women

Real Estate Investing For Women

I am so excited to welcome to the show our guest, Rhonda Britten. She is an Emmy Award winner, repeat Oprah guest and master coach that has changed lives in over 600 episodes of reality television. She authored four bestsellers including her seminal work, Fearless Livingtranslated into eighteen languages, and founded the Fearless Living Institute, the home of Fearless Living Life Coach Certification Program. It is considered the Ivy League of life coach training.

She was the first life coach on television in the world and appeared for three seasons as the head life coach and the hit daytime NBC show Starting Over. She was named its most valuable player by the New York Times and heralded as America’s favorite life coach, she brings the neuroscience of fear down to earth, giving you a path out of not being good enough using the “Wheels” technology she developed that saved her own life. She’s been read, heard and watched by millions, coached tens of thousands of clients, trained hundreds of coaches and wants to share all that she knows with you too. Welcome to the show, Rhonda. How are you?

I am so excited to be here. Every day is a good day to get fearless. Specifically, now is a good day to get fearless because of your topic. I love what you do.

Thank you. I love what I do too and I love what you do so we’re going to be a match made in heaven. Rhonda, tell us a little bit about you. I’d love to hear your story.

What you’re asking about is what got me here. What made me Rhonda Britten? Why me, why now, why do I get to even tell anybody about fear and how to get fearless? What gives me the right? Let me say I didn’t read it from a book even though I read a lot of books, and I didn’t learn it at a workshop even though I’ve taken a lot of workshops. The work of Fearless Living is from my own life experience and soul. As you said earlier about it saved my own life and it did.

I’m going to share the worst day of my life. It was Father’s Day. I was fourteen years old. I grew up in a little tiny town in Upper Michigan, 365 inches of snow a year, two restaurants, we’re talking little. My parents had separated. My father was coming to take us out to brunch. I don’t know about you but we didn’t grow up going out to dinner. There are three kids and two adults. There are five people. That’s a lot of people. My dad coming to take us to brunch is the biggest deal. I’m so excited because we never go out to eat. My mother made me a brand new dress. That’s how fancy it was. My mom is in her bedroom, putting on a blue eye shadow and fluffing for a beehive. My dad walks in. My sisters are fighting it out in our one bathroom.

Me, my mom and dad start walking out. My sisters still fighting out in our one bathroom. As me, my mom, and dad with my sisters still in the bathroom, go start walking out to the car. It starts raining. My dad looks at me and says, “I got to get my coat from the car.” He takes the key in, puts it in the trunk, and opens it up. Out of the corner of my eye, I see that he is not grabbing a coat. He is grabbing a gun and he starts screaming, “You made me do this,” and he fires. He shoots my mother. I start screaming, “Dad, what are you doing? Stop.”

He cocks the gun and he looks at me. I look at him and he blinks an eye. I’m 100% believe I’m next. I’m going to be dead in five seconds. My mother, with already a bullet inside of her, looks up and sees that gun in my face and screams, “No, don’t,” with her last breath. My father realized that my mother is still alive. He takes up a bullet intended for me and shoots my mother a second time. That second bullet enters my mother’s abdomen and goes out the back of her into the car horn. For the next twenty minutes, all I heard was a horn. The next second, my father cocks the gun again, drops to his knees, puts the gun to his head and fires. When I’m fourteen years old, I am the sole witness to my father murdering my mother and committing suicide in front of me.

When you understand how fear works, life changes for you, and you can be blissful. Click To Tweet

I don’t know how you would have responded. This is how I responded. I blamed myself because I was the only one physically outside that could have stopped it. I didn’t grab the gun. I didn’t kick my father in the shin. I didn’t jump in front of my mother even. I froze there saying, “Stop dad, stop.” That day, looking back on it, I split into two. The girl who had to be okay because I grew up in Upper Michigan, Upper Minnesota, suck it up, and everything is fine. I lived most of my life telling everybody I was fine where the internal part of me, the part that split off, was anything but fine. I was so not fine.

For the next several years, I had the battle within. The outside me, straight A student, I got a scholarship to college. I’m going to be all right. The internal me that started drinking and doing things in order to distract myself. I became an alcoholic, got three DUIs and had three suicide attempts. It was a third suicide attempt that I realized I’m not very good at killing myself. I got to figure out another way. I want to preface this by saying one thing. During those twenty years of me drinking, committing suicide, getting DUIs, remember, I split into two so there was another part of me that was perfectly wonderful. If you would have met me, I would have been like, “I’m fine.”

I read and I did everything to help myself. I went to workshops, I read books. You name it, I’ve done it. I have done everything. During those years, I tried to do everything to help myself. It wasn’t until that third suicide attempt that I realized all the things that I had tried were good information. It was a good knowledge to have but it fundamentally did not change how I felt about myself. It was good things to know but in the middle of the night, I still thought there’s something seriously wrong with me. When I got home from the psychiatric ward in my third suicide attempt because that’s where they put you when you try to kill yourself three times. They take you for evaluation. I was deemed not crazy. I went home, and said to myself, “If I’m going to live, I can’t keep doing this. I can’t keep living this. I have got to figure it out.”

Out of desperation, I started making exercises for myself. I thought to myself, I have to begin again. I got to go back to kindergarten. Shockingly to me, they started working. I didn’t think it was going to be for anybody but me. In fact, I was embarrassed that I had to create exercises because it seemed workshops, books, and therapy to helped everybody else but they didn’t help. I didn’t think differently of myself. I started making exercises and again, I didn’t think it was for anybody, but me and then a couple at church, chase me out one day and was like, “What are you doing?” I’m like, “What are you talking about? I’m not doing anything.” They’re like, “You’re doing something?” I’m like, “What? I’m not.”

It’s because I was embarrassed that I was so screwed up that workshops, books, and therapy didn’t help me and purge me of my negative thoughts. They kept badgering me. I’m like, “I’ll make it up in exercises.” They’re like, “Give me one.” I gave him one. The next week they came back and said, “It’s working. Can I have another one?” I’m like, “What?” That was the first moment that I was like, “Maybe this isn’t just for me. Maybe I just didn’t go through twenty years of how. This might have another purpose and another meaning.” I didn’t start teaching and coaching firm for years after that. There was no such thing as coaching when this happened.

I slowly but surely started doing the steps necessary in order to teach and coach. I was introduced to a mentor. Shockingly, Fearless Living, not only has it changed my life significantly but it has changed my clients’ lives and my students’ lives, and it’s miraculous. I’m very grateful that I had the opportunity to experience the life I’ve lived so far. People ask me all the time, “Would you rather have your parents alive or be Rhonda Britten?” I go, “Of course, I’d rather have my parents alive.” I am very grateful that I was willing, out of desperation, to do the work necessary in order to change my life.

It’s such an amazing story, Rhonda. It is true that there are so many people that will not do the work instead of being fearless or blissful to choose to wallow in the victimhood of, “Look at what happened to me.” I will say more people will do that than less. There’s a comfort zone about being the person that lived that life. Identifying yourself as that person, rather than trying to recreate who you are.

When I give a keynote, teach a class, or we’re talking about excuses, I say, “I have the ultimate excuse.” If I was an alcoholic on the side of the road, messed up somewhere, not living my life as me, or not living my true nature, nobody would say, “Poor Rhonda.” Everybody would be like, “You know what happened to Rhonda.” They would give up on me because I have a good excuse to be messed up. This is why I do what I do. It’s exactly what you’re saying right now. It takes tremendous courage for some people to get out of bed in the morning.

REW 43 | Live Fearlessly

Fearless Living: Live Without Excuses and Love Without Regret

For many years, it did me as well. It takes tremendous courage to get out of the victim’s story. I do believe that the only reason I got out of the victim’s story is because I got so desperate. I had tried so hard to change my life as well as keep my victim’s story but that doesn’t work. You have to let go and transform the victim’s story. You have to make it a victor story. You have to become victor but that takes great courage. There are a lot of people that stay in victim mode but I don’t blame them for that because we’re not taught.

We don’t understand how fear works because this is, again, why I do the work I do. I went to therapy and I did workshops but no one explained. They told me a lot of stuff but it didn’t fundamentally change my view of myself. The work that I do is I help people that feel like, “I’ve done everything. Why can’t I get this?” “I’ve done so many great things but why do I still have this it’s that?” It’s, “Why do I still or why can’t I get?” It is a new awareness, transformational and view of how fear works. Once you understand fear in the way that I do, all that guilt and shame fall off and that victim can be put to bed.

I would never blame someone for staying in that victim’s place. A lot of people are in that place and don’t even realize it because that’s not what it looks like. Victimhood comes in so many different shapes, forms, words, thoughts and all of that stuff. I don’t blame anybody. A lot of it is propagated by television, advertising, and news, all of those things which is why I don’t watch television. I’m careful about what’s around me but we can’t completely seal ourselves off from the world either and we wouldn’t want to.

We want to live fully. Building the strength to move yourself out of that is a hard thing. What’s interesting here is that your story is not the same as mine but I too have dealt with a lot of trauma. On the other side of that, I also became a coach. For me, I decided that my path was to focus on bliss, you have chosen the path to focus on fear. They’re the same but with different clothes. It’s not fear but fearless. It’s the lack of fear. Could you talk to me a little bit about why you made the choice to go that route?

That’s at the heart of what is stopping all of us. I believe that when you understand how fear works, life changes for you and you can be blissful. I’m sure that you’ve experienced people that want bliss but they keep getting tripped up. That trip is a sign that fear is in control. Also, for me, I’m committed. Let’s put it this way, for all of my life when I was going through alcoholism, suicides, etc., I never would have said I’m afraid. That’s the irony of this all. If you would have asked me if I’m afraid, I would be like, “No,” because I also think that people don’t even know they have fear and they’re being a victim.

They know that their life is stuck, they’re not doing what they want, they’re overwhelmed, procrastinating, perfectionism and anxious. That’s what they know. What they don’t know is all of that stems from fear. You can’t be anxious, overwhelmed, procrastinate, or infectious without a fear. When I understood how fear worked and it was God-given insight, it didn’t come from me, my life clicked into place. Everything was clicking.

I saw myself completely different. I saw the world differently because neuroscience says, “You can change your thoughts, feelings, values and beliefs. It’s a good exercise, but if you do not change the fundamental filter and system in which you operate out of, you will not create lasting change.” I help people move from that fear-based filter which they don’t even know they have to one of freedom such as bliss so that they can shift at because there’s no getting rid of fear. It’s part of our neurobiology. If you don’t understand how fear works, fear will always win and it’ll always trip you up. For me, fear is the fundamental building block of a blissful and fearless life. Without it, you’re going to keep getting stopped by it.

I have a thought around fear because this is the question that I get a lot because I talk a lot about fear in my work too. You’re right, it is foundational. Some people will say to me, “Fear is here to help us to survive. It’s a natural, good thing.” If I see a fire, fear is what makes me not put my hand in the fire. If I see cars whizzing by, fear is what makes me not jump in front of a car running across the street. Let’s talk about that. The fear that’s healthy, real, and serves us and then the fear that you’re talking about.

If you don't really understand how fear works, fear will always win. Click To Tweet

You’re talking about two different fears. You’re talking about fears instinctual to stay physically alive and we’re talking about emotional fears. I coined the term emotional fears because there was no way to describe the fears that I was talking about every day. When people talk about the whizzing traffic and the hot stove, that is instinctual, physical survival. That is physical fear. What I’m talking about and I’m sure what you talk about is emotional fears like fear of rejection, failure, inadequate, incompetent, worthless, being a loser, being stupid and being selfish. People get caught in like, “Isn’t fear good?” Yes, fear is good but if you do not know how to identify when anger is being used in fear versus freedom because anger in and of itself is neutral.

All feelings, beliefs and values can be used in service to fear of freedom. Everybody wants to have integrity. It’s one of the biggest goal like, “You have so much integrity. You’re so authentic.” A lot of people use the value of integrity through the lens of fear. If you have integrity and you’re in freedom, you’re flexible even though you have integrity. You can renegotiate. You can put your needs forward but people that use integrity out of fear, which is many people, is very rigid. They say things like, “I said I was going to do it and I’m going to do it, no matter what.”

Integrity is superseded like fear has danced with integrity. They’re using integrity as a positive but in reality, it’s fear-driven. What I always say there is no such thing as negative feelings. One of my clients said to me, “When my husband came home, he’s so negative.” I’m like, “What did he say?” “He was telling me about some guy at work that having a heart attack. I told him to quit being so negative.” I go, “That’s not negative. That’s information.” People have confused this whole conversation of what’s negative and positive. The frame needs to change to fear of freedom. We have this whole negative and positive. It’s so limiting and false. It keeps us trapped.

Talk to me about this whole concept of “I’m not good enough” that you address quite a lot.

I am not good enough as we know, from a spiritual perspective, that’s an illusion. We know that logically. We can understand that yet. It feels real when we’re feeling it. When I feel I’m not good enough, I feel it. One of the things that I work with my clients on is separating themselves from the feeling and all of the work out there that’s like, “Feel it.” It’s like, “No.” I could go on and on with feelings. There are people like, “You have to go with the feeling tone.” If you do not have awareness of where that feeling tone is coming from, you are going to be courting a feeling tone that is going to get you in places that is not good for you. That is fear-based even though it looks like it’s not.

What’s that healing tone mean?

For instance, there’s a lot of teachers out there that are like, “Go with the positive feeling tone. Get into the feeling. Let the Law of Attraction work.” It’s like, “Get into the feeling. Be the feeling. Feel the car in your hands.” That’s awesome. There is no problem with that, but if you’re driven to Law of Attraction and you want to get the car because the car is a status symbol, it’ll make you feel better, and you think you’re worthy of the car, you’re being attracted to the car out of fear. People don’t know that. They’re courting a feeling that they think is positive but it’s fear-based.

REW 43 | Live Fearlessly

Live Fearlessly: Your victimhood comes in so many different shapes, forms, words, and thoughts.

 

When I talk about people not feeling good enough, one of the things that I work with people on is separating themselves and having the awareness of how fear shows up in their life versus how freedom shows up in their life. I give people a little quiz and I ask them to rate themselves because again, as I said earlier, most people don’t even know they’re afraid. I am not good enough is an illusion. It’s a lie or fear. By the way, fear is smart. It is as smart, educated, spiritual and knowledgeable as we are. If you have evidence because excuses need evidence to make them excuses, fear takes that excuse and evidence and makes it real. You believe that you’re not good enough you because you have evidence to point to.

If you have evidence to point to, you believe the evidence because it’s right there. You’ve had three people say something, you failed three times or you have these two things happen and it’s clearly true and it feels true. What I want to do is help my clients separate from the feeling versus what freedom is. I want to have them separate those feelings, thoughts, and behaviors and choose freedom which is going to feel uncomfortable and not be something they want to do which they want to do intellectually but they don’t want to go through it. It’s like, “You got to go through the eye of a needle.”

I always say, my job and I’m sure your job is, “I hold your hand while you’re going through it. You’re not alone.” It’s not as scary as you think when you have the support and the tools that will help you get there. You need to see some guidance. My clients and my students are apprentice. I’m apprenticing them. I’m going to teach them how to be fearless as I’m sure you do as well. I’m not good enough as an illusion and the minute you believe that, fear wins.

I want to sit in everything you say for minutes and take it in. Let’s talk a little bit about this whole thing like you were saying about your client that, “My husband is so negative.” This has happened to me too. There are people that I love in my life that every single time I talk to them, they’ve got something to say that feels bad to me. They have some political spouting that they feel they need to do or they’ve got some complaint about that person. I’m like, “That’s all they do.” I would say those people are complainers and they’re negative. I want to spend as little time as possible as I can with them. I try to have as much compassion as possible but they feel negative. How do you deal with those kinds of people?

I don’t see them as negative. I see that they’re hanging on for dear life trying to find connections through their fears. Are they complaining? They might be complaining but people complain for connection. If you listen to complainers, they’re advertising their fears. They’re telling you what they’re afraid of. If you talk about the fears rather than the complaint, the conversation has an opportunity to change. Do you have to stay in a relationship with people that aren’t your cup of tea? No, but I do want my clients to have the skill to go to a family event. Their uncle is there and doesn’t believe what they believe or grumpy, old and complaining all the time.

I want them to be able to look at that uncle, love them to pieces, be able to be in somebody’s presence and recognize that the person itself is not flawed. The person who’s complaining that is “negative” is for you to see them and to give them empathy, compassion and innocence. That’s what they are crying for. The more that you can see their innocence, listen to anything in anybody and be completely sending love, innocence and connection then you do know who to hang out with and who not to hang out with. I’m not saying hang out with all those people that are complainers but I also believe that complainers, not everybody are doing it to be heard.

Can you hear what they’re saying underneath the words? Not label them negative. Anytime you call somebody negative, it writes them off. That’s not what you do because you give them compassion. I’ll preface this again by saying I am not saying you have to be in a relationship with abusers, betrayers, and people that reactivate your trauma every day. No, I do not want that for you. I also want you to have the skill of knowing what’s happening rather than you running. I don’t want my clients to hang out with their trauma abusers, the perpetrators. I want them to be awake to what’s going on underneath the surface like what’s really happening so that they don’t get caught in it themselves and keeping themselves afraid.

It’s very empowering to know that you can walk into any room and handle almost any conversation. Even if you don’t want to engage in that conversation, you can still have compassion. It’s a very empowering, uplifting filter, as you might call it, to see people asking for help rather than trying to offend you.

Enough is an illusion. It's the lie of fear. Click To Tweet

I love that you brought this up because having fearless conversations is one of the superpowers I have and one of the things I teach my students because not only do I want you to be able to go to a room and have a conversation with anybody but I also want you to be able to say, “No, thank you,” as well. Be able to be like, “That’s not happening.” Your no is as powerful as your yes. One of the things that I say all the time is, “If you can say no, your yes is meaningless.” If you don’t have permission to say no or yes for any question or invitation asked, then you are being driven by fear.

I’m not talking about your high school reunion where you’re like, “I’m going. Yes, I want to go.” That’s not what I’m talking about. I’m talking about if somebody asks you to do something and you’re like, “I better do it,” out of guilt and shame. If you’re doing something out of should, you haven’t put through the filter of what if I say no or yes and made a choice to say yes, then you are being a victim of circumstances. You’re being driven by fear. We all do that all day long. One of the exercises I give to my clients is keeping track of their shoulds every day. It’s shocking to them because they had no idea how everyday decisions were increasing their fear and powerlessness.

What came up for me around that is how much we should on other people too. We don’t feel we have a choice of yes or no then we expect others to be okay with not having a choice of yes or no. The more that you allow your own freedom, choice and power, you can then open yourself up to be that person for the people around you and then everybody expands. Love can be so much more intense, beautiful and learning expansion business, all of those things.

I’m so grateful that you said that because that is true.

I feel like we could talk forever. We’re soul sisters, Rhonda. We do have EXTRA. Rhonda and I are going to be sharing more in EXTRA. She has an interesting thing that she wants to share with you that’s called the Control or No Control Process. Could you tell us a little bit about that?

Let’s say that I had an actor come to me once as a client who said to me, “Acting is luck. I can’t seem to get any lucky breaks.” In acting, we all heard that like, “It’s a lucky break.” All the exercises that I create are either myself-generated because I need it and/or client-generated. One of my superpowers is creating unique individualized, personalized exercises is to help people truly transform in a matter of quick minutes. In that moment, he’s sitting in front of me and I’m like, “I’m going to make up this exercise.”

What it does is when you go through the exercise and when you do the follow-through, you will no longer have that feeling of powerlessness or that “should” feeling. You’re going to take your power back. You can finally get through uncertainty. You can get through the unknown and what ifs. All of those things that stop us from making decisions or makes us feel that life isn’t fair. The control, no control exercise is also going to take away that fear like, “They got something that I didn’t,” “I need a lucky break. If I was raised them then my life wouldn’t be this.” All of that conversation of powerlessness, frustration and insecurity, you’re going to see it through a very different lens and I’m going to give you some things to do so you can move from that place whenever you feel it into a different arena.

That’s going to be amazing. That’s coming up in EXTRA. It’s so awesome. Rhonda, how can people get in touch with you?

REW 43 | Live Fearlessly

Live Fearlessly: If you do not change the fundamental filter and system in which you operate out of, you actually will not create lasting change.

 

Go to FearlessLiving.org. I do have a free gift if I may.

Please share.

Go to FearlessLiving.org/Risk. When you go there, you’re going to see a page for an exercise called Stretch, Risk Or Die that will take your to-do list. That procrastination and perfectionism. Why don’t I get this done? You get your ten things on your task list and you do 1, 2, 3, skip 3 and 4, do 5, 6, 7, skip 8. Those 3, 4, 8, you put to the next day and you keep on skipping them. I’m going to show you what’s behind that skipping and what to do instead. I’m going to start you on the fearless journey of taking your power back so that you can take Stretch, Risk and Die in your life because that’s how you’re going to get comfortable in your own skin and take your power back.

I knew that when we were talking about it. As you said, this is the ultimate cure for procrastination.

It is the absolute, actual cure. You going to put your to-do list on its ear. The way you think of your goals and dreams you have for your life, you’re no longer going to think of them as a task list. You’re going to think of them through a different lens. You’re going to think about them through the emotional risk it takes because every action and new thought you have has an emotional risk to it. You’re not doing things in procrastination, perfectionism, overwhelm or anxiety because you’re not awake to the emotional risk it takes.

This exercise is going to show you how to take worksheets in there for yet. It got everything for you. It’s a very quick class. It’s three videos, fifteen minutes each so you’ll be able to have worksheets. The third video talks about the wheel of fear which is the core of my work. You’re going to see a little preview of that and it’s going to give you space to get off your back and quit beating yourself up about not doing things when you think you should.

The link for that is BlissfulInvestor.com/FearlessYou. Go get that amazing gift by Rhonda. Thank you so much for that. That is so generous.

You’re welcome. It’s my pleasure.

Success is based on your ability to live in uncertainty. Click To Tweet

Rhonda, are you ready for our three rapid-fire questions?

Yes.

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

Number one thing, you must be worth your future. You must decide that you’re worth your future because investing is a short versus long game. It’s a long game. Short-term thinking is based in fear. You’ve got to decide that you are going to make yourself worthy of long-term investment because you are worthy of success. You are worthy because fear no longer plays with you because you’re going to do Stretch, Risk Or Die and you are going to know what to do.

Give us one strategy on being successful in real estate investing.

Nothing is going to happen on your timeline. If you can embrace the uncertainty of success, you will be successful. If you are looking for certainty in success, you will never be successful. You might have one hit there. You might be randomly successful, but success is based on your ability to live in uncertainty. When you can live in uncertainty, you can then have the freedom to take the risks necessary to get where you want to go in the timeframe you want to get there per se. Success is never going to happen on your timeline.

By the way, I’ll tell you one other thing, a bonus tip. What you think success is now will transform in the future. I don’t want to say nothing as you think but trust me, it is going to be better than you can imagine. What I imagined my life would be 25 years ago when I started, I could never have imagined where I am. Your imagination is less than what’s possible for you. You keep following the breadcrumbs of your imagination and your desires. Remember, uncertainty is the skill that you must embrace in order to be successful.

I have to say that I feel exactly that same way because I tell my husband all the time, “How did we get here? We never could have planned for this. We could never have imagined. This life is so much bigger than we could have ever dreamed up.” Thank you, we stayed open for that.

REW 43 | Live Fearlessly

Live Fearlessly: All feelings and beliefs can be used in service to fear of freedom.

 

It takes courage to be open. People have this timeline and it’s like, “You don’t understand.” Timelines are nice. It’s good to have goals and dreams but they’re loose structures. If you make them your God, savior, and answer, you’re missing the point.

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

Acknowledgment is critical in the world of Fearless Living and there are so many. We have a daily practice of three things a day every day. Acknowledgment is my number one. Acknowledgment in the world of Fearless Living is “I acknowledge myself for” and you acknowledge yourself for any stretch, risk or die that you take during the day. That stretch, risk or die might be a new thought, new feeling, or new action but being willing to embrace that changes everything. Acknowledge yourself now. “I acknowledge myself for,” I got to write it down, five a day, and you will start recognizing your confidence increase within three days. I promise you that.

That’s beautiful, amazing stuff. Thank you, Rhonda.

You’re welcome.

Ladies, thank you so much for joining Rhonda and I for this portion of the show. I’m looking forward to what we’ve got coming up. In EXTRA where we’re going to be talking about control versus no control. Stay tuned for that if you are subscribed to EXTRA. If you’re not subscribed for EXTRA but would like to be, go to RealEstateInvestingForWomenExtra.com and you get the first seven days for free. You get Rhonda’s EXTRA. You can get as many as you can listen to in seven days. Check it out and see if it’s for you. If it is, you can stay with me and if not, you got a lot of good content. Thank you so much for reading this blog. 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.

Important Links:

About Rhonda Britten

REW 43 | Live FearlesslySpecialties: Top of the talent pool for changing lives through the mediums of television and radio. World-Class Speaker. Founder of “Ivy League of Life Coach Training” Life Coach Certification Program and Fearless Living Institute. 4x Bestselling Author. Named Coach of the Year. Teaches Advanced Coach Training @Fearless Conversations Workshop.

Rhonda Britten – Emmy Award-winner, Repeat Oprah guest, Huffington Post Contributor and Master Coach – has devoted her life to one thing: to teach people how to master fear.

Whether that’s a fear of rejection or loss; fear of failure or success; fear of abandonment or pain, she brings the neuroscience of fear down to earth giving you a path out of “not being good enough” using the “Wheels” technology she developed that saved her own life. What she teaches is what she’s lived.

Rhonda was the first Life Coach on reality television in the world on the first-show of its kind, Help Me Rhonda. Next, Rhonda changed lives on the hit NBC reality show Starting Over and named its “most valuable player” by The New York Times and heralded as “America’s Favorite Life Coach.” To date, Rhonda has altered lives in over 600 episodes of reality television that aired in more than 25 countries and impacted millions worldwide.

Media list includes: Today Show, Good Morning America, New York Times, Sunday London Times, Good Housekeeping, USA Today, Bill O’Reilly Show, etc.

Rhonda is a recipient of the “Coach of the Year” Award and keynoter for organizations such as; Southwest Airlines, Blue Shield of California, Northrup Grumman and many more.

Her “Life Coach Certification Program” is considered the Ivy League of Life Coaching Training. She also hosts Train-the-Trainer Programs using her work as the foundation to educate the world.

Rhonda’s four books include her bestselling Fearless Living, Change Your Life in 30 Days, Fearless Loving and Do I Look Fat in This.

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Yes, Even You Can Be A Property Investor! With Justin Pogue – Real Estate For Women

REW 42 | Rental Properties

 

Creating passive income through rental properties is certainly a good decision to make money. But as its landlord, you are putting a huge responsibility unto yourself, not only in taking care of the place itself but also the renters residing in it. To help aspiring property investors know where and how to start with this, Moneeka Sawyer sits down with author real estate consultant Justin Pogue. Together, they discuss how to jump into this industry the right way, the best strategies to apply when managing and keeping renters, and the proper way to negotiate a lease. Justin also explains how landlords can properly deal with the most unexpected challenges in rental properties by sharing how he dealt with his own flooding problem.

Listen to the podcast here:

Yes, Even You Can Be A Property Investor! With Justin Pogue

Real Estate Investing For Women

I am excited to welcome to the show, Justin Pogue. He is an author and real estate consultant based in San Jose, California. Fox News, Mercury News, SFGate, Realtor.com and ApartmentTherapy.com have all featured his insights for the benefit of their audiences. He got his start in real estate by purchasing properties on the lands available list in the State of Florida. Since 2003, he has developed and managed apartments and rental homes across the United States. Justin holds a degree in Economics from the Wharton School of Business at the University of Pennsylvania, as well as an MBA from the Darden School at the University of Virginia. Justin, how are you? Welcome to the show.

I’m great. It’s fantastic to be here.

He lives in San Jose, but there are fires in San Jose. He happens to be in Texas. I’m glad we’re chatting. Justin, give us a brief high-level story. How did you get into real estate?

Real estate wasn’t my original plan. I was in graduate school, getting my MBA, planning to go into management consulting, got the interview set up, got the internship all lined up, twelve weeks. I was all set and the dot-com bubble burst. The bottom fell out of that industry completely. Now it’s like, “What do I do next?” I’m trying to figure out what I want to do next. My mother who had been a real estate agent back in the ’80s, although it never took off as a career for her, she was learning about tax liens and how do you acquire property via tax liens. Florida was a good state to do that in. We took a road trip from California to Florida. We’re going between the different county recorder’s offices. We ended up purchasing three properties via the tax lien method, clearing the title, and flipping those to developers. That’s how I got started in the real estate industry.

That’s interesting that just like that, it happened.

She’s like, “You’re trying to figure out what you want to do next. Let’s look at some properties.” We went to look at a few, and we looked at a few more, and then we got one off of the lands available list, and it snowballed from there. We eventually got up to a total of 72 units that I was managing that were down in the Southeast of the United States.

That’s an amazing story. One of these things that I love about this story is the way that you took a bad situation. The bottom fell out of our markets and turned it into a huge success for yourself. I think a lot of people during that time. I remember I was in it. I lived in San Jose and we were in the heart of that complete bust. I remember the pain that was going on around then. Kudos to you for taking the bull by the horns and making something good happen.

REW 42 | Rental Properties

Rental Properties: Networking is a huge factor in real estate investing, property management, and business in general.

 

It’s a real lesson of the value of resilience and looking for other opportunities that you can get involved. Having that lesson in my back pocket from that period in time has helped me in other periods of time moving forward from there to ’08 and other situations even beyond that.

I’ve been there too. It’s amazing. I know that you focus a lot on renters, which is a very interesting perspective. We haven’t had anybody come on the show talking about the renter’s perspective. There are a lot of ladies that are renters. My first question for you is if someone is renting and they want to start investing, how do they start moving towards that path?

It all starts with education. You go down to the bookstore and you start looking at real estate books about investing. Start exposing yourself to the topics, the concepts, different case studies, that kind of thing. That’s a great place to start. Another step would be to go to local real estate investment clubs. Start networking with people who are doing what you are potentially going to do in the future. Ask them all the questions that you have. They’re more than happy to answer those questions. That’s why they’re part of the club. Networking is a huge factor in real estate investing and property management, and business in general. Understand that no matter how many books you read, no matter how many people you talk to, no matter how many seminars you go to, the butterflies in your stomach are not going to go away until you pull that trigger on that first property and then you’re in it.

I want to talk a little bit about this networking piece. We’ve had people come on the show talking about networking. My ladies hear me say this until I’m blue in the face. I’m sure they’re sick of hearing this. It’s that this is a people business. The numbers have to work, but it’s a people business. One of the things that you said was emphasized that again in real estate, but in any business. You have a degree from the Wharton School of Business. I have a degree from the Haas School of Business at UC Berkeley. We understand what we get taught in business school. Here’s the primary thing that we get taught in business school, in addition to finance, accounting, and all of those interesting things. The big thing that we learn in business school, and ladies you’re getting it right here, is learn how to network. Any business in the world cannot be successful if you cannot get along with people, inspire, engage and negotiate. That’s how we build businesses. That’s how we make the world different. That’s how we change lives.

Part of what trips people about networking is, “I’m going to go in and I’m going to talk to these people. I have no idea what I’m going to get out of it or what the payoff is going to be.” For some people, that scares them off like, “I’m investing this time, but I don’t know what I’m going to get for it.” That is the beauty of networking. You don’t know who the person you’re talking to might know. You don’t know what ideas they might share to inform what you’re doing. You don’t know what ideas you might be able to share to inform what they’re doing. Too often many people think, “I don’t have any ideas or concepts in my head that could possibly help this person. They’re so successful.” Remember, you have a different perspective than they have because you have a different experience than they have. There might be some nugget in your experience that can help propel them forward. When that happens, they will remember that. When you call them with a question or a concern later on, they will be more than happy to help you. That’s how networking works, even though you don’t know quite what you’re going to get out of it before you start.

Especially in something like this, if you have an agenda when you go into networking. I know there are a lot of people that teach about networking. You have to know what questions you’re going to ask. Have a plan because for a lot of people, that makes them much more comfortable to have the plan. The truth is a lot of times when you go in fully prepared like that and you appear to have an agenda, it tends to be a turnoff. If that’s the best that you can do, then you do that. If you can stay open to what the possibilities are for what you can learn, who you can meet, and what you can offer, then you’re not caught up in your own head. You are much more open to having real conversations, to showing an interest in somebody else, rather than filling their ear with everything you’ve decided you have to say.

Your skills at networking will improve over time. I was not perfect coming out of the gate in networking by any stretch of the imagination. The good news is you don’t have to be. Go out there, make an effort, and it will benefit you over time. You will see.

Any business in the world cannot be successful if you cannot inspire, engage, and negotiate with people. Click To Tweet

Let’s talk about how you had the confidence to finally pull the trigger the very first time.

It’s interesting because the very first time we’re looking at buying properties for tax liens. What that means is every year the county collects property taxes. If those taxes on a particular property are not paid, what the county does is they auction off their lien to someone else, a bank, a private investor or what have you. They need the money to pave the roads, pay for the schools, and all the stuff that the county does. Depending on the rules of the state, once you control a certain number of years of those liens, you can then take that interest, jump through some legal hoops, and gain ownership of a property. Typically, that property is going to be vacant land, especially if it’s in an urban area.

Sometimes it can have structure on it. In our case it was vacant land. Getting back to your question, since our investment was only the back taxes and not the full market value of the property, that made it a lot easier to pull the trigger and get started. Something else that made it easier in my situation is I was working with a trusted partner. My mother and I were the ones that were going on this road trip and this experience together. Having a partner can be helpful. It gives you somebody to bounce ideas off of, and to check the concepts that you have floating around in your head. Sometimes the ideas in your head sound great. Until you give them voice and you start working them back and forth and then, “Let’s tweak it here. Let’s tweak it there. Maybe it can be great.” I also felt I was ready to take a chance on this. I was ready to try something. This was early 2000s and you’re seeing a lot of people who have much less experience than I had become multimillionaires, investing in real estate and other things. I’m like, “I can do that too. I can take a shot at this and see what we can create.”

How would you translate that to someone who doesn’t have a specific thing that they’re looking at? They’re interested in, “I want to invest.” This is the thing that I get so much for my ladies is, “I don’t even know where to start.” I’m promoting education, listen to podcasts, read some good books, but there is that moment where you have to pull the trigger. It’s scary but it’s exhilarating too once you do it, but it’s getting there. What would you give the ladies advice around that?

Investing is this huge arena and there are many different types of investments that people can do. It’s important to understand who you are as an individual, and what you want out of this investment experience. Let’s take a few examples. You could invest in the stock market. You could buy some index funds. Understand that when you do that, you have no control over what any of these companies do. If they go out and buy a private jet, you can’t call up the president of the company and say, “I don’t think that that was a wise use of the company’s funds. You should return it.” They’re not going to take your phone call. You’re investing in businesses and they’re out there earning money. The stock price will hopefully go up over time and there may be some dividends and that kind of thing but understand there’s a level of control that you do not have in that experience.

When you look at real estate, when you buy a property, you have pretty much 100% control over that property. What improvements are you going to make to that property? What particular clientele you’re going to target that property towards? Are there any additional amenities that you want to add to the property? Do you want to invest in a property that’s near a community park? Do you want to invest one that’s maybe near a recreation center, or near that new restaurant that got five stars, and whatever that review was? You’re in charge of those things, which gives you total control. However, there’s more of a personal involvement in that than in the stocks. The stocks, you can just buy and forget about it. Real estate needs to be managed and it needs to be nurtured. Even if you’re going to hire somebody to manage that, you need to manage the people who are managing, and be aware of what they’re doing and what their relationships with your residents are, and who your residents are.

Those are the two ends of the spectrum. There are other things that people could invest in. The idea is if that level of control is something that you want, you’re not going to get it in stocks. You’re going to get it in real estate and starting your own business, which quite frankly, investing in a property is starting your own business. Know what level of control you want and what level of involvement you want to have in your investment. Those are two things that people starting out need to think about. This is all part of setting up your mindset before you even get started. That’s going to be the foundation for having a successful business regardless of what you invest in.

REW 42 | Rental Properties

Rental Properties: By having a great relationship with renters, landlords can get the most out of their investment with the least amount of stress.

 

When you started in real estate, did you feel like you were prepared for all the things you were going to experience?

I thought I was prepared. I had read a bunch of books. I had gone to I don’t know how many different seminars. They talked about property appreciation, forced appreciation, residual cashflow, and the depreciation you can take. I thought I was ready. What I didn’t know is that a lot of those seminars, they leave out a lot of information. There’s virtually no discussion on how a property operates. How is a property managed like boots on the ground, day-to-day basis? What does that process look like? If it gets to this point, what does an eviction process look like? What are the steps involved in that? What are the steps involved in marketing your property to attract quality renters to it? What do you do once people start showing up? How do you vet those people? They don’t go into any of that.

They present you with all the sexy, seductive stuff. They are then off to the next city to sell seminars to somebody else. I didn’t know that, like most investors who are starting out don’t know that. I had to learn all of that stuff. It’s unfortunate the lack of education on the landlord side because people are making investments. They’re taking their life savings and they’re putting it into an investment. That lack of education that’s not provided by most of these seminar services is a disservice. A lot of people are learning by the seat of their pants. That also points to why those local real estate investment clubs are important because they will help fill in some of those blanks for you.

You focus on renters and educating renters, and that sort of thing. I focus on that piece. Much of my coursework, the Blissful Investor Masterclass is all about being a landlord and filling in all of those pieces that nobody else talks about. I found the same thing. I had to create my own systems. I had to work my own mindset. I had to know how I was going to be thinking when I walked in to talk to a tenant that was not happy because my mindset was going to change the entire conversation. Those things are important and nobody talks about it. Your network is going to make a big difference. There is some education out there on that. There are many investors that have found out that it’s not that sexy and awesome. Tell us a little bit about the challenges you’ve had to face along the way.

This was in 2007. This particular property was a 32-unit garden-style walk-up property. It had a drainage ditch canal behind the building for stormwater and that kind of thing. One day during the summer, it rained all day. That canal was filled up with water. It got plugged up down the line somewhere. It flooded the first floor of both buildings in the apartment building. I’m standing on the second floor watching the water rise. I’m like, “Those seminars did not cover this.”

It’s my first flood. I have no clue what to do. My first phone call was to one of those flood recovery services. I was able to get somebody on the phone. They said, “Yes, we understand the situation.” They were going to charge $2,000 per apartment to come in, tear everything out, and sanitize what was left. That’s 32-unit apartment buildings, 16 apartments have been flooded. Sixteen apartments times $2,000 is $32,000. That’s a hole in my budget. I cannot afford because I was not planning for a flood.

What ended up saving me was not panicking. We had a vendor who was our carpet cleaning vendor, but they also had water extraction equipment. I talked to them about how to deal with the flood, and how can we get the carpets out, and that kind of thing. Talking with the vendor, we put together a plan to get the carpet out, get the apartments cleaned up, get things sanitized. We go in and put back clean carpet. It was 3 inches of water. It wasn’t waist deep. It doesn’t have to be that deep to ruin your day. We were able to get those apartments back together in livable condition in three days. The only person who called me to thank me was the mother of one of my residents. She was happy her son did not have to come live with her.

If you look in the media, the relationship between landlords and renters is broken and dysfunctional. Click To Tweet

Was that something not covered by insurance?

You can get insurance to cover that, but insurance comes later. It doesn’t cover you in the moment, in the situation. It all comes afterwards, assess, take pictures, and all of that. Meanwhile, I’ve got sixteen families that were displaced who are coming to me like, “What do we do?” That’s a part of property management that was never covered, let alone the flood and mitigating the damage and all of that. The fact that sixteen families are looking at you like, “What do we do now?” You can’t say, “I don’t know.”

“I’m going to call insurance and find out.” I see what you’re saying. Did you never get reimbursed for the insurance because they didn’t get to come out and take pictures and stuff? Tell me a little bit about what happened around that.

What happened around that was the area was determined a disaster zone. FEMA did come in and they provide loans and assistance to the people who were affected by that flood. What was most interesting about that is we had this conversation with the government about applying for the loans, and what information you had to submit, and all of that. We got down to the approval part. They said, “This is what we’ll approve you for. This will be your monthly payment on that disaster loan.” I looked at that and I said, “I’m not comfortable with adding that payment into my budget. What if we take half of the loan amount?”

They said, “The payment would still be the same,” which I thought was interesting because every other loan I’ve ever been involved in on the planet, how much you borrow affects the monthly payment for that particular loan. In this case, they said, “Your payment will be the same. We determined what we think you can pay. That’s what your loan payment will be based on the information that you’ve given us. That was an eye-opening experience for me because I had never dealt with a loan like that. We decided to pass on that loan for that reason. It wasn’t the only source of funds to get us back to where we needed to be, and to make us whole and all of that. Those were the reasons why we went ahead and passed on that loan. It was interesting to have that experience of going through that process, and then getting to that end result where they determine what you pay, and push you out of determining what you pay. You either get to say yes or no.

You said there were other sources of funds to make you whole. What other stuff did you do? It’s interesting to hear. You’re right. Nobody talks about this and I’ve never heard of this. Tell me what those other things were.

This is opening up a lot of different topics. First of all, when you acquire a property and you get your mortgage, the bank may or may not require you to get flood insurance, depending on where the property is located. In this case, the bank did not require us to get flood insurance. Don’t let the bank determine whether you get flood insurance or not. This is a lesson that we got out of this experience. You need to look at your own situation and determine whether you want flood insurance or not because you’re the one that’s involved in the investment. The bank is involved but what I’m saying is don’t let the bank determine what you need. You have to go through it yourself. In this case, we did not get flood insurance.

REW 42 | Rental Properties

Rental Properties: Determine the level of control and involvement you want to have in your investment.

 

What we ended up doing was pulling from some of our reserve funds to recover and recoup, which brings up the lesson of having reserve funds for things that are unanticipated. The other thing that turned up to be important was the value of your relationship with your vendors. I was able to call our carpet cleaning service. This is 7:00, 8:00 at night. This situation has affected more than just us. They have other customers calling them and they answered the phone when I called. The only reason that happened was because of the relationship that we had with them. If we hadn’t had that relationship, we would have waited until tomorrow or the day after for them to get back to us. The relationship with your vendors is key, and they are a fantastic source of information, in this case, related to flooding.

Also, think about, what needs to go back into your property? We’re tearing out carpet and pulling out baseboard. What needs to go back into your property? Where can you source those items from? What kind of financing you might be able to get from those stores or vendors on those cabinets, carpet, or whatever it is you’re purchasing. Especially if you have to purchase things in bulk, which for sixteen apartments, I was. All of those things go into this recovery process. That’s not to say that everybody’s going to have this type of experience. There’s going to be something that occurs relative to your investment that you weren’t prepared for. Relationships with your vendors, being inquisitive and curious enough to ask questions so that we can come to some reasonable solution and plan, and being able to communicate that plan to your resident, those are huge lessons out of that experience for me.

I appreciate that conversation. There aren’t many people that come on this show and talk about the details of when something goes wrong, the process of how you pull yourself out of that. That was valuable.

That was one thing that went wrong.

We’ve all got our stories. The big thing that I want the ladies to take away from this is things happen. They’ve happened to a lot of us. Justin’s been able to handle it. I’ve been able to handle it. You’ll be able to handle it. Things come up in life and there’s nothing you can’t handle. You just have to not freak out. You create the bliss practices that I talk about all the time. They get you centered and grounded so that you can look at things rationally, start to problem solve, and start to take action rather than starting to freak out, freezing, and making bad decisions. There isn’t much that will be handed to you that you can’t handle. You do need to have your bliss practices in place so that you can keep your head around it when things happen.

There are millions of landlords before you that have handled all of this stuff. You’re not alone. If you have a network, not just with your vendors, that you’ve created, whether you’re going to meetups, REIAs, or whatever real estate organizations, having those people will help to shore you up also because you can have these conversations. You have a larger network of people that can help you through problems and give you vendors.

Half the battle is knowing who to call and what question to ask.

The butterflies in your stomach will not go away until you pull that trigger on your first property. Click To Tweet

You’re a landlord and you wrote a book for renters. Why would you do that?

Rental Secrets came out of an experience I had in the bookstore. I’m sitting in the bookstore and I’m looking at the real estate section. I see books there for owners, managers and investors. I’m like, “There’s a group that’s missing here.” It’s the 43 million households that bring half a trillion dollars with a t to the table every year in terms of their rent payments. It struck me as odd that there are all these guides out there for buying a car or a computer but not for renting, which is what people are spending a third or more of their income on every month. It struck me that in writing books for landlords, owners and property managers, it’s a very top-down approach, as opposed to a bottom-up approach, which is the perspective that I take in my book. The other reasons why I wrote the book is because if you look in the media, the relationship between landlords and renters is broken and dysfunctional. If you’ve ever watched one of those judge shows on television and there’s a landlord-tenant dispute, typically there’s a chair that flies across the room during the proceedings at some point.

It’s a dysfunctional relationship. In many cases, it’s leading to bad governmental policy decisions. It’s leading to a lot of fear and frustration among renters and landlords. The idea is if we can get some education and understanding going on amongst renters about what landlords are dealing with, we can hopefully move towards getting better policy paths. We can hopefully move towards having better relationships between renters and landlords. We can do a way with this myth that renters have in their heads about landlords. The myth is that the landlords are sitting on their yacht in the Caribbean with their umbrella drink, watching the sunset in the background. That’s not what being a landlord is for the most part. I use that picture in my presentation.

People think that if you own property, you’re rolling in the dough. It is possible that your landlord may have a high net worth. What happens with a lot of landlords is that they’re net worth rich and cash poor. They are property rich, cash poor because running these properties, you suddenly have a $32,000 expense. Who can even come up with that? These things happen to landlords and we want to take care of our tenants. We end up in these sticky situations. You’re right and I love what you were talking about this top-down approach versus the bottom-up approach. It’s about respect.

A lot of the stories and the dramatization of what these relationships look like screw up the respect for one another. The reality is there are a lot of landlords that are not responsive. I know that there are a lot of tenants that are horrible to houses. These things all happen, but those are the exceptions more than the rules. Those are the things that are highlighted because they’re dramatic. It’s not a good story that everything is great, unless you’re on this show, I like to say that a lot, “Everything is awesome.” That doesn’t make for good television or good manners.

It makes people frightened to invest in property when they see that, “Why would I want to get into that relationship?” You’re right when you say that a lot of landlords end up being of high net worth, but they’re not necessarily cash rich. They are all tied up in terms of the equity in the property. When you want to go out on a Saturday, you can’t walk through a wall of your building and say, “I’d like $20 please.” It doesn’t work that way.

If we’re providing you a home, we probably don’t have cash. That’s not totally true, but that’s one way to think about it. It’s a roof over your head.

REW 42 | Rental Properties

Rental Secrets: Reduce Your Rent – Get Better Value – Create Quality Communities

It gets back to this concept of once you become a real estate investor, you’re in effect starting a small business. All of the issues and challenges that come around that concept, you’re now going to be exposed to. The other picture that I have in my presentation is sometimes being a landlord can feel overwhelming. It can feel like you’ve got one hand above the surface of the water and you’re trying to stay afloat. Especially if you don’t have a network or if you’re not plugging into a lot of these different resources that we’ve been talking about.

That’s not to scare everybody away. That’s not the experience for everybody. I’ve been in real estate for many years, and there have been those moments and they happen. They’re going to happen in life. They’re going to happen in your marriage. They’re going to happen with your children. They’re going to happen with your dog. Anything that you care about, these things happen. It’s a part of life and reality. It’s not a reason to stop living. It’s not a reason to not invest. It’s a reason to have that emotional and relationship tools to help you get through it. This has been a fun conversation. It’s a different one from anything I’ve had on this show. Thank you for that.

In EXTRA, we’re going to talk about negotiation. Part of what Justin talks a lot about in his book is the negotiation of renters with their landlords like, how to get better rents? How to negotiate your lease? He’s going to be talking about negotiation skills. What I wanted to do because it’s such an important piece for everybody’s business, whether you’re a renter, a landlord, a business owner, a client or a customer, negotiation is a big deal. He’s going to be talking about how to maximize your negotiation skills with regards to being a renter and also, can anybody use it? We’re going to be talking about that in EXTRA. I’m excited about that. Before we go there, could you talk to us about how people can reach you, Justin?

My website is RentalSecrets.net. They can get more information about my book there. They can also reach out to me by personal introductory site, which is JustinPogue360.com.

Are you ready for three rapid fire questions?

Absolutely.

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

REW 42 | Rental Properties

Rental Properties: If there is an understanding between renters and landlords, better policies can be created.

 

The super tip I would say that we’ve already touched on is those local real estate investment clubs, but I’ll add one little twist on it. Choose a club that is in the geography where you are investing, not necessarily a club where you live. They know who in the county departments to talk to, ask questions to, and who can get things done.

Thank you for that. What is one strategy for being successful in real estate investing?

My success strategy is you want to have great relationships with your residents. You screen them first, and then you maintain great relationships with them going forward, as long as they’re living in your property. Sometimes, even after they live in your property. Some of my residents I’ve kept in touch with. It will allow you to get the most out of your investment with the least amount of stress.

I always say that your tenants are going to be the biggest determining factor on how blissful your strategy or your business is going to be. For me, they’re everything and I feel grateful to have them in my world. The only reason they call me is to wish me Happy Birthday, Merry Christmas or Happy New Year. They don’t call me to bother me or to get more out of me, which is special. What is one practice that you would say that you do daily that contributes to your personal success?

It’s remembering who your target resident is, and understand that your investment property is not for you, it’s for them. Many people jump in and they’re like, “We’re going to remodel. We’re going to do this. We’re going to put marble in here.” That doesn’t fit your target market. You’re setting yourself up for failure, not necessarily because those aren’t nice things because they are, but the clientele you’re renting to is not going to value it the way you would. Keeping that in mind as part of every decision that you’re making relative to your investment property. It’s the actual tip that I would suggest.

Thank you for that. This has been a fantastic show. Thank you for all that you shared so far.

You’re welcome. It’s been fun.

Ladies, stay tuned for EXTRA. We’re going to be talking about negotiation skills as a renter and also business in general. Stay tuned for that. We’ve never covered this topic before. We’ve never covered topics that are renter-specific. I know a lot of you, ladies, are renters. This will be valuable for you. If you are subscribed to EXTRA, stay tuned. If you are not but would like to be, go to RealEstateInvestingForWomenEXTRA.com, and you get the first seven days for free. You can listen to EXTRA, as well as many others. See if it’s for you. If you want to stay on board, you can get subscribed. Otherwise, you can unsubscribe, no problems there. Thank you for joining Justin 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.

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About Justin Pogue

REW 42 | Rental PropertiesJustin Pogue is an award-winning author and real estate consultant based in San Jose, CA. His services are sought after by property management companies, investors, and real estate consulting companies alike.

FOX News, The Mercury News, SFGate, Realtor.com, and ApartmentTherapy.com have all featured his insights for the benefit of their audiences.

He got his start in real estate by purchasing properties on the Lands Available list in the state of Florida. Since 2003, he has developed and managed apartments, rental homes, and student housing across the United States.

Justin holds a degree in Economics from The Wharton School at the University of Pennsylvania, as well as an MBA from The Darden School at the University of Virginia. As a San Jose native, he also attended Bellarmine College Preparatory and the Harker School.

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